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

Wheat and corn futures kept the bearish momentum during early hours in Europe today, after on Tuesday the US Department of Agriculture revealed crops had progressed relatively well, pressuring all grains. Meanwhile, soybeans regained some ground, after it also slipped on the crops report yesterday.

Weather reports forecast mostly favorable conditions for planting in the US this week, with only scattered and mild showers in the Midwest and northern Plains, and the Delta. Meanwhile, moderate-to-heavy rains projected for the southern Plains bode well for the heat-weary crops, after the prolonged drought. Elsewhere, southwestern Russia and Ukraine are set for more heat this week, which could potentially damage crops.

The US National Agricultural Statistics Service (NASS) released its weekly crops report for the week through May 19 later yesterday.

“The solid planting pace coupled with very favorable weather and a decent increase to world stocks continues to weigh down prices,” said for Bloomberg Sam Sloane, senior analyst risk management and advisory at Ikon Commodities Pty.

Wheat

Wheat futures for July delivery on the Chicago Board of Trade stood at $6.370 per bushel, dropping 0.62% at 9:33 GMT today. Daily high and low were at $6.416 and $6.360 per bushel, respectively, reaching the lowest price in almost 8 weeks. Yesterday wheat dropped 1.76%, pressured by the crop report, after on Friday the contract closed for a weekly loss of more than 3%.

The NASS report revealed 44% of winter wheat in the 18 states, accounting for 87% of output, was in poor or very poor condition for the week through May 19, which is the same as last week and largely usual. Meanwhile, 70% was headed, after 57% for the previous week.

Spring wheat planting in the 6 major states was progressing well, growing to 74% completion from 49% for last week, though below readings from past years. Meanwhile, 43% of acreage had emerged, which is also behind the 5-year average of 57%, but well-above the 24% from the previous weekly report.

Corn

Corn futures for July traded for $4.674 per bushel in Chicago at 9:31 GMT today, dropping 0.48%. Prices reached a daily high and low at $4.700 and $4.672 per bushel, respectively, recording the deepest trough in 12 weeks. Yesterday corn also lost 1.73%, after last week the contract fell by more than 1.3%.

The NASS report showed corn planting was progressing well, to record 88% across the 18 states, which account for 91% of produce. Meanwhile, 60% of crops had already emerged, which is in line with figures for the period from previous years. Emergence was at only 34% last week.

“Weve got very good weather conditions, especially for corn and soybeans,” said for Associated Press Todd Hultman, grains and beans analysts for DTN in Omaha, Nebraska.

Soybeans

Soybean futures for July traded for $15.000 per bushel in Chicago at 9:30 GMT today, adding 0.76%. Prices ranged between $15.020 and $14.874 per bushel. Like other grains, soybeans lost 1.77% yesterday. Last week the contract added more than 3% on tight supplies.

The NASS crops report revealed 59% of soybeans in the 18 major states was completed, beating previous years readings and adding on last weeks 33%. Meanwhile, 25% of acreage had emerged, which is on par with past figures for the period.

Technical view

According to Binary Tribune’s daily analysis, wheat for July delivery on the CBOT will see its first resistance level at $6.462. If breached, the contract will advance to $6.514 and then to $6.544 per bushel. The first support points is estimated at $6.380. Should it be broken, wheat will test $6.350 and after that $6.298 per bushel.

Corn for July will have its first resistance at $4.733, and if it broken the contract will advance first to $4.771 and then to $4.791 per bushel. The first support level is calculated at $4.675. Should the contract breach that, it will probably continue down to $4.655. If both previous supports are penetrated corn will test $4.617 per bushel.

Soybeans for July have the front resistance level estimated at $15.072. If the contract manages to pass the first level, next resistance is expected at $15.258 and then $15.362 per bushel. Meanwhile, support is expected at $14.782, $14.678 and $14.920 per bushel.