Corn
Price action: December corn futures climbed 5 1/4 cents to $3.96 and settled on session highs.
Fundamental analysis: Corn futures saw sustained buying pressure throughout today’s session, helped out by strong gains in the soybean complex. December corn futures are near the upper end of the recent range, bringing prices to an inflection point to end the week and the month of August. Prices have been relatively flat for the month and have seen limited volatility. Historically, September boasts additional weakness, though our anticipation for a lower corn yield than USDA has shown promising signs for price in recent years.
USDA reported daily sorghum sales of 118,000 MT to China for 2024-25. Earlier this week, Beijing requested imports buy less foreign sorghum and barley as ample supplies and weaker-than-expected demand weigh on domestic grain prices. Historically, China will import either corn or sorghum in a marketing year. For 2024-25, China has been adding sorghum purchases regularly but has yet to initiate any purchases for corn.
USDA reported weekly corn sales of 15,300 MT for 2023-24 – a marketing-year low. Net sales totaled 1.494 MMT for 2024-25, which were above expectations. Increases for new-crop came primarily for Mexico, unknown destinations and Japan. Traders expected sales from -100,000 to 200,000 MT for 2023-24 and 700,000 MT to 1.4 MMT for 2024-25. Exports totaled 1.049 MMT.
Technical analysis: December corn futures have alternated between gains and losses the past four days. Bears continue to hold the technical advantage, though prices closed above the 10-day moving average for the first time since August 19. That will mark initial support at $3.94, while further selling would eye support at $3.88 3/4. Bulls are seeking to close prices above the 20-day moving average, currently at $3.97 3/4, which has limited the upside since mid-June. That is backed by psychological $4.00 resistance.
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 15 1/2 cents to $9.92 1/2, near the session high and hit a nearly three-week high. December soybean meal closed up $2.60 at $310.90, near mid-range and hit a three-week high. December soybean oil rose 141 points to 42.13 cents, near the session high and hit a four-week high.
Fundamental analysis: The soy complex futures today saw short covering and perceived bargain hunting featured, led by a solid rally in soybean oil amid good gains in crude oil futures today. Bullish soy traders overlooked a rise in the U.S. dollar index again today. Also friendly, soybean crush margins continue to improve, prompting crushers to operate at full capacity.
USDA this morning reported weekly U.S. soybean sales reductions of 143,600 MT for 2023-24. Net sales totaled 2.616 MMT for 2024-25. Increases for new-crop came primarily for China and unknown destinations. Sales were within expectations for 2023-24 and above expectations for 2024-25. Exports totaled 542,300 MT.
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 Sep. 12.” Soil moisture should be adequate to support most immature crops to maturity, said the forecaster.
Technical analysis: The soybean bean bears have the firm overall near-term technical advantage. However, a nearly three-month-old downtrend on the daily bar chart has been negated. 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 $10.00 and then at $10.15. First support is seen at Wednesday’s low of $9.72 3/4 and then at this week’s low of $9.60 1/2.
The soybean meal 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 December futures above solid technical resistance at $325.00. The next downside price objective for the bears is closing prices below solid technical support at the contract low of $298.50. First resistance comes in at today’s high of $313.90 and then at $318.00. First support is seen at today’s low of $307.20 and then at $302.00.
While soybean oil bears still have the overall near-term technical advantage, a price downtrend on the daily bar chart has been negated and prices are starting to trend up. The next upside price objective for the bean oil bulls is closing December 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 37.66 cents. First resistance is seen at 42.58 cents and then at 43.00 cents. First support is seen at 41.00 cents and then at today’s low of 40.63 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 7 1/4 cents to $5.48 3/5 and closed near session highs. December HRW futures climbed 4 3/4 cents to $5.60 1/2, on session highs. December HRS futures rose 6 3/4 cents to $5.90 1/2.
Fundamental analysis: Wheat futures traded lower overnight though persistent strength in corn led wheat futures higher throughout today’s session.Additional clarity surrounding the crop problems in the EU have underpinned wheat futures this week, but at this juncture, buying efforts can still be chalked up to corrective buying. French soft wheat exports outside the European Union are expected to fall to 4.1 MMT in 2024-25, down 60% from last year, Argus Media forecast. The firm forecasts exports within the bloc, however, would be only slightly lower than last season’s 6.3 MMT, Argus kept its estimate of this year’s French soft wheat production at 25.17 MMT. That would be down 27% from the five-year average and the smallest crop since the 1980s. Meanwhile, Ukraine has been shipping grains at a rapid rate out of the Black Sea. Ukraine’s grain exports through the first two months of 2024-25 totaled 6.75 MMT, up 2.15 MMT (62.3%) from the same period last year, according to ag ministry data. Shipments included 3.4 MMT of wheat, 2.2 MMT of corn and 1.1 MMT of barley.
The world wheat balance sheet continues to tighten. Historically, that is favorable for prices in the long run, but sellers continue to hold firm control of the wheat market. The global outlook for wheat favors higher prices but it is difficult to predict when price action will reflect that.
USDA reported weekly wheat export sales of 532,100 MT for 2024-25, up 8% from the previous week and 53% from the four-week average. Increases came primarily for the Philippines, South Korea and Guatemala. Sales were within expectations of 300,000 to 650,000 MT for 2024-25. Exports totaled 576,800 MT.
Technical analysis: December SRW futures closed higher for the third consecutive session, though bears continue to hold the technical advantage. Bulls are seeking to overcome resistance at $5.49, the 20-day moving average, then downward trendline resistance at $5.55. Above that mark, bulls can argue an interim low is in place. Support comes in at $5.42 1/4 then the psychological $5.25 mark.
December HRW futures have traded similarly to SRW futures the past few days. Bears continue to hold the technical advantage in HRW futures. Resistance stems from $5.61 with additional backing from $5.72 3/4. A resurgence of selling pressure finds support at $5.52 1/2 with additional backing from $5.46 1/2.
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: Cotton futures posted an impressive rebound from Wednesday’s losses, with most-active December futures surging 137 cents to 69.92 cents.
Fundamental analysis: It isn’t uncommon for cotton export sales to prove relatively weak at this time of year, so traders probably aren’t following the weekly numbers all that closely. Still, this morning’s 2024-25 export sales figure at 135,187 bales represented a high for the new crop year begun August 1. The shipments result at 144,248 bales was less impressive, since it fell almost 25,000 bales below the week prior result. Still, futures seemingly reacted very well to the news.
Nevertheless, cotton bulls may face “a hard row to hoe” in the coming weeks, especially with the Southern Plains likely to be blessed with significant rainfall in the days just ahead. And while the harvest has reportedly begun in southern Texas, there is apparently little concern about the rainfall damaging open bolls.
Technical analysis: Although bears seemed to have the upper hand at the start of today’s trading, price action may have flipped the short-term technical advantage back to bulls. The strong rebound from technical support at the July 23 low of 68.72 cents carried the market back above what is now initial support at the 40-day moving average near 69.47. Conversely, a close below 68.72 would open the door to a retest of support at the July 24 low of 67.50, then the August 16 low at 66.26. However, initial resistance at the psychologically important 70.00-cent level looks formidable. Moreover, it’s stoutly backed by resistance stemming from the July 10 low of 70.21. A breakout above that point would have bulls targeting the June 21 high of 73.09, then the 75.00 level.
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.