Grains trading outlook: corn, soybeans and wheat futures extend slide

Corn, soybeans and wheat were all in the red during early trade in Europe today, as investor leer away from grains on expectations of a sizable surplus by this seasons end. The focus today will be on the US Department of Agricultures weekly crops report, as traders look to reinforce outlooks of record harvests.

The US, the worlds top corn and soybeans grower, as well as the top wheat exporter, will see the highest-ever corn and soybeans harvests this year, analysts and government agencies say. Near-perfect weather during the past three months helped crops enough to spark talk of “many piles of corn laying on the ground”, as storage space proves insufficient.

Now traders eye the US Department of Agricultures statistics arm, the National Agricultural Statistics Service (NASS), and its weekly report on US crop progress, with expectations of a confirmation of an impressive crop condition across all grains.

Corn futures for December delivery on the Chicago Board of Trade (CBOT) stood at $3.360 per bushel at 7:32 GMT, down 0.74%, after reaching a four-year low of $3.356 earlier today. The contract dropped ~5% last week, and corn is down some 25% this year.

Traders will shift focus to robust demand “in coming months,” with corn futures “trending back towards $4,” Christoper Narayanan, the head of agricultural research at Societe Generale, said in a Sept. 12 report cited by Bloomberg.

NASS logged corn crops’ condition to be quite impressive as of September 7th, logging 74% in good or excellent condition, well above the 54% 5-year average for the reviewed week.

Soybeans, wheat

Soybeans futures for November were at $9.816 per bushel, down 0.36%. The contract lost 3.5% last week, when a four-year low of $9.694 was reached. Soybeans have also lost more than 25% this year.

Meanwhile, December wheat traded at $4.982 per bushel, down 0.85%, also having reached a four-year low of $4.972 earlier. The contract lost 6% last week, while wheat is down 20% so far this year.

The US Department of Agriculture expects the 2014 global wheat harvest to be the highest on record, with stockpiles climbing to a three-year high.

Last week NASS reported 72% of soybeans in good or excellent shape, while wheat crops in top condition slightly declined to 60% of the total. Meanwhile, 58% of wheat was harvested, well below the 78% completion rate average for the past five years.

“If you were to get a sharp U-turn in prospects for the really nice weather we’ve been having, some kind of frost or winter-type blast, that would” support prices, Sameer Samana, a senior international strategist who helps manage $1.4 trillion at Wells Fargo Advisors, said for Bloomberg. “It would be a short-lived rally.”

Technical support and resistance levels

According to Binary Tribune’s daily analysis, December corn future’s central pivot point on the CBOT stands at $3.399. The contract will see its first resistance level at $3.425. If breached, it will advance to $3.467 and then to $3.493 per bushel. The first support points is estimated at $5.357. Should it be broken, wheat will test $3.331 and after that $3.289 per bushel.

November soybeans central pivot is at $9.848. The future will have its first resistance at $9.906 and if it broken it will advance first to $9.960 and then to $10.018 per bushel. The first support level is calculated at $9.794. Should the contract breach that, it will probably continue down to $9.736. If both support levels are penetrated corn will test $9.682 per bushel.

December wheats central pivot is projected at $5.039. The contract will have the front resistance level at $5.077. If it manages to pass the first level, next resistance is expected at $5.131 and then $5.169 per bushel. Meanwhile, support is expected at $4.985, $4.947 and $4.893 per bushel.