Willie Wright, Oilseed Trader at Gleadell Grain Merchants gives the latest updates on the global oilseed market. Weather concerns, which appear to have eased in the wheat market are still very much dictating oilseed prices.

Soybeans are continuing to take direction from South American weather, although the USDA report last week would indicate the market is pricing this in. The US signed a supply agreement with China for 8-12mln/t soybeans after a Chinese delegation toured Iowa this week.

From a technical point, March soybeans look as if they have broken through their resistance at $12.45 and could now test the $13.00 level.

Crude oil has seen a rise of $7 per barrel over recent weeks, the main reason being political tension with Iran. However, we did see a sharp reduction in US crude oil stocks last week which will under pin crude in the short term.

Australian & Canadian canola supplies look plentiful and are certainly cheaper than EU rapeseed currently. This should keep old crop rapeseed prices in check for the time being and could possibly put some pressure on early new crop prices.

New crop rapeseed will be in strong demand throughout Europe in 2012/13 with continued strong demand from the German biodiesel sector. The current weather problems through Southern Europe and Black Sea regions look set to underpin rapeseed demand until we have a better Idea of what winter kill has taken place, if any.

Macro-economic activity continues to rumble along although, surprisingly, the impact on the market would appear to be lessening. There is no doubt the €480 billion of 3 year loans provided at 0.5% by the ECB pre-Christmas have had the desired effect, and it looks as if we will see a further €500 billion being offered in March/April. What effect this money supply will have on commodities is yet to be seen, but the professional view is that printing money and gauging inflation is the equivalent of pulling a brick with a piece of elastic, commodities could have a surprising outcome yet!

Tweet