Gleadell Grain’s Oilseed Trader Willie Wright offers the latest insight into the oilseed markets; positive market conditions, higher plantings and ideal weather conditions in the short to medium term are providing a boon for the UK sector.

The Soybean complex has been the corner stone in CBOT markets this month with Soybeans rising 10 per cent on continuing fears of production shortfalls in South America. Once again, the markets are looking to the USDA report for guidance but, with European rapeseed production in deficit and problems with Soybean production in South America, the market looks set to trend higher, although possibly overbought currently.

Rapeseed prices have rallied back to excellent levels with farmers achieving £370 for spot rapeseed and £350 plus for harvest as available. There has been a flurry of activity in both old and new crop rapeseed with the UK export program continuing apace. New crop rapeseed has come through the winter in good shape and some good rains forecast this week. Defra announced their December planting figures, showing an increase in rapeseed plantings for England & Wales of 6% at 698k hectares. If the UK farmer can repeat the yield performance of harvest 2011, England & Wales alone could produce 2.75mln/t of rapeseed, add in Scotland at 200k t and we are knocking on a record 3mln/t crop. Europe will have an estimated 2.5mln/t deficit in their rapeseed S&D for 2012/13 and, with Ukraine’s exportable surplus diminishing, the UK will be a key supplier to the German Bio diesel sector for some time to come.

Matif rapeseed futures continue to trade an inverted structure with May 13 trading at a €14 discount per tonne to August 12, showing no great incentive to hold on to the physical crop.

Political fears (Iran) are keeping crude oil on its toes, with Brent hitting $125 per barrel this week. Crude looks overbought currently and may come under some pressure from the Greek bond deal agreement this week.