Grains trading outlook: futures decline after mixed results yesterday, US crops report

Chicago grains futures traded lower during early hours in Europe today. Yesterday the US Department of Agriculture (USDA) released the weekly report on crops, which revealed planting had progressed very well, pressuring wheat and corn. Soybeans advanced, supported by a surge in exports from the US.

Weather reports forecast frequent, though scattered showers throughout the Midwest this week, which could potentially disrupt fieldwork, to slow remaining planting and possibly force some replanting. The Delta will also see some rain, though the mostly sunny weather will favor crops. In Europe, Ukraine and southwestern Russia will see relatively favorable weather conditions, with some excess rain possible, though the moisture is quite welcome after a prolonged period of heat and drought.

The USDAs National Agricultural Statistics Service (NASS) posted the weekly report for the seven days through June 1 yesterday. The log revealed very well progressing crops, reinforcing earlier forecasts of record-high supplies this year.

“This weather continues to benefit most of the U.S. crop,” Matt Zeller, director of market information at INTL FCStone, said in a note, Reuters reported. “Early-season prospects couldnt be shaping up much better.”

Wheat

Wheat futures for July delivery on the Chicago Board of Trade stood at $6.192 per bushel, dropping 0.24% at 10:11 GMT today. Daily high and low were at $6.240 and $6.180 per bushel, respectively. Yesterday wheat lost 1.04%, reaching the lowest price in almost three months. Last week the contract lost further 3.00%.

The NASS report showed spring wheat planting was 88% done, which is in line with the average, after 74% for last week. 67% of crops had emerged, after 43% was logged in the previous reading.

Meanwhile, 44% of winter wheat was reported of poor or very poor condition, while only 30% were in good or excellent condition. 79% of crops were headed, after a 70% were reported last week.

“Wheat crops have seen the benefit of recent rain to boost U.S. yield potential,” said for Bloomberg Darrell Holaday, president of Advanced Market Concepts in Wamego, Kansas. “Planting-delay concerns are easing, and there are very few significant global production concerns.”

Corn

Corn futures for July traded for $4.622 per bushel in Chicago at 10:08 GMT today, dropping 0.70%. Prices reached a daily high and low at $4.650 and $4.616 per bushel, respectively. Yesterday corn dropped 0.05%, recording the lowest level since February at $4.612 per bushel. Last week the contract lost further 1.57%.

The NASS report revealed corn planting had progressed to 95% completion for the week through June 1, on par with the 5-year average rate, after 88% last week. Meanwhile, 80% of corn had emerged, compared to 60% from last week.

76% of crops were reported to be in good or excellent condition, much more than 63% for the same week last year.

Soybeans

Soybean futures for July traded for $14.920 per bushel in Chicago at 10:14 GMT today, losing 0.57%. Prices ranged between $15.020 and $14.904 per bushel. On Monday soybeans added 0.49%, after last week the contract lost 1.47%.

The NASS report revealed soybeans planting was 78% complete, after logging 59% last week. The reading is well-above the 5-year average of 70%. Meanwhile, emergence was at 50%, after 25% for the previous week.

Soybeans gained yesterday, despite the USDA report showing a positive outlook for supply. According to traders cited by Reuters, US exports saw big increases recently, possibly thinning domestic stockpiles, bumping up the Chicago contract.

Technical view

According to Binary Tribune’s daily analysis, wheat for July delivery on the CBOT will see its first resistance level at $6.261. If breached, the contract will advance to $6.315 and then to $6.365 per bushel. The first support points is estimated at $6.157. Should it be broken, wheat will test $6.107 and after that $6.052 per bushel.

Corn for July will have its first resistance at $4.705 and if it broken the contract will advance first to $4.755 and then to $4.807 per bushel. The first support level is calculated at $4.603. Should the contract breach that, it will probably continue down to $4.551. If both previous supports are penetrated corn will test $4.501 per bushel.

Soybeans for July have the front resistance level estimated at $15.153. If the contract manages to pass the first level, next resistance is expected at $15.301 and then $15.487 per bushel. Meanwhile, support is expected at $14.819, $14.633 and $14.485 per bushel.