Grain futures mixed, wheat declines for a fifth day to touch 18-month lows

Grain futures were mixed on Wednesday, with wheat declining for a fifth consecutive day to the lowest in 18 months amid forecasts for an all-time high global harvest, according to data by the US Department of Agriculture. Corn also declined on speculations that China has rejected more than 500 000 metric tons of U.S. Corn in November and December, containing the unapproved genetically modified insect-resistant MIR 162 substance. Soybeans advanced.

On the Chicago Board of Trade, wheat futures for settlement in March declined by 0.46% to trade at $6.1638 per bushel at 13:44 GMT. Prices jumped to a session high of $6.1862, while day’s bottom was touched at $6.1488 per bushel, the lowest since June 18th 2012. The grain lost 3.3% last week, after declining 2.6% in the preceding 5-day period. Wheat has slumped 21% so far this year on expectations for a record-high global output of 711.42 million metric tons, according to data by the USDA.

On December 10th, the government agency raised its November forecast before the start of the Northern Hemisphere harvests in 2014 to 182.78 million tons, up from 178.48 million tons. The revision was mainly due to the higher-than-expected Canadian and Australian harvests compared to a year ago.

“We’re anticipating the supply side from the wheat perspective to continue to remain strong, barring any global supply shocks like drought. We do see global stocks rebuilding into next year.” said Graydon Chong, a grains and oilseeds analyst at Rabobank International, cited by Bloomberg.

DTNs December 17th forecast called for a new cold wave to move into the northern and western Midwest during the end of the week. The cold trend will be strongest in the northern half of the region, impacting central Iowa and northern Illinois. Temperatures are expected to be below or even much-below-normal. Meanwhile, the eastern and southern portions of the region will see moderate to heavy rain, replenishing moisture for wheat, accompanied by inflow into the Mississippi river system. There is no threat of potential ice storm for the southeastern Midwest-northern Delta area at this time. There is a probability of light to moderate precipitation during the end of the week in the Southern Plains, favoring the wheat crop.

Soybeans futures for settlement in January traded at $13.4662 per bushel at 13:44 GMT, adding 0.03% on a daily basis. Prices swung between day’s high and low of $13.5088 and $13.3812 per bushel. The oilseed added 0.11% last week, after declining 0.85% in the preceding one. On December 10th, soybeans reached $13.5338, the strongest level since September 19th.

Corn advances

Corn futures for March delivery traded at $4.2612 a bushel by 13:42 GMT, advancing 0.05% for the day. Futures held in a range between day’s high and low of $4.2738 and $4.2562 per bushel. On December 16th, prices touched $4.2063, the lowest since December 2nd. Corn lost 2.2% last week, after gaining 2.6% in the preceding two 5-day-periods.

Corn advanced, but gains were limited amid speculations that China has rejected more than 500 000 metric tons of U.S. corn in November and December containing the unapproved genetically modified insect-resistant MIR 162 substance. This was almost three times the amount it previously announced, according to an anonymous source with knowledge of the issue, cited by Bloomberg. According to the source, at least nine vessels each carrying about 60 000 tons of the of the grain have been refused. Seven out of the nine vessels were bought by the state owned COFCO Corp.

On December 6th, the Chinese Ministry of Agriculture, said it rejected the grain because its safety should be considered. Meanwhile, the quarantine agency said yesterday that it found more of the US corn, containing the genetically modified substance, without giving a precise figure. The agency already reported on December 4th to have found 180 000 tons of the corn.

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