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

The CBOT oilseeds complex remains underpinned by this week’s keen buying of soybean futures by the funds. There was little fundamental news to support the market.

In Brazil, harvest continues to move forward. Yield reports in Mato Grosso are very encouraging, and there is talk of the crop now exceeding 106mln t, up a further 2mln from the last USDA estimate.

Logistics in Brazil continue to be problematic, where busy shipping commitments are supporting prices in the spot positions. However, if the crop does yield 106+mln t, prices could well come under pressure in the latter part of the year.

In Europe, the old crop market remains tight, despite improved depths on the internal European waterways easing transport problems.

In the UK things have changed. Cargill is about discharge 58,000t of rapeseed from its first Australian vessel and we understand there is another on the way. This, combined with smaller imports into Erith, should provide the UK with ample old crop supplies.

UK harvest prices remain around £320/t, although new crop remains a tricky market to call with weather and currency still big unknowns. The planted area in Europe points towards a potential increase in production next campaign. In addition, the political uncertainty that elections in France and maybe Italy bring to the Eurozone could see sterling continue to appreciate. Neither would be good for UK ex-farm prices.