Grain futures decline, soybeans fall on favorable South America weather

Grain futures fell on Tuesday with wheat and corn falling following a bearish USDA crop progress report, while soybeans declined on forecasts for continuing favorable weather in South America.

On the Chicago Board of Trade, soybeans futures for settlement in January traded at $13.2763 per bushel at 11:16 GMT, down 0.12% on the day. Prices shifted in a days range between $13.2863 and $13.2413. The contract surged to a two-month high of $13.3438 on Monday and settled the day 0.7% higher but trimmed its weekly advance to little over 0.6% on Tuesday.

Soybeans were pressured as weather forecasters continued to predict mostly favorable weather across South Americas major growing areas. DTN reported on November 25 that dry and very warm conditions across Brazil during the weekend and on Monday will favor planting but rainfall is expected to return later this week. In Argentina, dry and hot weather at the end of last week favored spring field work in the countrys central region. Scattered rains and colder weather early this week will maintain ample soil moisture while slowing planting.

The oilseed however drew support after the USDA reported on Monday that soybeans inspected for export in the week ended November 21 surged by 21% to 66.93 million bushels from a year earlier. Outbound shipments jumped by 5.9% to 585.6 million bushels since September 1, up from 553.1 million a year earlier.

According to data by the U.S. Department of Agriculture, production in Brazil is set to surge to a record 88 million tons in the 2013-2014 season, while Argentina’s output may jump by 8.5% to 53.5 million tons.

Elsewhere on the Chicago Board of Trade, corn futures for settlement in March slid by 0.69% to $4.2763 a bushel by 11:06 GMT. Prices shifted in a days range between $4.3113 and $4.2713 per bushel. The grain jumped to a 1-1/2-week high of $4.3288 on Monday and settled the day 1.7% higher but trimmed its weekly advance to 1.0% on Tuesday.

The U.S. Department of Agriculture said in its weekly crop progress report yesterday that the U.S. harvest accelerated from last weeks 91% and neared completion. Farmers had collected 95% of the corn crop in the week ended November 24, above the five-year average of 91% but below last years full completion during the comparable week.

Also fanning negative sentiment for corn and soybeans, DTN reported on Monday that cold weather in the Midwest during the week will help firm the ground in previously wet areas, favoring the final harvest stage. In South Africa, showers will favor development of early planted corn in the countrys east and south areas, while providing adequate soil moisture and easing planting in the west and north regions, DTN said.

Wheat declines

Elsewhere on the grains market, wheat also fell on mostly favorable conditions in the U.S. Futures for settlement in March traded at $6.5513 per bushel at 11:13 GMT, down 0.62% on the day. Prices held in a days range between $6.6063 and $6.5513 per bushel. The grain rose to a 3-week high of $6.6238 on Monday and settled the day little over 1.6% higher but trimmed its weekly decline to 0.9% on Tuesday.

The USDA reported yesterday that 93% of the U.S. crop had emerged in the week ended November 24, surpassing the five-year average of 89% and last years 88% during the same period.

A slight deterioration in crop conditions however provided some support. The government agency said that 8% of the crop was categorized as “Very poor” and “Poor”, up 1% from a week earlier. Meanwhile, 62% of the plants were rated good-excellent, compared to 63% during the preceding seven days.

DTN reported on Monday that winter-type precipitation in the Southern Plains continues to recharge soil moisture for winter wheat but low temperatures will slow development of the crop. Meanwhile, rain last week and early this week will delay the final harvest stage for crops in the Delta but will recharge soil moisture for soft red winter wheat. In China, a rainy weekend supported the late-season growth of winter wheat and rapeseed across most of the North China Plain and the Yangtze River valley, DTN said.