The rally in US wheat futures and Paris rapeseed are the two major moves overnight. Paris rapeseed pushed higher, the nearby contract at one stage reaching a high of E577 before settling at E572.75, a nice E16.50 rally in the Feb 23 slot. In Aussie dollar terms this is roughly a day-to-day change, when considering the stronger AUD, of about AUD$26.26 per tonne.
Prior to last night’s EU session the consensus from most of the major EU analyst appeared to be bearish. Yet here we are milling wheat higher by E7.50, London feed wheat even managed a £2.35 rally in the March slot, Paris corn higher. US markets moved in a similar fashion, although Chicago soybeans were generally sideways. All three wheat contracts closed higher, soft red winter wheat leading the way but there were also good gains in HRWW and spring wheat futures.

The fuel for last night’s rally is mixed but generally it’s to do with weather in the USA and S.America. The punters are just coming to terms with how far 30mm of rain goes in Argentina when the soil is already parched and it’s 40C for days on end. The impact from the drought in Argentina will be felt the most in corn Argentina is (was) the 3rd largest corn exporter. Argie soybeans will be impacted as well, but most punters expect the bigger Brazilian bean crop to counter any losses in the Argentine crop. Even if this is the case, world soybean production is still not going to be as big as they though it was going to be a month ago. Currently just 19% of the Argie bean crop is rated G/E, as opposed to 85% this time last year. To rub some salt in, sowing progress is slow, just over 50% of the crop is in the ground.
Wheat futures found support from potential winter freeze in the USA. There’s little snow cover in Kansas and low temperatures may kill some fields.