Corn
Advice: We advise hedgers and cash-only marketers to sell another 10% of 2023-crop in the cash market to get to 70% sold.
Price action: December corn fell 1 1/4 cents to $3.98 1/2 but ended nearer the session high.
Fundamental analysis: Corn futures extended to a fresh near-term low in earlier trade, though modest buying interest ensued, pulling new-crop futures off their lows. SRW wheat strength helped limit losses today, while weakness in crude oil futures and U.S. dollar strength cast a shadow over commodities. Earlier today, USDA released weekly export sales data, with old-crop sales totaling 167,900 MT, a new marketing-year low, down 49% from the previous week and 60% from the four-week average. Net sales missed analysts pre-report range of 275,000 to 600,000 MT. Meanwhile, new-crop sales were reported at 710,900 MT, which landed near the upper end of the pre-report range of 400,000 to 800,000 MT, while exports totaled 1.035 MMT. New-crop export sales continue to trail the five-year average, but are seemingly gathering steam, similar to year-ago, when sales rose in the fall and winter months.
USDA will release its monthly Grain Crushings Report, with analysts expecting corn-for-ethanol use to be 450.0 million bu. for June, which would be down 3.7 million bu. (0.8%) from May but up 7.9 million bu. (1.8%) from last year.
Weather continues to prove mostly favorable for crops throughout the Midwest, as most areas will receive rain during the next two weeks, according to World Weather Inc. Sufficient amounts are expected to occur, maintaining a moisture abundance. The only exception will be in the lower Missouri River Valley where net drying and warm to hot weather will continue until next week’s colder air arrives.
Technical analysis: December corn ended lower for the third straight session, though support at $3.96 1/4, backed by $3.92 1/2 and $3.87 1/2 limited heavier selling. However, initial resistance stood around $4.00, with further resistance standing at $4.04 3/4 and the 10- and 20-day moving averages, each trading around $4.11. Bears continue to firmly grasp the near-term technical advantage, with sights likely set on the $3.50 area, while bulls continue to look towards the July high of $4.26 1/2.
What to do: Get current with advised sales.
Hedgers: NEW ADVICE -- Sell another 10% of 2023-crop in the cash market to get to 70% sold.
Cash-only marketers: NEW ADVICE -- Sell another 10% of 2023-crop to get to 70% sold.
Soybeans
Price action: November soybean futures fell 6 cents before settling at $10.16 1/2, nearer session lows. September meal futures firmed 70 cents to $328.00. September bean oil futures fell 79 points to 42.47 cents.
Fundamental analysis: Soybeans forged a new for-the-move low though corrective buying efforts closed prices well off intraday lows. Strength in the wheat market helped stifle selling efforts in the corn and soybean markets today.
Export demand for soybeans was price supportive today as USDA reported export sales of 376,400 MT for 2023-24, exceeding pre-report expectations and the largest total since June 13. That is likely to help boost old-crop exports to, if not above, the current forecast for the crop year. Sales for 2024-25 totaled 632,100 MT were within pre-report expectations of 300,000 to 900,000 MT. China continues to advance new-crop purchases, as noted by today’s daily export sale announcement of 132,000 MT for delivery during 2024-25.
USDA will release their monthly Oilseed Crushings Report this afternoon. Analysts expect USDA to report soybean crush totaled 184.4 million bu. during June, which would be down 6.9 million bu. (3.6%) from May but up 10.2 million bu. (5.8%) from last year. That would be above the required rate to hit the current USDA forecast of 2.29 billion bushels crushed, though it is common for crushing facilities to have downtime in August.
Beneficial and greater than expected rain fell on some of the driest areas in the southwestern Midwest Wednesday, with rain falling on much of the Soybean Belt overnight, says World Weather Inc. The coming two weeks are expected to boast favorable conditions for crop development, though little rain is expected from Friday until August 15. Ample soil moisture and lack of significant heat are expected carry the crop through dryness with minimal stress, says the forecaster.
Technical analysis: November soybean futures marked a fresh for-the-move low before corrective buying efforts limited losses. Bears continue to hold the near-term technical advantage. Bulls are seeking to overcome today’s high of $10.26 1/4, which is reinforced by resistance at $10.31 3/4 then the 10-day moving average at $10.41 1/2. Support stems from today’s for-the-move low at $10.13 then the psychological $10.00 mark.
September meal futures saw relative strength today as bulls attempt to keep the near-term uptrend intact. Gains stalled above 20-day moving average resistance at $329.00, which is reinforced by the 40-day moving average at $334.20, which capped gains late last week and earlier this week. Support comes in at $325.20 with further selling seeking to close prices below $322.50 support.
September bean oil futures saw heavy selling today alongside crude oil. Bears continue to hold the near-term technical edge. Resistance stems from yesterday’s close of 43.26 cents then the 10-day moving average at 43.90 cents. Bulls are seeking to hold stiff support at 42.50 cents, with further selling seeking to overtake the July 29 contract low of 41.44 cents.
