US futures were flat for corn and softer for wheat and soybeans.
Focus is on the developing La Nina which is expected to be weak and short lived. The dryer expectations for S.America is expected to result in greatly reduced corn and soybean production from that region in 2018. Monsanto are predicting up to a 20-30% reduction in summer crop area in Brazil. Wet weather in Australia is expected to help production of both cotton and sorghum.
US wheat futures were hard hit yet again, December SRW at Chicago closed below 400c/bu at 398.5c, right on the session low. That’s around AUD$194 / tonne. This has ASW NTP Newcastle at a AUD$117 premium over US soft red wheat futures. That is some serious basis premium right there. Last year SRW futures at Chicago drifted below 400c/bu on and off from late August through to boxing day before recovering around 10% early in the new year. This time last year basis was closer AUD$6.00 over ASW.
The main pressure on US wheat futures came from a Stats Can report increasing wheat production in Canada by around 2mt from 28mt to 30mt. Globally this has little impact as the Australian crop was recently reduced by a similar volume from ABARES.
Wheat will continue to struggle at an international level while Black Sea production and stocks continue to grow.