There’s some serious flooding across SE Brazil after up to 400mm of rain was recorded over a 24 hour period. The region most heavily impacted by the flooding appears to be around the SE across Rio Grande do Sol where around 14% of the Brazilian soybean crop is produced. In the last USDA WASDE report Brazil was estimated to produce 155mt, 14% of that being 21.7mt. Harvest there was nearing completion, with approximately 20% left to strip. That equates to roughly 4.34mt, if 50% of these standing beans have been impacted, that over 2mt.
It’s unlikely the final reduction will be that high, production in Rio Grange do Sol is generally west of the heaviest rain, but that area has also seen 100mm+. As dramatic as the pictures and videos of headers getting washed down the river looks on social media, the final impact of the flooding on total bean production could be as little as 500kt to 1mt.
The Chicago soybean pit liked what it saw, floating headers was just what the market wanted. Chicago soybean futures rallied nicely, up 28.75c/bu (AUD$16.09/t) in the July slot. This encouraged both ICE Winnipeg canola futures and Paris rapeseed futures to push higher. Continued wet weather across much of Europe wasn’t bearish either. Although much of the main rapeseed area is Europe is expected to see the lighter falls over the next 7 days.
In Canada the driest parts of SW Saskatchewan are finally predicted to see some decent rain over the next 7 days. Alberta will also see some good falls across the major canola provinces. The major canola districts in Saskatchewan will see rain too, but not as much as the SW or across the durum belt.
Both Winnipeg and Paris canola / rapeseed futures closed higher, dragged higher by CBOT beans.
It could have been a better result for us if it wasn’t for another rally in the Aussie dollar. The conversion from futures to AUD, taking the strength in the AUD into account, is +AUD$9.67 for Paris and +AUD$11.72 for Winnipeg on the nearby futures contracts.
US wheat futures and cash values out of the PNW also clawed back some of their recent losses. Fundamental strength coming from Russian concerns.