Willie Wright, Oilseed Trader at Gleadell, offers analysis of the week’s developments in the global oilseed market, where this week the effects of the Eurozone crisis are still being felt, as Greece's future remains undecided.

Soybeans prices remain at the top end of their recent range at $14.30, although a number of long holders are keen to take some profits and reduce their exposure. The soybean complex fundamentally remains strong, which was confirmed by the USDA report last week. The announcement by the Chinese that they will release 2.5mln t of soybean reserves on to the market could be perceived as negative in the short term, but positive in the long term, as these stocks will need to be replaced.

Canola will have a greater impact for the oilseeds market in the coming season with the potential for Canada and Australia to produce record crops. If the European rapeseed crop comes in at 17.5mln t as forecast by a number of analysts, we will be heavily reliant on imports from Australia to meet our crush demand.

Rapeseed prices have continued their decline in line with the oilseeds sector. Old crop rapeseed farm sales have slowed in recent weeks and crush demand remains weak due to continued poor crush margins. Rapeseed exports from the UK remain excellent with the March figure coming in at 135,000 tonnes, this takes the seasonal exports to 770,000 tonnes to the end of March.

Matif rapeseed prices continue to trade on an inverted basis with Aug 12 trading at a €15 premium to May 13. If crush margins are so poor, you have to ask the question why traders want to own the most expensive rapeseed of the season!

Greece continues to be the focus of attention after unsuccessful elections and mounting fears gripping the country. Commentators are starting to report the opinion that the austerity measures being asked of Greece and other European countries are too much and it is not possible to grow their economies out of recession.

This softening approach to struggling European countries is being seen by some as preparation for a large round of quantitative easing by the ECB, although a number of analysts feel this will be required whether Greece stay in the Euro, or if Greece leave the Euro.

Either way it looks like the printing presses will start shortly which in turn will support commodities once more.