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24/10/2011 10:53:48
Gleadell sum up a suprising and challenging oilseed rape season and disclose harvest pool results
Announcing Gleadell’s Harvest oilseed rape pool results, Jonathan Lane, the company’s trading manager comments: ’The season to-date has been a surprising and rather challenging marketing season with conflicting fundamental outlooks and prices being influenced heavily by the hugely volatile outside markets.
"Looking back to last year’s plantings, while the area of rapeseed throughout Europe was only marginally down, the UK saw a sharp increase and we saw the likelihood of another record crop in 2011 following the bumper 2.1mln/t production in 2010.
"UK crops generally came through the winter without too many problems, so the outlook in the early spring looked well and, with this in mind, we took a little and often approach to put a base into our Pool sales. It wasn’t until mid-April that we really started to get concerned about the drought and having, already locked into a good percentage of the Pool, we waited to see how the crops would react to the prolonged dry spell.
"In the event, once the combines started to get into the fields, it quickly became apparent that the crop had defied all expectations with bumper yields leaving most happily surprised. It will almost certainly turn out to be an all-time UK record 2.7mln/t crop, hence we sold the balance of the Pool into the developing export demand, allowing us to return ’352.50/tonne ex-farm post commission and before bonuses to our Pool members. [SEE ATTACHED CHART] For those who took our advice and committed a balanced proportion of their oilseed rape crop to the Pool, this is an excellent result as the price line of the chart shows.
"Focussing on today’s markets, ex-farm prices for old crop have been trading at ’355-’365, depending on location, with new crop ex-farm prices at ’330-’340. The rapeseed market has been pushing on the upper resistance trend line for a few days now, but has failed to post a strong close above it, giving technical traders a good reason to look for a 10/15% correction. Indeed, Soybeans and Crude are under pressure, so it is hard to see any real gains in rapeseed at this time - also crush margins are currently poor for rapeseed."
Mr Lane adds: ’There is some concern over rapeseed plantings in Germany, Denmark, Romania and Bulgaria - and this uncertainty should support new crop UK rapeseed for the time being. Gleadell’s view is that underlying continental demand will support rapeseed throughout the season, but prices may be vulnerable in the short term.’
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"Looking back to last year’s plantings, while the area of rapeseed throughout Europe was only marginally down, the UK saw a sharp increase and we saw the likelihood of another record crop in 2011 following the bumper 2.1mln/t production in 2010.
"UK crops generally came through the winter without too many problems, so the outlook in the early spring looked well and, with this in mind, we took a little and often approach to put a base into our Pool sales. It wasn’t until mid-April that we really started to get concerned about the drought and having, already locked into a good percentage of the Pool, we waited to see how the crops would react to the prolonged dry spell.
"In the event, once the combines started to get into the fields, it quickly became apparent that the crop had defied all expectations with bumper yields leaving most happily surprised. It will almost certainly turn out to be an all-time UK record 2.7mln/t crop, hence we sold the balance of the Pool into the developing export demand, allowing us to return ’352.50/tonne ex-farm post commission and before bonuses to our Pool members. [SEE ATTACHED CHART] For those who took our advice and committed a balanced proportion of their oilseed rape crop to the Pool, this is an excellent result as the price line of the chart shows.
"Focussing on today’s markets, ex-farm prices for old crop have been trading at ’355-’365, depending on location, with new crop ex-farm prices at ’330-’340. The rapeseed market has been pushing on the upper resistance trend line for a few days now, but has failed to post a strong close above it, giving technical traders a good reason to look for a 10/15% correction. Indeed, Soybeans and Crude are under pressure, so it is hard to see any real gains in rapeseed at this time - also crush margins are currently poor for rapeseed."
Mr Lane adds: ’There is some concern over rapeseed plantings in Germany, Denmark, Romania and Bulgaria - and this uncertainty should support new crop UK rapeseed for the time being. Gleadell’s view is that underlying continental demand will support rapeseed throughout the season, but prices may be vulnerable in the short term.’
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