Jonathan Lane, trading manager at gleadell, shares insight into this week’s events in the oilseed markets.

Another week, another EU meeting regarding the debt crisis. Commodity markets are almost paralysed by the confusion in the EU, one minute there is partial agreement and the next individual countries want a referendum on their austerity plans and debt obligations. Whilst the debt fiasco unfolds, each week brings a new twist, leaving commodity markets on the back foot trying to digest the outcome. As if all this wasn’t tricky enough, a major commodity broker - MF Global - crashed into administration, spooking markets even further with reports of $700million of clients funds being misappropriated in large directional bets on Euro sovereign debt.

US soybeans have had a mixed week, struggling to rally above the $1250 level and slipping into the $1180 region basis November. The USDA report on 9^th November will provide the market with a better idea of the soya crop and yields being achieved, there shouldn’t be a great deal of activity in soybeans pre report, if anything a small rally in anticipation of the yields.


The old crop rapeseed market has had a quieter week, with a number of people executing business already booked. We saw Sterling rally sharply against the Euro this week that knocked circa £10 off the value of rapeseed alone before the market itself drifted. With ex-farm prices for old crop in the low/mid £350 region and new crop sitting around £320 there appears to be little appetite by farmers to take these prices.

Weather forecasters are predicting the first real sharp frosts in Ukraine this winter, possibly down to -7° with no snow cover to protect. The Ukraine crop is very important to Europe and will be watched closely this year, especially with poorer planting reports and continued demand through 2012.