Grain futures mixed, soybeans extend decline on favorable weather

Grain futures were mixed on Friday with wheat and corn advancing, while soybeans fell to a 17-month low as favorable weather conditions boosted crop prospects and demand for U.S. supplies declined.

On the Chicago Board of trade, soybeans for August delivery traded at $13.4663 a bushel at 9:52 GMT, down 0.57% on the day. Prices held in range between days high at $13.5213 and low of $13.3088 per bushel, the lowest since March 2012. The oilseed fell for the last three days, extending current weeks decline to over 9.4% so far after surging 4.3% the previous one.

Soybeans fell as forecasters predicted favorable weather that will benefit both soybeans and corn crops. DTN said in a report yesterday that scattered thunderstorms and mild weather is expected during the next 10 days in the Midwest, which would benefit both corn and soybeans, the country’s two biggest crops. The oilseed has fallen more than 11% so far this year as the USDA projected domestic output will jump to a record 3.42 billion bushels, which would boost global inventories by 20% to an all-time record high of 74.1 million tons.

Meanwhile, the USDA said yesterday U.S. soybeans exports in the week ending July 18 fell 32% to 82 231 tons.

Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, said for Bloomberg: “The combination of slower U.S. soybean and meal exports and excellent northern hemisphere oilseed production prospects – – both soybeans and canola — remains the major bearish influences on oilseed prices.”

Goldman Sachs’s 12-month price estimate for soybeans remained at $11 per bushel.

As for the soybeans condition, the government agency reported it was overall the same like last week and far better than the previous season. As of July 21, 8% of the crop was categorized as “Very poor” and “Poor”, the same like the preceding week and well below 2012′s 25%. Meanwhile, 28% of the crop fell in the “Fair” category compared to 27% a week earlier and 34% last year. As for the premium quality, 64% was rated good-excellent, 1% less than the week ending July 14 but well above last year’s 31%.

Corn rebounds from a 33-month low

Elsewhere on the market, corn rebounded during the European session after hitting a fresh 33-month low in early Asian trading. Corn for September delivery marked a new days high at $4.9688 a bushel at 9:53 GMT, up 0.34% on the day. Days low stood at $4.9263, the lowest level since September 2010. The grain fell throughout the past four days, extending this weeks decline to over 8.5% so far after slipping 0.18% the previous one.

Corn shed 31% this year as the U.S. Department of Agriculture 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 and is 29% higher than last year’s drought damaged crop. This year’s global stockpiles are projected to rise to 150.97 million tons by the end of the 2013-2014 marketing year, 22% more than the previous period.

The USDA said in its weekly crop progress report on Monday that this year’s crop condition is a lot better than the last season’s, but a bit worse than the previous week. As of July 21, 11% of the crop was categorized as “Very poor” and “Poor” compared to 9% a week earlier and 45% in 2012. Meanwhile, 26% was categorized as “Fair”, above last week’s 25% and below last year’s 29%. As for the premium quality, 63% was rated as good-excellent, compared to 66% a week earlier and 26% in 2012.

Elsewhere on the market, wheat also traded higher on the day after hitting a 13-month low earlier in the day. Wheat futures for September delivery traded at $6.5450 a bushel at 9:53 GMT, up 0.79% on the day. The grain shifted between days high at $6.5488 and low of $6.4813, the weakest level since June 2012. The grain settled lower throughout the week, bringing this weeks decline to 1.4% after dipping 2.5% the preceding one.

Wheat has fallen 16% so far this year as the USDA projects a record high global output of 697.8 million tons amid increased production in Russia and the European Union. Goldman Sachs’s 12-month price estimate for wheat stood at $6.50 per bushel.

The USDA said in its crop progress report on Monday that the spring wheat condition was overall better than last season’s and almost unchanged from a week earlier. As of July 21, 5% of the crop was categorized as “Very poor” and “Poor”, the same like the previous week and better than last year’s 11%. Meanwhile, 27% of the grain was of “Fair” quality compared to 25% a week earlier and 29% in 2012. As for the premium crop, 68% was rated “Good” and “Excellent”, below 70% as of July 14 but above last year’s 60% during the comparable week.