Jonathan Lane, Gleadell’s trading director, comments on the OSR market

Soybeans traded higher throughout the week moving from the bottom of the recent channel towards the top, despite little new fundamental news. The USDA report is out on Monday and it will be interesting to see if this provides some momentum for the market to break out.

In Europe the rapeseed market has moved higher on both the futures and the delivered markets as traders struggle to cover short positions due to a lack of farmer selling. Crush margins are now poor and on paper we have a plentiful supply of seed. But, with many traders short, this squeeze has forced them to cover positions, adding upward momentum to the markets.

February futures expire at the end of the month and traders will use this to cover shorts and with Australian seed arriving Feb/March there may be a relatively small window for prices to continue to rise. In our opinion timing will be key in the old crop rapeseed market. There is no real bullish story and at some point a wave of physical selling could again pressure prices, although when is impossible to predict.