Corn
Price action: December corn futures climbed 4 3/4 cents to $4.03 1/4 and closed near session highs, though lost 6 3/4 cents on the week.
5-day outlook: Corn futures rebounded as volatility plagued the marketplace, ending the week near the July lows. Outside markets saw sustained volatility today as concerns continue to arise surrounding heightening tensions in the Middle East. Poor jobs data for July released by the Bureau of Labor Statistics implied the economy is slowing, which heightened selling efforts in the U.S. equity markets and sent bonds soaring, lowering interest rates as traders are betting the Fed will cut rates by at least 25 basis points in their September meeting. While equities saw heavy selling pressure, the grain and oilseed markets saw strength. Some of that strength can be attributed to the risk-off attitude of the marketplace. When markets are in turmoil, traders often try to get flat positions to cover margin calls and assess what to do next. Given heavily short positioning, traders are buying back short positions to cover margin, which was price supportive. Early next week will give clarity if today’s rally had more legs than simply short covering. December futures breaking below the prior low at $4.03 and subsequent break below $4.00 was a bearish omen for the corn market. Bulls are looking to build on today’s strength to post a false breakdown, reversal on the daily bar chart. If current forecasts hold true, bulls will continue to fight an uphill battle as we anticipate record yields.
30-day outlook: Some net drying is expected over the next couple of weeks throughout the Midwest, though current soil moisture levels are expected to carry the crop through the period with minimal crop stress, maintaining high yield potential, says World Weather Inc. The southwestern Corn Belt is forecast to be warm to hot and rainfall will be limited, but serious crop stress is not expected. Most analysts are likely to expect record, if not above trend yields this fall. Commodity brokerage StoneX estimated corn production at 15.207 billion bu. on a yield of 182.3 bu. per acre. In July, USDA projected corn production and yield at 15.1 billion bu. on a trendline yield of 181 bu. per acre. The StoneX estimates are based on a survey of its customers and assume USDA’s harvested acreage. While we anticipate acreage to come in lower than USDA’s estimate in June, higher yield expectations more than offset the drop in harvested acres. Our Crop Tour August 19-22 will give an inside look into top production areas across the Corn Belt. If production does not look as fruitful as anticipated, prices could quickly turn around.
90-day outlook: As production prospects are better realized, attention will focus on demand in the coming quarter. Demand for old-crop is near record and we are forecasting record demand in 2024-25. Still, total supplies outmatch total use and the balance sheet is expected to expand for the second consecutive year. Exports remain a bit of a wildcard as concerns over a trade war have taken hold of the marketplace. Purchases for new-crop are running 33.4% below the five-year average, though new-crop sales have picked up the past couple of weeks, with a daily sale to unknown destinations announced earlier this week. Even as use is projected to be a record, a widening balance sheet is likely to continue to weigh on prices through harvest barring any disruptions to supply.
What to do: Get current with advised sales.
Hedgers: You should be 70% sold on 2023-crop in the cash market.
Cash-only marketers: You should be 70% sold on 2023-crop.
Soybeans
Price action: November soybeans rose 10 3/4 cents to $10.27 1/2 but lost 21 1/4 cents on the week. December soymeal rallied $8.40 to $324.60 but marked a 10-cent week-over-week loss. September soyoil fell 79 points to 41.68 cents and lost 133 points on the week.
5-day outlook: A second straight daily soybean sale to China and an assist from a plummeting U.S. dollar spurred some short-covering in the soy complex, while general strength across the grain complex lent additional support. USDA reported a second straight daily sale earlier today, which totaled 202,000 MT for delivery during 2024-25. This brought sales to China over the past two days to 334,000 MT and marked the first back-to-back sale for 2024-25 to the top soybean importer. With new-crop sales notably trailing the five-year average, the marketplace will closely watch for additional sales next week, as well as the U.S. dollar as extended weakness likely spurring additional short-covering.
