The September wheat contract on the Chicago Board of Trade (CBOT) sat at US430 cents a bushel on Monday night, the lowest level for a second closest contract for over 10 years.

Following a negative US Department of Agriculture (USDA) report last Thursday wheat prices fell around $A17.70 a tonne up until Monday.

The slump, which is based on higher than expected stocks and better than expected international wheat production, has seen over US100c/bu fall from the September contract since the early June rally. 

This equates to a close to $A50/t fall in prices.

Currency and basis has shielded the Australian market from some of the fall, but ASX NSW wheat futures for January delivery were down at $254/t on Monday, while cash markets for new crop have fallen by around $30/t in the same period.

Ideal conditions in virtually all key major wheat producing nations have seen the International Grains Council stack on an extra 7 million tonnes of production in its latest 2016 crop estimate for a total global crop of 729 million tonnes, pushing out the world wheat surplus to 9 million tonnes.

The only skerrick of positive news for pricing is emerging quality concerns in Europe. There was no corn-inspired relief to the wheat sector following the USDA report, which flagged higher than expected corn acreages along with solid yields forecast and saw corn values fall heavily as well.

The market has been wary of a potential La Nina weather event emerging during corn’s critical development periods and delivering hot and dry conditions in the US, but at present crops are in good condition.

NAB agribusiness analyst Phin Ziebell said it was difficult to find significant upside for wheat prices in US dollar terms given the forecast for strong global supply.

CBA agriculture analyst Tobin Gorey said critical Black Sea producing nations were also sitting pretty and a solid growing season meant bumper crops were expected.