Grains trading outlook: wheat, corn and soybeans futures continue slump, 20% lower than three weeks ago

Wheat, corn and soybeans futures were lower during midday trade in Europe today. All grains totaled near 20% losses for the past three weeks, after the US posted improving crops progress, adding to bearish sentiment.

Weather patterns project a relatively cool week for the Midwest, slowing developing crops, with some warming later on. Soil moisture will be adequate-to-surplus, with rains and showers with the advancing Canadian system. Said system will push as far as Texas, lowering temps and bringing plenty moisture to growing areas across the Plains and Midwest.

“There were some weather extremes downstate and pretty heavy rainfall over the weekend,” Steve Erdman, the president of EFG Group in Chicago, said in a telephone interview for Bloomberg. “I think that reminds people that although we have tremendous potential, that could be disrupted. We could lose acres.”

The USDA’s National Agricultural Statistics Service (NASS) released its report on crops progress and quality for the week through July 13 yesterday. The log revealed steady improvement throughout, with winter wheat harvest advancing and good crops condition across all grains.

Wheat

Wheat futures for September delivery on the Chicago Board of Trade stood at $5.342 per bushel, down 0.65% at 12:04 GMT today. Prices shifted between $5.340 and $5.382 per bushel. The contract added 2.23% yesterday, though it did reach a four-year low of $5.242 per bushel, after the massive 12% loss last week.

The NASS report showed 69% of winter wheat was harvested by July 13, matching the figure from the 5-year average.

Meanwhile, 69% of spring wheat was headed, in line with past readings, while 70% of crops were in good or excellent condition, same as last week.

Corn

Corn futures for December traded for $3.850 per bushel, dropping 0.84%. Prices ranged between $3.850 and $3.880 per bushel. Yesterday the contract added 0.91%, though it reached a four-year low of $3.802 per bushel, after about 8% were lost last week, for a total of more than 20% decline for the past three weeks.

Readings in the NASS report pointed out that, slightly adding to last weeks figure, 76% of corn crops were in good or excellent condition, while the reading for this week of last year is 68%.

“Weather remained largely ideal across the U.S. Corn Belt last week, as the polar vortex swept cooler-than-normal temperatures into the central Corn Belt just in time for pollination,” Morgan Stanley analysts including Bennett Meier wrote in an e-mailed report today, cited by Bloomberg. “Despite cooler temps, corn pollination accelerated last week.”

Soybeans

Soybean futures for November traded for $10.804 per bushel, dropping 0.53%. Prices ranged from $10.780 to $10.862 per bushel. The contract was up 1.05% yesterday, after an 8% decline last week, when a 2.1/2-year low of $10.650 per bushel was reached, for a total of more than 18% loss over the past three weeks.

The NASS log revealed 72% of beans crops remained in good or excellent condition, same as last week and on par with the reading for the same week last year.

Technical view

According to Binary Tribune’s daily analysis, wheat for September delivery on the CBOT will see its first resistance level at $5.430. If breached, the contract will advance to $5.484 and then to $5.578 per bushel. The first support points is estimated at $5.282. Should it be broken, wheat will test $5.188 and after that $5.134 per bushel.

Corn for December will have its first resistance at $3.915 and if it broken the contract will advance first to $3.949 and then to $4.005 per bushel. The first support level is calculated at $3.825. Should the contract breach that, it will probably continue down to $3.769. If both previous supports are penetrated corn will test $3.735 per bushel.

Soybeans for November have the front resistance level estimated at $10.951. If the contract manages to pass the first level, next resistance is expected at $11.043 and then $11.177 per bushel. Meanwhile, support is expected at $10.729, $10.595 and $10.505 per bushel.