- Location
- Stoneleigh
Delivered rapeseed prices recorded by AHDB have been reaching record levels over the past month. The previous record high new crop (Erith, November delivery) price was reached in June 2011, at £432.50/t. On Friday, we recorded Erith (Nov-21) at £477.00/t, surpassing the 2011 November high by £44.50/t.
So, can we expect prices to rise further?
Factors driving price rises
This season delivered rapeseed prices have seen substantial support from rising vegetable oil values and high soyabean prices.
Last Friday, new crop Chicago soyabean futures (Nov-21) closed above 8-year highs, at $526.67/t. Gains were made on dry South American weather and tight US stocks, causing supply concerns. This has been met with continued Chinese demand for feeding their expanding pig herd, as explained in this week’s market report. Furthermore, In Canada, end of March canola stocks were down 37.7% on the year, from increased demand through the pandemic.
In the EU and UK, the balance of supply and demand is expected to be tight again in 2021/22. Recent cold weather across the UK and Europe has heightened concerns for crop development. The latest MARS report made some cuts to rapeseed yields, in France especially, playing into delivered gains.
Are prices going to continue rising?
The flow of bullish news will be a big determinant of when prices reach a turning point.
Monday’s US planting figures leaned slightly bearish, with 42% of US soyabeans planted, as at 9 May. This was above the five-year average by 20 percentage points. Yet yesterday, Chicago soyabeans (Nov-21) climbed $6.39/t to $525.99/t, in anticipation today’s USDA new crop world supply and demand estimates (WASDE).
Soyabean ending stocks will be a key watch point on account of Chinese demand versus global supply.
Vegetable oil prices and crush margins will also be key to watch going forward, to establish crushers demand.
In the EU and UK, weather remains a key watch point to influence the Paris rapeseed futures and so UK delivered prices. Even if global fundamentals pressure global vegetable oil and soyabean prices, it is likely EU and UK prices may stay reasonably elevated until more news emerges on crop progress (next European crop report due on 25 May).
Delivered rapeseed prices at record levels, can they go higher?
Join the 3.5K people who subscribe to our Grain Market Daily publication here - https://ahdb.org.uk/keeping-in-touch
So, can we expect prices to rise further?
Factors driving price rises
This season delivered rapeseed prices have seen substantial support from rising vegetable oil values and high soyabean prices.
Last Friday, new crop Chicago soyabean futures (Nov-21) closed above 8-year highs, at $526.67/t. Gains were made on dry South American weather and tight US stocks, causing supply concerns. This has been met with continued Chinese demand for feeding their expanding pig herd, as explained in this week’s market report. Furthermore, In Canada, end of March canola stocks were down 37.7% on the year, from increased demand through the pandemic.
In the EU and UK, the balance of supply and demand is expected to be tight again in 2021/22. Recent cold weather across the UK and Europe has heightened concerns for crop development. The latest MARS report made some cuts to rapeseed yields, in France especially, playing into delivered gains.
Are prices going to continue rising?
The flow of bullish news will be a big determinant of when prices reach a turning point.
Monday’s US planting figures leaned slightly bearish, with 42% of US soyabeans planted, as at 9 May. This was above the five-year average by 20 percentage points. Yet yesterday, Chicago soyabeans (Nov-21) climbed $6.39/t to $525.99/t, in anticipation today’s USDA new crop world supply and demand estimates (WASDE).
Soyabean ending stocks will be a key watch point on account of Chinese demand versus global supply.
Vegetable oil prices and crush margins will also be key to watch going forward, to establish crushers demand.
In the EU and UK, weather remains a key watch point to influence the Paris rapeseed futures and so UK delivered prices. Even if global fundamentals pressure global vegetable oil and soyabean prices, it is likely EU and UK prices may stay reasonably elevated until more news emerges on crop progress (next European crop report due on 25 May).
Delivered rapeseed prices at record levels, can they go higher?
Join the 3.5K people who subscribe to our Grain Market Daily publication here - https://ahdb.org.uk/keeping-in-touch
