It was all happening at Chicago last night, US grain futures closed sharply higher. Corn and soybeans dragged wheat higher, all making significant double digit gains by the close. Corn and soybeans found support from the rapid deterioration of the G/E condition rating in the weekly USDA crop progress report, which was out after the close on Tuesday night.
The nearby corn contract hasn’t seen a rally of this magnitude since July last year. I don’t like to rain on the parade, but last year corn had also shed over 90c/bu within 14 days of the rally. And there lies the key to the sustainability of this rally, rain.
This morning’s weather map for the states has some heavy rain predicted for the Dakotas, Nebraska and much of Minnesota over the next seven days. Harvest weather across the HRWW belt should be close to idea with just a few storms crossing the Pan Handle towards the middle of next week.
The driest parts of the corn belt have dodged any major heat so far, as lucky as this sounds, pictures of some of the corn crops do indicate that they are quite capable of trying to die regardless of whether they have suffered any heat stress or not, no rain is a pretty big issue.

The US weather map looks as bad or worse for soybeans. This should continue to influence Winnipeg canola futures, as it did last night, but we did see Paris rapeseed futures correct in overnight trade, after generally trending higher since the end of May. The Feb 24 slot at Paris shed E10.00 per tonne. Taking the AUD/Euro into account this is roughly equivalent to AUD$12.34 downside here today. Local canola basis has been hit pretty hard of late, basically doubling to the negative since the 12th of June. This could be an opportunity for the trade to hand a little of that dramatic basis slide back to the producer, a rare occurrence but plausible.