Grain futures mixed, soybeans decline as rain seen aiding crops

Grain futures were mixed on Monday with wheat and corn advancing, while soybeans declined as rains in parts of the Midwest may halt a decline in soybeans condition that has already deteriorated for four consecutive weeks.

On the Chicago Board of Trade, soybeans futures for November delivery fell by 1.04% to $13.6650 per bushel at 10:55 GMT. Prices held in range between days high and low of $13.7513 and $13.6050 per bushel respectively. The oilseed fell 1.1% on Friday but still settled the week 0.9% higher after adding 1% in the preceding five-day period.

Soybeans and corn rallied to multi-week highs in the last couple of weeks as dry and hot weather in most of the main growing ares were expected to curb yields. However, MDA Information Systems LLC said on Friday that rain is anticipated to return to the region this week, which would east stress on the crops.

Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, wrote in a note: “Forecasts for beneficial rain in the U.S. this week weighed on sentiment for soybeans. The market is still coming to terms with the USDA’s surprise upgrade to U.S. corn-production prospects,” he said, referring to the U.S. Department of Agriculture by its initials.”

The U.S. Department of Agriculture trimmed its crop estimate to 3.149 billion bushels this year on September 12, down from August’s 3.255 billion, as a result of recent unfavorable weather conditions.. Analysts surveyed by Bloomberg expected a drop to 3.134 billion bushels. Yields projections were trimmed in nine Midwest states where drought vastly expanded. The government agency reported a fourth consecutive weekly deterioration of the crop condition last Monday with 52% of the crop being rated good-excellent, 2% below the previous week.

Meanwhile, corn futures for delivery in December rose by 0.44% to $4.6063 a bushel at 10:55 GMT. Prices held in range between days high and low of $4.6088 and $4.5463 per bushel respectively. The grain fell 1.7% on Friday and settled the week 2% lower after retreating 5.3% in the preceding two five-day periods.

Corn futures declined last week after the U.S. Department of Agriculture reported that the nation will harvest a record 13.843 billion bushels of corn in 2013, confounding analysts’ projections for a a drop to 13.641 billion bushels from 13.763 billion estimated in August. Domestic output will be 28% higher than last year’s drought damaged crop. U.S. corn reserves will total 1.855 billion bushels on August 31, 2014, above the previous estimate of 1.837 billion. Global inventories will surge 24% to a 12-year high, the agency reported.

The USDA reported that corn condition had again worsened last week with 54% of the crop being rated good-excellent, 2% below the previous week.

Elsewhere on the market, wheat futures for delivery in December rose by 0.42% to $6.4413 a bushel at 11:09 GMT. Prices held in range between days high and low of $6.4443 and $6.3863 a bushel respectively. The grain slipped 1.9% on Friday and marked a second consecutive weekly decline of 1.1%.

The USDA reported on Thursday that U.S. wheat reserves before next year’s harvest will total 561 million bushels, confounding analysts’ expectations for a drop to 544 million from August’s estimated 551 million. Global production forecast was raised to 708.9 million tons from 705.4 million estimated last month and 655.2 million last year.

DTN reported on September 12 that rains in the Central/Southern Plains would recharge soil moisture for the next winter-wheat crop. The USDA reported that winter-wheat planting has begun last week and 5% of the crops were planted. This compares to the five-year average of 5% and last year’s 4% during the comparable week.

DTN also said that dry weather in the Northern Plains will improve conditions for the spring wheat harvesting. The U.S. Department of Agriculture reported that spring wheat harvesting has surpassed the five-year average pace but remained below last year’s tempo. As of September 8, 80% of the crop was reaped, marking a 16% advance from the preceding week and going 1% above the five-year average reading. During the comparable period in 2012, 97% of the crop was harvested.