Market Morsel: Corn to battle wheat.

Grain | 15th January 2024 | By Andrew Whitelaw

Market Morsel

In Australia, there isn’t a public stock recording of grain like there is in the United States. In the US, they release quarterly stock information on grains for both on and off-farm.

The chart below shows the US corn stocks from 2000 to the present. The US corn stocks are at 12.16bn bushels. This is up 12.5% from the same period last year. This is a large increase in stocks, placing them at the highest level since 2018 and the third largest on record.

We grow very little corn in Australia, so why does it matter what happens with corn stocks?

Commodity markets don’t operate in isolation. What occurs in one commodity can have an impact on another. This is especially the case with corn and wheat.

Looking at the charts below, we can see the price of wheat and corn. The reality is that they follow one another very closely. This is because corn and wheat have similar usage.

What do these high corn stocks mean? If stocks of corn remain high, then that can have a negative impact on wheat pricing.

As we move into 2024, corn will continue to have a major impact on wheat pricing.