Corn
Price action: December corn fell 1/4 cent to $4.20 1/2, nearer the session high.
Fundamental analysis: Corn futures faced pressure for the eighth straight session, though solid crude oil gains and increasing strength in SRW wheat and soybean futures spurred light short-covering from the session low. Meanwhile, Midwest weather is expected to be mostly favorable over the next two weeks, although there will be pockets of drying in the eastern Midwest, interior southeastern states and a part of the Tennessee River Basin, while the northern Midwest will remain abundantly wet, according to World Weather Inc. In Brazil, weather has recently proven positive for harvest as the safrinha harvest advanced to 49% complete as of last Thursday, according to AgRural, up from 34% from the previous week and 16% a year earlier.
Lending some optimism to price action today were comments from Mexico’s incoming agriculture minister, which stated the outgoing President Andres Manuel Lopex Obrador’s goal to reduce the country’s yellow corn imports, to achieve self-sufficiency in production of the grain, will be discarded. However, Reuters reported the country will focus on maintaining self-sufficiency in white corn and reducing deforestation linked to agriculture.
USDA’s weekly export inspection data proved somewhat drab, as inspections totaled 819,577 MT (32.3 million bu.) for the week ended June 27, down 333,373 MT from the previous week. However, inspections were within the pre-report range of 580,000 MT to 1.3 MMT and continue to outpace year-ago by 28%.
Following the close, USDA will release its Grain Crushings Report, with analysts anticipating corn-for-ethanol use to have increased to 445.9 million bu., up 7.0% from April and 1.6% above last year. The report will be released at 2:00 p.m. CT.
Weekly crop condition ratings will also be released following the close, with analysts expecting a one-point decline from last week’s “good” to “excellent” rating of 69%, according to a Reuters poll.
Technical analysis: December corn spent the session trading within Friday’s lower range, as resistance served at the previous session’s close, though Friday’s low of $4.12 served as initial support. Despite bears having the firm near-term technical advantage, oversold conditions could spur some additional short-covering, which would face additional resistance at the 10-, 20-, 100- and 40-day moving averages of $4.44 1/2, $4.55 3/4, $4.68 3/4 and $4.69 1/2. However, extended selling will face further support at $4.08 1/4, then at $3.95 1/2 and $3.79 1/4.
What to do: Get current with advised sales.
Hedgers: You should be 50% sold in the cash market on 2023-crop.
Cash-only marketers: You should be 50% sold 2023-crop.
Soybeans
Price action: November soybean futures firmed 7 cents to $11.11 while nearby August futures rallied 12 1/2 cents to $11.46. August meal futures rose $3.00 to $349.00 and settled nearer session highs. August bean oil future jumped 196 points to 46.03 cents.
Fundamental analysis: Old-crop futures led corrective buying efforts today though prices continue to trade in a steep technical downtrend on the daily bar chart. Soyoil futures saw strong gains today, leading the soy-plex higher ahead of this afternoon’s crush report. Analysts expect USDA to show soybean crush rebounded to 194.0 million bu. in May, which would be up 9.2% from April and 2.5% above year-ago. Soyoil stocks are seen as falling to 2.221 billion lbs., down from 2.386 billion lbs. a month ago. Strong gains in wheat prices helped carry soybeans higher today as well, and corn futures settled off intraday lows. It is not uncommon for soybean and corn prices to post a bottom and start a rally in the first week of July, but the key will be how markets finish the week as many are expecting traders to take a long weekend and for volume to be light, especially in the latter half of the week.
Temperatures throughout most of the Midwest will start the week mild before warming to average temperatures by mid-week. The western Midwest is expected to see regular rounds of rain through next Friday that will maintain high soil moisture content before a drier pattern rolls into the Soybean Belt next week, says World Weather Inc.
Expectations for the soybean crop were mixed in a Bloomberg poll today that shows expectations of the soybean crop being rated 66% “good” to “excellent.” That would be down one percentage point from a week ago, though expectations ranged from 63% to 69% “good” to “excellent” as uncertainty lies around how much flooding impacted crops in the northern Soybean Belt and how much recent rains improved conditions in the eastern Midwest.
USDA reported export inspections of 303,023 MT (11.1 million bu.) during the week ended June 27, down 46,861 MT from the previous week and in the middle of the pre-report range of 200,000 and 400,000 MT.
Technical analysis: November soybean futures saw corrective gains that stopped short of downtrend line resistance stemming from the late May highs. Bears continue to retain the near-term technical advantage. Strength above downtrend line resistance at $11.10 has bulls targeting 10-day moving average resistance at $11.18 1/2 which is backed by Friday’s high of $11.25. Support stems from last Friday’s for-the-move low close of $11.04 then today’s low of $10.97, which has little backing until $10.85.
