Corn
Advice: We advise hedgers and cash-only marketers to sell the final 20% of old-crop in the cash market to get to 100% sold.
Price action: December corn futures climbed a nickel to $4.01 and closed nearer session highs. That marked a 10 cent gain on the week.
5-day outlook: Corn futures ended the month on a high note after facing heightened volatility throughout the week. December futures closed out the week near this week’s high, surging the past two sessions.Prices climbed today despite the near-term forecast turning largely favorable for finishing the growing season. Rain returned to much of the Corn Belt the last couple of days and brought cooler temperatures with it. That should give much of the corn crop a chance to “slow cook,” allowing for ample grain fill, which in turn could be beneficial for test weights. Forecasts call for moderate temps and periodic rains for much of the Corn Belt through mid-September. The technical posture of December futures this week took a more bullish tone. Today’s close above the psychological $4.00 level was a key step in putting in a market bottom, though bulls will want to see followthrough early next week in order to negate a potential “false breakout.”
30-day outlook: The coming month will give a better idea as to how much corn is going to be produced. USDA will continue to update their crop production forecasts and will incorporate field data in their September Crop Production Report. They will also update their acreage forecast using FSA data, but we do not expect any large revisions at this juncture. Supply will likely be the main focus over the coming month as the crop nears maturation. The current forecast and soil moisture levels look to be beneficial for finishing and our Crop Tour showed great potential for this year’s crop. A record yield and near-record production is likely to continue to anchor corn prices in the coming month.
90-day outlook: As production prospects are better realized, more attention will be turned to the demand side of the balance sheet. The quarterly Grain Stocks Report released at the end of September will detail use for the old-crop marketing year and will show how much demand increased as prices sank lower. Export activity remained robust into the end of the marketing year and stocks are coming in well below where anticipated six months ago. If that improved demand continues into the new marketing year, it could provide a solid floor under prices. However, woes over a surplus of corn could limit buying efforts barring South American problems when they begin planting in the next couple of months.
What to do: Get current with advised sales.
Hedgers: NEW ADVICE – Sell the final 20% of old-crop in the cash market to get to 100% sold on 2023-crop production.
Cash-only marketers: NEW ADVICE – Sell the final 20% of old-crop to get to 100% sold on 2023-crop.
Soybeans
Price action: November soybean futures rose 7 1/2 cents to $10.00, nearer the daily high and hit a three-week high. For the week, November soybeans rose 27 cents. December soybean meal gained $2.10 to $313.00, near mid-range and hit a three-week high. On the week, December meal rose $8.50. December soybean oil futures fell 12 points to 42.01 cents, near mid-range and hit a five-week high early on today. For the week, December bean oil rose 163 points.
5-day forecast: Today’s technically bullish weekly high closes in November beans and December meal futures set the stage for follow-through chart-based buying interest when trading resumes next Tuesday. Markets are closed Monday for the Labor Day holiday. Soybean bulls today also got a boost as USDA reported daily U.S. soybean sales of 132,000 MT to China and 100,000 MT soymeal to Colombia, both during the 2024-25 marketing year. As the U.S. soybean crop races to maturity, traders will still be watching weather patterns in the Midwest. World Weather Inc. today said central and southern parts of the Midwest are expected to see some timely rains in the coming week, while the northwest becomes drier. “Production potentials are unlikely to change greatly,” said the forecaster. Next Tuesday afternoon’s monthly crush report from the Census Bureau is expected to show U.S. soybean crush of 191.7 million bushels in July, according to a Bloomberg survey, compared to 184.8 million bushels last July.
30-day outlook: The coming weeks will see the harvest of a big U.S. soybean crop move into full swing. Seasonal harvest and related commercial hedge pressure from farmer selling could limit price upside. However, with the improved near-term technical postures for soybeans, meal and bean oil, there are early clues that near-term market bottoms are already in place. We believe traders have already factored into futures prices expectations for a very large 2024 soybean crop.
