US grain futures, bar soybeans, were generally flat leading into this weeks USDA report.
Soybeans saw double digit gains closing the day out just under the sessions high. Wheat found support from reports Ukraine annual exports are running at about 80% complete versus 70% this time last year. Russia will be the benefactor here. Thoughts of some winterkill in wheat across southern Russia and parts of the Ukraine may also have a few punters clearing short positions in the outer months. From a futures perspective sell nearby and buy outer months looks workable.

The stronger soybean market in the States pulled ICE and Paris canola values higher. Talk of some winter kill in eastern European oilseed rape also has this market a little on edge. The eastern states of Europe were expected to pick up the slack after lower sowings of winter rape were reported across western Europe this season. I know it appears that international prospects seem to have little influence on local basis (note the sarcasm here after this year’s basis reductions to counter oil bonifation payments) but we may be able to see basis here, possibly on new crop contracts, begin to firm again in the following weeks. Looking at ICE canola futures we do see a discount for the new crop though, so it’s possible, even with better basis, we will still see $20 – $30 lower prices by the middle of the year. It’s all speculation though until the spring thaw in the northern hemisphere is complete.