The Road Ahead
I expect that wheat and corn price decreasing by increasing supply. Thanks to little rain in U.S., the Corn Belt and the Southern Plains have seen better winter crop. Seasonal harvest influences future contract price decrease for wheat and corn.
Also for wheat, Russia is exporting wheat twice what they mentioned before. This allows importer to find less price conflicts of wheat.
As well, I could say price decrease is relevant to poor demand for U.S. Last week, Importers preferred to make small amount of grain contract with other exporters offering lower price of wheat instead of U.S. For example, Egypt, biggest importer, made small contract with France. I think when Crop Production report is released by USDA next week, it could be guideline for importers to decide where they could make large contract or many of small contract compared to last week. I assume This leads to price fluctuation more.
I assume that corn exported demand is decreasing because China imports less corn. From the US Grains Council reports, China produces corn 5-6 million tonnes more than in 2011. With increasing own production, it could satisfy certain domestic demand. The report also says that in order to reserve its stockpiles, China plans to import some from US.
As well, I think Corn-based ethanol affects corn price. From the Energy Information Administration report, the result of ethanol output is lowest since the agency started to record production data. Demand from ethanol producers is decreasing, and it is related to decreasing corn prices.
Wheat demand also decrease since corn market price declines. All supports that wheat and corn price would be decreasing.
http://www.nass.usda.gov/Publications/Reports_By_Date/2012/September_2012.asp
http://in.reuters.com/article/2012/10/04/markets-grains-idINL3E8L403S20121004
http://in.reuters.com/article/2012/10/04/markets-grains-idINL3E8L403S20121004
http://farmfutures.com/story.aspx/morning-market-review-bryce-knorr-0-30780