Oilseed Market Report: Election announcement leads prices down
Friday 21 April 2017
Jonathan Lane, Gleadell’s trading director, comments on the OSR market
Rain and flooding problems in Argentina have largely been discounted in the past week, with storms confined to the north-east and a drier outlook in longer term forecasts.
Whilst this weather threat may have initially offered support to the soybean complex, funds have negated any weather worries as they continued to sell soybeans, and now hold a 4 mln t short position.
Political murmurs regarding the US administration halting bean oil imports from South America could threaten local prices further and increase the usage of domestic US beans. Shuffling of product on a global level does little to detract from stocks that remain 10 mln t higher than a year ago.
European OSR markets have this week also become weather focused, as both the UK and France have seen little precipitation recently, although current forecasts now look more favourable for rain.
Theresa May’s call for a snap election has strengthened sterling against the euro by over 3%, and this has translated into a decrease in UK farmgate prices by £8/t. Euro weakness remains a threat with the first round of the French election due this weekend.