Corn
Price action: December corn futures saw continued selling pressure, settling 4 1/2 cents lower to $3.92 1/2, marking a 2 1/2 cent loss on the week.
5-day outlook: December corn futures sunk to a fresh contract low as prices continue to trend lower on the daily bar chart. Prices traded sideways for most of the week after Monday’s USDA Supply and Demand Reports, which imply record yield and the third highest production. Bulls were able to push prices higher earlier in the week as acres came in lower than anticipated and use continues to outpace prior estimates. Next week, our Crop Tour will give a widespread, objective look into yields across the Corn Belt. That will help give an inside look into how big the current crop really is and will give a better idea of where yields will end up this year. Keep an eye on our evening reports on daily Tour scout findings starting on Monday.
30-day outlook: Production will remain a key focus in the coming month as the crop matures. The crop continues to mature a little ahead of average. Rain across the Midwest this week provided some needed moisture in the dryest parts of the Corn Belt, notes World Weather Inc. Additional rain is expected over the coming week though rain becomes sparser in the latter half of the outlook into early September. Soil moisture conditions remain quite favorable, which are likely to help carry the crop through maturation without stress. Eyes will be on subjective data from the Crop Tour and the upcoming USDA September Crop Production Report.
90-day outlook: The longer-term outlook will be heavily dependent on demand as production prospects are better realized. Exports continue at a rapid pace for old-crop and ethanol use has proven robust as well. New-crop export sales have improved in recent weeks but are still slightly behind, historically. China has typically purchased a significant amount of either corn or sorghum by this point but has not made many purchases for either for delivery in 2024-25. Feed use is still up for question, though history has proven that feed us increases when prices are low. USDA has been slow to increase feed use, though there will be little clarity on use for feed until the next Quarterly Grain Stocks report on September 30. USDA has been reducing their balance sheet for both old-crop and new-crop the past several months. If demand continues to improve, it could help put a floor under falling prices.
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 soybeans fell 11 1/2 cents to $9.57 and lost 45 1/2 cents on the week. December soymeal fell $5.60 to $302.10, down $8.30 week-over-week. September soyoil rose 29 points to 39.18 cents but faded 247 points on the week.
5-day outlook: Soybeans ended the week by marking a fresh contract low amid broad-based selling across commodities. USDA’s record production estimates earlier this week certainly gave the soybean market little reason to rally, though a reach to multi-year lows could boost demand. Into next week, the marketplace will be focused on the Pro Farmer Crop Tour, which will be a first-hand, objective look at the 2024 crop. Look for daily updates next week, with final yield estimates next Friday following the close. Meanwhile, weather will continue to influence prices into harvest, though weather throughout most of the Soybean Belt has proven largely favorable thus far.
30-day outlook: South American weather will become a larger focus in the next month, as areas of Brazil begin to consider planting. While forecasts of a robust U.S. crop reduce global supply concerns, with Brazil serving as the top soybean producer in the world, the marketplace will certainly be tuned in to monitor crop projections. However, low commodity prices and cash flow strains in the country could bound efforts to expand production. Meanwhile, U.S. harvest will begin in earnest in the next 30 days, with actual yield data providing additional market direction.
90-day outlook: U.S. soybean demand has been quite lackluster over the past year, though a recent dive in prices has spurred some new-crop demand from China, however the country’s sputtering economy has generated cause for concern regarding demand in the foreseeable future. Look for U.S. export sales to be a market focus over the longer term, especially as the November election nears and the overall political stage transforms.
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 futures rose 2 1/4 cents to $5.52 1/2 and nearer the daily high. For the week December SRW fell 13 1/4 cents. December HRW wheat futures gained 2 1/4 cents at $5.55 and nearer the session high after hitting a contract low early on. For the week, December HRW lost 15 1/2 cents. December spring wheat futures rose 7 cents to $6.09 and rose 1/2 cent on the week.
5-day outlook: The winter wheat futures markets today saw some more tepid short covering, with gains limited by losses in the corn and soybean futures markets. The past two weeks have seen sideways price action at lower levels, which may be “basing” that puts in a market bottom soon. With soybean and corn growing seasons still in progress and harvest of both crops pending, look for wheat futures traders to look more closely to the corn and soybean markets for daily price direction. However, trader expectations for bountiful, if not record, U.S. corn and soybean crops this year likely won’t offer much price support to the wheat futures markets.
30-day outlook: Wheat traders in the coming weeks will continue to monitor weather patterns in major global wheat-growing regions. World Weather Inc. today said recent rain and milder weather in the northern U.S. Plains was welcome and good for late-season crops. Winter crop harvesting will advance well in the Pacific Northwest and around showers in Ontario and Quebec as well as parts of the U.S. Midwest. Meantime, Australia’s wheat crop is looking good for the start of spring development. Argentina’s crop is semi-dormant with rain needed before spring arrives. Spring wheat in China would benefit from drier weather and that may occur in some areas better than others. Spring wheat in eastern Russia’s New Lands will remain wet and mild to cool for at least another week to ten days, maintaining some concern over wet weather disease. Crops in the southwest of Russia need some rain. Europe spring wheat is likely developing relatively well.
90-day outlook: USDA Thursday 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. Sales of U.S. wheat abroad will need to continue to improve to help pull the wheat market out of its languishing mode at lower price levels. One positive element for that prospect is that the U.S. dollar index this week closed at a five-month-low close and is trending lower. A depreciating greenback will make U.S. wheat more price-competitive on the global trade markets.
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 rose 9 points to 67.24 cents but lost 110 points on the week.
5-day outlook: Cotton futures extended to a fresh low overnight but gathered enough steam from additional strength in equities along with a fading U.S. dollar to move up from the intraday low. USDA’s production update earlier this week failed to round up bulls, with technical resistance at the 20-day moving average, limiting buying interest, as it has since the end of June. Look for the natural fiber to continue to trade sideways to lower into next week, with daily price direction to stem from outside markets.
30-day outlook: Weather will continue to be the focus over the next month as harvest approaches. World Weather Inc. reports West Texas cotton areas will not get much moisture in the coming week to ten days, although it will not be completely dry. Good harvest weather is prevailing in southern Texas and that should prevail for ten days. Meanwhile, cotton in the southeastern states is improving following flood and wind damage associated with Tropical Cyclone Debby last week. The improving trend should prevail, according to the forecaster. U.S. Delta crops are rated favorably with little change likely, and the same is true for the far west, although smaller bolls than usual are suspected due to persistent heat this summer.
90-day outlook: Cotton exports will continue to be the long-term market focus, which will provide insight into the global economy as recession concerns loom. Purchases from top importer China will be of particular note as will the direction of the U.S. dollar. Look for traders to closely monitor actions from the Federal Reserve as it continues to battle inflation
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.