World oilseed prices are expected to be volatile over the next few monthsas markets monitor pre-harvest weather in major soyabean growers Braziland Argentina, according to the UK's Home Grown Cereals Authority (HGCA).

The HGCA also believed Chinese demand for oilseeds would be a key driverof prices.

Speaking at an oilseeds conference, HGCA oilseeds analyst Josh Dadd saidthat "the global oilseed market was relying on the South Americanharvest." "This means that weather will be critical between now andharvest in May, and so price volatility is expected," he added.

Both Argentina and Brazil have both recently seen wet weather which hasfuelled concerns over the condition of the soya crop and whether yieldswill be affected (see also later this page).

"The level of demand from China will also be key," Dadd said. "Havingstarted off the season importing huge quantities of soyabeans, they havesince started to defer US shipments, which indicates that they are waitingfor the South American harvest."

China is expected to consume around 38 million tonnes of soyabeans in2003/04, some 23mt of which will be imported, HGCA said.

In 2003/04, Brazilian and Argentine production is expected to account foraround 50% of the global market, up from 29% in 1995/96.

The HGCA said it was still too early to predict what world oilseed outputwas likely to be in 2004/05, but that an increase from this seasonappeared likely given the recent rise in prices.

Source : Agra Europe Ltd.