August meal futures traded on both sides of unchanged today as bears continue to maintain the near-term technical advantage. Initial resistance stems from the 10-day moving average at $349.60, which capped gains today, and is backed by resistance at $355.00. Bulls are seeking to hold support at $345.00, which is reinforced by support at $342.80.
August bean oil futures surged higher today, lending the near-term technical advantage to the bulls. Prices have been tightening for the past couple of months and today’s rally indicates a significant breakout higher. 100-day moving average resistance at 45.99 cents today capped most gains ahead of the close, above which additional resistance lies at 46.56 cents then 47.00 cents. Support steams from 45.13 cents with firm backing from 43.30 cents.
What to do: Get current with advised sales.
Hedgers: You should be 65% sold in the cash market on 2023-crop. You should have 10% of expected 2024-crop production sold for harvest delivery next fall.
Cash-only marketers: You should be 60% sold 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 15 1/2 cents to $6.12 1/2. December HRW wheat gained 12 cents to $6.15 1/4. Both markets closed near their session highs. December spring wheat rose 18 1/4 cents to $6.50 3/4.
Fundamental analysis: The winter wheat futures markets today saw more short covering from recent losses that put both SRW and HRW in technically oversold conditions. The two-day gains in wheat futures have been especially impressive to the wheat market bulls, given the recent downdraft in corn futures prices.
USDA this morning reported U.S. wheat export inspections of 309,775 MT during the week ended June 27, down 33,897 MT from the previous week but within the pre-report range.
World Weather Inc. today said that in HRW country periodic showers and thunderstorms “will slow crop maturation and harvest progress, but no serious threat of grain quality declines is anticipated.” Summer crops will benefit most from the periodic rain. In the northern Plains, some areas in the eastern Dakotas and Minnesota “will be too wet for a little while this week. Less frequent and less significant rain is expected late this week into next week. Temperatures will be cool and that may slow drying rates between rain events keeping field progress slow, said the forecaster.
This afternoon’s weekly USDA crop progress reports are expected to show 70% of the spring wheat crop in “good” to “excellent” condition as of Sunday, compared to 71% last week and 48% one year ago at this time. U.S. winter wheat condition is seen at 52% good to excellent condition compared to 52% last week and 40% one year ago at this time. U.S. winter wheat harvested is forecast at 54% complete versus 40% last week and 37% at this time last year.
Technical analysis: Winter wheat futures bears still have the solid overall near-term technical advantage. Prices are in four-week-old downtrends on the daily bar charts. SRW bulls’ next upside price objective is closing December prices above solid chart resistance at $6.50. The bears’ next downside objective is closing prices below solid technical support at the March low of $5.65 3/4. First resistance is seen at $6.15 and then at $6.25. First support is seen at $6.00 and then at today’s low of $5.91 1/4. The HRW bulls’ next upside price objective is closing December prices above solid technical resistance at $6.50. The bears’ next downside objective is closing prices below solid technical support at the March low of $5.69 3/4. First resistance is seen at $6.20 and then at $6.30. First support is seen at $6.00 and then at the June low of $5.92 3/4.
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 rose 41 points to 73.10, ending the session above the 10-day moving average.
Fundamental analysis: Cotton futures posted modest gains to begin the week as solid gains in crude oil futures curbed selling interest, though USDA’s larger-than-expected acreage data continued to limit a move higher. However, price action is likely to remain mostly subdued ahead of FOMC minutes, due out Wednesday, Thursday’s Fourth of July holiday and Friday’s monthly jobs report.
World Weather Inc. reports West Texas weather will be fair to good over the next ten days especially if rain evolves this weekend into next week, while the Delta and southeastern states may continue to get some timely rain supporting good crop development. Additional rain of significance in northeastern Mexico and “possibly” in South Texas will be good for late season boll season and overall production.
USDA will release its weekly crop condition data following the close. Last week, plantings were estimated to 94% complete, while the “good” to “excellent” rating rose two percentage points to 56%.
Technical analysis: December cotton spent the session trading within Friday’s lower range but was able to hold a close above the 20-day moving average of 73.00 cents. Initial resistance will now serve at the 10-day moving average of 73.35 cents and is backed by the 40-day moving average of 74.59 cents and resistance at 76.44 cents. Conversely, initial support lies at Friday’s low of 72.07 cents, then at 71.44 cents, 70.20 cents and the June 17 low of 70.00 cents.
What to do: Get current with advised sales.
Hedgers: You should be 90% sold in the cash market on 2023-crop. You should also have 25% of expected 2024-crop production forward sold for harvest delivery.
Cash-only marketers: You should be 90% sold on 2023-crop. You should also have 25% of expected 2024-crop production forward sold for harvest delivery.