The USDA report was out overnight, the big mover was Aussie wheat production up from 28.3mt to 33mt, this was by and large factored into the equation after the ABARE report hit the market earlier this month. World ending stocks were higher and are now estimated at 252.1 up 2.9mt from last month. Corn and soybean world ending stocks were increased slightly.
The USDA peg the current world wheat crop at 751mt, there’s no way of sugar coating that number, it’s a huge crop and will cap wheat prices for a while, possibly years if there isn’t a major production problem or government intervention of some kind.
In saying that world usage is also high though, pegged at 740mt. To put this into perspective world usage in the year 2000 was around 590mt and it has increased buy 100mt in the last ten years alone. This is a massive increase and goes to show just how a small interruption in supply could indeed correct this market in the blink of an eye. But until we see this interruption we appear to be stuck with low prices and low basis if the current market is any indication.

Fund money appears to be leaving gold and bonds in search of greener fields, possibly agricultural fields. With the fundamental news in the USDA not exactly bullish at first glance fund money influx is more than likely a key reason as to why grains rallied in the US last night.