What to do: Get current with advised sales.
Hedgers: You should be 100% sold in the cash market on 2023-crop with 25% reowned in October $10.50 short-dated serial call options at 18 1/2 cents. You should have 10% of expected 2024-crop production sold for harvest delivery next fall.
Cash-only marketers: You should be 70% sold on 2023-crop. You should have 10% of expected 2024-crop production sold for harvest delivery next fall.
Wheat
Price action: December SRW wheat rose 4 3/4 cents to $5.56 3/4. December HRW wheat gained 5 cents to $5.70 3/4. Both markets closed nearer their session highs. September spring wheat futures rose 7 cents to $5.88 1/2.
Fundamental analysis: The winter wheat futures markets saw more tepid short covering today, but stronger buying interest was limited by the recent meltdown in the corn and soybean futures markets. A firmer U.S. dollar index and weaker crude oil prices today were negative outside-market forces that also constrained the bulls.
World Weather Inc. today said good wheat-harvest weather is expected in the central U.S., and rain in the Midwest “should be infrequent enough to protect its harvest, although drier weather will be desirable.” There is some concern about the wheat crop in Canada and the northwestern U.S. Plains because of dryness, “although today’s forecasts are suggesting greater rainfall next week in the southwestern Prairies and the northwestern Plains. There is also some concern about spring wheat in Russia and Ukraine, although recent cool weather and the prospects for some showers have reduced some of the worry,” said the forecaster.
USDA this morning reported weekly U.S. wheat export sales of 286,600 MT for the week ended July 25, down 7% from the previous week and 41% from the four-week average. Sales were near the low end of the pre-report range of expectations. Exports during the week totaled 454,200 MT, up 67% from the previous week and up 21% from the four-week average.
Technical analysis: Winter wheat futures bears still have the solid overall near-term technical advantage. Two-month-old downtrends are in place on the daily bar charts. SRW bulls’ next upside price objective is closing December prices above solid chart resistance at $5.81. The bears’ next downside objective is closing prices below solid technical support at $5.00. First resistance is seen at $5.66 and then at $5.75. First support is seen at today’s low of $5.45 1/2 and then at the contract low of $5.39 1/2. The HRW bulls’ next upside price objective is closing December prices above solid technical resistance at $6.00. The bears’ next downside objective is closing prices below solid technical support at $5.25. First resistance is seen at $5.82 and then at $5.95 1/2. First support is seen at today’s low of $5.60 and then at the contract low of $5.51 1/4.
What to do: You should have claimed profits on the 2024-crop hedges in July SRW futures. Wait on a corrective rebound to increase sales.
Hedgers: You should be 60% sold on 2024-crop in the cash market. You should also have 10% of anticipated 2025-crop production forward sold for harvest delivery next year.
Cash-only marketers: You should be 60% sold on 2024-crop. You should also have 10% of anticipated 2025-crop production forward sold for harvest delivery next year.
Cotton
Price action: December cotton fell 91 points to 68.08 cents, closing nearer the session low.
Fundamental analysis: Cotton futures extended Wednesday’s losses amid technical selling combined with lacking outside market support. Heavy selling in crude oil futures and equities, combined with U.S. dollar strength, crimped the natural fiber today. Meanwhile, USDA released its weekly export sales data, which showed net old-crop cancellations of 1.086 RB for the week ended July 25, which included net reductions for China (597,300 RB), Pakistan (369,100 RB) and Vietnam (126,100 RB). However, new-crop sales totaled 1.36 MMT, with China, Pakistan and Vietnam the top three purchasers for the week. Exports for the week totaled 129,900 RB, down 1% from the previous week and 11% from the four-week average.
World Weather Inc. reports today’s weather hasn’t provided much change. U.S. southeastern states are a little too wet and will dry down briefly, but a tropical system next week may bring abundant to excessive rain to parts of Georgia and northern Florida. The Delta will dry down beneficially, and a good mix of rain and sunshine is expected for most of the Texas crop areas. Harvesting in South Texas will advance well in the absence of rain, while less heat in California will reduce some plant stress that has prevailed for weeks.
Technical analysis: December cotton ended the session below support at 68.31 cents, with initial support now serving at 67.62 cents, which is backed by the recent low of 67.50 cents. Conversely, initial resistance will now serve at today’s failed support level, then at the 10- and 20-day moving averages of 69.22 cents and 70.28 cents, which are backed by 40-day moving average of 71.60 cents.
What to do: Get current with advised sales.
Hedgers: You should be 100% sold on 2023-crop. You should also have 25% of expected 2024-crop production forward sold for harvest delivery.
Cash-only marketers: You should be 100% sold on 2023-crop. You should also have 25% of expected 2024-crop production forward sold for harvest delivery.