With the US dollar up, crude oil down, corn ratings improving and good weather in the US it was always going to be a big call to see even a flat US futures market last night.
Well flat it wasn’t, by the close corn, wheat, soybeans and ICE canola were sharply lower. Internally US corn and soybean cash prices did not follow futures lower. Farmers chose to hold grain off the market resulting in improved basis, corn at 355c/bu how low does the market expect it to fall. This time last year we did see the market touch 300c/bu.

China is still trying to auction of it’s corn to local consumers. This week we see around 2mt of corn reserves hit their local markets. The success of these auctions appears mixed, although there are reports that around 40mt has changed hands since May. The S&D sheet still looks ugly though with old crop production adding another 9.7mt to the pile they already have. It is expected that this year lower yields will see consumption outstrip production by around 3.17mt. Import restrictions are also helping to lower Chinese stocks. Government prices to farmer look likely to be reduced further for corn and wheat, this should limit further imports. The USDA does expect to see China draw down on corn stocks in 2017-18, starting with 101.28mt and closing with 81.26mt.
Our export outlook for new crop sorghum will depend a lot on what internal support prices China settle on in October.