Grains trading outlook: wheat, corn, soybeans futures lower after slump on Monday’s report

Grains futures continued downwards during early trade in Europe today. The US Department of Agriculture (USDA) posted weekly figures on crops progress, pressuring corn and beans to multi-year lows. Wheat was also down, reaching a five-month low.

Weather patterns project rains throughout the US this week, with plenty in the South Plains and the central US, as well as the Delta, worsening conditions for winter crops as well as delaying harvesting. Parts of the Midwest should also be prepared for potential flooding, possibly damaging growing crops.

more storms for the northern Plains and the Midwest this week. Rains will maintain surplus soil moisture, favoring growing crops, though damaging mature winter wheat. The southern Plains will also see showers and some not-so-warm weather this week. The Delta will probably also see winter wheat harvest delays due to rains.

The USDA’s National Agricultural Statistics Service (NASS) released its report on crops progress and quality for the week through June 29 yesterday. The log revealed steady improvement throughout, with winter wheat harvest advancing and good crops condition across all grains.

“The market is now looking at the conditions of the U.S. crop, which is quite good as well, and started to build in some large expectations for new crop,” Paul Deane, analyst at Australia & New Zealand Banking Group Ltd. in Melbourne, said for Bloomberg.

Wheat

Wheat futures for September delivery on the Chicago Board of Trade stood at $5.764 per bushel, down 0.13% at 9:18 GMT today. Prices shifted between $5.750 and $5.810 per bushel. The contract dropped 2.74% yesterday, reaching a five-month low of $5.674 per bushel, after adding about 1.5% last week.

“We’re seeing ample global supplies,” Christopher Narayanan, the head of agricultural research at Societe Generale SA in New York, said for Bloomberg June 27. “The downside risk is greater than upside risk at this point. Barring any kind of summer woes, things look pretty good.”

The NASS report showed 43% of winter wheat was harvested by June 29, below the 48% of the 5-year average for this week. Like last week, 30% of crops were in good or excellent condition, while 44% were in poor or very poor shape.

Meanwhile, 26% of spring wheat was headed, slightly below past readings, while 71% of crops were in good or excellent condition, slightly improving on last years figure for the week.

Corn

Corn futures for December traded for $4.226 per bushel, down 0.59%. Prices ranged between $4.246 and a five-year low of $4.210 per bushel. Yesterday the contract dropped 4.92%, after about 2.5% were lost last week.

“Inventories were larger than expected and signal no shortfall in supplies ahead of the harvest this year,” Dale Durchholz, the senior market analyst for AgriVisor LLC in Bloomington, Illinois, said in a telephone interview for Bloomberg. “Corn supplies are comfortable.”

Readings in the NASS report pointed out that 75% of corn crops were in good or excellent condition, while the 5-year average for this time of year is 67%.

Soybeans

Soybean futures for November traded for $11.500 per bushel, dropping 0.63%. Prices ranged from a five-year low of $11.464 to $11.586 per bushel. The contract was down 5.76% yesterday, after a further 3% decline last week.

The NASS log revealed 72% of beans crops remained in good or excellent condition. Meanwhile, 94% of crops had emerged and 10% were blooming, both readings on par with their respective 5-year averages.

Technical view

According to Binary Tribune’s daily analysis, wheat for September delivery on the CBOT will see its first resistance level at $5.907. If breached, the contract will advance to $6.041 and then to $6.157 per bushel. The first support points is estimated at $5.657. Should it be broken, wheat will test $5.541 and after that $5.407 per bushel.

Corn for December will have its first resistance at $4.399 and if it broken the contract will advance first to $4.547 and then to $4.629 per bushel. The first support level is calculated at $4.169. Should the contract breach that, it will probably continue down to $4.087. If both previous supports are penetrated corn will test $3.939 per bushel.

Soybeans for November have the front resistance level estimated at $12.237. If the contract manages to pass the first level, next resistance is expected at $12.901 and then $13.443 per bushel. Meanwhile, support is expected at $11.031, $10.489 and $9.825 per bushel.