Rapeseed futures fall, as policy diverges across the pond


Oilseed markets could only be supported so much by US biofuel hopes, with US markets closed for Thanksgiving.

Rapeseed markets in Paris turned south, after the previous session's rapid gains.

European vegoil markets are facing up to diverging policies on biofuels in Europe and the United states.

On Wedensday the EPA announced an unexpectedly large boost to mandated US biofuel requirement for next year.

But Brussels is planning to cut the mandate for use of "first generation" biofuel, such a diesel made from rapeseed oil.

"These two decisions are contradictory with the political discourse on both sides of the Atlantic…" observed Paris-based agency Agritel.

February rapeseed futures in Paris finished down 0.5%, and E404.00 a tonne, after touching four-year-highs of E406.75 a bushel in the previous session.

Cash market pressure

Paris wheat markets were also down a touch, under pressure from the well-supplied cash market.

"Several boats importing wheat from Baltic countries are expected," Agritel said.

Export data showed the EU exported some 481,000 tonnes of soft wheat in the week to November 22.

This leaves exports so far in the year from July 1 at 9.4m tonnes, up some 9% year-on-year.

But competition from outside the EU is also heavy.

Ukraine's wheat exports ware up by some 9% in the July to October period, at 8.24m tonnes, analyst UkrAgroConsult.

The consultancy said Ukrainian wheat shipments to the European Union were "comparatively sluggish".

Egyptian seizure

And Egyptian authorities ordered the seizure of 18,000 tonnes of Russian wheat over suspicions it was unfit for human consumption, a state owned newspaper said.

It is reported that the seizure was due to insect contamination.

Such a move is hardly unusual, but it will raise worrying memories of the summer, when wheat shipments were stalled due to zealous enforcement of wheat quartertone rules.

Good wheat hopes for next year

There was additional bearish data, as the International Grain Council saw world wheat prospects for 2017 as favourable thanks to good weather and stable sowings.

The IGC also revised upward its forecast for this season by 1m tonnes, to a record 749m tonnes.

December wheat futures in Paris finished up E168.25 a tonne.

The International Grains Council lifted by 7m tonnes its forecast for 2016-17 world corn production, to 1.042bn tonnes.

January maize futures in Paris finished up 0.2%, at E166.50 a tonne.

Good export prospects for UK supplies

But in London, wheat futures were unchanged on the day.

"The rally of the sterling against the euro could limit the pace of exports but… this season is different in the sense that the share of non-EU exports has never been so high at this stage of the campaign," CRM said.

"Therefore, as the sterling continues to lose ground against the dollar, the UK origin will remain competitive so domestic prices will to remain at least at current levels or higher to try and prevent further exports outside Europe."

London May wheat futures finished unchanged, at £140.30 a tonne.

Vietnamese production weighs on markets

Robusta coffee futures in London moved south, weighed on by the accelerating harvest in Vietnam, the world's top producer.

"The new crop harvest in Vietnam is now in full swing and with the reference prices of the London robusta coffee market still offering good value, there is active new crop robusta coffee selling within the internal market in Vietnam," said broker I&M Smith.

January robusta coffee finished down 1.2% at $2,022 a tonne.

Flat sugar market

March white sugar futures traded flat, closing at $522.40 a tonne.

"Weather forecasters continue to expect wetter conditions in Brazil's southern cane regions over the weekend said Tobin Gorey of CBA.

"The market will assess any problems for late season (cane) crushing in the region next week," he said.


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