Rapeseed and wheat market experiences
Due to the favourable precipitation conditions high yield was achieved at the summer harvested crops in 2004. The good weather caused high crop quantity not only in Hungary, but also in Western-Europe so after the buyer's market of 2003 a seller's market was generated in this year.
In the season of 2003/2004 rapeseed was sowed on 100.000 hectares. The yield was approximately 270.000 tons. In the spring the contracts started on high price level, there were contracts even over 60.000 HUF/ton. As the HUF got stronger and the European sunflower and rapeseed listings lowered, the buyers offered lower prices. The bottom was touched in these days. Packed in barge rapeseed can be sold only for 47-48.000 HUF/ton. The market conditions were much worse because this year the BUNGE Rt does not buy and process rapeseed in Martfű, so in the Eastern part of Hungary the premise price of the rapeseed was 3-4.000 HUF/ton less than close to the Danube. Because of the high yield Poland did not import rapeseed neither that furtherly worsen the situation in East-Hungary.
The harvested rapeseed is of good quality. The oil content according to the tests up to now is 1-2% over the base. The higher oil content may increase the price with 1-2.000 HUF/ton for those growers who contracted with oil bonification.
In this year wheat is harvested on 1.1 million hectares. The harvest was delayed with two weeks by the high amount of precipitation. Approximately the two-third of the harvest was perfomed in good weather conditions but later it could be continued only after several rainy days. The expected yield is 5.5 million tons. Despite the rain the quality is medium. In this season a large amount is fodder quality because of the high gluten spreading. The increase of gluten spreading is due to the high rate of bug-pierced kernels that proves faults of chemical control.
In the spring the wheat could be contracted for high price like the rapeseed. In Trans-Danubia there were contracts over 30.000 HUF/ton but the prices continuously decreased because of the good weather.
The mills on the Great Plain corner wheat for 21-22 HUF/ton. On Trans-Danubia the mill price was 23-24 HUF/ton. The price of the wheat in the EU is very low. The FOB Danube prices have fallen from 120 to 95-97 EUR/ton up to these days. These prices are already around the intervention prices. Due to the low prices and the few mill corners less contracts are made. Possibly the only way to sell the rest of the wheat will be the EU intervention. Up to this day 650.000 tons intervention ware house capacity was registered altogether, that means that Bruxelles will be able to place the offered quantity.
It will cause problems that the time and way of the intervention transports are not exactly known yet. If these are delayed there may be storage problems at sunflower and corn harvest. This can adversely effect the price of these crops.
Gábor Vámosi
Contractual Production and Crop Trade vice-manager
