As we enter the last trading week of the year, the rapeseed market has become very thinly traded. Matif prices have dropped and despite a weaker pound, £1=1.11 euros, sterling prices have dropped to around £320 ex in England and £315 ex in Scotland.
Soyabeans have enjoyed a flurry of activity as the Chinese have finally booked tonnage from the US, but the market seems to have bought the rumour and sold the fact so currently soya prices are dropping.
Biodiesel prices have been dropping rapidly as the supply required to meet mandates seems to be finally available. Also, Rhine river levels have been rising which allows for logistical bottlenecks to be eased so product can be produced in the quantities required. Despite this fall, biodiesel margins are still good and we expect demand to remain robust whilst RME (Rape Methyl Ester) is still required in the cold winter months.
Despite the current weaker tone, many commentators remain bullish about prices going forward as next harvest’s production prospects remain bleak. European rapeseed areas are forecast well down to possibly below 6.0 million hectares which would be 10 to 15% down on this season and likely to represent a total production of only 19 million tonnes or below. Such a scenario would curtail EU rapeseed supplies to an 11 year low, and require large imports from Ukraine and Australia to meet demand.
May I take this opportunity to wish you a Happy Christmas and Prosperous New Year.
Regards,
Owen
