United States Department of Agriculture revises corn planted areas

The revised estimates increased US planted corn acres, and decreased soybean acres, by more than market expectations.

This saw Chicago Board of Trade (CBoT) corn futures decrease, pulling wheat futures lower with it, and soybean futures increase, pulling canola prices higher with it.

Rainfall was also received through the US corn belt along with forecasts turning wetter which added to the downward movement in corn values.

At time of writing, nearby CBoT corn had fallen 136 USc per bushel (A$80/t) from the high made on June 21, wiping out all the gains to close equal to the previous lows on May 18.

More corn supply means more corn can potentially flow into feed demand that may otherwise consider using wheat.

Hence corn was pulling wheat futures lower.

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The market is now waiting for the USDA's updated monthly World Agricultural Supply and Demand Estimates (WASDE) to see if they increase demand estimates to soak up the extra supply.

The upcoming USDA WASDE may also help to remind a very US-focused market that other parts of the world have a significant impact on the global value of grains.

In Australian markets, the weaker tone seen in CBoT corn and wheat was not overly reflected in prices with a lift in buyer activity on Clear Grain Exchange in the first week of the new financial year supporting prices.

In cereal grains, trading ranges were relatively narrow with some improvement in prices towards the end of the week.

Traded values of canola took their lead from international futures with values higher over the week.

In many cases growers were able to achieve their target prices as buyers pushed bids up.

Canola traded $730/t in Kwinana and $678/t across Victorian ports plus oil bonification payments as examples.

The feed barley market in Australia continues to reflect the paradox of dry conditions in north-eastern Australia compared with better cropping conditions experienced in many parts of southern Australia.

There are reports feed barley is being shipped from WA to Queensland to help relieve the tight grain balance sheet in north-eastern Australia.

Australia has had three consecutive years of record-breaking winter crops, and just five to six months after the headers stopped, we appear to be trading a drought market for cattle feed supplied into Queensland.

It's a good demonstration of how quickly grain market fundamentals can change.

Grain demand continues to increase over time and the world will need more grain.