Grain futures mixed, corn rebounds off 33-month low

Grain futures were mixed on Monday with wheat marking minor daily gains and corn rebounding off a new 33-month low, while soybeans plunged to lowest since February 2012 amid favorable weather.

On the Chicago Board of Trade, corn futures for September delivery traded at $4.9313 a bushel at 11:34 GMT, up 0.39% on the day. Prices ranged between days high at $4.9338 and low of $4.8913 a bushel, the lowest since September 2010. The grain plunged 0.81% on Friday, marking a weekly decline of over 9.4% last week after slipping 0.18% the previous one.

The grain continued to edge lower as weather forecasters predicted favorable conditions for crop growing. According to National Weather Service data, temperatures in the two top growing states, Iowa and Illinois, were forecast to remain below 27 degrees Celsius. AccuWeather Inc. said in a report temperatures in the Midwest and northern and central Great Plains may remain cool during August.

Dennis Gartman said today in his daily Gartman Letter: “In most areas the crops are growing rapidly and production figures are higher and rising. We may well see a corn crop becoming steadily closer to 15 billion bushels.”

Corn shed 32% this year as the U.S. Department of Agriculture confirmed expectations for reduction in the total output to 13.95 billion bushels, down from 14.005. However, this is still an all-time record high and is 29% higher than last year’s drought damaged crop. This year’s global stockpiles are projected to rise to 150.97 million tons by the end of the 2013-2014 marketing year, 22% more than the previous period.

The USDA said in its weekly crop progress report on Monday that this year’s crop condition is a lot better than the last season’s, but a bit worse than the previous week. As of July 21, 11% of the crop was categorized as “Very poor” and “Poor” compared to 9% a week earlier and 45% in 2012. Meanwhile, 26% was categorized as “Fair”, above last week’s 25% and below last year’s 29%. As for the premium quality, 63% was rated as good-excellent, compared to 66% a week earlier and 26% in 2012.

Soybeans on a 16-month low

Soybeans extended last weeks declines on Monday and touched a 16-month low as weather conditions in U.S. growing areas that were favorable for corn growing also benefited soybeans. The September contract traded at $12.6525 a bushel at 11:35 GMT, down 0.73% on the day. Prices ranged between high of $12.7138 and low at $12.5713, the lowest since February 2012. The oilseed settled 0.13% lower on Friday, closing last week almost 9.4% lower after adding 4.32% the preceding one.

The oilseed has fallen more than 11% so far this year as the USDA projected domestic output will jump to a record 3.42 billion bushels, which would boost global inventories by 20% to an all-time record high of 74.1 million tons.

Goldman Sachs’s 12-month price estimate for soybeans remained at $11 per bushel last week.

As for the soybeans condition, the government agency reported it was overall the same like last week and far better than the previous season. As of July 21, 8% of the crop was categorized as “Very poor” and “Poor”, the same like the preceding week and well below 2012′s 25%. Meanwhile, 28% of the crop fell in the “Fair” category compared to 27% a week earlier and 34% last year. As for the premium quality, 64% was rated good-excellent, 1% less than the week ending July 14 but well above last year’s 31%.

Wheat gains slightly

Wheat traded slightly on the upside on Monday, gaining 0.27% by 11:33 GMT. The September contract traded at $6.5213 a bushel and ranged between days high and low of $6.5350 and $6.4863 a bushel respectively. The grain settled higher on Friday but still closed the week 2.20% lower, a second weekly decline in a row.

Wheat has fallen more than 16% so far this year as the USDA projects a record high global output of 697.8 million tons amid increased production in Russia and the European Union. Goldman Sachs’s 12-month price estimate for wheat stood at $6.50 per bushel.

According to data from the Russian Agriculture Ministry today, the country has harvested 36% of its crop as of July 26, which equaled 27.8 million tons, well above last years 19.4 million. Meanwhile, the European Union raised its output forecast last week to 131.7 million tons of soft wheat, up from its last estimate of 128.9 million tons in the beginning of July.

Market players are now looking ahead into this weeks USDA crop progress report, scheduled for release at 4:00 PM Eastern time.