Ölsaaten Cockpit, 20.03.2015

High oilseed crops - but solid and attractive prices?Increases in canola prices in Paris and firm soy meal prices in Hamburg leave at first glance the presumption, that the supply situation in the oilseed sector seems to be just balanced. Reported record harvests in the dominant soybean sector want to fit not so right in the image.

But on closer look, it turns out that the market situation in the oilseed sector is however more complex structured.

First is the Exchange rate impact progam out. Using the example of the history of the soy meal prices shows that dollar-quoted soy meal prices downwards significantly, while the same quotes converted into € je since Nov. 2014 exhibit an average sideways movement with temporary fluctuations. The loss of purchasing power of the euro of 1.27 on $1.07 has the dollar-quoted soybean price drop from 80 € $ per t fully captured.

For the canola sector is the influence of the exchange rate as to determine, because the EU acts as importer of canola seed. A purchasing power weak euro caused an increase of the imports with the result that domestic prices are going with.

The rapeseed quotes but also the weak world harvest expected 2015 is expressed. According to present estimates he should fall instead of previous harvests with 71 and more million tonnes the year's result below the 70 mark to about 68 million tonnes. The lower estimates in the two strongholds of rape production of the EU with 21 million tonnes and Canada with 16 million tonnes, but also in smaller areas such as the Ukraine is chiefly responsible.

Amazing however is how stable the demand emerged after rape, when the crude oil price drop and the tough competition to biodiesel in mind. Although the admixture obligation a part contributes to that biodiesel production has yielded little. The export of biodiesel seems to have a supportive effect.

The crude oil price fall has taken more palm oil prices. With violent fluctuations are the courses of less than $800 per t to $600 fallen per t. And the production of palm oil has suffered as Nino drought El, as by regional flooding in low-lying plantations.

However, it is the contrary to keep that stock supplies of palm oil are the current production at the level. The future taxation when exported to Malaysia and Indonesia will affect the prices and sales opportunities.

The counter-rotating interactions in the oilseed sector reveal still no reliable trend, in which direction will control the further course. In the medium term the ample availability of soya should prevail in the market, as soon as first the majority of record harvests are actually finalised.

Still, risk premiums play a crucial with role in pricing. These show the samples of varying assessments of the two South American crops and their availability. This tendency to optimistic magnitude seems now to enforce. The moderate import behavior of China is striking in this context.