Corn
Price action: December corn futures fell 4 1/2 cents to $3.86 1/2 and settled near session lows.
Fundamental analysis: Corn futures underwent selling pressure for the third consecutive session. Gains in the soybean complex did little to spur buying activity in the grain markets as corn and wheat both saw continued selling pressure. The coming week is expected to bring modest crop stress back into the picture as temperatures are forecast to be above average, which could cause the crop to mature faster than ideal. Temperatures are expected to cool into the weekend, with highs in the low 80’s early next week being much more moderate. Some additional moisture would be beneficial for the crop, but World Weather Inc. notes no widespread rain is expected, though the Corn Belt will not be totally dry.
USDA reported export inspections of 894,295 MT (35.2 million bu.) for the week ended Aug. 22, down 312,404 MT from the previous week. Corn inspections continue to move along at a healthy clip and imply a modest beat of the current USDA export forecast of 2.25 billion bushels.
USDA will release its weekly Crop Progress Report this afternoon. Traders expect USDA to lower the corn crop one point to 66% “good” to “excellent.”
Technical analysis: December corn futures fell for the third consecutive session as bears continue to hold the technical advantage. Initial support stems from the contract low of $3.85 with further selling seeking to overcome $3.80 support. Resistance lies at $3.90 then the 10-day moving average at $3.94 3/4.
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 climbed 7 3/4 cents to $9.80 3/4 and on session highs. September meal futures closed $5.8 higher to $312.1. September bean oil futures rose 23 points to 41.70 cents.
Fundamental analysis: After opening lower last night, soybean futures built on Friday’s strength throughout today’s session, closing higher for the second consecutive day, though still within last week’s range. Most of the past two weeks’ range has been within the Aug. 13 range as price action has tightened. This points to an upcoming move, though the direction of that move is unclear. The current soybean crop has ample pods and soil moisture, but this week’s heat has spurred buying in the soy complex, as concerns over how the soy crop will finish has enticed profit-taking.
As traders look further into the future, some concerns over a potential strike of 85,000 dockworkers represented by the International Longshoremen’s Association persist. The union issued a 60-day strike notice to the U.S. Maritime Alliance, intending to strike if a deal is not reached by Sept. 30. The strike would put a damper on soy exports in the busiest soybean export time of the year.
USDA is set to release its weekly Crop Progress Report this afternoon. Dryness has analysts expecting crop conditions to fall a point to 67% “good” to “excellent.”
USDA reported export inspections of 411,165 MT (15.1 million bu.), up 5,537 MT from the previous week. Inspections are running on pace with the current USDA export estimate of 1.7 billion bushels.
Technical analysis: November soybean futures closed higher for the second consecutive session, though bears continue to hold the near-term technical advantage. Bulls are looking to overcome resistance at $9.84 3/4 before tackling the 20-day moving average at $9.95 1/4. Support lies at $9.68 1/2 then the contract low of $9.55.
September meal futures are near trendline resistance at $312.5, bulls first initial target, though continue to trend lower on the daily bar chart. Further strength eyes resistance at $314.5, while resurgent selling pressure seeks to overcome support at $310.5 then last week’s low of $302.8.
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 100% 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 fell 3 cents to $5.25, nearer the daily low and hit a contract low. December HRW wheat gained 2 1/4 cent to $5.37 1/4 and nearer the session high after hitting a contract low early on.
Fundamental analysis: SRW wheat futures saw more selling pressure today, while the HRW market saw some late, tepid short covering, amid fully bearish charts that show no solid, early clues that market bottoms are close at hand. The drop to a fresh contract low in December corn futures today added spillover selling pressure to the wheat markets.
USDA this morning reported decent U.S. wheat export inspections of 537,179 MT, up 164,472 MT from the previous week.
World Weather Inc. today said harvesting of small grains in the U.S. northern Plains, Pacific Northwest and Canada’s Prairies “is quite mixed.” Lower yields are expected from central through southwestern parts of the Prairies and in a few northwestern Plains locations. Good yields are likely in other areas. Spring cereals in Europe and the western CIS are developing relatively well. Dryness in parts of Russia’s southwestern spring wheat areas has also been a concern while too much rain in the eastern New Lands may reduce grain quality, said the forecaster.
This afternoon’s weekly USDA crop progress reports are expected to show the U.S. spring wheat crop that is in “good” to “excellent” conditions at 73% as of Sunday, the same as last week and compares to 37% last year at this time. U.S. spring wheat harvested is seen at 48% complete as of Sunday, compared to 31% last year and 54% at this time last year.
Technical analysis: Winter wheat futures bears have the solid overall near-term technical advantage. Price downtrends on the daily bar charts have been restarted to give the bears fresh power. SRW bulls’ next upside price objective is closing December prices above solid chart resistance at the August high of $5.74 3/4. The bears’ next downside objective is closing prices below solid technical support at $5.00. First resistance is seen at Friday’s high of $5.38 1/4 and then at $5.50. First support is seen at the contract low of $5.22 and then at $5.10.
The HRW bulls’ next upside price objective is closing December prices above solid technical resistance at the August high of $5.83 3/4. The bears’ next downside objective is closing prices below solid technical support at $5.00. First resistance is seen at $5.50 and then at $5.60. First support is seen at the contract low of $5.27 1/4 and then at $5.15.
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 closed down 65 points at 70.26 cents and near the daily low. Prices hit a five-week high early on.
Fundamental analysis: The cotton futures market saw a routine corrective price pullback today following recent good gains that pushed prices well up from the contract low scored in mid-August. Cotton bulls got no help today from solid gains in crude oil futures prices. Steady-to-weaker U.S. stock indexes today likely offset the cotton-friendly crude oil gains, as risk appetite in the general marketplace has receded following the weekend escalation in military actions between Israel and Hezbollah.
Cotton traders will closely examine this afternoon’s weekly USDA crop progress reports. World Weather Inc. today said rain in West Texas late this week into next week “may be good for late season crops, but it will mostly come too late in the season to seriously improve yield.” Weather in the Blacklands should be good for late season crops, as well. U.S. Delta weather will be mostly good, although restricted rainfall could stress a few crops along with warmer than usual temperatures. The southeastern U.S. crop has been improving since Tropical Storm Debby and conditions should remain favorable this week, said the forecaster.
Technical analysis: The cotton futures bears have the overall near-term technical advantage. However, a 2.5-month-old downtrend on the daily bar chart has been negated to suggest a market bottom is in place. The next upside price objective for the cotton bulls is to produce a close in December futures above technical resistance at 73.00 cents. The next downside price objective for the cotton bears is to close prices below solid technical support at the August low of 66.26 cents. First resistance is seen at today’s high of 71.36 cents and then at 72.00 cents. First support is seen at 70.00 cents and then at 69.00 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.