China's efforts to cut its domestic corn stocks by shunning imports and alternatives have already roiled U.S. sorghum and renewable fuel markets, and are now poised to hit U.S. wheat prices just as a bumper harvest rolls in.

China announced two months ago that it planned to scrap its corn stockpiling system, which had left it with the biggest corn supplies in the world, put premiums on domestic prices and brought a flood of corn and alternative feed imports.

Now, sorghum is piled up in Kansas, the top producer in the United States, as farmers who planted a year ago find their hopes of Chinese demand dashed. Total sorghum stocks as of March 1 was at the highest in nearly two decades, USDA data shows, as demand fell off a cliff.

Sorghum exports to China dropped to 497,335 tonnes in March 2016 from 1.131 million tonnes a year earlier, USDA data shows.

Those sorghum supplies are clogging elevators and could now weigh down wheat prices, as storage space is tight and farmers are just weeks from harvesting a bumper wheat crop.

Cash premiums for both wheat and sorghum are at five- to six-year lows at many elevators throughout Kansas, which is also America's top wheat producer.

"A year ago they (elevators) were loading it (sorghum) on the rails and shipping it out to California (for export)," said Gary Millershaski, a farmer in Lakin, Kansas. "They have hardly shipped out any this year. For the last six months we've been thinking that it should be cheap enough to be going overseas, but it is just not."

The glut of grain at large terminals in Hutchinson and Wichita is backing up supplies at country elevators, said Warren Devore, chief operating officer of United Prairie Ag, which operates 12 elevators in southwest Kansas. As a result, some elevators will struggle to find space for wheat come harvest.

"We're in a dry area so can put a lot of grain on the ground. Generally it's not wheat, but it looks like we may be doing that this year," he said.

The USDA has forecast that the U.S. wheat stockpile would balloon to 1.029 billion bushels by the end of the 2016/17 crop year, the biggest since 1987/88.

China Asks Probing Questions on DDGS

Exports of distillers grains (DDGs), an ethanol byproduct and animal feed, to China slid to just 121,619 tonnes in March, according to USDA data, from 469,354 tonnes in March 2015 and slumping from a record 967,529 tonnes last June.

China has launched an investigation into potential dumping and subsidizing of U.S. DDGs imports, which traders and U.S. grains industry organizations see as another step to reduce imports of corn and alternatives.

"People recognize that what is motivating this inquiry is that China is sitting on massive stockpiles of corn," said Geoff Cooper of the Renewable Fuels Association.

The investigation is looking at more than 70 ethanol companies, and targeting three in particular, sources familiar with the investigation said: Poet LLC, Big River Resources LLC and Marquis Energy.

Those three companies were required to fill out lengthy surveys on production and pricing of DDGs, according to Tom Sleight, president of the U.S. Grains Council.

U.S. ethanol producers and DDGs exporters are on pace to lose more than $500 million if China continues to buy minimal amounts from the United States, USDA data showed.

"It is hard to make up for that lost volume elsewhere. It takes sometimes years to develop export markets," the Renewable Fuels Association's Cooper said. "There is a bit of a sense of hopelessness about it."