90-day outlook: Thursday’s rallies in soybeans and meal were especially impressive as they came amid a late-week rally in the U.S. dollar index. So far, the rebound in the USDX from an eight-month low scored on Tuesday is just corrective in nature and the index remains in a downtrend. The soybean bulls would likely benefit from the USDX remaining in a downtrend, as it would make U.S. soybeans more price-competitive on the global trade markets. How the new U.S. president says he or she will handle China trade issues will also come into keener trader focus as the election approaches. In the past, U.S. political candidates have based China on several fronts—likely prompting the world’s second-largest economy and voracious consumer of raw commodities to look at all other possibilities before doing business with the U.S.
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 rose 2 3/4 cents to $5.51 1/2, gaining 23 1/2 cents on the week. December HRW futures closed 4 3/4 cents higher at $5.65 1/4, a 30 1/4 cent gain on the week.
5-day outlook: Wheat futures ended the week on a strong note, following corn futures higher and rising for the fourth consecutive session. Concerns over production throughout the northern hemisphere helped prices work higher throughout the week. Reports of lowered production estimates came for Canada, France, Germany and Russia hit the newswires this week. Each of these countries exports a significant portion of their crop. While reports of lower production helped lift U.S. wheat futures, prices continue to be long-term bearish from a technical perspective. Prices traded near resistance at the end of the week, but price action early next week will be key in finding if the near-term price action remains bearish or if prices will continue to bounce.
30-day outlook: While it will take additional strength to confidently claim a market bottom is in place, buying this week indicated that traders are paying greater attention to the world balance sheet. While U.S. stocks are abundant and seen as growing, world wheat stocks have been tightening for half a decade. Wheat stocks-to-use in the world’s largest exporters is seen as tightening to the lowest mark in over a decade. Reports of lower production this week point to the world balance sheet tightening even more, which could eventually spark renewed demand for U.S.-origin wheat.
90-day outlook: Acreage decisions for the 2025 winter wheat crop are currently being made with planting to take place in the next couple of months. Prices remain depressed which often plays a significant role in acreage decisions for winter wheat. Weather will also play a key role in the coming months as to just how many acres are planted. Export demand will play a key role in how prices react during the winter months, whether or not faltering world supply will lead importers to the U.S. The longer-term outlook remains more bullish for wheat, but it is uncertain how long prices will take to reflect tight world supply.
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 rose 7 points to 69.99 cents and near mid-range. For the week, December cotton lost 92 points.
5-day outlook: After showing some good price strength last week, the cotton futures market this week returned to its sideways-and-choppy mode, to suggest more of the same next week. Cotton traders will be focused on U.S. economic data, including the important jobs report from the Labor Department next Friday.
World Weather Inc. today said rain in West Texas into next week “may be good for late season crops, but it will mostly come too late in the season to seriously improve yield.” However, fiber quality might be improved in the more immature crops. Weather in the Blacklands should be good for late season crops, as well, said the forecaster. U.S. Delta weather should improve with the development of scattered showers and thunderstorms along with warm temperatures.
30-day outlook: Today’s personal consumption expenditure price indexes (PCE) came in as expected, which reinforced marketplace notions the Federal Reserve will lower interest rates in September. That’s a bullish scenario for the cotton market. However, the months of September and October can be turbulent for the stock and financial markets. If that’s the case this year the cotton futures market will find it more difficult to sustain price gains. Meantime, the U.S. cotton harvest has begun but will pick up speed in the coming weeks, allowing the trade to get a better picture of the size and quality of the U.S. crop. Farmer selling and related commercial hedge pressure may limit the price upside in cotton futures.
90-day outlook: U.S. cotton export sales are seasonally weaker this time of year. However, this week’s 2024-25 export sales figure at 135,187 bales was a high for the new crop year that began August 1. However, shipments of 144,248 bales were uninspiring. The upcoming U.S. presidential election and how the new president says he or she will deal with major cotton importer China will be closely monitored by the cotton trade. Demand for the U.S. fiber abroad appears even more critical for any sustained price uptrend in the coming months, as cotton futures have only traded sideways since USDA lowered its U.S. production estimate on August 12.
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.