Grain futures higher, soybeans advance on increased demand

Grain futures rose on Tuesday following USDAs crop progress report on Monday which showed harvesting fell well behind last years pace, while soybeans condition remained unchanged after 5 weeks of deterioration and the corn crop improved. Increased U.S. exports of the oilseed pushed prices over 1%.

On the Chicago Board of Trade, soybeans futures for delivery in November rose by 0.99% to $13.2138 per bushel at 11:23 GMT. Prices held in range between days high of $13.2263 and low of $13.0550 per bushel, the weakest level since August 21. The oilseed erased its previous weekly decline and surged 0.4% after settling 4.7% lower the preceding five-day period.

Soybeans reversed their weekly movement as data by the USDA showed that export inspections rose to 16.8 million bushels in the week ended September 19 from 2.97 million in the previous week.

The government agency also reported that the crop condition remained unchanged last week after worsening for five consecutive weeks. As of September 22, 50% of the plants were rated good-excellent, the same as in the previous period and well above last years 35%. Meanwhile, 33% of the crop was categorized as “Fair” and 17% as “Very poor” and “Poor”, compared to 32% and 18% in the previous week respectively.

Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, said: “The most significant thing is the export demand for U.S. beans. The USDA’s latest projection for carryout at 150 million bushels for 2013-2014 remains very, very tight and should continue to support the complex.”

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 year’s drought-damaged crop.

Corn advances

Meanwhile, corn futures for delivery in December rose by 0.10% to $4.5388 per bushel at 11:23 GMT. Prices held in range between days high and low $4.5688 and $4.5138 a bushel. The grain rose 0.4% on Monday and extended its weekly advance to 0.5% after falling 6.6% in the preceding three weeks.

The U.S. Department of Agriculture reported on Monday that the crop condition has improved last week but harvesting fell well behind last years pace. The government agency said that as of September 22, 16% of plants were rated very poor-poor, compared to 18% a week earlier and 51% in 2012. Meanwhile, 29% of the crop was categorized as “Fair”, the same as last week and above the previous years 25%. As for the premium quality, 55% of the harvest was rated good-excellent, marking a 2% improvement from the previous period and well above last years 24%.

As for the harvesting pace, the USDA reported that 7% of the crop was reaped as of September 22, up from 4% in the previous week but well below the five-year average pace of 16% and last years 37%.

Corn has been on a downward trend in the recent weeks amid improving crop conditions in the Midwest. Informa Economics raised its estimate on Friday for the 2013 crop to 13.889 billion bushels, above USDA’s all-time-record-high forecast. The government agency said on September 12 that the nation will harvest a record 13.843 billion bushels of corn in 2013, confounding analysts’ projections for 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.

Wheat little changed

Elsewhere on the market, wheat was little changed and traded at $6.5438 per bushel at 11:06 GMT, up 0.06% on the day. Prices shifted between days high and low of $6.5788 and $6.5313 a bushel respectively. The grain rose 1.2% on Monday and extended its weekly advance to 1.3% after adding 0.8% in the preceding week.

DTN reported on September 23 that a drier trend in the Southern Plains will favor the summer crop harvest and winter wheat planting this week. The USDA said on Monday that as of September 22, 23% of the crop was planted, the same like the comparable week a year earlier and 1% below the five-year average pace.

DTN also said that dry weather in the Northern Plains will improve conditions for harvest during the next few days. The USDA said that 93% of the spring wheat crop was harvested last week, the same as the five-year average but below last years full completion.