Grain futures edge lower, corn hits 38-month low on inventories data

Grain futures fell on Tuesday following USDAs inventories report on Monday with corn hitting the lowest since August 2010, while soybeans fell to the weakest level since the middle of August. Wheat dropped as well.

On the Chicago Board of Trade, corn futures for delivery in December traded at $4.4113 a bushel at 9:52 GMT, down 0.11% on the day. Prices shifted between days high of $4.4463 and low at $4.4038, the weakest level since the beginning of August, 2010. The grain plunged 2.6% on Monday and extended its weekly decline to nearly 2.8%.

Corn continued to retreat after the U.S. Department of Agriculture reported on Monday that inventories as of September 1 stood at 824 million bushel, 25% higher than the agencys estimate of 661 million on September 12. Analysts surveyed by Bloomberg anticipated a rise to 694 million bushels. The government agency said in its latest WASDE report that the nation will harvest a record 13.843 billion bushels of corn in 2013. Projections will be updated on October 11.

Data also showed that U.S. corn consumption and exports fell by 10% in twelve months ended August 31 from a year earlier. According to a Bloomberg survey, total supplies after this months harvest will surge 24% to 14.537 billion bushels. The grain has fallen 37% this year and is the worst performer of the Standard & Poor’s GSCI Index of 24 commodities.

Dale Durchholz, the senior market analyst at AgriVisor LLC in Bloomington, Illinois, said for Bloomberg: “The market is going to be dealing with big corn supplies for the next year, and that’s going to limit rallies.”

Soybeans decline as well

Meanwhile, soybeans futures for November settlement slipped 0.67% to $12.7375 per bushel at 10:10 GMT. Prices held in range between days high of $12.7863 and low at $12.7238 per bushel, the lowest since August 14. The oilseed plunged little over 2.9% on Monday and extended its weekly decline to 3.5% after Tuesdays retreat.

Soybeans were pressured after the USDA reported yesterday that supplies as of September 1 were 11% higher than previously estimated on September 12. Total stockpiles stood at 141 million bushels, well above previously calculated at 125 million. Analysts surveyed by Bloomberg last week expected a rise to 127 million. Demand in the three months ended August 31 fell by 41% to 294 million bushels compared to 2012. The USDAs 2012 output estimate was increased by 18.6 million bushels. The government agency trimmed its crop estimate to 3.149 billion bushels this year on September 12.

Randy Mittelstaedt, the director of research at R.J. O’Brien & Associates in Chicago, said for Bloomberg: “Supplies are a little bigger than people expected. Without a bullish surprise, the market is under pressure with the harvest coming very quickly. Yields collected so far have been better than expected, and now we’ll wait to see what happens to the crops that were planted late because of the flooding.”

Elsewhere on the market, wheat for delivery in December fell by 0.22% to $6.7788 per bushel at 10:10 GMT. Futures held in range between days high and low of $6.7988 and $6.7588 per bushel respectively. The grain slipped 0.3% on Monday.

DTN reported on September 30 that rains will help improve soil moisture for planting and early development of winter wheat in the Southern Plains. Meanwhile, there continues to be no significant threats for cold weather in the Midwest.