Demand for rapeseed has fallen over the last quarter and the price in the markets has reflected this downturn. Since its high at the beginning of June, the market price has dropped by almost 20%.
The current IG client sentiment indicators show that 60% of our clients are short, and with the price action in the markets they are being given little reason to change that stance.
Due to the oil’s bitter taste, only a fraction of the total annual production finds its way into human consumption; the crop is predominantly used for a combination of biodiesel fuel and food supplements for livestock.
Around 66% of the production in the European Union is directed towards the biofuel market, where the crops are subsidised. With the EU yet to merit any confidence that a recovery is on the way, biofuel – like crude or Brent – has found that industrial demands have reduced.