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

US weather has dominated the past week and had a positive influence on oilseed prices. The forecasts have been extremely hot and dry in some key US soybean producing states. The hot weather has also come at the crucial pod-filling stage for soybeans.

The weather problem has developed after USDA cut the soybean acreage figure in its last report, and with the late plantings also posing a frost risk in late September the market is now full of uncertainty about the soybean crop size. Until the harvest starts and bean yield results come through, the market could remain very volatile.

Funds have been covering short positions in soybeans and this buying activity has helped elevate prices.

The MATIF rapeseed contract has ticked higher tracking soybeans and ex-farm prices in excess of £300/t are achievable across the UK. Rapeseed supply and demand fundamentals remain unchanged but if beans continue to rally MATIF values could respond accordingly. Predicting market direction from here is difficult as it all depends on the US weather and, more importantly, the impact of that weather on the crop, which is the big unknown.