Corn
Price action: December corn futures rose 6 1/4 cents at $3.92 3/4 and nearer the session high.
Fundamental analysis: Short covering was featured in the corn futures market today after December futures hit a contract low on Monday. Corn was supported by a lower U.S. dollar index today. The USDX traded to the lowest mark in over a year today.
The corn market also saw support today as USDA reported a daily U.S. corn sale of 127,760 MT to Mexico for the 2024-25 marketing year.
USDA Monday afternoon rated 65% of the U.S. corn crop as “good” to “excellent” and 13% “poor” to “very poor.” On the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect), the corn crop dropped 4.4 points to 368.1 for the lowest rating of this growing season. Pro Farmer crop consultant Michael Cordonnier left his U.S. corn yield forecast at 183.5 bu. per acre, though he has a neutral to slightly lower bias as weather turned hotter and drier.
World Weather Inc. today said nearly all of the Midwest will receive at least some rain this week that will be beneficial for late crop development before mostly dry weather Saturday through Sep. 10 allows crop maturation to occur favorably. Heat this week will be beneficial in areas with maturing corn as the maturation process will be sped up, said the forecaster.
Technical analysis: The corn futures bears have the solid overall near-term technical advantage. Prices are in a 3.5-month-old downtrend on the daily bar chart. The next upside price objective for the bulls is to close December prices above solid chart resistance at $4.15. The next downside target for the bears is closing prices below chart support at $3.75. First resistance is seen at today’s high of $3.94 1/2 and then at $4.00. First support is at the contract low of $3.85 and then at $3.80.
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 rose 5 3/4 cents to $9.86 1/2 and nearer the daily high. September soybean meal closed up $5.20 at $317.30, nearer the session high and hit a more-than-two-week high. September soybean oil fell 55 points at 41.15 cents and near the session low.
Fundamental analysis: The soybean and soybean meal futures markets today saw short covering following recent selling pressure. Soybean oil was pressured by a solid drop in crude oil prices today. A drop in the U.S. dollar index today was a bullish outside-market element for the soybean complex but that was somewhat mitigated by the daily losses in crude oil.
USDA Monday afternoon rated the U.S. soybean crop at 67% “good” to “excellent” and 9% “poor” to “very poor.” On the Pro Farmer CCI, soybeans dropped 4.4 points 363.0, the lowest rating of the growing season. Pro Farmer consultant Michael Cordonnier left his U.S. soybean yield at 53.5 bu. per acre, with production estimated at 4.61 billion bushels.
World Weather Inc. today said a large part of the Midwest will be much warmer than normal into Thursday, with today hottest when southwestern to eastern areas warm to the 90s with some lower 100s in central parts of the region Tuesday. However, at least some rain over much of the Corn Belt during this week will be beneficial for late maturation of the soybean crop, said the forecaster.
Technical analysis: The soybean futures bears have the firm overall near-term technical advantage. However, a nearly three-month-old downtrend on the daily bar chart has stalled out. The next near-term upside technical objective for the soybean bulls is closing November prices above solid resistance at $10.25. The next downside price objective for the bears is closing prices below solid technical support at the contract low of $9.55. First resistance is seen at today’s high of $9.91 1/2 and then at $10.00. First support is seen at $9.75 and then at this week’s low of $9.60 1/2.
The soybean meal futures bears have the overall near-term technical advantage. However, recent sideways price action at lower levels begins to suggest a market bottom is in place. The next upside price objective for the meal bulls is to produce a close in September futures above solid technical resistance at $330.00. The next downside price objective for the bears is closing prices below solid technical support at the contract low of $299.40. First resistance comes in at today’s high of $318.10 and then at $322.00. First support is seen at today’s low of $311.40 and then at $308.00.
Soybean oil bears have the overall near-term technical advantage. However, a price downtrend on the daily bar chart has been negated to suggest a market bottom is in place. The next upside price objective for the bean oil bulls is closing September prices above solid technical resistance at 45.00 cents. Bean oil bears’ next downside technical price objective is closing prices below solid technical support at the contract low of 38.60 cents. First resistance is seen at this week’s high of 42.17 cents and then at 42.61 cents. First support is seen at 41.00 cents and then at 40.22 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 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 futures rallied 10 1/2 cents to $5.35 1/2 and settled nearer session highs. December HRW futures climbed 9 1/2 cents to $5.46 3/4 and closed nearer session highs. December HRS futures gained 9 1/2 cents to $5.46 3/4.
Fundamental analysis: Wheat futures surged alongside corn today, marking the first higher close in the last five trading sessions. Prices marked a fresh contract low in overnight trading before strength in corn helped wheat prices reverse. USDA released their weekly Crop Progress Report yesterday afternoon. The report noted that the winter wheat harvest is complete and the spring wheat harvest is 51% completed, just below the five-year average. Spring wheat crop conditions fell three points to 69% “good” to “excellent.” On the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect), the spring wheat crop fell 7.3 points to 372.9.
Not much rain is expected aside from some scattered showers the next few days in the northern Plains over the coming week, allowing harvest to continue without many interruptions, notes World Weather Inc. Some late season crops in the western Dakotas and Montana could use more rain.
Technical analysis: December SRW futures posted a key reversal higher today, though in recent history most key reversals have been faded. Bears continue to hold the technical advantage in wheat. Initial resistance stems from $5.40 with further backing from the 20-day moving average at $5.50. Support lies at $5.26 1/4 then the contract low of $5.20 3/4.
December HRW futures continued yesterday’s reversal from the contract low. Bulls are seeking to close prices above 10-day moving average resistance at $5.49 3/4, which capped the upside today. Further resistance stands at $5.58 3/4. Support lies at $5.35 then the contract low of $5.27 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 futures sunk 28 points to 69.98 cents and settled near mid-range.
Fundamental analysis: Cotton futures fell for the second consecutive session as bulls struggle to break the downtrend stemming from the early April highs. Prices continue to face persistent selling pressure despite the relief rally the past couple of weeks. Cotton futures failed to rally despite continued weakening crop conditions. The “good” to “excellent” rating declined another two points to 40% “good” to “excellent” last week, while crops rated “poor” to “very poor” increased two points to 28%, with “very poor” ratings increasing four points from a week ago. The bearish story for cotton continues to be a poor demand outlook. Concerns over the Chinese economy continue to circulate, with woes over exports continuing to weigh heavily on the cotton market despite continued weakening condition ratings pointing to lower production.
Technical analysis: December cotton futures saw losses for the second consecutive session. Bears continue to own the technical advantage, though their edge has weakened in the past week. Support lies at 69.97 cents then 69.07 cents, while bulls are seeking to overcome resistance at 70.90 cents then yesterday’s high of 71.36 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.