Grain futures mixed, corn drops on favorable weather

Grain futures were mixed on Friday with corn extending losses amid favorable weather conditions that should boost crop developing, while wheat and soybeans advanced.

On the Chicago Board of Trade, corn futures for September delivery traded at $5.3838 a bushel at 9:16 GMT, down 0.41% on the day. Prices held in range between days high and low of $5.4088 and $5.3813. The grain settled 0.28% higher yesterday but still marks a weekly decline of over 1%.

According to a DTN report yesterday, rainfall and cooler temperatures will settle in the U.S. Midwest after the next two days of hot and dry weather, which would ease crop stress. According to AccuWeather.com on Thursday, a thunderstorm is expected to move through the Corn Belt, delivering near-normal for the season rain.

Graydon Chong, a grains and oilseed analyst at Rabobank International in Sydney, said for Bloomberg: “The weather is driving this market and pressuring corn lower.”

Last week, the U.S. Department of Agrictulure confirmed expectations for reduction in the total output to 13.95 billion bushels, down from 14.005. However, this is still an all-time record high.

On Monday, the USDA said crop quality as of July 14 was far better than last year’s drought-damaged crop, 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”.

Soybeans advance

Meanwhile, soybeans advanced, extending this weeks gain to over 3.2%. On the Chicago Board of Trade, soybeans for August delivery traded at $14.7488 at 9:18 GMT, up 0.36% on the day. Prices held in range between days high and low of $14.8238 and $14.7013.

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%.

Wheat gains as well

Meanwhile, wheat gained on the day, snapping a five-day losing cycle amid increased demand from China. According to grain handler Emerald Group Australia Pty, The Asian country may increase wheat purchases from Australia by 67% to 2 million tons in the year starting July 1 as rains damaged local crops.

Wheat futures for September delivery traded at $6.6313 at 9:08 GMT, up 0.32% on the day. Prices held in range between days high and low at $6.6688 and $6.6063 a bushel. The grain marked daily losses throughout the week and has declined 2.6% so far after gaining 3.2% during the last five-day period.

The USDA said in its weekly crop progress report on Monday that 71% of the spring wheat crop 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.