The US wheat markets had a reality check overnight, yep, the world is still awash with wheat, just like it has been for a year or two. The weather map in the US looks pretty good and realistically any shortfall in 2017 production in most of the major exporters is likely to be covered by the excessive carryover stocks most are now holding.
Wheat futures at Chicago came very close to pushing under the 400c/bu mark, we also see Dec17 hard wheat futures trading at a discount to soft wheat futures again. Crazy stuff really, a punting man might actually buy this spread in the short term if it continues to decrease.
Most of the punters now expect to see increases in the crop condition rating for US winter wheat next week but we may also see a slower than average spring wheat planting pace given the rain delays. The spring wheat sowing delays in the US and Canada combined with the producer looking for alternative crops to wheat and durum may support the spread to the premium grades but a spread has to come off some kind of base and at the moment that base ain’t real flash.

Sorghum FOB Texas is offered at US$179 and sorghum FOB Argentina is offered at US$159. Both the Texas and S.American product works out at roughly US$200 delivered China. Current Aussie values are closer to US$222 FOB China but this does stack up ok against US corn offerings to China. Dalian corn futures are sitting around US$236 / tonne for September.