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

The European rapeseed market is still in a state of flux. In theory there should be ample supplies of rapeseed, but the market certainly doesn’t currently feel like that. Some significant crusher shorts remain in the physical market which, combined with a lack of sellers, is underpinning the relative differential between cash prices and the futures market. However, however crush margins remain poor (in a lot of cases below cost) for the crushers.

The weak euro is heavily undermining UK farm gate prices. It is worth noting that every 1 cent move in the pound/euro exchange rate equates to a £3/t reduction in UK ex farm prices. Had it not been for a lack of farmer selling, this week’s currency move should have knocked £12/t off domestic prices.

Eventually the EU supply and demand balance sheet should weigh on the market, and we would not be surprised to see prices ease as we move into the late spring.  With this in mind any rally should be viewed as an opportunity to sell any old crop balances, especially given the forecasts for the continuing slide in the value of the euro.