Grains trading outlook: wheat, corn, soybeans futures lower as crop quality assessed

Wheat, corn and soybeans prices were all in the red during early trade in Europe today, as traders weighed incoming data from a crop-quality assessment tour in the US, the largest grower.

According to the Pro Farmer Midwest Crop Tour, soybeans, corn and wheat in the US will all see the largest harvest to date, confirming the US Department of Agricultures (USDA) projection of records being set this season.

“It’s all about the supply side,” Wayne Gordon, an analyst at UBS AG, said for Bloomberg. People on the tour think “‘How does it look this year, relative to when I was on the tour last year?’ And things clearly are looking fantastic.”

The USDA monthly crop report said global supplies of wheat at the end of the 2014-15 season will be at 192.96 million metric tons, while the US corn harvest was projected at the record 14.03 billion bushels, and beans were forecast at a record 3.82 billion bushels.

Near-perfect US weather in the past three month, with three times the normal rainfall, spell a supply boom for grains in the US, pressuring grains prices some 15% lower this year.

Wheat futures for September delivery on the Chicago Board of Trade (CBOT) traded at $5.454 per bushel at 9:09 GMT, down 0.09%. The contract reversed earlier loss to log a 0.65% gain on Tuesday, after dropping 1.59% on Monday.

NASS’ log put spring wheat crop condition at predominantly good, with 68% of crops reported in good or excellent shape. Meanwhile, 17% of acreage was already harvested, which is well-below the 5-year average figure of 33% harvest completion for the same week.

The US Department of Agriculture’s (USDA) statistical arm, the National Agricultural Statistics Service (NASS), posted its weekly readings on US crops late on Monday. The log, which covers the seven days through August 17, revealed steady progress and overall good condition for developing crops, reaffirming USDA’s projection for record crops across all grains this year.

December corn on the CBOT stood at $3.700 per bushel, down 0.60%. Corn prices also recovered a significant deficit yesterday to close 0.2% higher, after losing ~1.5% on Monday.

Monday’s report pointed a still impeccable corn crop condition, with 72% of acreage said to be in good or excellent condition, while 71% of beans crops were also reported in good shape.

Meanwhile, beans futures for November were at $10.476 per bushel, down 0.47%. Beans prices were down 0.5% as trading closed on Tuesday.

Technical support and resistance levels

According to Binary Tribune’s daily analysis, wheat September future’s central pivot point on the CBOT stands at $5.458. The contract will see its first resistance level at $5.562. If breached, it will advance to $5.664 and then to $5.768 per bushel. The first support points is estimated at $5.356. Should it be broken, wheat will test $5.252 and after that $5.150 per bushel.

December corn’s central pivot is at $3.707. The future will have its first resistance at $3.745 and if it broken it will advance first to $3.767 and then to $3.805 per bushel. The first support level is calculated at $3.685. Should the contract breach that, it will probably continue down to $3.647. If both support levels are penetrated corn will test $3.625 per bushel.

Beans November future’s central pivot is projected at $10.511. The contract will have the front resistance level at $10.587. If it manages to pass the first level, next resistance is expected at $10.645 and then $10.725 per bushel. Meanwhile, support is expected at $10.449, $10.373 and $10.311 per bushel.