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Harvest preview
How to cut risk when returning to oilseed rape
to oilseed rape this summer. Positive net margins are pos- sible if yields can be achieved, ac- cording to Farmbench data from the Agriculture and Horticulture Development Board – encourag- ing farmers to consider growing the crop after turning away from rape in recent years.
H Unreliable weather and pest
problems such as cabbage stem flea beetle mean many growers abandoned the rape. But some farmers are thinking again after recent highs saw prices climb be- yond £500/tonne. Harvest prices for the 2022/23 season are well supported, says
igh prices for harvest 2022 could encourage more farmers to return
AHDB analyst Anthony Speight. Paris rapeseed futures for August 2022 closed as high as £390.64/t on 7 May, he explains.
“Fundamentals driving the whole oilseed complex have been well documented, and the contin- ued bullish outlook is providing support to both Aug-21 and Aug- 22 contracts,” says Mr Speight. With harvest 2022 prices con- siderably above 2017-2020 rang- es, some growers may be looking to forward sell to lock in some of these gains. But forward selling a percent- age comes with the risk of unex- pected yield loss.
The risk depends on the size of the commitment. But Mr Speight warns that overcoming such ex-
More growers are expected to plant rape this summer
posures may increase a growers cost of production – and subse- quently erode potential margins. This pressure could be miti- gated by taking out an options contract on the Euronext rape- seed futures contracts. By trading options, growers can gain an income off the mar- ket moving up or down depending
on if you buy a call or put option. “Presently there isn’t enough data or evidence to steer wheth- er the 2022/23 marketing year is bullish for rapeseed,” says Mr Speight. “But as plantings and intentions become more concrete by the end of this year, fundamen- tals can start to clarify market sentiment.”
DRYING, PROCESSING, HANDLING, STORAGE Your crop handled from harvest to grain trader with Tey Farm Systems.
Call us on 01206 210003 Supporting East Anglian Farmers during COVID-19 JUNE 2021 • ANGLIA FARMER 47
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