Sharp rise in oilseed prices: Report

In Germany, UFOP reports that firm prices for soybeans, palm oil and crude oil have sent prices for rapeseed on a sharp climb over the past few days. At the futures exchange in Paris on 6 December 2016, the nearby closed at EUR 412.50 per tonne, the highest level since April 2014.

Consequently, rapeseed increased in value by 6 per cent in only three weeks. In the same period, US soybeans even rose by 7.5 per cent. Above all, soybeans benefited from an unexpected buying interest by China. Also, the falling dollar improved the prospect of future business. At the same time, the incipient weather markets in South America made an impact.

More specifically, as Argentine growing conditions for freshly sown beans seemed to be too dry, renowned analysts already reduced their harvest estimates. In other words, the chances are that the crop could be even smaller than the previous year. This situation has lent support to prices and shifted the focus to the development in South America. However, as conditions in Brazil have been fine, the crop forecast remains at an estimated record high of 102 million tonnes. German rapeseed prices also benefited from the firm prices for palm oil in Malaysia. The foreseeable scarcity of supply has already supported prices over the past few weeks. Given a weak domestic currency that encourages exports, the gap between supply and demand could narrow further, especially because this month’s palm oil output is estimated lower than the previous month’s volume. Palm oil prices went up 13 per cent over the above-mentioned three-week period.