Corn strengthened US5.75c/bu.
The global carryout was reduced by 20 per cent (pc) year-on-year in the USDA report, although production was increased on the back of higher acres (yields were unchanged).
A great deal of our current focus is on yield, which is hard to get right in early July, and the potential damage early season heat caused in the US.
Time will tell.
Volatility remains true in wheat after a 12.75c rally overnight.
The USDA report that came out overnight was the first opportunity to include updated planted areas, as well as an opportunity to factor in the effects of tariffs on the US balance sheet.
The overnight rally comes on the back of the USDA peeling off 9 million tonnes off global production, including -4,5mil from EU, -2mil from AUS and -1.5mil from Russia.
It is important to note that the fact that the USDA have incorporated the effects of tariffs into their figures will provide a lot of wiggle room over the next couple of months.
Soybean numbers were less than attractive across the board.
US exports were pulled back 250 million bushels, resulting in an increase in ending stocks by 200 million bushels from the June report.
Chinese imports were cut by 8 million tonnes causing global ending stocks by 11 million tonnes.
Can China really import so few soybeans?
Canadian canola was hit hard by a very weak vegoil market that was prompted by tariff issues, a positive Canadian weather forecast was also added some weight to the offer.
This was in spite of a weaker dollar that was down 0.7pc as risk off selling saw a rush to safer assets amidst the sea of trade uncertainty.
European values were lower, but showed more resilience than Winnipeg, with ongoing production issues in Europe preventing bear trap selling.
Back home in Australia we can expect a dry week in NSW and QLD with the 8-day forecast only showing worthy rainfall from the Riverina down through Victoria. Cropping areas of SA and WA may see up to 10mm which is only enough to keep things ticking over for now.
Source: Lachstock Consulting