Grains trading outlook: corn, wheat futures reverse some gains, soybeans up

Corn and wheat futures corrected some of Fridays rally during early trade in Europe today, while soybeans were still on the upside. Meanwhile, investors and farmers prepare for the largest US harvest to date.

The US Department of Agriculture (USDA) will release its monthly World Agricultural Supply and Demand Estimates reports on Thursday, set to confirm earlier forecasts of record harvests in the US as well as record global surplus. Grain futures have dropped 15%-20% this year, as supply projections heavily outweighed demand prospects.

Meanwhile, later today USDAs statistical arm, the National Agricultural Statistics Service (NASS) is set to release its weekly crop progress report, which will probably show the significantly better-than-expected crop quality across all grains remains well entrenched, supporting grain bears.

Last weeks NASS log reported 74% of corn in good or excellent condition, while 74% of soybeans and 63% of wheat were also reported better than average.

Corn futures for December delivery on the Chicago Board of Trade (CBOT) stood at $3.544 per bushel at 8:47 GMT, down 0.42%. The contract added 2.74% on Friday, after logging a four-year low of $3.436 on Wednesday, settling the week for a ~2.2% loss.

“Cooler forecast weather in the US Midwest has raised some concerns for ripening and drying time for the US corn crop,” Australia & New Zealand Banking Group Ltd. analysts wrote in an note cited by Bloomberg. “Those short in the market may be taking profits.”

An incoming cooler Canadian system will reach the Corn Belt in the US by midweek, with temperature lows dropping to as little as 30 degrees Fahrenheit, -1.1 Celsius. The negative Celsius means water freeze, signifying possible frost threat to still immature crops.

This is only a worst-case scenario, though, and these cooler weather patterns failed to record a lasting impact on grain prices, following the rally they induced on Friday.

Soybeans, wheat

Soybeans futures for November were at $10.240 per bushel, up 0.24%. Beans prices were down ~0.3% for the week at close on Friday, after reaching a four-year low of $10.022 earlier in the week.

Meanwhile, December wheat traded at $5.344 per bushel, down 0.14%. Wheat prices slid by more than 5% last week.

“Weve reached a point where supply is swamping demand, and because of that were having a price adjustment like we havent seen for years,” Don Roose, president of U.S. Commodities, a brokerage in West Des Moines, Iowa, said for The Wall Street Journal. “The weather turned out to be almost ideal.”

Technical support and resistance levels

According to Binary Tribune’s daily analysis, wheat December future’s central pivot point on the CBOT stands at $5.351. The contract will see its first resistance level at $5.421. If breached, it will advance to $5.489 and then to $5.559 per bushel. The first support points is estimated at $5.283. Should it be broken, wheat will test $5.213 and after that $5.145 per bushel.

December corn’s central pivot is at $3.533. The future will have its first resistance at $3.601 and if it broken it will advance first to $3.641 and then to $3.709 per bushel. The first support level is calculated at $3.493. Should the contract breach that, it will probably continue down to $3.425. If both support levels are penetrated corn will test $3.385 per bushel.

Soybeans November future’s central pivot is projected at $10.154. The contract will have the front resistance level at $10.286. If it manages to pass the first level, next resistance is expected at $10.358 and then $10.490 per bushel. Meanwhile, support is expected at $10.082, $9.950 and $9.878 per bushel.