Grain futures mixed, corn at 35-month low

Grain futures were mixed on Friday with corn extending falling to the lowest since September 2010, while soybeans remained fairly unchanged and wheat gained.

On the Chicago Board of Trade, corn futures for September delivery fell to a fresh 35-month low of $4.8363 a bushel at 12:00 GMT, down 0.82% on the day. The grain slumped as weather conditions remained favorable for crop developing. Days high stood at $4.8938 a bushel. Corn plunged 2.23% on Thursday and is set for a third straight weekly decline, having fallen 1.6% so far this week after tumbling 9.48% the previous one.

Corn continued its steep fall as weather conditions kept supporting record-high output prospects. The International Grains Council said yesterday that favorable weather and advancing harvests reinforced prospects for a significant rebound in northern hemisphere grain output after last years drought damaged crops. Global corn output is expected to surge by 9.7% to 942 million tons in the 2013-2014 season. The grain fell 6.3% in July, marking a sixth consecutive monthly decline, the worst run since 1996. The grain has fallen over 32% so far this year, underperforming the Standard & Poor’s GSCI Index of eight agricultural commodities, which lost 17%.

The USDA trimmed its latest U.S. corn crop output forecast to 13.95 billion bushels, down from 14.005 billion, but that was however 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 government agency said in its weekly crop progress report on Monday that as of July 28, 11% was categorized as “Very poor” and “Poor”, well below 2012′s 48%. Meanwhile, 26% of the crop fell in the “Fair” category compared to 28% a year earlier. As for the premium quality, 63% was rated good-excellent, well above last year’s 24% during the comparable week.

Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, said for Bloomberg: “Rebuilding global grain supply remains intact.” He also said weather conditions remain bearish for corn and soybeans.

DTN said in a report on Wednesday that cool weather across the U.S. within the next 10 days will support corn pollination, while rains in the Midwest will aid pod-filling soybeans.

Soybeans fairly unchanged

Soybeans swung between gains and losses on Friday and remained fairly unchanged in the late European session. The September contract traded at $12.3563 a bushel at 12:02 GMT, up 0.12% on the day. The oilseed fell to $12.3050 a bushel on Thursday, the lowest since February 2012, and settled the day 0.99% lower, extending this weeks decline to over 8.4% after shedding 9.4% the preceding one.

Soybeans fell 3.7% in July, marking a second monthly decline in a row. The oilseed has lost more than 14% so far this year as the USDA projected domestic output will jump by 13% 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.

The USDA said soybeans condition was almost the same compared to the preceding week and far better than last year’s quality. As of July 28, 9% of the crop was rated very poor-poor, compared to 37% in 2012. Meanwhile, 28% of soybeans were categorized as “Fair”, below last year’s 34%. As for the premium quality, 63% of the crop was rated good-excellent, compared to 29% during the comparable week in 2012.

Wheat gains

Wheat continued to climb on Friday, marking a fifth day of gains in six, as lower prices led to an increase in demand with countries refilling stockpiles. The grain traded higher throughout the day and stood at $6.5888 a bushel at 11:54 GMT, up 0.04% on the day. The September contract ranged between days high at $6.6238 and low of $6.5650 a bushel respectively. Futures have advanced 1.4% so far this week after losing 4.7% the preceding two.

Wheat rose to $6.6738, the highest since July 17, as increased international demand supported prices. Japan bought 89 579 tons of western-white wheat from the U.S. on Thursday, the first purchase after lifting a two-month suspension on Oregon white wheat as an unauthorized genetically modified strain was detected growing in Oregon. The resumption of U.S. wheat imports eased concern over short supply in Japan, which imports 90% of the wheat it needs and 60% of total food. Japan already purchased earlier in the month 23 963 tons of club wheat grown in Washington state, 1,497 tons of Australian premium-white and 1,710 tons of U.S. soft-red winter.

Meanwhile on Wednesday, Egypt, the world’s largest wheat importer, made a fourth purchase this month, ordering 240 000 tons from suppliers in Romania and Ukraine.