Corn and soybeans futures at Chicago dragged wheat higher in overnight trade. The punters are backing a significant decrease in both ending stocks or corn and beans thus the dip in futures on Monday was viewed as a buying opportunity.
The expected return to more seasonal rainfall across the corn belt and upper Midwest put a cap on the wheat rally. Nearby MGEX futures were flat and cash rates for spring wheat were actually significantly lower at Duluth while higher out of the Pacific Northwest.

The punters are watching the WASDE with the average trade guess for US corn ending stocks predicted to be about 32.4mt, anything lower than this may see buying ramp up again. Anything higher will probably see some serious liquidation triggered. The water may get muddied a little with the introduction of the first 2021-22 estimates. There is always the fear the market will be “buying the rumour and selling the fact” too.
As for what all this will mean for Australian producers is a little up in the air given the amount of basis buffer that has been factored into this market over the mid term. If corn does indeed see as tight or tighter ending stocks than predicted the flow on effect for wheat is obviously good and prices should stabilise or firm for the new crop in the short to mid term.
This year continues to present good opportunities in the swap market for and those looking to use US options as a hedge for new crop values. For instance buying a ICE canola put option to cover canola downside.