US wheat futures were hit hard last night. Hard red winter wheat futures at Chicago shedding over 28c/bu in the March contract. The USDA report really was a buy the rumour / sell the fact report. The weight on wheat appears to be world stocks, although lower month on month, with a stocks to use ratio above 30% it’s always going to take something significant to push the market sustainably higher.
The sell off in US wheat futures was initially triggered by poor US weekly export data. There’s a good chance we’ll see the major consumers take advantage of this decline, possibly some more Chinese purchases on top of the Algerian, Tunisian and Bangladesh tenders announced yesterday.

Soybean futures at Chicago were the big winner overnight. A poor weather forecast for Brazil’s central west was again the key. World Ag Weather.com shows between 0 – 50mm falling across this region over the last 7 days. It’s been very patchy across Mato Grosso for much of the growing season. Combine the patchy rain with hot summer days and there are many soybean fields falling behind. The seven day forecast for much of Brazil is drier than average. Mato Grosso is expected to see some nice falls in the far NW but generally the state will remain drier than needed.
Production estimates for the Brazilian soybean crop remain high, +150mt. Without rain in the next 2-3 weeks this will start to come back, as will the projected area for summer corn in Brazil.
The move in soybean futures lent support to both Paris rapeseed futures and Winnipeg canola futures. Paris closing E4.25 higher in the Feb slot. Taking daily EURO/AUD move into account, and the move at Paris, the rally there is worth about AUD$8.62. The oilseeds were the only green on the board this morning apart from milling wheat at Paris, which appears to have caught a punter or two a little short on the expiring Dec contract, outer months lower.