Corn
Price action: December corn fell 3 3/4 cents to $3.97, near the session low.
Fundamental analysis: Corn futures favored the downside in largely sideways trade, with early strength in soy complex limiting selling interest, though solid U.S. dollar gains generally weighed on commodities. Meanwhile, both the Rosario Grain Exchange in Argentina and the International Grains Council (IGC) each bumped up corn production forecasts, complementing pressure from the dollar. The Rosario Grains Exchanged increased its corn crop estimate by 1.5 MMT to 49 MMT, while the IGC raised its world production outlook 1 MMT to 1.226 billion tons.
This morning, USDA also reported old-crop export sales of 120,500 MT for the week ended Aug. 8, a new marketing-year low and down 75% from the previous week and 66% from the four-week average. Net sales were short of analysts’ pre-report estimates ranging from 300,000 to 550,000 MT. However, net new-crop sales totaled 800,500 MT, topping the pre-report range of 150,000 to 800,000 MT. Exports during the week were reported at 1.03 MMT, down 21% from the previous week and 11% from the four-week average.
Weather will continue to be a focus as the nation’s corn crop progresses through grain fill. World Weather Inc. reports rain will become less frequent and lighter this weekend through Aug. 29 and while much of the Midwest will dry down, soil moisture should be great enough to keep conditions for crop development favorable through much of the region.
Technical analysis: December corn futures managed to hold above recent support at $3.96 3/4 but also continued to face resistance at $4.03 1/4. Recent consolidation is indicative of a more pronounced move near-term. Moreover, give bears’ firm grasp on the technical advantage, additional selling seems likely, though additional support will serve at $3.93 and again at Monday’s low of $3.90 1/4, with $3.75 serving as additional support. Conversely, the 10-day moving average of $4.00 1/2 will serve as initial resistance and is backed by resistance at $4.03 1/4, the 20-day moving average of $4.05 1/4, then $4.09 1/2 and the 40-day moving average of $4.14 1/4.
What to do: Get current with advised sales.
Hedgers: You should be 80% priced in the cash market on 2023-crop.
Cash-only marketers: You should be 80% priced on 2023-crop.
Soybeans
Price action: November soybean futures closed steady on the session at $9.68 1/2, though settled nearer session lows. September meal futures firmed $2.80 to $307.90 and closed nearer session lows. September bean oil futures sunk 54 points to 39.47 cents and made a fresh contract low today.
Fundamental analysis: Soybeans traded on either side of unchanged as prices are caught between improving demand and anticipated record production. USDA reported new-crop export sales of 1.344 MMT, by far the largest quantity so far for 2024-25. Export sales for new crop are still running well behind average, though have improved significantly in recent weeks. Demand has improved significantly with November futures below the $10.00 mark. There is still a significant way to go before stating that demand will make up for record production, but recent signs of life in the export market have been encouraging.
NOPA reported July crush of 182.881 million bushels, up 7.282 million bushels from June and a record for the month of July. It was bullish against expectations, as crush was above trade forecasts of 182.367 million bushels from Reuters. Soyoil demand has proven robust, as soyoil stocks came in below expectations, totaling 1.499 billion lbs. NOPA data implies July crush of 191 million bushels, which points to a likely beat of the current USDA estimate for the crop year.
Beneficial rain fell in the western Midwest into central and northern Illinois Wednesday and into this morning with enough rain in the drier areas to improve conditions for crop development, says World Weather Inc. Wetter weather is expected to persist into Friday, which will continue to restore soil moisture and improve conditions for crop development, maintaining fruitful conditions for most of the month of August and enabling the best opportunities for high soy yields.
Technical analysis: November soybean futures struggled to garner much bullish momentum above the psychological $9.75 resistance level as bears continue to retain the near-term technical advantage. Bulls are seeking to close prices above $9.75 before testing 10-day moving average resistance at $9.95. Support stems from Tuesday’s closing price at $9.62 1/2 then the contract low of $9.55 1/4.
