HPS meal continues to be explosive on the back of concerns over the current dry conditions in Argentina – funds are thus bullish, piling into CBOT futures. To compound the issue, domestic premiums in South America have also gained ground as farmers are holding on to supplies ahead of a change in export tax structure in the new year. Worth noting that Arg crops are around 50% planted with a 2-3 week window remaining for normal planting to be complete.
Informa put 2017/18 Brazil soybean production at 110 million tonnes, down 1 million from its previous estimate. Brazil 2017/18 all-corn production was estimated at 89 million tonnes, down 3 million from previous forecast.
The tropical Pacific Ocean has reached La Niña temperature levels, although climate models suggest the weather event will be weak and short-lived, Australian weather officials said on Tuesday. La Niña events are triggered by a drop in sea surface temperatures in the central Pacific Ocean, generally bringing stormier, colder winters to the northern hemisphere and warmer, wet summers in the southern hemisphere. While a La Niña can be less damaging than an El Niño, it can cause major disruptions in grain markets, with the weather event linked to lower-than-average rainfall in North America, affecting major grain growing areas.