Market report: Oilseed rape

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Global politics and economic data continue to impact volatility in outside markets according to ADM. Most importantly Ukraine has stated that Russia has ended the Black Sea grain initiative ahead of its official end date by not registering incoming vessels. Hopefully negotiations will continue later this week.

US and EU markets have continued their slide as they await tomorrow’s United States Department of Agriculture (USDA)  and the World Agricultural Supply and Demand Estimates (WASDE) reports later today.

In the United States soybeans are trading back to levels seen at the start of the month.  US beans are also still trading at a premium to Brazilian beans, which added to poor demand prospects against expectations is weighing on prices. Also the Brazilian harvest is 93.7% complete, but there is limited storage space available which could mean more product coming onto the market.

Energy rebound

The ADM market report also pointed out that energy markets have rebounded from the sharp sell-off at the start of the month. Higher stocks reported by the US Energy Information Administration (EIA) seemed to cap price gains for West Texas oil above $74. Veg oils were mixed – soy oil following beans lower this week, though palm oil did try and buck the trend. Reports in the last coupl of days estimated palm production for April being below expectations (1.2m tonnes v 1.3m tonnes which offered little support to prices overnight.

Statistics Canada estimated that March stocks of canola at almost 5.9m tonnes, below the average trade estimate of 6.9m tonnes. Fears that souring relations between Ottawa and Beijing could impact on prices going forward. MATIF rapeseed traded to nearby highs last week but was subject to a sharp correction on Monday when august futures closed €20 lower at the end of the session. It made new contract lows on Tuesday. Better EU crop prospects and a large old crop carryout continue to weigh prices as we head into the final stages of the season.

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