September meal futures continue to lead price action in the soy complex. Prices saw strong gains for the second consecutive session, with signs pointing to a potential near-term bottom, though bears do still own the overall technical advantage. Resistance stems from the 10-day moving average at $314.20, which coincides with the July low. Strength above that mark finds resistance at $320.00. Support lies at the psychological $300.00 level which coincides with this week’s for-the-move low.
September bean oil futures continue to see relative weakness as bears own full control of the technical edge. Resistance stands at the psychological 40.00 cent mark with further strength finding resistance at the 10-day moving average, currently at 41.21 cents. Bulls are seeking to hold support at the contract low of 39.48 cents, then 38.75 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 80% priced on 2023-crop. You should have 10% of expected 2024-crop production sold for harvest delivery next fall.
Wheat
Price action: December SRW wheat fell 6 cents to $5.50 1/4 and near the daily low. December HRW wheat fell 8 1/2 cents to $5.52 3/4, near the session low and closed at a contract low close. September spring wheat futures fell 5 3/4 cents to $5.86 1/4.
Fundamental analysis: The wheat futures markets today saw selling pressure due in part to solid gains in the U.S. dollar index and weaker corn futures prices. Bulls got no traction from news the International Grains Council trimmed its world wheat production forecast by 2 MMT, to 799 MMT.
USDA this morning reported U.S. wheat export sales of 399,900 MT for the week ended Aug. 8, up 24% from the previous week but down 6% from the four-week average. Net sales were within the pre-report range of expectations.
World Weather Inc. today said that in the northern Plains, conditions in the next seven days “will continue to be favorable with a few exceptions. The western half of the region is not likely to receive enough rain to counter evaporation. This will stress some late season crops. However, the weather pattern will be supportive of early season crop maturation and aggressive fieldwork advancement.” In the Dakotas and Minnesota, greater rainfall will be good for crop development and enough dry time is expected between areas of rain for favorable fieldwork progress, said the forecaster.
Technical analysis: Winter wheat futures bears have the firm overall near-term technical advantage. However, price downtrends on the daily bar charts have stalled out and recent sideways price action at lower levels could well be “basing” that puts in market bottoms. SRW bulls’ next upside price objective is closing December prices above solid chart resistance at $6.00. The bears’ next downside objective is closing prices below solid technical support at $5.00. First resistance is seen at today’s high of $5.68 and then at last week’s high of $5.74 3/4. First support is seen at this week’s low of $5.52 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 today’s high of $5.72 3/4 and then at last week’s high of $5.83 3/4. First support is seen at the contract low of $5.51 1/4 and then at $5.40.
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 futures firmed 10 points to 67.15 cents though settled nearer session lows.
Fundamental analysis: Cotton futures struggled to maintain early gains as sellers took advantage and sold the rally. While it is a relatively slow time of the year for export sales, sales this week were rather disappointing at 133,300 bales and outstanding sales for 2024-25 are the lowest since 2016-17 for this time of the year. While USDA took an axe to production earlier this week, pessimism surrounding the Chinese economy and slow export sales continue to weigh heavily on prices. Still, the downside is likely to be limited as prices are trading at the lowest mark in four years and have faced persistent selling pressure for six consecutive months. Cotton futures struggled to maintain gains today despite strength in the equity markets, which were spurred by retail sales coming in higher than anticipated this morning. That data is particularly relevant to the cotton market as discretionary spending has picked up over the last month, which could spark additional demand for textiles. Cotton futures seeing relative weakness despite that bullish news is a testament to the pessimistic attitude surrounding the cotton market at this time.
Technical analysis: December cotton futures struggled to maintain early gains and ultimately closed nearer session lows as bears continue to hold the overall technical advantage. Resistance stems from the intraday high of 67.94 cents, which coincides with the 10-day moving average. Strength above that mark seeks to overcome resistance at 68.66 cents. Bulls are looking to hold support at 67.00 cents, which has capped most of the downside in the past week and a half. Further weakness finds support at 66.55 cents, the contract low.
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.