Rapeseed looks a better bet than grains for a bull run on Euronext as Ukraine runs out of export supplies which have been keeping a lid on prices.

Agritel, the French analysis group, has rated as "bullish" its sentiment on Paris rapeseed prices, even after a rise of 11% over the last two months near to the highest levels since July.

The rally would have been bigger were it not for a stream of Ukraine exports which have "damaged" the market in north west Europe.

Shipment slowdown

However, with Ukraine's rate of exports, at about 1.5m tonnes so far in 2009-10, running in line with last season's despite a weaker harvest, its shipments were poised to tail-off.

"Ukrainian export potential is about 1m tonnes lower than that of last year," Agritel said in a weekly market report

The note added: "A slowdown in rapeseed exports from the Black Sea region… could lead to further increases in oilseed prices."

Agritel's bullishness was echoed by a separate report, on technical factors, from Sucden Financial Research highlighting that prices of February rapeseed had broken above a line drawn to reflect the trend of falling prices since the summer.

'No hope of a bounce back'

However, Agritel said it was neutral on prospects for the major grains, noting a "low chance" of the 2010 harvest improving the fundamentals for wheat, of which there are ample global supplies.

The group, which noted forecasts of global winter wheat plantings down "only" 0.7%, said Europe's farmers "could" consider hedging 20% of their 2010 crop ahead of an increase in sales expected in January.

Corn faced the prospect of lower demand from feed producers, "in what is still a very difficult livestock market", while barley had "no hope" of a rebound in prices.

"The forecasts for the carryout stock next June are pointing to a very large volume of grain supply, pushing down the price and reducing the chances of a bounce," Agritel said.

The comment comes a day after data from German agriculture agency BLE showed German farmers have offered 780,000 tonnes of barley for European Union intervention buying since purchases started on November 1. The figure was up 77,000 tonnes on the week.

Wheat for January closed down E1.00 at E128.75 a tonne in Paris, and by £1.25 at £105.50 in London.

February rapeseed ended E0.25 higher at E282.50 a tonne.