Grain futures edge higher, soybeans gain on increased demand

Grain futures advanced on Thursday with wheat rebounding from yesterdays decline, while soybeans gained as the recently hit 18-month low spurred demand prior to USDAs crop production report on August 12. Corn gained as well.

On the Chicago Board of Trade, soybeans for September delivery traded at $12.0988 a bushel at 9:03 GMT, up 0.91% on the day. Futures ranged between days high and low of $12.1188 and $11.9888 a bushel respectively. The oilseed rose 0.43% on Wednesday, snapping an 11-day falling streak and trimmed its weekly decline to little over 0.1% after shedding 19.2% in the last two five-day periods.

Soybeans continued to trade on the upside on Thursday as Mondays 18-month low spurred demand for the oilseed ahead of USDAs crop production report next Monday. U.S. exporters sold 220 000 tons of soybeans to China for delivery in the year starting September 1, the government agency said.

The Standard & Poor’s GSCI Index of eight agricultural commodities declined 19% so far this year with soybeans marking a 17% drop, while corn erased 34%. Both of the crops, the two biggest in the U.S., marked major losses in the last couple of weeks as favorable weather conditions in the main growing areas benefited developing and the USDA forecast record-high output this year. The government agencys previous projection was for a jump in domestic soybeans output by 13% 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.

The USDA said in its Monday crop progress report that as of August 4, 79% of the soybean plants had bloomed, up from 65% in the previous week and nearing the five-year average of 85%. During the comparable week a year earlier, 93% of the soybean crop was in the blooming stage.

As for the corn crop, the USDA said in its report that as of the week ending August 4, 86% of the corn plants were in the silking stage, compared to 71% a week earlier. This was near the five-year average of 89%, but below last year’s reading of 98%.

According to a Bloomberg survey, farmers may reap a record 14.036 billion bushels of corn this year, 30% more than last year’s production. The USDA will publish a revision of its projections at noon on August 12. The government agency trimmed its latest output projection to 13.95 billion bushels, down from 14.005 billion, but that was however still an all-time record high.

On the Chicago Board of Trade, corn futures for September delivery rose to $4.7163 a bushel at 9:01 GMT, up 0.66% on the day. Prices held in range between days high and low of $4.7263 and $4.6863 a bushel respectively. The grain rebounded from Tuesdays low of $4.6563 a bushel, the weakest level since September 2010, and reduced its weekly decline to little over 0.9% after shedding 12.6% during the last two weeks.

The USDA said in its report that as of the week ending August 4, 86% of the corn plants were in the silking stage, compared to 71% a week earlier. This was near the five-year average of 89%, but below last year’s reading of 98%.

Brett Cooper, senior manager markets at FCStone Australia Pty., said for Bloomberg: “You’ve got the USDA production and supply and demand reports so there’s probably a little bit of squaring up ahead of that. Corn and soybeans have had a fair retracement since the previous report.”

Wheat gains as well

Wheat also gained on Thursday and traded at $6.4538 a bushel at 9:06 GMT, up 0.28% on the day. Futures held in range between days high and low of $6.4225 and $6.4613 a bushel respectively. The grain fell 0.94% on Wednesday, extending current weeks decline to 2.2% after gaining 1.69% the previous five-day period.

Wheat was supported recently as lower prices induced stockpiles refilling by some countries. However, wheat prices plunged on Wednesday as Iraq and Egypt avoided purchases of U.S. wheat, indicating ample global supply. Instead, Iraq bought 150 000 tons of Canadian and Australian wheat, while Egypt, the worlds biggest importer, purchased 60 000 tons from both Romania and Ukraine.

Jamey Kohake, a broker and branch manager at Paragon Investments in Silver Lake, Kansas, said yesterday for Bloomberg: “Wheat’s lower because we missed out on that sale to Egypt. I don’t think wheat’s going to fall apart completely, but since we missed that sale, investors are selling the grain.”

The USDA reported on Monday that spring wheat heading advanced to 97% last week, 3% above the preceding week’s pace and 1% below the five-year average of 98%. During the comparable period in 2012, 100% of the crop was headed.

As for the wheat condition, its moderately better than last season’s crop. As of August 4, 7% of the spring wheat was categorized as “Very poor” and “Poor”, compared to 11% a year earlier. Plants in the “Fair” category were 1% less than in 2012, standing at 25%. As for the top quality, 68% was rated good-excellent, above last year’s 63% during the comparable week.