Corn
Price action: December corn futures closed down 1 3/4 cents to $4.05 1/4 and near mid-range.
Fundamental analysis: Corn futures saw modest selling pressure today amid still fully bearish technicals and good prospects for a bountiful harvest. A rebound in the U.S. dollar index today was a mildly negative outside-market element for corn.
World Weather Inc. today said that for the corn market, “there is still not much reason to be bullish from a weather perspective. U.S. and eastern Canada corn and soybean production is still poised to perform well.” Harvest weather in South America will continue to advance well, said the forecaster. Pro Farmer’s crop consultant, Michael Cordonnier, raised his U.S. corn yield by 0.5 bu. per acre to 182 bu., which raised his U.S. production estimate to 15.02 billion bu.
USDA in its Monday afternoon weekly crop progress reports rated 67% of the U.S. corn crop as “good” to “excellent” and 10% “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 dipped 0.2 point to 374.6 but is well above the reading seen one year ago.
Technical analysis: The corn futures bears have the solid overall near-term technical advantage. Prices are in a 2.5-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 the July high of $4.26 1/2. The next downside target for the bears is closing prices below chart support at $3.85. First resistance is seen at today’s high of $4.09 and then at $4.13. First support is at $4.00 and then at this week’s low of $3.96.
What to do: Get current with advised sales.
Hedgers: You should be 70% sold on 2023-crop in the cash market.
Cash-only marketers: You should be 70% sold on 2023-crop.
Soybeans
Price action: November soybeans fell 14 cents to $10.26 3/4, while December soymeal closed $5.20 lower at $326.60, with both ending nearer the session low. September soyoil fell 24 cents to 40.85 cents, marking a high-range close after reaching a fresh contract low early on.
Fundamental analysis: Soybean futures spent the session trading within Monday’s range, with spillover pressure stemming from soy derivatives, while technical resistance also continued to curb buying interest. USDA’s unexpected increase in the crop’s “good” to “excellent” rating to 68% also hovered over prices today, while the “poor” to “very poor” rating held at 8%. Crop consultant Dr. Michael Cordonnier also increased his yield forecast 0.5 bu. to 52.5 bu. per acre, noting generally good conditions thus far in the growing season. He noted the thing to watch now is limited rainfall in the south-central part of the country due to remnants of Hurricane Debby.
The soy complex largely shook off earlier news of an Argentine strike involving two unions of soybean oil factory workers in the country over wages, which is halting activity in one of the world’s largest exporting hubs for processed soybeans. The head of CIARA, Gustavo Idigoras reported the strike has paralyzed activity at all soybean processing plants in the South American country. Meanwhile, in Brazil, the president of farmers group Aprosoja Brazil reported the area planted to soybeans in the country will increase at a slower rate for 2024-25 than previous years as prices are near a four-year low. Brazil’s soybean plantings rose 4.5% to 46 million hectares in 2023-24 after a 6% jump in 2022-23. “I don’t know if it (soybean expansion in 2024-25) will reach 1%,” the official said.
Technical analysis: November soybeans took back Monday’s gains as the 10- and 20-day moving averages of $10.38 1/2 and $10.46 1/2 continued to limit the upside. However, initial support at $10.23 1/2 continued to serve as initial support and is backed by last week’s low of $10.13. Bears still grasp the near-term technical advantage and are looking to breach psychological support at $10.00, while bulls need to breach last week’s high of $10.86 3/4.
December soymeal edged to a more than one-month high in early trade but ended the session near the session low and below the 40-day moving average of $329.40, which will serve as initial resistance. Meanwhile, the 10-day moving average of $323.10 will provide initial support and is backed by the 20-day moving average of $318.20 and further support at $314.70. A move back above the 40-day will face additional resistance at $336.60, $341.30 and the 100-day moving average of $345.10.
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 70% 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 firmed 3 1/4 cents to $5.66 1/2 while December HRW futures rose 1 1/2 cents to $5.78 1/4. September HRS futures climbed a nickel to $5.92 1/2.
Fundamental analysis: Wheat futures continue to trade in volatile, directionless trade as bulls and bears fight for the technical advantage. Prices failed to break down yesterday and settled near session highs while futures traded on either side of unchanged today, failing to break initial support or initial resistance. Wheat seems to be little affected by outside markets during daytime trade, though prices are currently at an inflection point, leading to wide daily ranges and choppy price action.
USDA rated 74% of the spring wheat crop as “good” to “excellent,” unchanged from a week ago, while 97% of the crop was headed. On the CCI, spring wheat dropped 1.9 points to 380.8, though that was still 59.1 points (18.4%) above last year at this time. The spring wheat harvest was estimated to be 6% complete as of Sunday, slightly behind the five-year average of 10%, while the winter wheat crop was 88% harvested.
Improved rainfall in the coming week paired with unusually cool temperatures will reduce stress in later maturing crops, especially in Montana and the western Dakotas where the driest and hottest weather has recently been, says World Weather Inc. The rain should be infrequent enough to allow harvesting to continue without many interruptions. Strong crop conditions and a healthy crop are likely to breed record yields in many spring wheat crop acres, which could continue to weigh heavily on prices as the balance sheet is already seen as expanding in 2024-25.
Technical analysis: December SRW futures traded in a wide range on either side of unchanged. Bears still hold the near-term advantage though are losing their edge. Bulls’ initial objective is closing prices above stiff resistance at $5.73, with further strength seeking to overcome resistance at $5.80. Support comes in at $5.62 1/4 with further selling finding support at $5.55 1/2.
December HRW futures continue to work higher at a slow pace though bears continue to hold the technical edge. Stiff resistance remains at $5.90 with the 20-day moving average resistance standing at $5.82 1/2 on the way. Bulls are seeking to hold support at $5.75 1/4 then $5.62 on resurgent selling pressure.
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 slipped 48 cents to 67.30 cents, a new contract-low close.
Fundamental analysis: Cotton futures continued to be driven lower by technical pressure and returned U.S. dollar strength, though the downside was limited by modest gain in crude oil futures and strength in equities following Monday’s hefty selloff. Meanwhile, USDA’s “good” to “excellent” rating for the crop slid four percentage points from last week and the “poor” to “very poor” rating rose five points to 27%. The decline stemmed from eroding conditions in Texas, with the state’s “good” to “excellent” rated at 32% and 40% “poor” to “very poor,” down eight points in the top two categories and up nine points in the bottom two.
Conditions could continue to deteriorate in next week’s report as World Weather Inc. maintains too much rain and flooding in the U.S. southeastern states may hurt cotton development especially if flood water develops in many fields and prevails for a while. Far southwestern Georgia and the western Florida Panhandle as well as Alabama and should not be included in the wettest problem areas. Concerns above the Carolinas will be high until Tropical Storm Debby passes.
Technical analysis: December cotton spent the session trading within Monday’s range, with support serving at the previous session low of 66.90 cents, while the 10-day moving average of 68.47 cents stood as initial resistance. An extension lower will face additional support at 66.07 cents and again at 65.25 cents, while a move above the 10-day will meet additional resistance at the 20-day moving average of 69.82 cents and then the 40-day moving average of 71.18 cents. Bears continue to firmly grasp the near-term technical advantage, though a push into near-term oversold conditions could spark some corrective buying.
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.