Soybean futures at Chicago basically made everything else irrelevant last night. It was the biggest one day gain in the bean pit since October 2010, up 5.64%, 57.25c/bu, AUD$28.50 / tonne, any way you write it looks impressive.
So what spurred beans to life in last night’s USDA report. Well simply put the problems being experienced in South America are expected to steer additional business to the USA. This additional business will understandably draw down on stocks but until many saw the rate at which the USDA expect this to occur on paper it apparently hadn’t really registered.
The big fall was in Argentine production, back 2.5mt after some serious flooding last month. Brazil was also back 1mt.
The next thing to watch is the US planting pace, at the moment it is fine and actually ahead of the 5 year average but forecast showers may see this rate slow in the week ahead.
The good news is the effect this has on canola and rapeseed values, both were up considerably in overnight trade. In Canada the ICE canola contract closed up C$15.80 / tonne and in Paris rapeseed was up €6.50 / tonne. The AUD was a little higher against all the major currencies but we should still see local canola bids for the new crop move at least $10 this morning.
Wheat futures closed a little higher with support from the soybean pit being the main driver. Fundamentally wheat hasn’t changed much with a large world crop weighing on prices. The USDA picked world production at 726mt for 2016-17.