Deteriorating crop conditions in large grain exporting countries continued to push grain prices higher last week.
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A weight on global wheat prices has been expectations of a large global corn crop. If corn supply is high, it can substitute wheat out of feed rations and impact wheat prices.
The United States Department of Agriculture in its last World Agricultural Supply and Demand Estimates predicted global corn exports to increase 20.3 million tonnes in 2024.
US, Brazil, Argentina, and Ukraine are the largest global exporters of corn.
The USDA estimated Argentina and US corn exports to increase 16.8 and 11.1 million tonnes respectively from last year. Both Brazil and Ukraine are expected to export less corn in 2024.
Argentina's corn crop is harvested through March, April, and May while the US corn crop is currently being planted for harvest in September, October, and November.
In recent weeks, Argentina's Buenos Aires Grain Exchange has reduced its total corn production estimates to 46.5mt, compared to the USDA WASDE at 55mt.
Deterioration of the Argentine corn crop could be significant for the market given the impact it's estimated to have on global grain supply and trade flow.
The production estimates coming from Argentina imply the USDA's projected increase in global corn supply may be hard to achieve, or at least rely more heavily on the US crop.
US corn planting is reportedly ahead of average with good emergence under warmer than normal conditions and so is off to a reasonable start.
Good growing conditions will need to continue for the USDA estimates to eventuate given record US corn crop yields have been used in the USDA's current production numbers.
The last CFTC Commitment of Traders report put the net position of fund managers (or speculators) in Chicago Board of Trade corn futures at 160,000 contracts "net short".
This means they make money if CBOT corn futures move lower and lose money if CBOT corn prices rise.
Speculators reduced their net short position by 45,000 contracts in the week before the CFTC report, which fits a more supportive change in sentiment being observed in grain markets recently.
In Australia demand for grain remained robust with 45 different buyer businesses purchasing grain through Clear Grain Exchange last week and another 75 buyers searching for grain offered for sale.
Many growers appear to be taking advantage of the strong appetite for grain, naming their price, and offering it for sale so all buyers can try to purchase it.
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