Grains trading outlook: wheat and soybeans futures lower after USDA outlook, corn climbed

Grain futures were trading in the black midday in Europe today, after mixed results yesterday. Wheat and beans logged sizable losses on Tuesday, in light of the US Department of Agricultures monthly global crop outlook, which projected record yields. Corn was also estimated to log a record harvest, but dropped as traders had expected an even bigger number.

Weather patterns called for a favorable trend for the Midwest and the Plains, with scattered showers and near to below normal temperatures. Europe has been subject to damaging rainfall throughout the whole harvest season this year, with rains continuing through central Europe, damaging wheat quality and delaying harvest.

The USDAs World Agricultural Supply and Demand Estimates Report (WASDE) was posted yesterday, revealing the Departments view of record yields and harvests for wheat, corn and beans. Near-perfect weather in the past three month, with three times the normal rainfall, spell a supply boom for grains in the US, pressuring prices some 15% lower this year.

Wheat futures for September delivery on the Chicago Board of Trade (CBOT) stood at $5.422 per bushel at 12:13 GMT, up 0.79%. The contract lost 1.56% on Tuesday.

The USDA said global supplies of wheat at the end of the 2014-15 season will be at 192.96 million metric tons. The Department also lowered its season-average price projection by $0.3 to $5.80 – $6.80 per bushel.

Earlier, the USDAs statistical arm, the National Agricultural Statistics Service (NASS), reported on crop quality and progress on Monday. Winter wheat harvest was 95% complete, while spring wheat harvest was just starting, with 6% complete by August 10. Still, 70% of spring wheat was reported in good or excellent condition.

Corn, beans

Corn for December traded at $3.694 per bushel, up 0.14%. Corn gained 0.20% yesterday.

The USDA projected the corn harvest at the record 14.03 billion bushels, on yields of 167.4 bushels per acre, also at record level. Both figures, however, were below expectations and offered support to corn futures.

“The corn number being sub-170 [bushels an acre] is the big surprise,” Sterling Smith, a futures specialist at Citigroup in Chicago said for The Wall Street Journal. “That was way under expectations.”

Mondays crop progress report showed 73% of corn crops were logged as in good or excellent condition.

Meanwhile, November beans stood for a 0.14% drop at $10.610 per bushel. The contract closed Tuesday 1.28% lower.

The USDA estimated this seasons harvest would be a record 3.82 billion bushels, on record yields of 45.4 bushels an acre.

NASS report logged beans quality as predominantly positive, with 71% of crops in good or excellent condition.

“We got confirmation that there will be plenty of soybeans, and we know there will be plenty of corn,” said Joe Hofmeyer, an analyst with commodity brokerage CHS Hedging in Minnesota, said for The Wall Street Journal.

Technical support and resistance levels

According to Binary Tribune’s daily analysis, wheat September future’s central pivot point on the CBOT stands at $5.396. The contract will see its first resistance level at $5.458. If breached, it will advance to $5.536 and then to $5.598 per bushel. The first support points is estimated at $5.318. Should it be broken, wheat will test $5.256 and after that $5.178 per bushel.

December corn’s central pivot is at $3.665. The future will have its first resistance at $3.748 and if it broken it will advance first to $3.806 and then to $3.890 per bushel. The first support level is calculated at $3.606. Should the contract breach that, it will probably continue down to $3.522. If both support levels are penetrated corn will test $3.464 per bushel.

Beans November future’s central pivot is projected at $10.599. The contract will have the front resistance level at $10.759. If it manages to pass the first level, next resistance is expected at $10.923 and then $11.083 per bushel. Meanwhile, support is expected at $10.435, $10.275 and $10.111 per bushel.