Today is going to be an interesting one. The rally in US grain futures last night was the biggest one session move nearby soft red winter wheat futures had since the 25th of July…….2018. It’s the best one session rally nearby corn futures at Chicago has had since June 30th, 2015. Soybeans were through the roof, dragging ICE canola up along the way, this session may take some digesting.

The first thing to get the ball rolling was not in the USDA WASDE report, the USDA US stocks report or their acreage report it wasn’t even in the USA it was out of Russia. There is talk of the export tax that was to be implemented in February now being imposed earlier, in January. There was also speculation this tax could now be higher than the US$30 it is expected to be. This saw exporters simply walk away from the Russian Black Sea markets. Egypt was caught up in it all, cancelling a tender when offers came in US$30 higher than their previous tender.

The market was already lively when the WASDE hit the floor.  For wheat we saw world beginning stocks back 530kt, production back 1.02mt to 772.64mt (still pretty big), increases to consumption, which rolled out to a net drop in ending stocks of 3.31mt (2.24mt of that in China). China has seen some good uptake in their recent government stock tenders. Aussie beginning stocks were back 1mt to 2.9mt (about time), everything else was left unchanged for Australia so our ending stocks fell 1mt. EU exports were increased. Argentine production was trimmed 500kt but so was their export estimate. Russian production was increased 1.3mt, their ending stocks increased 1.8mt ??????