Grains trading outlook: corn, soybeans advance on demand outlook, wheat declines

Grains futures traded above last weeks multi-year lows, as bargain hunting and rising exports support prices ahead of US Department of Agricultures (USDA) weekly report later today. Corn, beans and wheat were all pressured by a best-in-20 years crops outlook for the US last week.

The USDA said this years corn harvest will be the second-best on record, while beans will be at an all-time high.

Meanwhile, U.S. exporters sold 1.4 million metric tons of corn in the week through July 17, 34% more than a week earlier, while soybean sales more than quadrupled to 2.7 million tons, USDA data show.

“Grain markets have quickly priced in a larger-than-expected U.S. corn crop,” Australia & New Zealand Banking Group Ltd. analysts including Paul Deane wrote in a note. “Given the extent of the sell-off in the last month, we view grain prices as likely to stabilize near-term.”

Corn December contracts on the Chicago Board of Trade (CBOT) stood at $3.740 per bushel, adding 0.61%. Daily price range was at $3.722 – 3.766 per bushel. The contract dropped about 2% last week, reaching a four-year low of $3.704 per bushel. Corn prices have lost more than 20% over the past month, as US crops outlooks improve.

Soybeans for November added 0.88% to trade at $10.930 per bushel. Beans gained some 1% last week, though prices also reached a 2.1/2-year trough at $10.550 per bushel.

Last weeks National Agricultural Statistics Service (NASS) crop progress report revealed that as of July 20 76% of corn crops were in good or excellent condition, while 73% of beans were also in good or excellent shape.

Wheat

Wheat in Chicago traded lower today, despite analysts expressing concern of Australias output, the worlds fourth exporter, as traders monitor the extremely positive US crop outlook.

Wheat for September delivery in Chicago traded at $5.334 per bushel, down 0.84%. Last week the contract logged minor gains, reaching a four-year low of $5.202 per bushel, and has lost more than 13% over the past three weeks.

Last weeks NASS report showed the US winter wheat harvest was progressing well, with 75% of crops collected by July 20, on par with the 5-year average for the week.

Meanwhile, 80% of spring wheat crops were reported in good or excellent condition, standing slightly higher than last year’s reading for the week.

Technical view

According to Binary Tribune’s daily analysis, wheat for September delivery on the CBOT will see its first resistance level at $5.421. If breached, the contract will advance to $5.463 and then to $5.541 per bushel. The first support points is estimated at $5.301. Should it be broken, wheat will test $5.223 and after that $5.181 per bushel.

Corn for December will have its first resistance at $3.742 and if it broken the contract will advance first to $3.768 and then to $3.816 per bushel. The first support level is calculated at $3.668. Should the contract breach that, it will probably continue down to $3.620. If both previous supports are penetrated corn will test $3.594 per bushel.

Soybeans for November have the front resistance level estimated at $10.903. If the contract manages to pass the first level, next resistance is expected at $10.973 and then $11.073 per bushel. Meanwhile, support is expected at $10.733, $10.633 and $10.563 per bushel.