Grain futures mixed, corn drops a third day amid forecasts for a record global output

Grain futures were mixed on Wednesday, wheat declined amid expectations for a record global output. Meanwhile, wheat touched 5-week high, while soybeans edged lower.

On the Chicago Board of Trade, corn futures for March delivery traded at $4.4088 a bushel by 15:30 GMT, losing 0.12% for the day. Futures hit a session high at $4.4262 per bushel, while day’s low was touched at $4.3938 per bushel.

The grain increased 4.3% so far this year after it lost nearly 40% in 2013, the steepest annual drop on record and the worst annual performance since at least 1959.

The US Department of Agriculture updated this week its forecast for the global corn output and said it will surge to 966.6 million metric tons in 2013-2014 season, leaving its previous estimate little changed. In 2012-2013 global production reached 862.8 million tons. The government agency also increased its projections for the US exports of the grain in 2014.

“In corn, despite the good export figures for the U.S., the global balance sheet remains heavy,” Paris-based farm adviser Agritel wrote in a market comment, cited by Bloomberg.

Ending stockpiles for the 2013-2014 season were also estimated to advance to 13-year high of 157.3 million tons from 134 million tons.

DTN.com reported on February 12 that the extreme heat and dryness in southern Brazil will continue to stress filling soybeans and corn for one more day, after which showers and more seasonal temperatures may develop on Thursday and Friday. The showers will ease some stress on soybeans, but according to the website, significant amounts of rainfall will be needed to prevent further stress to the crop. Hotter conditions will return during the weekend and on Monday, before showers and cooler weather have the chance to redevelop later next week.

Meanwhile, soybeans and corn producing regions in central Argentina will benefit from adequate to surplus soil moisture, except for some areas where recent heavy storms have caused serious flooding. According to the website, a break in the action may occur soon, but it may not last long, before more thunderstorms redevelop during the weekend.

Elsewhere on the grains market, soybeans futures for settlement in March fell by 0.23% to trade at $13.3188 per bushel by 15:50 GMT. Prices touched a session high at $13.3988 per bushel, the strongest level since December 23, while day’s low stood at $13.2212 per bushel. The oilseed settled last month 0.45% lower, after it lost 8.5% in 2013.

Wheat touches five-week high

On the Chicago Board of Trade, wheat futures for settlement in March added 0.88% to trade at $5.9563 per bushel by 15:51 GMT. Prices jumped to a session high of $5.9800 per bushel, the strongest level since January 8, while day’s bottom was touched at $5.8612.

The grain settled last week 4.1% higher, the biggest gain since the period ended September 27. However, wheat slumped 22% last year, marking the largest annual decline since 2008, on expectations for a record global output of 712.7 million tons, according to data by the US Department of Agriculture.

DTN’s February 12th forecast called for very cold weather over the Midwest early this week, with the pattern moderating somewhat later in the week. The expected storm will track across the most eastern and southern parts of the region, likely remaining east and south of the Midwest producing areas. A possible return to stormy weather may be expected, but temperatures will not be as freezing as they have been recently.

Meanwhile, the website reported that a much warmer trend is expected over the Southern Plains at the end of this week. The warmer weather may favor the dormant wheat crop, but will also melt the protective snow cover. The soil moisture of the wheat belt may be recharged later this month as an active pattern is expected, but forecasts remain somewhat uncertain for now.