Last week the USDA released their updated world agricultural supply and demand report, which surprised many market participants. US corn (barometer of global grain prices) production was surprisingly revised higher, while feed wheat demand was revised lower. Surprisingly given the high numbers of cattle and pigs on feed, maybe more feedlots are chasing distiller?s dry grain? Only conservative cuts (as was expected) were made to Sth American corn production. Further downgrades are likely, but it is worth noting that current forecasts are still records! This provided a sharp drop in the futures market whilst dryness in South American lost its drive as weather forecasts projected some useful rain, which consequently removed nearby price support.

After slowly creeping up in price over the last month, domestic grain prices sunk today in the aftermath of the USDA report. The barometer of global grain prices US corn, production was revised higher then expected; while only conservative cuts (as was expected) were made to Sth American corn production.

The canola chart from May this year has been going in one direction, and growers without sales on the book, it has been ugly.