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

USDA released its latest report and on Tuesday we saw little change to the soybean balance sheet. The soybean futures contract sold off heavily after the report, but prices remain in a lateral trading range, unable to break out in either direction. At present there are no problems of note in South America.

MATIF rapeseed futures eased back around €10 this week as the market became over extended and good volumes of farmer selling were seen across the continent as prices rose to target levels.

In Europe the spot physical market has squeezed a bit ,which has helped lift prices. Some farmers and traders also remember a similar rise in prices in this period last season, so they have held seed. From a fundamental perspective, on paper Europe has a plentiful supply of seed, and more Australian seed is now forecast to come into the EU which, supply and demand-wise shouldn’t be needed.

Prices have also risen in the EU with crush margins not particularly attractive. The question now is can the market kick on again or will we see large volume sellers pressuring prices? We think this market is about timing, nearby squeezes are possible but at some point the size of the crop should again come to bear.

The Euro continues to weaken against sterling, which is not helping UK domestic prices.