Grain futures mixed amid U.S. budget stalemate, favorable weather outlook

Grain futures were mixed today with wheat and soybeans marking daily declines, while corn advanced. Soybeans declined as a possible government shutdown if Congress fails to pass a budget for the 2014 fiscal year threatened to disrupt crop inspections, while favorable weather boosted yield prospects.

On the Chicago Board of trade, soybeans for delivery in November fell by 0.37% to $13.1438 per bushel at 9:44 GMT. Prices held in range between days high and low of $13.1488 and $13.0913 a bushel respectively. The oilseed rose by 0.2% on Friday and settled the week 0.3% higher, extending its quarterly advance to 4.7%.

Soybeans remained pressured throughout the day amid growing uncertainty whether U.S. lawmakers will pass a budget today for the 2014 fiscal year, beginning on October 1. The House of Representatives voted on Sunday to stop many of the central provisions of the Affordable Care Act for a year, the so-called Obamacare, and tied it to an extension of government funding. Meanwhile, both the White House and the Democratic-controlled Senate said they will not support any budget that defunds or amends the act. If the bill gets rejected today, the government could be shut starting tomorrow.

Meanwhile, DTN reported on Friday that rainfall during the weekend in the western Midwest might benefit some late-filling soybeans in Iowa. No threats for significant cold weather also boosted yield outlook.

The USDA reported last Monday that soybeans’ condition remained unchanged in the preceding week after worsening for five consecutive weeks. As of September 22, 50% of the plants were rated good-excellent, the same as in the previous period and well above last year’s 35%. Meanwhile, the corn crop condition improved last week with 55% of the harvest rated good-excellent, marking a 2% improvement from the previous period and well above last year’s 24%.

Joyce Liu, an analyst at Phillip Futures Pte in Singapore, said for Bloomberg: “Traders may be cautious about trading right now because there is no certainty whether grains inspection will continue at the same rate. The favorable weather in the U.S. will help with rapid harvesting.”

Elsewhere on the market, corn futures for December settlement rose by 0.37% to a session high of $4.5488 per bushel at 9:45 GMT. Days low was touched at $4.5238 a bushel. The grain fell by 0.8% on Friday but settled the week 0.5% higher, trimming its decline to 11% in the three months ending today. This would be a fourth consecutive quarterly decline.

Meanwhile, wheat futures for delivery in December traded at $6.8188 a bushel at 9:14 GMT, down 0.11% on the day. Prices shifted in a days range between $6.8275 and $6.7963 a bushel. The grain rose by 0.4% on Friday, a ninth daily advance in ten, and settled the week 5.5% higher. Prices are up 3.6% in the third quarter, en route to snap three consecutive quarterly retreats.

Wheat was well supported last week amid increased global demand. The U.S. Department of Agriculture said in its exports report on Thursday that the nation has sold a net 620 212 tons of wheat in the week ended September 19 with China accounting for 28% of the new sales. U.S. exports over the past four weeks exceeded last year’s outbound shipments by 40% during the comparable period. China, the world’s biggest consumer, is increasing imports to reduce local prices and boost stockpiles. Smaller domestic output and higher demand this year led to a 3.4% jump in prices in September, data by China National Grain & Oils Information Center showed.

Meanwhile according to the United Nations’ Food & Agriculture Organization, Argentina’s output may fall to 9.5 million tons from previously estimated at 11 million. The country is the southern hemisphere’s second biggest producer.

DTN said on Friday that scattered showers in the Southern Plains during the weekend should improve soil moisture for the winter wheat crop, but this would slow summer crop harvests and winter wheat planting.