Grain futures mixed

Grain futures were mixed on Tuesday as the U.S. Department of Agriculture published its weekly crop progress report yesterday. Wheat traded lower on the day and soybeans marked gains, while corn rebounded after plunging 2.2% yesterday and stood higher as well.

On the Chicago Mercantile Exchange, corn futures for July delivery traded at $6.5200 per bushel at 8:38 GMT, up 0.22% on the day. Prices ranged between day low of $6.4938 and high at $6.5275 a bushel. Prices dipped 2.2% yesterday, the most in five weeks, amid speculation that favorable weather will assist crop developing.

In its weekly crop progress report, the U.S. Department of Agriculture said yesterday that 95% of the nations corn crop was planted as of the week ending June 9, compared to 91% in the preceding week. This is lower than the same time last year when 100% of the crop was planted and is also below the five-year average of 98%. According to USDAs report, 7% of the corn crop fell in the “Very poor” and “Poor” condition categories and 30% was assessed as “Fair”, which shows improvement compared to last year when 8% was “Very poor” and “Poor” and 26% “Fair”. As of last week 63% of the corn crop was of “Good” and “Excellent” quality, slightly lower than last years 66%.

Luke Mathews, a commodity strategist at Commonwealth Bank of Australia (CBA), wrote in a report for Bloomberg: “The USDA data may maintain the bearish mood. The USDA indicated that U.S. corn planting to 95 percent complete last week to be only 3 points off the normal planting pace. Emergence rates continue to improve and 63 percent of the crop is rated good-to-excellent.”

Wheat prices kept being pressured as favorable crop conditions in the Black Sea region suggested an increased supply from Russia and Ukraine. Also, according to forecaster DTN, drier and hotter conditions later this week and early next week will assist harvesting in the U.S. Wheat futures for July marked a 0.16% loss for the day and stood at $6.8813 a bushel at 8:33 GMT.

Jaime Nolan-Miralles, a commodity risk manager with INTL FCStone Inc. in Dublin said for Bloomberg: “Warmer and drier weather being forecast for the U.S. Plains is giving far improved harvesting conditions for U.S. wheat.”

According to USDAs report, as of the week ending June 9 87% of the nations spring wheat was planted, compared to 80% in the preceding week. This is below the same time last years full completion and the five-year average 96% figure. The USDA said 43% of the winter wheat crop was of “Very poor” and “Poor” quality and 25% fell in the “Fair” category. Only 32% was categorized as “Good” and “Excellent”. Last year 17% of the crop was assessed as “Very poor” and “Poor”, 30% as “Fair” and 53% was rated “Good” and “Excellent”.

Last week, reduced demand for U.S. wheat pressured wheat prices as the USDA reported an unauthorized genetically modified strain was found in Oregon. This caused Japan, South Korea and Mexico to cancel orders, resulting in a 33 200 tons export reduction in the week ending May 30.

Elsewhere on the market, soybeans bounced off a one-week low and traded 0.53% higher on the day. Soybeans for July delivery stood at $15.2025 a bushel at 8:34 GMT. The USDA reported on Monday that 71% of the U.S. soybeans crop was planted as of June 9, compared to 57% in the preceding week. This is well below last years 97% during the same week and the five-year average of 84%. According to USDAs report, 48% of the crop has emerged, 17% above the preceding weeks figure. This is also lower than last years 88% and the five-year average 67$ figure.

Soybean prices found support lately as increased demand dried up inventories and slower planting was reported. According to the U.S. Department of Agriculture, soybeans inventories in the U.S. will drop 26% to 125 million bushels before this year’s harvest. This is the lowest level since nine years. U.S. exporters have already sold 36.62 million metric tons of the 36.74 government prediction.