The US markets were driven higher by soy meal demand and the feed grain complex.
It’s an interesting one to watch unfold as it really drives home the ability of the feed millers to swap from one source to the next depending on price.
The heavy rain at harvest time destroyed a lot of soybeans in Argentina. At the same time we saw failing corn crops in parts of Brazil. Low ethanol prices in the USA saw the corn crush lower thus there is less mill run (DDG) to supply the feed market.
So initially the soybean meal price rallied, this dragged soybeans higher and forced millers to look at alternatives. In Brazil this drove wheat prices higher. After two poor quality wheat crops in a row this put a lot of pressure on flour millers in Brazil but also the feed market who were relying on corn / DDG or beans to back up supplies. Brazil wheat prices rallied by up to 25% in US dollar terms.
Funds were happy to get behind the rally in US bean futures last night, the strength in the bean pit dragged both wheat and corn higher.
Black Sea states report generally favourable growing conditions for the winter wheat crops. Spring plantings are progressing well but some rain delays this week will slow things down. The only real threat to the FSU crops now seem to be what may happen later in the season closer to harvest. A good spring grows tall wheat prone to lodging apparently, so a suitable finish maybe necessary.