Rapeseed futures staged a late recovery, avoiding recording a
four-year closing low as growing optimism over the European Union harvest was offset
by some concerns over Canadian and Australian crops.
Paris rapeseed futures for August, which had threatened earlier to set its lowest close since July 2010, entered positive territory in late deals on Friday, ending 0.25 cents up at 337.75 a tonne.
The recovery came despite mounting expectations over the
European Union harvest, the world's biggest, which is widely expected to beat
by a margin the record 21.6m tonnes set five years ago.
'Pretty good results'
ODA, the French-based analysis group, earlier this week
lifted its forecast for the EU harvest by 700,000 tonnes to 22.5m tonnes, including
an upgrade of 150,000 tonnes to 5.35m tonnes in its estimate for the French
On Friday, rival consultancy Agritel said that first cuts from
the French harvest had shown "pretty good results", adding that the winter
barley harvest was showing "pretty good yields".
"Nonetheless, there are big differences between the regions,
with the eastern part of France being still very dry which could be a trouble
in light soils," Agritel added.
In fact, the proportion of winter wheat rated "good" or "excellent"
has risen three points week on week to 70%, overtaking the condition last year,
data from the official FranceAgriMer bureau on Friday showed.
FranceAgriMer, which does not give rapeseed ratings, showed
the French soft wheat crop steady at 69% good or excellent, one behind the
'Farmer is undersold'
As an extra pressure on rapeseed values, producers have held
back from pricing crop as the market has deteriorated, placing an overhang of
unfulfilled selling pressure over futures.
"The European farmer is undersold coming into harvest and
crops look good in almost all countries," said Jonathan Lane at UK grain
"European traders are anticipating a wave of selling during
harvest with farmers needing movement and cash."
In the UK itself, "farmers have sold a lower percentage of a
bigger crop but many require movement and finance".
Nonetheless, after a "large downward move" in prices, "we
now have a more cautious view on short-term price direction," Mr Lane said.
And some setbacks to crops of canola, the rapeseed variant,
abroad have given some hope of selling pressure abating for now.
In Australia, a sizeable canola exporter, where the crop had
been seen as making its "best start in a generation", an outbreak of beet
western yellow virus has hit potentially 10,000 hectares of the oilseed in
The outbreak of the virus, which can cause severe yield
losses, is being put down to the growing resistance to insecticides of the peach
aphid which carries it, and which has thrived amid a spell of warm and humid
'Well over six inches
And in Canada, the top canola exporter, heavy rains are
raising concerns of farmers being unable to complete planting plans, and
inundating some of what was seeded.
Farm officials in Saskatchewan said overnight that 66% of
oilseed crops in the province, Canada's top producer, were "behind" in their
development, a factor which can red.
"Significant amounts of rain fell over much of the province
this weekend with some south eastern and east central areas receiving well over
six inches of rain in a few days," the officials said.
"Crops in the hardest hit areas have been significantly
impacted by localised flooding and saturated field conditions."
'A relative outperformer'
The Saskatchewan farm office rated the province's canola
crop 62% good or excellent, down from 73% a year ago.
At Citigroup, Sterling Smith said: "Cool and wet weather
continues to hamper crop development and there has been some localised flooding
"This can allow the canola to be a relative outperformer in the
vegetable oil space."
However, as an extra pressure on prices on Friday, futures
of palm oil lost 0.9% to close at 2,402 ringgit a tonne in Kuala Lumpur.
Rapeseed, as an oilseed heavy in oil rather than meal when
processed, is particularly sensitive to the palm oil market.