Grains trading outlook: corn, soybeans and wheat futures turn red after rally

Corn, soybeans and wheat futures were all on the downside during midday trade in Europe today, reversing some of the sizable gains from Monday. Investors eye USDAs grains stocks report, due later today, as US farmers are on track to collect the biggest soybeans and corn harvests on record.

Weather patterns project overall favorable conditions for crops in the US. Scattered showers will pose some delays in harvesting across the Midwest and Northern Plains, while mild temperatures support early developing winter wheat and late maturing corn and beans. The Southern Plains will also see warm temps and scattered rains, helping the planting process and easing early crops.

“The forecast brings more moisture into the Midwest than seen on Friday, which would bring a slowdown in harvest for a few days,” Greg Grow, the director of agribusiness at Archer Financial Service Inc. in Chicago, said for Bloomberg, in address to Mondays rally.

Investors now turn focus towards a key US Department of Agriculture (USDA) report on grains stocks, due for release later today.

“Operators expect an upward revision of U.S. corn and soybean ending stocks, in a context where the first feedback on yields is showing record levels,” Paris-based farm adviser Agritel wrote in a market comment cited by Bloomberg.

Corn futures for December delivery on the Chicago Board of Trade (CBOT) stood at $3.250 per bushel at 12:20 GMT, down 0.23% for the day. The contract added 0.85% on Monday, though it also reached a five-year low at $3.220 earlier. Corn is down some 26% this year.

Investors bet on the somewhat worse weather forecasts to go bullish on grains on Monday, disregarding another bearish weekly report by the USDA statistics arm, the National Agricultural Statistics Service (NASS). The log showed corn crops remained in top-notch shape in the week through September 28th, with 73% reported in good or excellent condition. Meanwhile, the harvest had progressed to 12% completion, as farmers look to collect the largest harvest on record at more than 14 billion bushels.

“The soybean and corn crops remain in truly wonderful condition,” economist Dennis Gartman wrote in his daily newsletter, cited by Bloomberg. “Corn is almost exactly the same, a truly amazing crop that keeps growing larger by the day.”

Soybeans, wheat

Soybeans futures for November were at $9.170 per bushel, down 0.70%. The beans future also logged a four-year bottom at $9.054, though it closed for a 1.46% gain. Beans are down about 29% this year.

Meanwhile, December wheat traded at $4.770 per bushel, down 0.88%. The wheat contract added 1.48% on Monday, paring this years losses to ~26%.

The NASS report on Monday revealed soybeans were also bulking up outlooks, with 72% of crops in good or excellent condition. Farmers had collected 10% of the record harvest this year, projected to reach almost 4bn bushels. Meanwhile, spring wheat harvest was almost complete, while winter wheat planting was 43% done, and 14% of crops had already emerged, both figures beating last-year same-week readings.

Technical support and resistance levels

According to Binary Tribune’s daily analysis, December corn future’s central pivot point on the CBOT stands at $3.247. The contract will see its first resistance level at $3.273. If breached, it will advance to $3.291 and then to $3.317 per bushel. The first support points is estimated at $3.229. Should it be broken, wheat will test $3.203 and after that $3.185 per bushel.

November soybeans’ central pivot is at $9.177. The future will have its first resistance at $9.301 and if it broken it will advance first to $9.367 and then to $9.491 per bushel. The first support level is calculated at $9.111. Should the contract breach that, it will probably continue down to $8.987. If both support levels are penetrated corn will test $8.921 per bushel.

December wheat’s central pivot is projected at $4.780. The contract will have the front resistance level at $4.856. If it manages to pass the first level, next resistance is expected at $4.900 and then $4.976 per bushel. Meanwhile, support is expected at $4.736, $4.660 and $4.616 per bushel.