Corn
Price action: December corn slid 3 3/4 cents to $3.97, marking a fresh near-term low close after carving fresh daily lows late in the session.
Fundamental analysis: Corn futures slid for a third straight session, while another day of U.S. dollar strength continued to overshadow support from follow-through gains in crude oil. Meanwhile, USDA’s weekly export sales data was somewhat mixed for corn, with weekly old-crop sales totaling 485,400 MT for the week ended Aug. 1, surpassing analysts’ pre-report expectations ranging from 100,000 to 400,000 MT. New-crop sales during the week proved much less impressive at a paltry 249,100 MT, notably missing the pre-report range of 475,000 MT to 1.0 MMT. Exports during the week did jump 26% from the previous week to 1.3 MMT, with top destinations including Japan, Mexico and Colombia.
Weather throughout the Midwest continues to prove mostly favorable, though World Weather Inc. indicates flooding rain is a concern for crops in the southeastern U.S., while the lower Midwest and Delta are going to dry out in the next five days with some rain possible in portions of those areas during the following five to seven days. The forecaster reports the eastern Midwest will also dry down for nine or ten days.
Traders are likely to remain cautious ahead of Monday’s data release from the USDA, which will include supply, demand and production updates. Moreover, changes to planted and harvested data could be made as NASS will utilize FSA’s certified acreage in the report.
Technical analysis: December corn skid to fresh session low near the close, with bears securing a close below $4.00 and recent support of $3.98 1/2, handing more momentum for the camp to edge toward their likely target of $3.50. Last week’s low of $3.95 will be support in the event of an extension lower. Conversely, initial support resistance will stand at today’s failed support level, then at the 10- and 20-day moving averages of $4.03 3/4 and $4.07 3/4.
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 fell 10 1/2 cents to $10.08 1/4, a fresh near-term low, while December soymeal slipped $2.20 to $316.10, marking a low-range close. September soyoil rose a modest 10 cents to 42.17 cents.
Fundamental analysis: Big new-crop soybean sales were apparently unimpressive to traders today, as sales continue well behind normal. November futures slipped to a fresh near-term low and extended losses for a third straight session. Continued selling in meal futures pressured the complex today, though soyoil ultimately ratcheted higher, which likely provoked some corrective buying from session lows in both meal and soybeans. However, technical pressure continues to loom and continues to yield pause among traders, especially ahead of USDA’s data release on Monday.
In Argentina, a soy worker union strike continued for a third straight day, halting shipments from ports that have soy processing facilities. Only two ports Among Argentina’s main ag shipping hubs, all located north of the city of Rosario on the Parana River, do not host soybean crushing plants. Unions are reportedly unhappy with wage increases offered by trading houses, saying they aren’t enough to prevent an erosion of purchasing power amid Argentina’s chronic inflation running at some 270% a year, according to Bloomberg.
In the U.S., soybeans will face drier weather in a large part of the Midwest, though most will not endure serious stress as temps through the next ten days will often be mild, while subsoil moisture is still adequate to support crop development in much of the region. However, World Weather maintains stress and potential negative impacts to yields may be seen in the driest areas from eastern Nebraska and western Iowa as well as in central Missouri.
Technical analysis: November soybeans ended the session dismally, edging to fresh lows late in the session, with bears ultimately securing a close below recent support of $10.12 1/4 to a new low close. Initial support will now serve at $10.05 3/4, which is backed by psychological support at $10.00 and additional support at $9.97 1/2. Hope for bulls seems to be eroding, with the camp needing a close above last week’s high of $10.86 3/4, with resistance beginning at the 10- and 20-day moving averages of $10.27 and $10.41, then tat $10.50 and again at the 40-day moving average of $10.78 1/4.
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 80% priced 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 1/2 cent to $5.61 1/4 and near mid-range. December HRW wheat fell 3 1/2 cents to $5.68 3/4 and near mid-range. September spring wheat fell 1/2 cent to $5.85 1/4.
Fundamental analysis: Winter wheat futures traders were in a pause mode today, seemingly waiting to see what develops in the key outside markets that have been more volatile this week. Solid gains in the U.S. stock indexes and better risk appetite in the marketplace on this day lent little support to wheat futures. The U.S. dollar index posted slight gains today, which was a mild negative for wheat.
USDA this morning reported U.S. wheat sales of 274,000 MT for the week ended Aug. 1, down 4% from the previous week and down 23% from the four-week average. Sales were near the low end of the pre-report range of expectations.
World Weather Inc. today said “there is still not much incentive for weather to be a bullish factor” for wheat futures. There is still some concern over spring wheat in the Russia New Lands because of too much rain east of the Ural Mountains and not enough in some southwestern production areas. Europe crops are rated favorably, and winter crop harvest conditions have improved with much of the fieldwork concluding. Canadian Prairies rainfall this week has been helpful for some late-filling wheat, but the moisture comes too late for most areas, said the forecaster.
Technical analysis: Winter wheat futures bears have the solid overall near-term technical advantage as 2.5-month-old downtrends are in place on the daily bar charts. SRW bulls’ next upside price objective is closing December prices above solid chart resistance at $6.00. The bears’ next downside objective is closing prices below solid technical support at $5.00. First resistance is seen at this week’s high of $5.71 3/4 and then at $5.81. First support is seen at $5.50 and then at the contract low of $5.39 1/2.
The HRW bulls’ next upside price objective is closing December prices above solid technical resistance at $6.00. The bears’ next downside objective is closing prices below solid technical support at $5.25. First resistance is seen at this week’s high of $5.83 3/4 and then at $5.95 1/2. First support is seen at this week’s low of $5.61 1/2 and then at the contract low of $5.51 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 fell 49 points to 67.24 cents and forged a high-range close after marking a new contract low early on.
Fundamental analysis: December cotton futures extended to a fresh contract low in early trade but managed to rebound from session lows, as firming equities and an extended crude oil rally likely offset woes stemming from U.S. dollar strength and tepid export sales data. While it’s not unusual to see sales cancellations at the turn of a marketing-year, which for cotton began at the beginning of the month, net sales reductions of 949,600 RB for the week ended Aug. 1 certainly cast a bearish tone for the natural fiber. Moreover, exports through July 31 totaled 738,100 RB and brought accumulated exports to 11,070,400 RB, down 6% from the prior year’s total of 11,777,500 RB. China was a top destination during the week, followed by Vietnam and Pakistan.
Weather in the southeastern U.S. could be affecting some cotton-growing areas, as World Weather reports too much rain and flooding may hurt cotton development, especially if flood water prevails for a while. However, far southwestern Georgia and the western Florida Panhandle as well as Alabama were not negatively impacted by Remnants of Hurricane Debby, though concern about the Carolinas will be high until the storm departs, which should be Friday. In southern Texas, harvest weather has boded well all week, while rainfall expected in West Texas will not be enough to counter evaporation and crop conditions should remain mostly unchanged. Cotton in the Texas Panhandle and southwestern Oklahoma will receive significant rain, according to the forecaster.
Technical analysis: December cotton continues to edge mostly sideways in consolidative trade, with initial support continuing to serve at 66.99 cents, which will now be backed by today’s low of 66.55 cents. A breach of these levels will find bears looking to breach 66.26 cents and 65.65 cents. A move higher will continue to face initial resistance at the 10-day moving average of 68.21 cents, then at 68.94 cents and the 20-day moving average of 69.48 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.