UK rapeseed prices remain at the low end of recent range between £295 and £300/tonne ex farm in England, and around £290 ex farm in Scotland. We have seen recent swings in the currency from £1=1.15 euros up to £1=1.17 euros, which is making the market difficult to trade. Unfortunately, with the continuing uncertainty over Brexit this is likely to continue.
A major current issue in the market is the refusal by China to continue to buy Canadian canola on the premise that it contains too high a level of contaminants and risks spreading disease.
It is probably not a coincidence that a Chinese top executive of the communications firm Huawei, called Meng Wanzhou, is currently facing extradition to the US from Canada.
Because of this Canadian canola futures have been heavily sold and there are now several cargoes of Canadian canola destined for mainland Europe. This is not a normal trade flow, as Europe can only take limited amounts of GM seed and only a certain amount of Canadian canola is sustainable for biodiesel purposes. However, these few cargoes are enough for European crushers to step out of the market and allow old crop prices to trade at levels close to new crop bids.
Regarding the UK, we believe the crushers still have plenty to buy, but the change of trade flows with Canadian imports is allowing some French rapeseed to be competitively imported in to Erith. This may not yet be too much of an issue as new crop production prospects remain poor due to cabbage stem flea beetle damage and potential drought.
Regards,
Owen
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