Grains trading outlook: wheat futures continue to drop, corn and soybeans add; US crops report

Wheat was lower during early trade in Europe today, while corn and soybeans gained, after earlier losses for all grains. The US Department of Agriculture (USDA) revealed crops progress yesterday, with a sizable bearish vibe for all grains to it, as crops condition and other readings logged improvement. A key report on agricultural outlooks is expected later this week.

Weather reports project plenty rains for the US Plains, providing adequate-to-surplus soil moisture for crops this week, improving prospects for grains. The Delta will also see some showers, and overall US conditions remain favorable. Eastern Europe will experience some cool relief this week, after scorching 90-95 degrees Fahrenheit were logged over the weekend.

The USDAs World Agricultural Outlook Board (WAOB) will post its first monthly World Agricultural Supply and Demand Estimates Report (WASDE) for this year on Thursday. The report is a major influence on grains markets, and is keenly awaited by traders.

The USDAs statistical arm, the National Agricultural Statistics Service (NASS), released the weekly report on crops progress for the week through June 8 yesterday, revealing improving readings on corn, soybeans and spring wheat. Meanwhile, winter wheat harvest has begun.

Wheat

Wheat futures for July delivery on the Chicago Board of Trade stood at $6.120 per bushel, dropping 0.08% at 9:58 GMT today. Daily high and low were at $6.160 and $6.102 per bushel, respectively. Wheat fell by 0.93% on Monday, while last week the contract declined by about 1%, reaching a three-month low of $6.030 per bushel.

“Around $6 is pretty cheap so technically it’s going to be a key support level,” said for Bloomberg Paul Deane, an analyst at Australia & New Zealand Banking Group Ltd. in Melbourne. “I can’t see a big risk here that we go much lower.”

Winter wheat harvesting has begun in the US. By June 8, 9% of crops were collected, slightly less than previous years, while 86% were headed, which is in line with the 5-year average reading for the week. Only 30% of crops were reported in good or very good condition, while 44% were in poor or very poor shape.

Meanwhile, spring wheat planting was 95% complete, and 80% of acreage had emergence. 71% of crops were logged in good or excellent condition, more than readings for previous years.

Corn

Corn futures for July traded for $4.516 per bushel in Chicago at 9:59 GMT today, up 0.17%. Prices reached a daily high and low at $4.524 and $4.482 per bushel, respectively. Corn dropped 1.74% yesterday, after last week the contract lost about 1%, reaching a 3.1/2-month low of $4.470 per bushel.

The NASS report revealed 92% of corn acreage had emerged, slightly more than previous years. Meanwhile, 75% of crops were reported of good or excellent condition, well-above the 63% of the 5-year average.

Soybeans

Soybean futures for July traded for $14.634 per bushel in Chicago at 9:59 GMT today, adding 0.45%. Prices ranged between $14.644 and $14.542 per bushel. The contract was unchanged yesterday, reaching a monthly low of $14.520 per bushel, after last week soybeans futures lost more than 2%.

Soybeans planting was nearing completion, the NASS report showed, with 87% of acreage planted, more than the 81% of the 5-year average. Meanwhile, 71% of crops had emerged, after 50% emergence was reported last week. Also, 74% of crops were reported in good or excellent condition.

A Bloomberg survey suggested soybeans produce in the US will jump 10% this year, to reach an all-time high. Macquarie Group Ltd. said soybeans may drop 14 percent to $10.50 a bushel, cited by Bloomberg.

“It’s a major shift to excessive supplies,” Bill Gary, the president of Commodity Information Systems Inc. in Oklahoma City, said for Bloomberg. He expects prices to drop below $10 during the harvest. “The rate of soybean usage is starting to level off, and production is ramping up. We will have too much.”

Technical view

According to Binary Tribune’s daily analysis, wheat for July delivery on the CBOT will see its first resistance level at $6.233. If breached, the contract will advance to $6.341 and then to $6.421 per bushel. The first support points is estimated at $6.045. Should it be broken, wheat will test $5.965 and after that $5.857 per bushel.

Corn for July will have its first resistance at $4.571 and if it broken the contract will advance first to $4.633 and then to $4.691 per bushel. The first support level is calculated at $4.451. Should the contract breach that, it will probably continue down to $4.393. If both previous supports are penetrated corn will test $4.331 per bushel.

Soybeans for July have the front resistance level estimated at $14.671. If the contract manages to pass the first level, next resistance is expected at $14.771 and then $14.847 per bushel. Meanwhile, support is expected at $14.495, $14.419 and $14.319 per bushel.