Grain futures steady, corn hovers over 3-year low on U.S. crop outlook

Grain futures were steady during the European trading session on Tuesday with corn rebounding from a three-year low, while soybeans rose on increasing demand for U.S. exports. Wheat fell to the lowest in six weeks amid favorable weather conditions in the U.S. and as the USDA reported planting accelerated last week and surpassed the five-year average pace.

On the Chicago Board of Trade, soybeans futures for settlement in January rose by 0.24% to $12.5938 per bushel by 13:30 GMT. Prices held in range between days high and low of $12.6188 and $12.5550 per bushel respectively. The oilseed added 0.3% on Monday and extended its weekly advance to over 0.6% on Tuesday.

Soybeans were recently pressured on expectations for ample global supplies and accelerating U.S. harvest. The oilseed however extended its advance on signs of increased demand for U.S. exports. The USDA said it inspected 80.6 million bushels for shipment in the week ended October 31., up 32% from a year earlier.

Gains were however limited after the government agency reported on Monday that the U.S. harvest accelerated last week and surpassed the five-year average pace. As of the week ended November 3, 86% of the crop was reaped, up from 77% a week earlier and 1% above the five-year average. During the same week last year, U.S. farmers had harvested 92% of the crop.

Elsewhere on the grains market, corn futures for settlement in December traded at $4.2563 per bushel at 13:28 GMT, down 0.09% on the day. The contract fell to a session low of $4.2538 per bushel, the weakest level since August 2010, followed by a rebound to days high of $4.2663 per bushel. The grain lost 0.2% on Tuesday, a seventh daily retreat in eight.

Market sentiment remained dampened on expectations the U.S. crop might be larger than previously projected and as the harvest in the worlds biggest grower accelerated past the five-year average pace.

According to the median estimate of 36 analysts surveyed by Bloomberg, the U.S. corn crop may surge to an all-time record of 14.03 billion bushels, up 1.3% from USDAs previous estimate and 30% larger than 2012s drought damaged harvest. Also according to the poll, inventories before the 2014 harvest may more than double from a year earlier.

The grain was also pressured after the USDA said in its weekly crop progress report that as of the week ended November 3, 73% of the U.S. corn crop was reaped, up from 59% a week earlier and above the five-year average reading of 71%.

Corn and soybeans however drew some support after DTN reported that moderate to heavy precipitation across the Midwest on Tuesday and Wednesday will disrupt the harvest, but mostly in the northwestern areas. Drier weather is expected later in the week and during the weekend, the agency said, but possible snowfall in parts of the northeast belt on Tuesday might be unfavorable to dry out corn.

In Brazil and Argentina, drier weather early this week will help improve conditions for planting and early development of corn and soybeans, DTN said on November 4. Soybeans planting in Brazil was reported half done, ahead of average, but heavy rains in Argentina through the end of the week will cause delays to field work. Improving conditions in South Africa will ease field work after recent rains and thunderstorms caused delays but provided ample soil moisture.

In Western Europe, continuing episodes of rain and low temperatures maintain adequate to surplus soil moisture for the development of winter wheat but also slow the late-summer crop harvests and winter grains and oilseed planting, DTN reported.

Wheat steady near 6-week low

Wheat futures rose during European trading on Tuesday but hovered over 6-week low amid improving weather outlook and accelerating planting. Wheat futures for settlement in December traded at $6.6413 per bushel at 13:29 GMT, up 0.14% on the day. The grain shed 0.6% on Monday, a fourth straight daily retreat, but trimmed its weekly decline to 0.4% on Tuesday.

Wheat traded near multi-month lows after the USDA reported on Monday that planting of the winter U.S. crop advanced from a week earlier and was ahead of the average. As of the week ended November 3, 91% of plants were sown, matching last years pace and surpassing the five-year average reading of 90%. The government agency also reported that 78% of the crop had emerged, up from 65% from a week earlier. This was also above the five-year average of 73% and 2012s 72% during the comparable week.

The grain was additionally pressured as weather forecasts turned favorable for some of the worlds key growing areas. Ample precipitation is expected to favor the pre-winter development of winter wheat in the Midwest, while scattered showers and a recent warmer trend will benefit the crop in the Southern Plains, DTN reported yesterday.

The agency also said that warm to hot weather and showers in Argentinas growing areas will provide favorable conditions for the development of winter wheat. In China, last weeks moderate rains through the Yangtze River valley and the southern areas of the North China Plain will favor pre-winter development of winter wheat and rapeseed, DTN added.