Oilseed market (focus on soybeans, rapeseed) as at 10.06.2013:

Global oilseed harvests improved by over 22 million tons or 4.7% in the transition from the 2012/13 to the 2013/14 marketing years. A record soybean harvest in South America and the expectation of an above-average soybean harvest in the USA in fall 2013 are the main factors. Import growth, particularly from China, has almost come to a standstill. The result is a build-up of surplus stocks of over 12 million tons. The supply situation rose by almost 3 percentage points to a stock-to-use ratio of 20.5%, but is still below the very favorable 2010/11 level of just under 22%.

South American soy deliveries are still being delayed - albeit to a lesser extent - due to handling bottlenecks in Brazil and inflation-related reluctance to sell on the part of Argentinian farmers. In conjunction with the low stock levels in the importing countries, a short-term supply deficit has arisen with correspondingly high price fluctuations.

Rapeseed production in 2013/14 is estimated to be 2 million tons higher at 63 million tons. An increase of 1 million tons is expected in both the EU and Canada. The smaller producers Australia and Ukraine have also announced good rapeseed harvests. Rapeseed consumption in 2013/14 will remain at around 63 million tons for the third year in a row. The years-long reduction in stocks since 2008/09 of over 7 million tons will fall below 3 million tons to a low not seen for over a decade.

The EU-28 remains a net importer with 3 million tons of rapeseed imports and is hoping for good harvests in Ukraine and Australia with GMO-free supplies. The import duties on imported biodiesel from Argentina are intended to help secure the use of rapeseed in this country.

The above-average build-up of palm oil stocks in Malaysia in the second half of 2012 has peaked. The price pressure is no longer quite as intense.

Oilseed prices will temporarily remain at a high level until sufficient South American soybean supplies and the new US harvest come onto the market. For the late summer/autumn dates, stock market prices are indicating a considerable decline. The rapeseed market will not be able to escape this. The decisive prerequisite is a US soybean harvest in 2013 that is at least average.

ZMP opinion: Oilseed prices are trending downwards towards the fall; the rising global supply situation will be decisively rounded off by the coming US soybean harvest. In the oil sector, low palm oil prices are still exerting pressure for the time being.

Bullish factors: Temporary supply bottlenecks in the soybean sector, global rapeseed stocks at a decade-long low; EU rapeseed import requirements

Bearish factors: Increasing soybean deliveries from South America, expectations of an above-average US soybean harvest, China's reluctance to buy, favorable rapeseed harvests in Ukraine and Australia for EU imports