Grains trading outlook: wheat, corn and soybeans futures slide amid poor weather concerns

Grains futures slid during early trade in Europe today, after rallying on poor rainfall projections for the US on Monday, which pressured crops outlooks. The US Department of Agriculture (USDA) posted steady weekly crop figures yesterday.

Weather reports project a week of limited rainfall for the Midwest, which should not affect crops too much, as temperatures remain near-to-below normal, easing pressure due to moisture supply. The Southern Plains will see more rains, and below-normal temps, which will ease crops after a hot and dry last week. The Northern Plains and Canada will see mostly favorable conditions, with mild weather and sufficient soil moisture.

“The meager rainfall in parts of the Midwest of late has reduced moisture levels in the upper soil layers,” Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt, said in an e-mailed report. “Although soil moisture levels are still good at lower levels, rain will soon be needed to prevent yield expectations from being revised downwards.”

The USDAs National Agricultural Statistics Service (NASS) posted weekly crop progress readings yesterday. The log revealed steady crop condition at above-average levels across all crops.

Corn

Corn December contracts on the Chicago Board of Trade (CBOT) stood at $3.750 per bushel at 9:54 GMT, dropping 0.46%. Daily price range was at $3.750 – 3.772 per bushel. The contract added 1.34% yesterday, after dropping 2% last week, when a four-year low of $3.704 per bushel was reached.

NASS weekly report showed 76% of corn crops were in good or excellent condition as of July 27, while last years standing for the week was 63%.

Soybeans, wheat

Soybeans for November lost 0.14% to trade at $11.062 per bushel. The contract added 2.24% on Monday, and beans gained some 1% last week, though the November future also reached a 2.1/2-year low at $10.550 per bushel.

“People want to see a widespread Midwest rain before pressing the soybean market” after this year’s price slump, Dan Cekander, director of grain-market analysis at Newedge USA LLC in Chicago, said for Bloomberg. “Soybean yields are determined by August rain.”

Beans crops were reported to remain in top-notch condition, with 71% in good or excellent shape.

Meanwhile, US exports of soybeans more than tripled on an annual basis to 2.68 million tons in the week ended July 17, USDA data showed on Monday.

Wheat for September delivery in Chicago traded at $5.330 per bushel, down 0.33%. The contract dropped 0.60% on Monday, after logging minor gains last week, reaching a four-year low of $5.202 per bushel.

The NASS log pointed that winter wheat harvest was 83% complete, after the 75% figure for last week, while spring wheat condition was unchanged at 70% in good or excellent shape.

Technical view

According to Binary Tribune’s daily analysis, wheat for September delivery on the CBOT will see its first resistance level at $5.412. If breached, the contract will advance to $5.478 and then to $5.524 per bushel. The first support points is estimated at $5.300. Should it be broken, wheat will test $5.254 and after that $5.188 per bushel.

Corn for December will have its first resistance at $3.788 and if it broken the contract will advance first to $3.810 and then to $3.844 per bushel. The first support level is calculated at $3.732. Should the contract breach that, it will probably continue down to $3.698. If both previous supports are penetrated corn will test $3.676 per bushel.

Soybeans for November have the front resistance level estimated at $11.150. If the contract manages to pass the first level, next resistance is expected at $11.240 and then $11.348 per bushel. Meanwhile, support is expected at $10.952, $10.828 and $10.754 per bushel.