It was all about US soybeans last night. Chicago bean futures rallied 34.5c/bu (AUD$17.50/t) on the nearby contract. Spill over buying was evident in both Winnipeg canola and Paris rapeseed. The AUD was a little firmer, countering the move at Winnipeg by less than a dollar, so in theory a move higher of AUD$22 per tonne could be reflected here if we experience a flat basis over Winnipeg ….. LOL …. flat basis.
The strength in US bean prices came of the back of rumoured Chinese purchases and continued talk of extreme weather events capping production in Brazil. I have read some horror stories about the weather in Brazil and some wildly lower production estimates than official numbers so keep an eye on this market. We may not see this volatility reflected in local canola bids here, past experience tells us that is a dream, but it may give those who are partial to some punting in the futures market some opportunities.
Tension between Ukraine and Russia is a factor in the broader picture, Biden is giving his two bobs worth, not that he’s getting much over the line of late.
Cold weather in the US this week, Commodity Weather Group suggesting up to 20% of the US winter wheat crop could be at risk of winter kill after this week’s cold snap. Temperatures across the HRW belt fell to -14C / -5C in Kansas and colder in S.Nebraska and Colorado. Kansas, Oklahoma and Nebraska had very little to no snow cover prior to this cold snap and many crops were already experiencing stress. Generally winter wheat can tollerate temperatures below -15C if conditions prior to the event are ideal. As seed beds are already dry the crops ability to tollerate winter kill is less. It will take agronomist about 5 days to determine the level of damage, if any.