Jonathan Lane, Gleadell’s Trading Manager, comments on the OSR market

Factors neutral to the market

• The rapeseed market remains stymied across Europe. Farmers are reluctant to sell and crushers are reluctant to chase supplies. Crush margins on paper remain supported and this should help prevent seed prices collapsing in the short term, though all eyes remain focused on the USDA report due to be released later today (1700 GMT).

•  The USDA supply and demand estimates will be the first since September due to the administrative shutdown in October. We have seen big differences between private analysts’ estimates on US soya production, which makes the content of Friday’s USDA report difficult to call. There is a general acceptance, however, that crop size will be bigger than estimated in September. The question is by how much? And is this increase already factored into the market?

Factors depressing the market

• The biggest factor affecting UK domestic prices this week has been the sharp increase in the pound/euro exchange rate. The sharp jump in growth in the UK service industry reported on Tuesday really took the market by surprise with the sector increasing jobs at the fastest rate since 1997. This sterling supportive news was followed by the European Central Bank cutting base rates by 0.25% after the Bank of England left UK base rates unchanged. Prices have fallen £5/t purely on the back of the currency move.