WHEAT prices are in free fall, hitting the lowest levels on international futures exchanges in a decade.
The September wheat contract on the Chicago Board of Trade (CBOT) sat at US430 cents a bushel on Monday night, the lowest level for a second closest contract for more than 10 years.
Following a negative United S tatesDepartment of Agriculture (USDA) report last Thursday wheat prices fell about $A17.70 a tonne up until Monday.
The slump, which is based on higher than expected stocks and better than expected international wheat production, has seen more than US100c/bu fall from the September contract since the early June rally, which peaked on June 9.
This equates to a close to $A50/t fall in prices.
Currency and basis has shielded the Australian market from some of the fall, but ASX NSW wheat futures for January delivery were down at $254/t on Monday, while cash markets for new crop have fallen by about $30/t in the same period.
Ideal conditions in virtually all key major wheat producing nations have seen the International Grains Council stack on an extra 7 million tonnes of production in its latest 2016 crop estimate for a total global crop of 729mt, pushing out world wheat surplus.
Wet weather in France during the harvest period has raised some quality concerns, but the market barely flinched upon digesting this news in its push down.
There was no corn-inspired relief following the USDA report, which flagged higher than expected corn acreages along with solid yields forecast.
The market has been wary of a potential La Nina weather event developing during corn's critical development periods of July and August and delivering hot and dry conditions in the US, but at present crops are in good condition.
NAB agribusiness analyst Phin Ziebell said it was difficult to find significant upside for wheat prices in US dollar terms given the forecast for strong global supply.
CBA agriculture analyst Tobin Gorey said critical Black Sea producing nations were sitting pretty.
"The Black Sea region has entered its harvest period and a solid growing season means bumper crops are expected," he said.
Mingenew grower Jared Heitman is taking a "watch and see" approach as the wheat price hits a decade low.
Growing predominantly noodle wheats at Arena Farm, south of Mingenew, Mr Heitman said they had taken a good position at the start of June, nominating to forward sell 1t/hectare of this year's crop at $310/t.
"The prices are low due to the massive amounts of grain in the world," he said.
"However, it's still early days and there is plenty of time for the price to turn around.
"August tends to be a better month as this generally gives you the average price over the year."