Two things weighed on grain prices last night. The ceasefire between Iran and Israel, and news that Brazil is likely to harvest a record summer crop corn harvest this year. Corn, due to its usage in US biofuel, is linked to the value of oil to a degree. Anything bearish oil, like a truce in the Middle East, will according to the punters have an impact on the value of corn.
That doesn’t tell us why corn futures are now 20c/bu cheaper than they were at the beginning of June, but it is just another compounding factor to a derailing market.
The bigger impact is more likely to be the expectation of more competition against US corn from Brazil. Reuters reports that the Safrinha crop, summer plant crop, is expected to be a record 123.3mt this year. Representing roughly 80% of Brazil’s corn production. To put this into perspective the new estimate is some 10.4mt higher than the May estimate, and if realised will be 20.2mt larger than last year. An ideal season has seen average yields increase by roughly 12% and there was also a 5.7% increase in sown area. This may influence sorghum pricing both here and in the US. Sorghum is often benchmarked against corn in the feed sector.

US wheat futures continued to push lower. Combine this with a higher AUD here today and the trend lower is likely to spill across the new crop bids. US futures moved lower, impacting on cash values out of the US Pacific Northwest and Canadian values. HRWW out of the PNW shed about AUD$6.79/t compared to yesterdays conversion into an Asian market. US white wheat values were also lower, down roughly AUD$4.06/t compared to yesterday. Black Sea values were mixed, Russian milling wheat shedding AUD$1.50/t and Ukraine values down AUD$0.88/t. French FOB milling wheat was hit hard shedding AUD$8.99/t compared to yesterdays conversion. Harvest pressure in the northern hemisphere is likely to be the key to the downside short to mid term.