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

The US soybean market rallied sharply this week following a bullish report from the USDA and whilst the world should have ample supplies of soybeans, the market remains jittery as the focus turns to the US growing season.

In the EU we have seen big problems on old crop as the expected farming selling didn’t materialise and it now seems clear that the 2014 crop production figure was overstated. For new crop, lower plantings in many countries combined with some dryness in areas of Germany and Poland mean we should have a much reduced rapeseed crop. Current estimates are down between 2-2.5mln t, possibly as much as 3 mln t or 12% depending on yield. Price action on the MATIF futures market has reflected these factors, with prices rising in excess of €70/t since last October.

In Canada frost followed by dry weather has damaged the canola crop and reduced the crop size potential. Canola prices have risen aggressively over the month. Rapeseed oil and meal remain firm versus other oilseeds as you would expect with the bullish inputs, but margins are poor and there are question marks over demand at current price levels.