Grains trading outlook: wheat, corn recover some losses, soybeans continue slide

Wheat and corn futures recovered some losses during early trade in Europe today, while soybeans continued downwards. All contracts scored sizable losses on Monday, after the US Department of Agriculture (USDA) posted weekly readings on crops progress and conditions.

Weather patterns project mild weather for the US Midwest this week, favoring corn pollination, while scattered showers will keep adequate-to-surplus soil moisture, improving outlooks for all growing crops. Conditions for winter wheat harvesting will be good, with mostly dry weather across the Midwest and the Delta. The Plains will also see mostly dry weather, helping field work, while warmer temperatures boost developing crops.

The USDA’s National Agricultural Statistics Service (NASS) released its report on crops progress and quality for the week through July 6 yesterday. The log revealed steady improvement throughout, with winter wheat harvest advancing and good crops condition across all grains.

Wheat

Wheat futures for September delivery on the Chicago Board of Trade stood at $5.592 per bushel, up 0.45% at 9:25 GMT today. Prices shifted between $5.570 and $5.610 per bushel. The contract dropped 3.93% yesterday, reaching a five-month low of $5.560 per bushel, after losing about 2.5% last week.

The NASS report showed 57% of winter wheat was harvested by July 6, below the 60% of the 5-year average for this week. Like last week, 31% of crops were in good or excellent condition, while 44% were in poor or very poor shape.

Meanwhile, 47% of spring wheat was headed, in line with past readings, while 70% of crops were in good or excellent condition.

Corn

Corn futures for December traded for $4.070 per bushel, adding 0.18%. Prices ranged between $4.062 and $4.080 per bushel.

“Technical indicators are oversold,” Avtar Sandu, senior commodities manager at Phillip Futures Pte in Singapore, said for Bloomberg, adding that the rebound may be short-lived. “There are showers in the Corn Belt and the weather is cool. This would help corn achieve a record harvest, thereby increasing both U.S. and global inventories which are already on the high side.”

Yesterday the contract dropped 2.17%, reaching a 4.1/2-year low of $4.030 per bushel, after about 7% were lost last week, for a total of more than 12% decline for the past two weeks.

Readings in the NASS report pointed out that, same as last week, 75% of corn crops were in good or excellent condition, while the reading for this week of last year is 68%.

Soybeans

Soybean futures for November traded for $11.234 per bushel, dropping 0.18%. Prices ranged from $11.222 to $11.294 per bushel. The contract was down 0.71% yesterday, reaching a five-month low of $11.160 per bushel, after a further 6% decline last week, for a total of more than 10% loss over the past two weeks.

The NASS log revealed 72% of beans crops remained in good or excellent condition, same as last week and on par with the reading for the same week last year. Meanwhile, 98% of crops had emerged and 24% 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 $5.704. If breached, the contract will advance to $5.842 and then to $5.914 per bushel. The first support points is estimated at $5.494. Should it be broken, wheat will test $5.422 and after that $5.284 per bushel.

Corn for December will have its first resistance at $4.101 and if it broken the contract will advance first to $4.139 and then to $4.175 per bushel. The first support level is calculated at $4.027. Should the contract breach that, it will probably continue down to $3.991. If both previous supports are penetrated corn will test $3.953 per bushel.

Soybeans for November have the front resistance level estimated at $11.305. If the contract manages to pass the first level, next resistance is expected at $11.357 and then $11.429 per bushel. Meanwhile, support is expected at $11.181, $11.109 and $11.057 per bushel.