Grains prices were in the negative midday in Europe today, as traders await the crucial monthly global crop outlook report by the US Department of Agriculture. Yesterday the Department released its reading on domestic crop progress report, to pressure wheat and beans lower, while corn was boosted.
Weather patterns called for a favorable trend for the Midwest and the Plains, with scattered showers and near to below normal temperatures. Europe has been subject to damaging rainfall throughout the whole harvest season this year, with rains continuing through central Europe, damaging wheat quality and delaying harvest.
Wheat futures for September delivery on the Chicago Board of Trade (CBOT) stood at $5.404 per bushel at 11:49 GMT, down 1.10%. The contract lost 0.50% on Monday, after adding about 2.5% last week.
“Wheat is likely to be the under-performer on the back of the report,” analysts Chris Gadd and Daryna Kovalska at Macquarie Group Ltd. wrote in an e-mailed report, cited by Bloomberg. “We would expect the USDA to increase production for the U.S., EU and Russia as they reflect better-than-expected harvest results.”
The US will harvest a record 2.015 billion bushels of wheat in 2014, a Bloomberg survey suggested, ahead of the official US Department of Agriculture (USDA) projection later today.
“Without geopolitical disruptions, we expect Chicago wheat prices to resume their downward track” as prospects for the U.S. crop improve, Morgan Stanley analysts said in a report. “Concerns of supply disruptions in the Black Sea have proven unfounded to date.”
The standoff between Russia and the West created some risk premium, especially as Moscow imposed a food imports ban, of all things, on European producers, stirring the markets.
Corn, beans
Corn for December traded at $3.666 per bushel, down 0.41%. Corn gained 1.3% yesterday, after some 0.5% increase last week.
“Were seeing a lot of short covering in case the USDA does not give us the big yields the private forecasters have expected,” Brian Hoops, the president of brokerage Midwest Market Solutions in Springfield, Mo., said for The Wall Street Journal yesterday. “If we dont see that type of move up [in production estimates] then maybe traders may say its cheap enough for now.”
Analysts surveyed by The Wall Street Journal said the USDA will project corn production at 14.2 billion bushels, or 170 bushels an acre, both records, later today.
Meanwhile, November beans stood for a 0.40% drop at $10.690 per bushel. The contract closed Monday 1.06% lower, after gaining about 2.5% last week.
Technical support and resistance levels
According to Binary Tribune’s daily analysis, wheat September future’s central pivot point on the CBOT stands at $5.486. The contract will see its first resistance level at $5.542. If breached, it will advance to $5.620 and then to $5.676 per bushel. The first support points is estimated at $5.408. Should it be broken, wheat will test $5.352 and after that $5.274 per bushel.
December corn’s central pivot is at $3.665. The future will have its first resistance at $3.707 and if it broken it will advance first to $3.733 and then to $3.775 per bushel. The first support level is calculated at $3.639. Should the contract breach that, it will probably continue down to $3.597. If both support levels are penetrated corn will test $3.571 per bushel.
Beans November future’s central pivot is projected at $10.782. The contract will have the front resistance level at $10.842. If it manages to pass the first level, next resistance is expected at $10.952 and then $11.012 per bushel. Meanwhile, support is expected at $10.672, $10.612 and $10.502 per bushel.
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