Jonathan Lane, Gleadell’s Trading Manager, comments on the OSR market

The main focus of the week for oilseeds has been the USDA report, which confirmed the widely held view that old crop US soybeans are suffering from tight supply. The support being offered to old crop beans is also pulling up new crop even in the face of record US planting intentions and a very large South American crop.

In Europe the old crop market is fairly tight. The MATIF futures have ticked higher throughout the week and the May contract expires at the end of this month. It will be interesting to see if the May futures contract is squeezed higher as we approach the delivery period; will this in turn provide a short-term lift to new crop? European traders are waiting to see how much seed will come out from the May delivery and where.

In the UK we have seen some light volumes of old crop coming forward from farm but trade is slow. Crush margins are not particularly attractive but we do see short covering merchants and crusher buying of old crop. UK prices still do not calculate into European destinations as domestic crushers remain a better sale for merchants. 

The new crop market is quiet, here and in Europe. Although early crops look very good in the UK and good in most areas of Europe, there are reports of some dryness in areas of Poland, but we feel this is far too early to be concerned. Current European crop predictions are circa 21.5 mln t with noticeable increases in the UK and France.