Grain futures mixed, wheat traders bearish

Grain futures were mixed on Friday with corn and soybeans marking daily gains, while wheat fell amid global ample supply forecast. Wheat futures have been under pressure as favorable weather conditions boosted developing prospects in different parts of the world. Harvests in the Black Sea region by Ukraine and Russia, Australia and Europe are expected to be higher, increasing competition on the global markets and driving prices down.

On the Chicago Mercantile Exchange, wheat futures for July delivery traded at $6.8175 a bushel at 10:08 GMT, down 0.53% for the day. The grain varied between daily high and low at $6.8550 and $6.8138 per bushel respectively.

Ukraine is expected to boost its wheat export to 8-9 million tons for the 2013-2014 period. Australia projected that its 2013 crop will jump to 25.4 million tons, above last seasons 22.1 million tons and surpassing Marchs expectations of a 24.9 production. Germanys output may rise 7.3% to 24 million tons according to farm industry group Deutscher Raiffeisenverband e.V.
Worldwide output in the 2013-2014 crop year is expected to be 6.1% higher than the preceding period and near the record level of the 2011-2012 season, totaling 696.9 million metric tons of wheat.

Clement Gautier, a wheat analyst at Horizon Soft Commodities in Noisy le Grand, France, said for Bloomberg: “For next season, if you want wheat you’ll find it pretty much anywhere. Harvests are good in the exporting countries, and as some importers also have good potential, that suggests a possible decline in demand. That’s why the market is under pressure. There will certainly be strong competition among the various exporting countries. Fundamentally, the trend is bearish.”

Wheat futures fell to a three-week low of $6.7912 on Wednesday as the USDA said wheat reserves will exceed the 655 million bushels market expectations and total 659 million bushels. U.S. wheat output is also forecast to surpass market projections.

Elsewhere on the grains market, soybeans traded 0.56% higher on the day and stood at $15.1913 at 10:02 GMT. Prices ranged between daily high and low at $15.2188 and $15.0625 a bushel respectively.

Soybeans reached a seven-month high of $15.5850 on Wednesday after the USDA left its domestic soybean stocks projection unchanged at 265 million bushels, while market anticipations were for an increase to 273 million. The agency left its U.S. crop output projection unchanged.

The USDA reported on Monday that 71% of the U.S. soybeans crop was planted as of June 9, compared to 57% in the preceding week. This is well below last year’s 97% during the same week and the five-year average of 84%. According to USDA’s report, 48% of the crop has emerged, 17% above the preceding week’s figure. This is also lower than last year’s 88% and the five-year average 67$ figure.

Meanwhile, corn futures for July delivery traded at $6.4788 a bushel at 10:05 GMT, up 0.60% on the day. Prices ranged between days high at $6.4863 and low at $6.4450 a bushel.

The USDA said U.S. corn stockpiles before the 2014 harvest will total 1.949 billion bushels, well above market projections of 1.829 billion. This fall’s U.S. harvest will also exceed the 13.82 billion bushels expectations and will total 14.005 billion. The record domestic output will more than double inventories before the 2014 harvest, said the agency.

In its weekly crop progress report, the U.S. Department of Agriculture said on Monday that 95% of the nation’s corn crop was planted as of the week ending June 9, compared to 91% in the preceding week. This is lower than the same time last year when 100% of the crop was planted and is also below the five-year average of 98%. According to USDA’s report, 7% of the corn crop fell in the “Very poor” and “Poor” condition categories and 30% was assessed as “Fair”, which shows improvement compared to last year when 8% was “Very poor” and “Poor” and 26% “Fair”. As of last week 63% of the corn crop was of “Good” and “Excellent” quality, slightly lower than last year’s 66%.