30-day outlook: Over the next month, weather will continue be of trade interest, as the U.S. crop progresses through its most crucial growth phase, along with USDA’s August Production Report. The National Agricultural Statistics Service (NASS) stated this week that in preparation for the report, a review of survey data and the latest information from the Farm Service Agency and Risk Management Agency is being conducted for planted and harvested acreage. NASS will update planted and harvested acreage estimates in its August 12 report if the data review justifies any changes.
90-day outlook: With U.S. export sales notably trailing the five-year average, traders will continue to closely monitor soybean sales. As of late, the marketplace has seemingly prepared for a trade war amid the recent political climate, while a sputtering Chinese economy and generally favorable U.S. weather have caused continued fund selling across the complex. However, with harvest fast-approaching, U.S. production will become a bit more certain in the coming months, as will the political environment as the election nears.
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 futures rose 5 1/2 cents to $5.62 1/4, nearer the session high and on the week up 3 3/4 cents. December HRW wheat gained 5 1/2 cents to $5.76 1/4, near the session high and for the week up 14 1/4 cents. September spring wheat futures rose 6 1/2 cents to $5.95 and gained 6 1/2 cents on the week.
5-day outlook: Today’s technically bullish weekly high closes in December SRW and HRW futures suggests some follow-through buying is possible early next week. However, grain traders will likely be watching the outside markets extra closely on Monday morning, given today’s big sell off in the U.S. stock market following some downbeat U.S. economic data released late this week.
30-day outlook: The U.S. winter wheat harvest is winding down, which should be a seasonal positive for futures markets as commercial hedge pressure should also wane. World Weather Inc. today said good harvest weather is expected in the central U.S. as well as in Europe and the CIS. Concern about Canadian wheat and the northwestern U.S. Plains wheat crops continues because of dryness, although greater rainfall is expected next week in the southwestern Prairies and the northwestern Plains. The coming weeks will likely see wheat futures market traders more closely following the corn and soybean markets for daily price direction, as those two crops are still in their growing seasons.
90-day outlook: With the U.S. winter wheat harvest winding down, trader focus is turning to demand prospects and the outlook for the 2025 U.S. wheat crops. Weekly USDA export sales numbers for U.S. wheat have been uninspiring recently, but this week’s report did show actual exports picking up. Bulls in the coming months may get some help by a depreciating U.S. dollar on the foreign exchange market. The U.S. dollar index today fell to a 4.5-month low. The likely lower U.S. interest rate environment most market watchers see in the coming months should further weaken the greenback. Such would be a positive for making U.S. wheat exports more competitive on the world 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 17 points to 68.25 cents and gained 26 points on the week.
5-day outlook: Cotton futures managed to trade remarkably well given a second straight day of notable selling across equities and crude oil futures, with heavy weakness in the U.S. dollar, which pushed to a four-and-a-half month low early on, certainly supporting the natural fiber. Global recession fears have resurfaced this week, with yesterday’s ISM manufacturing PMI and weekly unemployment claims, combined with today’s weaker-than-expected July jobs report reigniting concerns about the health of the U.S. economy. While a recession would likely affect consumer demand for cotton, multi-year lows in cotton are likely limiting seller interest at this juncture.
30-day outlook: USDA’s supply and demand updates on August 12 will gather market attention, along with U.S. weather as the growing season progresses. World Weather Inc. reports the 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, the eastern Carolinas and northern Florida. Meanwhile, the Delta will dry down beneficially, while net drying is expected for most of the Texas crop areas. Harvesting in Texas will advance well in the absence of rain. The forecaster notes soil moisture should support crops in most areas, though stress in the northern Blacklands and southern parts of West Texas will steadily increase.
90-day outlook: U.S. cotton sales will continue to be a focal point over the next several months, as it provides insight into the global economy. This week, USDA reported net upland cancellations of a whopping 1.086 million RB for 2023-24 for the week ended July 25, with cancellations primarily for China, Pakistan and Vietnam, however, new crop sales totaled 1.36 million RB, with those three countries noted as the top three purchasers. Exports during the week were reported at 129,900 RB, down 1% from the previous week and 11% from the four-week average.
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.