Grain futures mixed, soybeans decline on favorable weather in South America

Grain futures were mixed on Friday with corn and wheat marking moderate advances, while soybeans fell on outlook for favorable weather across South Americas major growing areas. Wheat drew support on signs of increased demand for U.S. supplies.

On the Chicago Board of Trade, soybeans futures for settlement in January traded at $13.1063 per bushel at 10:59 GMT, down 0.20% on the day. Prices shifted in a days range between $13.1563 and $13.0913 per bushel. The oilseed snapped six days of gains on Thursday and further pared its weekly advance to 1.2% following Fridays retreat.

Soybeans were pressured as weather forecasts called for favorable weather in South Americas key growing areas. DTN reported on November 14 that Brazil continues to have mostly favorable conditions for planting and developing of corn and soybeans. However, some rains were expected to briefly delay the planting progress in the southern growing areas.

The agency also reported that mostly dry conditions during the next 10 days in the U.S. Midwest will favor the harvest as it nears completion.

Graydon Chong, a grains and oilseeds analyst at Rabobank International in Sydney, said for Bloomberg: “As we get closer to the South American crop, better weather certainly helps. That will obviously impact prices looking toward the new crop.”

The USDA said in its weekly crop progress report released on Tuesday that the U.S. harvest advanced by 5% from a week earlier. As of November 10, 91% of soybeans were harvested, 1% less than the five-year average and below last year’s 95% during the comparable week.

The government agency reported last week that global inventories before the next year’s harvest will be 70.23 million tons, below September’s estimate of 71.54 million tons but the U.S. production will be 3.258 billion bushels this year, the third-biggest ever.

Elsewhere on the market, corn futures for settlement in December traded at $4.2763 per bushel at 10:57 GMT, up 0.29% on the day. Prices shifted in a days range between $4.2888 and $4.2538 a bushel. The grain lost 1% on Thursday but extended its weekly advance to nearly 0.4% on Friday.

Corn rebounded from last week’s 38-month low after the USDA reported on Friday that U.S. farmers will harvest 13.989 billion bushels in the 2013 marketing season, below expectations for a revision to 14.029 billion. Meanwhile, U.S. corn inventories were expected to be 1.887 billion bushels in the year ending August 31, well below previous projections for 2.056 billion. U.S. suppliers are forecast to export 1.4 billion bushels, 14% more than previously calculated as importers will likely take advantage of low prices.

The grain however was pressured after the USDA said on Tuesday the U.S. harvest accelerated by 11% last week. As of November 10, U.S. farmers had collected 84% of corn, 5% above the five-year average but below last year’s 97% during the comparable week. Expectations for mild weather in the Midwest also dampened market sentiment.

Meanwhile, DTNs November 14 forecast called for continuing mild weather in central Argentina, favorable for corn planting in the southern growing areas. The agency also said that mostly suitable conditions for planting and developing of corn were in effect in South Africa.

Wheat gains

Wheat rebounded from a 2-month low on Friday on increased demand for U.S. supplies. Futures for settlement in December traded at $6.4775 per bushel at 10:57 GMT, up 0.40% on the day. Prices shifted in a days range between $6.4838 and $6.4488, near Wednesdays two-month low. The grain fell by 0.1% on Thursday but pared its weekly decline to less than 0.1% on Friday.

Wheat drew support on signs of increased demand for U.S. exports. Brandon Scott Crozier, chief executive officer of Nidera Brazil, said yesterday that Brazil may favor U.S. supplies and keep imports high in the next two years. According to data by the USDA, U.S. exporters sold 2 million tons of wheat to Brazil in the nine months through September, the most in 35 years.

Meanwhile, Egypt, the worlds biggest importer, is seeking to buy at least 60 000 tons of wheat in a tender today for shipment between December 1-15, Bloomberg reported.

Wheat was recently pressured after the U.S. Department of Agriculture predicted last week that U.S. wheat inventories will be 565 million bushels at the end of the current marketing year, up from previously estimated at 527 million.

Also fanning negative sentiment, the government agency reported on Tuesday that the planting process of the U.S. crop accelerated last week and neared completion. The USDA said that 95% of wheat was planted through the week ended November 10, above the five-year average of 93% and last year’s 94% during the comparable period. The report also showed that 84% of plants had emerged last week, exceeding the average of 80% and 2012′s 78% during the same period.

Meanwhile, DTN reported yesterday that recent scattered showers and warm weather in the Southern Plains continue to favor the pre-winter development of winter wheat, while mild weather in Argentina is providing suitable conditions for the filling wheat crop. In central China, recent showers have helped improve soil moisture for developing winter wheat and rapeseed ahead of winter dormancy for these crops, DTN said.