The US dollar was weaker, crude oil was stronger, Chinese new year starts Friday and a long weekend ahead in the US. Reasons enough for wheat to have double digit gains in US futures, well the punters think it is and who are we to argue. A simplistic conversion could see close to $6.00 gains in local values here today, combine that with the potential for further basis increases and wheat may well have another healthy day in NNSW.
The US is pretty consumed with the ongoing dry spell in the hard red wheat belt but there is also strength in the global market with Black Sea wheat moving US$2.00/t higher in tender business last week. The 15 day map for the USA show some very heavy rain is predicted across the SE and eastern Midwest but although some falls are expected across the HRW belt they will be much lighter than those to the east.
South American weather was probably what started the ball rolling in soybeans. Although some areas of Argentina did see some useful falls, generally weekend rain was considered patchy and missed quite a few dry patches. It leaves the 30 day anomaly at about 30% to 50% of average annual rainfall for much of the key soybean and corn states. The punters were quick to jump on S.American weather and quickly forgot about China cancelling 455kt of soybean purchases from the USA. Weekly export volume out of the states also helped ease the pain of the cancellation, coming in at 1.13mt, well above trade expectations. By the end of the session beans closed up 18.75c/bu and the strength rolled through to both ICE canola and Paris rapeseed.