Grain futures edge lower, soybeans hit 1-month low on rain forecasts

Grain futures retreated on Friday with wheat and corn marking minor daily losses, while soybeans posted a moderate retreat on speculations that rains in some growing regions will ease stress on the crops and boost yields.

On the Chicago Board of Trade, soybeans futures for delivery in November fell by 0.75% to $13.2913 per bushel at 8:58 GMT. Prices held in range between days high of $13.4000 and low at $13.2613 per bushel, the weakest level since August 23. The oilseed slipped 0.6% on Thursday, a third daily decline in four, and extended its weekly loss to over 3.8%.

Soybeans continued to decline despite increased demand for U.S.-grown crops from China as weather forecasters predicted favorable weather conditions that would ease stress on the plants. Futures rose 11% since the beginning of August as dry and hot weather threatened to curb yields and the USDA reported a deterioration in soybeans condition for five straight weeks.

DTN reported on September 19 that showers and warm weather in the Midwest will favor late-filling summer crops during the next couple of days, while the lack of freeze threats will allow immature crops to move slowly toward maturity. The agency also said that showers and somewhat lower temperatures will benefit late-filling crops in the the Southern Plains and weather in the Northern Plains will remain above the freezing zone for the next seven days or longer, thus allowing plants to continue to mature.

Graydon Chong, a grains and oilseeds analyst at Rabobank International in Sydney, said for Bloomberg: “Prices are falling “on the back of the supply coming on line.” 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 but that would still be 4.4% higher than last years drought-damaged crop.

Meanwhile, corn was little changed on the CBOT with the December contract trading at $4.5913 per bushel at 8:54 GMT, down 0.10% on the day. Prices held in range between days high and low of $4.5988 and $4.5638 per bushel respectively. The grain rose 1.4% in the last couple of days but trimmed its weekly advance to 0.05% following Fridays minor retreat.

The USDA reported on Monday that the corn crop condition marked a slight deterioration last week. As of September 15, 53% of the plants were rated good-excellent, compared to 54% a week earlier and 24% in 2012. Meanwhile, 18% of the crop was categorized as “Very poor” and “Poor”, 1% above the previous week and well below last year’s 50%.

Wheat with a minor fall

Elsewhere on the market, wheat futures swung between gains and traded at $6.5613 per bushel at 9:10 GMT, down 0.13% on the day. Prices held in range between days high and low of $6.5913 and $6.5438 a bushel respectively. The grain rose 1.7% on Thursday, the biggest daily gain since August 26 and fourth in a row, and extended its weekly advance to 2.4%.

Wheat drew support amid upbeat demand prospects. The USDA reported yesterday that U.S. wheat exports exceeded analysts projections and rose by 30% to 704 435 tons in the week ended September 12 from the previous week. Sales were up 38% to 17.1 million tons since June 1 compared to the same period a year earlier.

Greg Grow, the director of agribusiness for Archer Financial Services Inc. in Chicago, said for Bloomberg yesterday: “Export business continues to improve. Demand needs to continue to expand for additional gains.”

Grains, as other dollar-priced commodities, were also supported by a weaker dollar, which fell to a 7-month low after the Federal Reserve refrained from trimming its monetary stimulus on Wednesday.

Meanwhile, DTN reported that showers in the Southern Plains will cause minor delays to winter wheat planting. The USDA said in its crop report on Monday that as of September 15, 12% of the crop was planted, matching the five-year average pace and surpassing last week’s 10%. This marked a 7% advance from the preceding period.

At the same time, DTN pointed out that there are no major concerns for harvests in the Northern Plains in the next seven days. The USDA said on Monday that as of last week, 90% of the spring wheat crop was reaped, compared to the five-year average of 87%. This marked a 10% advance from the preceding week but fell behind last year’s 99% of crop harvested.