Grain futures were mixed on Tuesday with corn and wheat advancing, while soybeans declined. Corn fell to a 38-month low as the U.S. harvest accelerated and surpassed the five-year average pace, while wheat rallied after the USDA reported a deterioration in U.S. crop conditions.
On the Chicago Board of Trade, corn futures for settlement in December traded at $4.1413 per bushel at 11:19 GMT, up 0.66% on the day. Prices plunged to a 38-month low of $4.1088 a bushel, followed by a rebound to session high of $4.1438. The grain lost nearly 2.4% on Monday but trimmed its weekly decline to 1.9% on Tuesday.
Prices were pressured yesterday after the U.S. Environmental Protection Agency said in a draft rule released on November 15 it would require less gallons of renewable fuels in 2014 from a year earlier, the first reduction in the mandate since it was set in a 2007 legislation. The quota is expected to be reduced to between 15 billion and to 15.52 billion gallons of biofuels such as ethanol and biodiesel, down from 18.15 billion.
The USDA said in its weekly crop progress report on Monday that the U.S. harvest accelerated by 7% last week and remained above the average. As of November 17, 91% of the crop was collected, compared to the five-year average of 86% and last years 99% during the comparable period.
Elsewhere on the market, soybeans futures for settlement in January slid by 0.29% to $12.8363 a bushel by 11:29 GMT. Prices held in a range between days high and low of $12.9300 and $12.8213 a bushel. The oilseed rose by 0.6% on Monday but pared its weekly decline to 0.3% on Tuesday.
Soybeans were pressured after the U.S. Department of Agriculture said yesterday that American farmers had collected 95% of the crop as of November 17, near the five-year average of 96% and slightly below last years 98% during the comparable week.
Corn and soybeans however drew some support amid mixed weather outlook in different major growing areas. DTN reported on November 18 that heavier-than-expected rain during the weekend in the central and eastern Midwest will cause delays to the final harvest stage. In Brazil, scattered thunderstorms will maintain soil moisture for early development of corn and soybeans but may also slow the planting process, the agency said. In South Africa, thunderstorms and heavy rains during the weekend caused delays to planting but also recharged soil moisture and will favor development of corn.
Wheat snapped three days of declines on Tuesday after USDAs crop progress report showed on Monday crop conditions had deteriorated last week. Futures for settlement in December rose by 0.52% to $6.4638 a bushel by 11:28 GMT. Prices fell to a days low of $6.4275 a bushel, near yesterdays two-month low of $6.4238, followed by a rebound to session high at $6.4738 a bushel.
The grain was pressured after the USDA reported that 89% of the plants had emerged as of November 17, surpassing the five-year average of 85% and last years 83% during the comparable week. Prices were however underpinned by a deterioration in the crop condition, which may have been caused by tornadoes on November 17, according to AccuWeather Inc.
The USDA said that 7% of the wheat crop was categorized as “Very poor” and “Poor” as of November 17, up from 5% a week earlier. As for the premium grade, 62% of the plants were rated good-excellent, down from 65% in the preceding period.
Also fanning negative sentiment, DNT reported on November 18 that drier and warmer weather in the Southern Plains continued to provide suitable conditions for the pre-winter development of winter wheat and late-fall field work.
Hot weather in Argentina this week however may increase stress to winter wheat and earlier-planted summer crops, the agency said. Readings however were expected to turn lower later in the week, coupled with rainfall. Conditions in central China remained favorable for developing winter wheat and rapeseed after recent showers recharged soil moisture, DTN said.