Corn
Price action: December corn futures fell 2 cents to $3.90 3/4 and nearer the session low. Prices this week hit a contract low.
Fundamental analysis: The corn futures market today fell victim to bearish outside markets that included a sharp rebound in the U.S. dollar index and lower crude oil prices. The specter of record-large U.S. corn crop yields this fall is also overhanging the market.
Corn bulls got no traction today from USDA reported daily U.S. corn sales of 100,000 MT to Colombia and 165,735 MT to Mexico for the 2024-25 marketing year. The Energy Information Administration today reported U.S. ethanol production averaged 1.071 million barrels per day (bpd) during the week ended Aug. 23, down 27,000 bpd (2.5%) from the previous week but up 6.4% from the same time last year. U.S. ethanol stocks declined 2,000 barrels to 23.572 million barrels.
World Weather Inc. today said nearly all of the Midwest will receive at least some rain by Saturday that will be beneficial for late crop development before dry weather and favorable conditions for crop maturation are most common Sunday through Sept. 11.
Thursday morning’s weekly USDA export sales report is expected to show U.S. corn sales of minus 100,000 to up 200,000 MT in the 2023-24 marketing year, and sales of 700,000-1.4 million MT in the 2024-25 marketing year.
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 this week’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 soybean futures fell 9 1/2 cents to $9.77 though settled well off session lows. September meal futures fell $6.5 to $310.8, nearer session lows. September bean oil firmed 65 points to 41.80 cents.
Fundamental analysis: Soybean futures underwent heavy selling pressure, negating much of this week’s rally. Reports of greater-than-expected rain across much of the Midwest brought relief to crops following excessive heat the last couple of days. Temperatures are seen as falling into the weekend before normalizing to seasonal temps early next week, says World Weather Inc. The recent heat wave brought added stress to crops, but timely precipitation likely limited the longer-term impact of the heat. A slow finish would be the best-case scenario for the bean crop and the current forecast for World Weather Inc. fits that outlook. Scattered showers are expected to keep the Midwest from being totally dry over the coming week, but moderate temps and ample soil moisture should be beneficial for pod filling.
USDA reported daily sales of 264,000 MT of soybeans for delivery to China during the 2024-25 marketing year. China has curbed imports of grains due to ample stocks and poor domestic prices. While that does not have any current negative implications for the soy market, the expansion of slowed imports from corn to now both barley and sorghum as well has some traders concerned China may eventually slow soy imports.
USDA is set to release their weekly export sales report tomorrow morning. Traders expect old-crop sales between -150,000 and 150,000 MT and new-crop sales between 1.5 and 2.5 MMT. Net reductions are not uncommon this late in the marketing year.
Technical analysis: November soybean futures struggled to followthrough on strength seen earlier this week as bears continue to hold the near-term technical advantage. Bulls have held a fledging uptrend on the daily chart from the mid-August low but until prices close above $10.00, buying looks temporary. The 20-day moving average at $9.92 1/2 continues to serve up stiff resistance with additional resistance at $9.80 on the way. Bulls are seeking to hold support at $9.67 1/2 then $9.61 1/2 on continued selling pressure.
September meal futures underwent heavy selling pressure as bears continue to hold the technical advantage. Similar to beans, a modest uptrend persists on the daily chart, but until prices close above meaningful resistance, gains can be chalked up to corrective buying. Initial resistance stems from $314.4 with additional backing from the 40-day moving average at $321.0. Support stems from $306.0 then last week’s low of $302.7.
September bean oil futures saw relative strength today, managing to close nearer recent highs. Bears continue to hold the near-term technical advantage, though their grip has weakened in recent days. Resistance steams from this week’s high of 42.17 cents with backing from the 40-day moving average at 42.59 cents. Support comes in at 41.21 cents then today’s intraday low of 40.65 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 wheat rose 6 cents to $5.41 1/2. December HRW wheat gained 9 cents to $5.55 3/4. Both markets closed nearer their session highs.
Fundamental analysis: The winter wheat futures markets today saw short-covering, corrective price rebounds after hitting contract lows earlier this week. Gains were limited by a solid rebound in the U.S. dollar index today and lower crude oil prices. Also friendly for wheat futures today, Stats Canada estimated Canadian all wheat production at 34.4 MMT. That’s up 4.3% from last year but lower than the 35.1 MMT analysts polled by Reuters expected.
World Weather Inc. today said harvesting of small grains in the U.S. northern Plains, Pacific Northwest and Canada’s Prairies is 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 wheat in Europe and the western CIS are developing relatively well. Dryness in parts of Russia’s southwestern spring wheat areas has been a concern, while too much rain in the eastern New Lands may reduce grain quality, said the forecaster.
Thursday morning’s weekly USDA export sales report is expected to show U.S. wheat sales of 300,000 to 650,000 in the 2024-25 marketing year.
Technical analysis: Winter wheat futures bears still have the solid overall near-term technical advantage. Price downtrends are in place on the daily bar charts. 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 $5.50 and then at $5.60. First support is seen at today’s low of $5.33 and then at the contract low of $5.22. 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 $5.65 and then at $5.75. First support is seen at today’s low of $5.43 1/2 and then at 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 143 points to 68.55 cents and settled nearer session lows.
Fundamental analysis: Cotton futures underwent heavy selling pressure today, further cementing bears’ hold on the market. About half of the rally from the last couple of weeks has been negated. December futures have traded several days above the 40-day moving average several times since the recent downtrend started in early April. Each time, prices eventually reversed lower to fresh lows. Last week, prices traded several sessions over the 40-day and today’s sell-off put prices back below the 40-day with recent tendencies pointing to a test of the mid-August lows.
Traders will closely watch tomorrow’s USDA export sales report. Outstanding sales are currently at the lowest mark since 2016 for this time of year. Concerns over the Chinese economy has severely limited buying interest in cotton given a slowdown of the world’s second largest economy would not bode well for their imports of raw commodities. UBS today lowered their forecast for 2025 GDP growth in China to 4% from 4.6% previously.
Technical analysis: December cotton futures confirmed stiff downtrend resistance at 70.60 cents with this week’s breakdown, with today’s selloff falling below interim resistance at 69.90 cents and 69.17 cents. Bulls are seeking to hold support at 68.00 cents then 67.05 cents on continued selling pressure, with the contract low backing those levels at 66.26 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.