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Grain futures - weekly outlook: October 21 - 25

Published 10/20/2013, 09:25 AM
Investing.com - U.S. grain futures ended Friday’s session mixed, with wheat prices rallying nearly 3% to hit a four-month high amid speculation demand for U.S. supplies will remain robust in the near-term.

On the Chicago Mercantile Exchange, wheat for December delivery surged 2.88% on Friday to settle the week at USD7.0560 a bushel.

Earlier in the day, wheat prices rose to a session high of USD7.0640 a bushel, the strongest level since June 20.

CBOT December wheat prices strengthened 0.66% on Thursday to settle at USD6.8600 a bushel.

The December wheat contract ended the week with a gain of 1.89%, the fifth consecutive weekly advance.

Wheat prices climbed above the key USD7.00-a-bushel-level for the first time since June on Friday after Argentina's agriculture ministry estimated domestic wheat production at 8.8 million tonnes.

The forecast was sharply lower than the 12 million tonnes estimated by the U.S. Department of Agriculture last month.

Argentina is a major wheat exporter and competes with the U.S. for business on the global market.

Crop losses in Argentina could mean increased demand for U.S. supplies, which is the world’s third largest wheat producer and biggest exporter.

Meanwhile, corn futures for December delivery declined 0.34% on Friday to settle the week at USD4.4140 a bushel. The December contract settled 0.06% higher on Thursday at USD4.4300 a bushel.

For the week, the December corn contract rose 1.85%, the first weekly gain in three weeks.

Futures have been on a downward trend in recent weeks amid expectations this year’s corn harvest in the U.S. will be the largest on record.

Prices of the grain slumped to USD4.3200 a bushel on October 14, the weakest level since August 30, 2010.

Elsewhere on the Chicago Board of Trade, soybeans for November delivery eased down 0.15% on Friday to settle the week at USD12.9120 a bushel by close of trade.

The November contract ended Thursday’s session up 1.31% to settle at USD12.9320 a bushel.

Prices of the oilseed added 1.9% on the week, the first weekly advance in three weeks.

In the week ahead, grain traders will focus on the release of key USDA data, including export sales figures and crop progress numbers, which had been delayed due to the 16-day U.S. government shutdown.

The agency said it was cancelling the release of its closely-watched monthly supply and demand report for October, which was originally scheduled for October 11.

The next USDA crop report is scheduled to be released on November 8.

Meanwhile, corn and soybean traders will continue to pay close attention to weather forecasts for grain-growing regions in the U.S. Midwest, while wheat traders will monitor temperatures in the Great Plains-region.

Corn is the biggest U.S. crop, followed by soybeans, government figures show. Wheat was fourth, behind hay.

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