US soybean closed 14.25c/bu (AUD$7.74/t) higher after a couple of good sales hit the wires. China picked up 118kt of US soybeans and there was another unknown destination sale for 718kt. The strength in US soybeans rolled through to the canola and rapeseed contracts. Winnipeg canola gained C$11.60 on the nearby while Paris rapeseed closed E1.75 higher. The slightly stronger AUD will counter some of the move here but there is potential for upside and possible basis improvement given that basis is -$182.70 to Paris and -$233.33 to Winnipeg, very, very low by traditional measures.

With Brazil predicting a record soybean crop we will continue to see pressure on the oilseed market unless the increase in Brazilian beans is simply countered by a decrease in Argentine beans. With much of northern Argentina not only dry but also going through a devastating heatwave the chance that Argie beans will produce even an average crop is starting to look remote. Photos of corn looking more like pineapples are common on social media from that part of the world. With soybeans sharing the same growing season one can imagine what soybean seedling look like. Some patchy storms are predicted for the north of Cordoba mid next week, they may make a huge difference to some crops.

Many punters were tipping some carry over strength in US wheat futures after a +20c/bu rally in the previous session flushed out a few bargain hunters but it didn’t eventuate and both soft red winter wheat and hard red winter wheat futures at Chicago closed in the red. Minneapolis kicked the trend though and rallied 15c/bu on the nearby. The rally in spring wheat futures at Minneapolis was reflected in cash FOB offers out of the Pacific Northwest. In Aussie dollar terms spring wheat only pushed higher by roughly AUD$1.00 FOB PNW thanks to a stronger AUD to the USD.