Corn
Price action: December corn futures fell 2 cents to $3.95, nearer the session low and hit a 3.5-year low today. For the week, December corn lost 8 1/4 cents.
5-day outlook: With corn bears in firm technical command and no solid, early technical clues that a market bottom is close at hand, don’t look for any strong upside price action in corn in the near term. Traders are awaiting Monday’s USDA August Supply and Demand and Crop Production reports, which will show the first survey-based U.S. corn crop production estimate for the 2024 crop. USDA is expected to forecast a record corn yield. More turbulence in the key outside markets next week that produces general risk aversion across the general marketplace would likely keep grain market bulls on the sidelines.
30-day outlook: The annual Pro Farmer Crop Tour is just over a week away. The yearly event is closely watched by producers as well as grain market analysts worldwide. Look for our evening reports on daily tour scout findings starting Monday, Aug. 19.
The U.S. dollar index dropped to a seven-month low on Aug. 5. The USDX continues in a downtrend on the daily bar chart. Thursday’s USDA weekly export sales report showed weekly old-crop sales of 485,400 MT, better than expectations. However, new-crop sales were less impressive at just 249,100 MT and well below market expectations. Exports during the latest reporting week did rise 26% from the previous week. With the U.S. dollar index in a downward trajectory, corn market bulls are hoping that will provide for better U.S. corn sales and shipments abroad in the coming weeks.
90-day outlook: Fall harvest is just weeks away, with a bountiful U.S. corn crop looking very likely, which would bring significant seasonal commercial hedge pressure. World Weather Inc. today said U.S. corn production “is still poised to perform well.” Demand for old-crop corn is near a record and we are forecasting record corn demand in 2024-25. Even as corn use is projected to be a record, bigger supplies are likely to continue to weigh on corn prices in the coming months.
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 5 3/4 cents to $10.02 1/2, marking a weekly loss of 24 3/4 cents. December soymeal fell $5.70 to $310.40 and is down $14.20 from a week ago, while September soyoil rose 25 points to 42.42 cents and gained 74 points week-over-week.
5-day outlook: Soybeans extended lower for a fourth straight session to a fresh near-term low despite modest short-covering early on, following confirmation of additional export demand from USDA. Those sales included soybean sales of 132,000 Mt to China for 2024-25 and 212,000 MT to unknown destinations—50,000 MT for 2023-24 and 162,000 MT for 2024-25. USDA also reported 100,000 MT of soymeal sales to Colombia—12,000 MT for 2023-24 and 88,000 MT for 2024-25. While somewhat inspiring, traders continued to position ahead of USDA’s August crop reports on Monday, which will include the first survey-based crop estimates. According to a Reuter’s poll, analysts expect average production of 4.469 million bu. at an average yield of 52.5 bu. per acre and 85.11 harvested acres. Look for continued sideways to lower trade into the report on Monday, with increased volatility to likely ensue in the wake of its release.
30-day outlook: Harvest efforts across the U.S. will begin pick up in the next 30 days, which will provide increased insight into yields and overall production, with continuing to prove crucial into and throughout harvest. Moreover, traders will also increasingly focus on South American weather as producers begin to plant soybeans in areas of Brazil.
90-day outlook: In the next several months, the general marketplace will be riddled with news and volatility as the November election nears and U.S./China relations enter the center stage. Moreover, increasing recessionary fears, driven by last week’s downtrodden jobs data, have recently ignited volatility in equities and the dollar, with fading economic conditions around the globe exacerbating concerns. However, the oversold nature of agriculture commodities could continue to provoke broader export demand, though a slowing global economy could limit robust buying efforts in the coming months amid waning demand. Look for the marketplace to continue to closely monitor broader markets, with soybean exports a particular driver of the soy complex.
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 futures rose 4 1/4 cents to $5.65 3/4, near mid-range and hit a two-week high. For the week, December SRW gained 3 1/2 cents. December HRW futures closed up 1 3/4 cents to $5.70 1/2 and nearer the daily low. For the week, December HRW fell 5 3/4 cents. December spring wheat futures rose 3 1/2 cents to $6.08 1/2, which represented a weekly rise of 13 1/2 cents.
5-day outlook: Winter wheat futures languished at lower price levels again this week, but the recent sideways price action has the bulls hoping it is “basing” that will put in a market bottom. U.S. winter wheat harvest is winding down, which should reduce commercial hedging pressure on the futures markets. Monday’s USDA reports will be closely watched by wheat traders, but only minor changes are expected for wheat compared to the July WASDE report. Wheat traders next week will be closely monitoring the key outside markets, following the recent higher volatility and keener risk aversion on some trading days.
30-day outlook: Weather in major wheat-growing regions will continue to be closely watched in the coming weeks. World Weather Inc. today said 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 spring cereals are rated favorably and winter crop harvest conditions have improved with much of the fieldwork concluding. Australia’s winter crop outlook is favorable, though more rain is needed in Queensland and South Australia. Rain in southern and east-central Argentina the past two days was welcome. Canadian Prairies rainfall the past week was helpful for some late filling wheat, but the moisture came too late for many drier areas, said the forecaster. With the summer harvest largely complete, HRW traders will begin to focus on fall planting prospects. We project a modest year-to-year increase in fall plantings.
90-day outlook: On Thursday USDA 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. U.S. wheat sales abroad will have to improve in the coming months for winter wheat futures prices to sustain uptrends. One positive is that the U.S. dollar has been depreciating in the foreign exchange market. The weaker greenback is making U.S. wheat a better price competitor on the world trade markets.
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 rose 110 points to 68.34 cents and gained 9 points on the week.
5-day outlook: December cotton ended the week notably higher, ending the session above the 10-day moving average for the first time since mid-July. Outside market forces were largely beneficial to the natural fiber today, with weather likely an increased focus as southeastern areas of the U.S. face too much rain and flooding, which could affect cotton development. Into next week, an extension higher could be met with notable resistance at the 20-day moving average of 69.33 cents, which has served up strong resistance since the end of June, while this week’s low of 66.55 cents should limit selling efforts over the near term. However, USDA’s production, supply and demand estimates could stimulate a more vigorous move. A Bloomberg poll of analysts shows expectations of average production of 17.02 RB, up slightly from July, while ending stocks are expected at 5.27 RB, down slightly from last month. Look for sideways trade into Monday’s report, and a possible rise in volatility after the data is released.
30-day outlook: Weather will continue to serve as a main market driver over the next month as harvest progresses in southern Texas and damage is assessed in southeastern areas of the U.S and the risk of additional hurricanes linger. World Weather Inc. indicates harvest weather will bode well for harvest in southern Texas, though drying in the Delta may lead to some crop moisture stress, but cotton will handle the situation better than most grain and oilseed crops. West Texas rainfall will not be enough to seriously counter evaporation and crop conditions should stay mostly unchanged, despite showers last night and more tonight and again during the second half of next week.
90-day outlook: With August 1 the beginning of a new marketing-year, U.S. export sales will continue to be a focus, especially following USDA’s weekly sales data for the week ended Aug. 1, which showed net reductions of 949,600 RB. Fading economic conditions in top importer, China, combined with fresh South American supplies could separately hinder export interest in the coming months, minimizing general buying interest. However, a 19-cent drop from the late February high could stimulate some demand.
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.