South American weather continues to be a major driving force in the oilseed market. Overnight at Chicago soybean futures were again higher closing the session at 1375.75c/bu (AUD$652.58), about midway through the sessions range. Chinese demand is paramount though.
The strength in beans dragged both Paris rapeseed futures and ICE canola futures higher on the old crop contracts. ICE futures closed at C$657.70/t, an overnight increase of C$8.40 and hopefully pointing towards a higher start to the week on Monday. Local basis on the track here did take a nose dive yesterday, shedding over AUD$9.00, so it’s not beyond the local trade to ignore these increases in futures.

The weather map for Brazil paints the picture well. The 14 day anomaly shows the vast majority of the soybean country receiving just 40-60% of normal rainfall for this time of year, with 20-40mm falling over the last couple of weeks and a number of dry spots in that map. Granted, comparing their droughts and our droughts are not exactly comparing apples with apples but you don’t have to look too far back to see the impact that a reduction in yields of 20-30% can make to global S&D sheets. For example Europe a couple of years ago when wheat yields slipped to below 6t/ha. Further south in Argentina the map doesn’t look so bad, well not as bad as their political environment anyway, at least there’s no one waring bison hats and storming capitol hill in Buenos Aeries…yet.
There’s been some good falls across much of the Pampas and some useful falls across Cordoba and Santa Fe. Both of the later states are still reflecting slightly below normal 30 days rainfall totals though.