Grain futures fairly unchanged after Tuesday’s gains

Grain futures were steady on Wednesday following Tuesdays rally with wheat, soybeans and corn marking minor gains.

On the Chicago Board of Trade, corn futures for September delivery traded at $5.4638 a bushel at 11:53 GMT, up 0.07% on the day. Prices held in range between days high and low of $5.4888 and $5.4438 respectively. The grain settled around 1.5% higher yesterday amid increased demand from U.S. suppliers, marking a 0.28% weekly advance after settling 3.3% higher last week.

Corn traded in a tight range and swung between gains and losses. The grain was supported as unfavorable for crop developing drought threatened to reduce yields. DTN said in a report yesterday that hot temperatures may settle in the Midwest in the next three days. The USDA said in its weekly crop progress report that corn silking fell far behind last year’s pace, standing at 16% as of July 14. That was above the preceding week’s 6%, but well below last year’s 67% during the comparable week and the five-year average reading of 35%.

According to the Ohio State University Extension website, silking is part of the pollination stage when yield is vulnerable to drought and high-temperature stress.

As for the corn crop condition, crop quality as of July 14 was far better than last year’s, but worsened compared to the preceding week. As of July 14, 9% of the crop was categorized as “Very poor” and “Poor”, 25% as “Fair” and 66% was rated good-excellent. During the preceding week, 8% of the crop fell in the “Very poor” and “Poor” categories, 24% in “Fair” and the remaining 68% were rated as “Good” and “Excellent”.

According to the U.S. Department of Agriculture, U.S. exporters sold 120 000 tons to unknown destinations in the year that starts September 1. Market analysts generally interpet the “unknown destination” category as purchases from China.

Wheat advances

Wheat, the fourth biggest U.S. crop behind corn, soybeans and hay also advanced on the day. Wheat for September delivery traded at $6.7288 a bushel at 11:53 GMT, up 0.43% on the day. Prices held in range between days high and low of $6.7400 and $6.6738 per bushel respectively. The grain settled almost unchanged yesterday, but has declined 1.4% so far this week.

The USDA said in its weekly crop progress report on Monday that as of July 14 67% of the winter wheat was harvested, compared to 57% in the preceding week, but below last year’s 81% and the five year average reading of 71%.

As for the spring wheat crop, 71% of the crop was headed as of July 14, well above the preceding week’s 45% and nearing the five-year average 73%. During the comparable week last year, 93% of the wheat was headed.

Spring wheat condition was overall better than the 2012 season, but slightly worse compared to the preceding week. As of July 14, 5% of the crop was rated very poor-poor, the same like the previous week, but below last year’s 8%. Meanwhile, 25% was categorized as “Fair”, compared to 23% in the preceding week and 27% in 2012. As for the premium quality, 70% of the crop was rated as good-excellent in the week ending July 14, compared to 72% in the preceding one and 65% a year earlier.

The U.S. Department of Agriculture said last week U.S. wheat reserves will total 576 million bushels at the end of the current marketing year on May 31, down from previous month’s estimate at 659 million bushels.

Analysts expected the agency to cut its forecast to 624 million bushels. The USDA said it expects exports to be 100 million bushels higher this year than previously forecast due to “strong sales, particularly to China”. U.S. export sales rose to 1.47 million tons in the week ending July 4, twice more than the previous week, as China purchased 1.02 million tons of wheat.

Soybeans steady

Soybeans futures swung between gains and losses, remaining generally unchanged during late European trading. Soybeans for August delivery traded at $14.7613 at 11:56 GMT, gaining 0.04%. Prices held in a wide range between days high and low of $14.8063 and $14.7250 a bushel respectively. The oilseed rose by more than 1.5% on Tuesday after USDAs crop progress report showed delays in crop developing, extending this weeks gains to 1.5%.

The USDA said in its weekly crop progress report that soybeans blooming advanced last week, but still fell behind the previous year’s pace. As of July 14, 26% of soybeans plants had bloomed, compared to 10% during the preceding week. This however was well below 2012′s 63% reading and the five-year average of 40%.

As for the crop condition, soybeans quality is a lot better this year, but has worsened compared to the previous week. As of July 14, 8% of the crop was categorized as “Very poor” and “Poor”, compared to 7% in the previous week and 30% a year earlier. Meanwhile, 27% of soybeans fell in the “Fair” category, 1% higher than the prior week and below last year’s 36%. As for the premium quality, 65% was rated good-excellent, below the preceding week’s 67% and well above 2012′s 34%.