When politics play in commodity markets they tend to get murky pretty quickly. Last night we saw US soybeans cop a double whammy thanks to the US trade problems with China.
Bloomberg said leaked documents had suggested that the government is about to introduce a US$2.00/bu subsidy to farmers for soybeans. With the wet weather creating a rally in corn prices due to delayed sowing it was getting harder for a producer to walk away from late corn to plant beans but with an extra US$2.00 in the equation 800c beans become US$10 beans again.
There was also talk of lesser subsidies for wheat and corn, around 63c/bu. For wheat that’s roughly AUD$33.50 / tonne. Why they are subsidising wheat is anyone’s guess, it’s not like China was importing swaths of US wheat.
I guess after years of preaching free trade and actually getting some fools to agree with it the US is finally playing their hand, or am I just being cynical again.

In the US futures market wheat actually done well to hang on to recent gains. Spring wheat sowing progress was better than expected. There were a bunch of severe thunderstorms across Oklahoma to Nebraska on the weekend that spawned a large number of tornadoes. The prospects of damage by weather and disease has probably got a lot to do with the resistance to fall in wheat. Big chunks of the Canadian prairies is starting to get dry too. Europe is looking better though. Volga Valley and Kazakhstan remain dry though.