Grain futures decline, soybeans retreat from 5-1/2-month high on ample supply

Grain futures declined on Wednesday, soybeans eased off from the strongest level in more than five months amid expectations for ample global supply.

On the Chicago Board of Trade, soybeans futures for settlement in May fell by 0.26% to trade at $13.8328 per bushel by 14:32 GMT. Prices touched a session high at $13.8812 per bushel, the strongest since September 13, while day’s low was hit at $13.8138 per bushel. The grain settled last week 2.5% higher, after adding 0.5% in the previous 5-day period. However, the oilseed has lost 8.5% in 2013.

According to a report by Oil World, a Hamburg-based researcher, harvest in Brazil, the second largest exporter of soybeans, will be 85 million metric tons in the 2013-14 season, down from 89.5 million tons estimated in January. However, the company also reported that global inventories at the end of 2013-14 season may reach 73.1 million tons, up from 63 million tons a year ago.

Brazils soybeans crops have been curbed by a recent drought in the country, but weather forecasts called for an end of the dry period, which will relieve some stress on developing crops.

DTN.com reported on February 25th that heavy thunderstorms occurred in Brazil during the weekend, especially in portions of Mato Grosso and Parana producing regions. The heavy rain will probably delay fieldwork, as some local flooding may have occurred. The latter includes harvest delays for soybeans and first crop corn, along with delays to planting of second crop corn. According to the website, soil moisture for filling crops is adequate to surplus at the moment.

Meanwhile, a dry weather trend is expected in central Argentina during the week, which will be beneficial for developing crops, after recent heavy rainfall. The cool weather early this week will be followed by warmer weather trend at the end of the week.

Elsewhere on the grains market, corn futures for May delivery lost 0.08% to trade at $4.6012 a bushel by 14:34 GMT. Futures hit a session high at $4.6088 per bushel, while day’s low was touched at $4.5962 per bushel. Yesterday, prices touched $4.6162 per bushel, the strongest since September 30. Corn has advanced 7.6% this year after it lost nearly 40% in 2013, the steepest annual drop on record and the worst annual performance since at least 1959.

Wheat loses ground as well

Wheat declined on Wednesday, although adverse US weather conditions were seen damaging crops in the US Midwest and the southern Plains.

On the Chicago Board of Trade, wheat futures for settlement in May lost 0.56% to trade at $6.1413 per bushel by 14:34 GMT. Prices touched a session high of $6.1838 per bushel, while day’s bottom was touched at $6.1412.

The grain settled last week 2.1% higher, after adding 3.4% in the previous 5-day period. However, 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.

DTN’s February 25th forecast called for another round of extreme cold over the US Midwest, with temperatures from at least 15 to 25 degrees Fahrenheit below normal or even lower. The soft red winter wheat is under freezing threat as the recent warm conditions have melted some of the protective snow cover.

Meanwhile, a return to colder weather is also expected over the southern Plains during the week. The cold air seems to remain north and east of the region, but it bears watching as it may impact the region later in the week, with temperatures from 15 to 20 degrees Fahrenheit below average.