Grain futures mixed, wheat declines after largest gain in 6 months on supply outlook

Grain futures were mixed on Wednesday, wheat fell after rising the most since August yesterday, as investors weighed record global supplies against concerns over damaged crops in US, the largest exporter of the grain. Meanwhile, corn also lost ground, while soybeans advanced.

On the Chicago Board of Trade, wheat futures for settlement in March lost 0.18% to trade at $5.8313 per bushel by 15:39 GMT. Prices jumped to a session high of $5.8475 per bushel, while day’s bottom was touched at $5.7912. Yesterday, the grain rose 3.8%, capping the largest daily increase since August 26th, to settle at $5.8538 per bushel, the highest since January 10th.

On January 29th, prices touched $5.5075 per bushel, the weakest since July 14th 2010, to settle the week 2% lower. Wheat slumped 22% last year, marking the largest annual decline since 2008, on expectations for a record global output of 712.7 million tons, according to data by the US Department of Agriculture.

According to a report by the US Department of Agriculture on February 3rd, about 35% of the wheat in Kansas, which is the largest US producer of winter varieties, was in good or excellent condition, less than the 58% reported on December 30th.

DTN’s February 5th forecast called for much below-normal temperatures to continue during the next seven-to-ten days over the Midwest. The cold pattern will be accompanied by light snow, after the moderate to heavy snowfall during the past 24 hours. Damage to soft red winter wheat will probably be limited by the snow cover, which should be enough to insulate the crop from the freezing temperatures.

Meanwhile, according to the website, the Southern Plains north and central wheat growing areas will experience well-below normal temperatures during the week. Temperatures may drop significantly below zero Fahrenheit, but the snow cover will probably insulate the crop.

Elsewhere on the grains market, soybeans futures for settlement in March rose by 0.2% to trade at $13.1663 per bushel by 15:40 GMT. Prices touched a session high at $13.1988 per bushel, the strongest since January 16th, while day’s low stood at $13.0712 per bushel. The oilseed settled last month 0.45% lower, after it lost 8.5% in 2013.

Corn down as well

On the Chicago Board of Trade, corn futures for March delivery fell by 0.45% to trade at $4.3962 a bushel by 15:42 GMT. Futures hit a session high at $4.4188 per bushel, the strongest level since October 24th, while day’s low was touched at $4.3912 per bushel.

The grain increased 3.05% last month, marking the first monthly advance since May. Corn lost nearly 40% in 2013, the steepest annual drop on record amid expectations the global output will surge to 966.9 million tons in 2013-2014 season, boosted by record production in the US, the world’s top producer.

Corn prices were pressured by weather forecasting models that called for mostly favorable weather in two of the major producing countries, Argentina and Brazil.

DTN.com reported on February 5th that the dry and hot pattern in the Brazilian soybeans areas will probably continue at least during the next seven days, depleting soil moisture and increasing crop stress. The dry weather will be beneficial for early harvesting in the northernmost corn and soybeans areas, with an exception of the Sao Paolo area, where filling crops may be affected by drought.

Meanwhile, the website reported that pollinating corn and developing soybeans in central Argentina, will be favored by episodes of showers and thunderstorms during the next seven days. However, the website reports that storms will be so strong, that some local flooding is expected.