Corn
Price action: December corn fell 1 1/4 cents to $4.07 1/4, a high-range close after reaching a fresh near-term low early on.
Fundamental analysis: Corn futures extended to a fresh near-term low in narrow trade but closed off the session low. Extended selling in soybean and wheat futures cast a shadow over today’s price action, despite some outside market support. Increased moisture levels, compliments of Hurricane Beryl, in some of the driest areas of the Corn Belt, continue to ease production concerns in the marketplace. Moreover, lacking heat through much of the Midwest will keep crop conditions mostly favorable during a drier weather pattern, which is expected to return during the next two weeks and will leave areas much drier, according to World Weather Inc. Some warming may occur July 20-24 and by that time; topsoil moisture should be much lower than today in many areas, leaving the region in need of greater rain late in the month to maintain high production levels.
The Energy Information Administration reported ethanol production totaled 1.054 million barrels per day (bpd) during the week ended July 5, down 10,000 bpd (0.9%) from the previous week but up 2.1% from last year. Output was the second highest volume for the week, behind 2021 as ethanol margins continue to improve. Ethanol stocks rose 9,000 barrels to 23.603 million barrels.
USDA will release its weekly export sales data for the week ended July 4 early Thursday morning. Traders are expecting net sales to have ranged from 300,000 to 850,000 MT for 2023-24 and zero to 500,000 MT for 2024-25. Last week, net old-crop sales were reported at 357,152 MT, while new crop sales totaled 311,538 MT.
Technical analysis: December corn edged to a fresh near-term low in early trade, as technical resistance continues to plague any bull efforts. Initial support will continue to serve at $4.05 1/2, then at today’s low of $4.04. From there, support serves at the psychological $4.00 level. Conversely, initial resistance will continue to serve at $4.10, then at $4.15, with solid resistance serving at $4.26 1/2.
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: August soybeans dropped 18 cents to $11.13 1/4, near the session low and hit a contract low. September soybean meal closed down $4.00 at $321.20, near the session low and also hit a contract low. September soybean oil closed down 65 points at 46.14 cents and near the session low.
Fundamental analysis: Generally favorable growing weather in most of the Midwest and firmly bearish charts for soybeans, meal and bean oil had the soy complex bears in control again today. Bulls got little help from USDA reporting a daily U.S. export sale of 132,000 MT of soybeans for delivery to China during the 2024/25 marketing year. This is the initial purchase by China for new-crop, which is much later than usual but a positive sign export demand for U.S. new-crop beans may improve in the coming weeks.
World Weather Inc. today said crops in the driest areas in Illinois and Indiana benefitted from much-colder-than-normal temperatures and soaking rains from the remnants of Hurricane Beryl Tuesday, while rain extended to the west into central Missouri and elsewhere into Kentucky, western Ohio, and Michigan.
Thursday morning’s weekly USDA export sales report is expected to show U.S. soybean sales of 200,000 to 600,000 MT in the 2023-24 marketing year and sales of 50,000 to 300,000 MT in the 2024-25 marketing year.
Friday’s monthly USDA supply and demand report will be closely scrutinized by soybean traders. The trade expects the agency’s U.S. soybean production number to be just slightly lower than the June estimate.
Technical analysis: The soybean bears have the solid overall near-term technical advantage. Prices are in a six-week-old downtrend on the daily bar chart. The next near-term upside technical objective for the soybean bulls is closing August prices above solid resistance at the July high of $11.69 3/4. The next downside price objective for the bears is closing prices below solid technical support at $11.00. First resistance is seen at today’s high of $11.38 and then at Tuesday’s high of $11.53. First support is seen at today’s contract low of $11.13 3/4 and then at $11.00.
The soybean meal bears have the solid overall near-term technical advantage. The next upside price objective for the meal bulls is to produce a close in September futures above solid technical resistance at the July high of $339.50. The next downside price objective for the bears is closing prices below solid technical support at $300.00. First resistance comes in at today’s high of $327.20 and then at $330.00. First support is seen at today’s contract low of $320.70 and then at $315.00.
Bean oil bears have the overall near-term technical advantage. A bearish V-top reversal pattern has formed on the daily bar chart. The next upside price objective for the bean oil bulls is closing September prices above solid technical resistance at the July high of 49.53 cents. Bean oil bears’ next downside technical price objective is closing prices below solid technical support at the June low of 42.82 cents. First resistance is seen at today’s high of 47.21 cents and 48.00 cents. First support is seen at today’s low of 46.16 cents and then at 45.50 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 fell 10 1/2 cents to $5.85, marking a two-week low close, while December HRW wheat fell 12 1/2 cents to $5.83 3/4, a four-month low close. December HRS futures fell 6 3/4 cents to $6.29 1/2.
Fundamental analysis: Wheat futures ended the session off the two-week lows forged in early trade, though technical pressure continued to limit moves into positive territory. Outside markets proved mostly supportive for commodities today as the U.S. dollar favored the downside. However, reports of better-than-than expected yields in Russia in the south of the country and improving crop prospects in other regions, according to Fastmarkets, was likely influential in today’s inferior price action.
World Weather Inc. reports wheat harvesting in northern Africa and southern Europe has advanced well and the same is expected for winter grains in southern Russia, though the crop may be smaller because of drought and freeze damage earlier this year. Meanwhile, central and northern Europe rains may slow grain harvest progress and could restore concerns over the quality of unharvested crops in “some” areas, while spring cereals in Russia and Ukraine may be at risk of lower yields due to building dry and warm weather.
USDA will release weekly export sales data for the week ended July 4, early Thursday morning. Traders are anticipating net sales to range between 300,000 and 700,000 MT for 2024-25. Last week, net sales totaled 805,318 MT, solidly topping pre-report expectations.
Technical analysis: December SRW continued to face resistance at the 10-day moving average, currently trading at $5.98 1/2, with bears further increasing their technical posture, with a close held below support at $5.91 1/2 and $5.87 3/4. Initial support will now serve at the June 26 low of $5.79 and again at the March low of $5.65 3/4. Meanwhile, bulls’ next upside target is notching a close above Tuesday’s high of $6.02 1/2, then at last week’s high of $6.15 1/4, with $6.50 serving as major technical resistance.
December HRW ended the session at over a four-month low, ending the session below support at $5.92 3/4 and $5.89 1/4. Initial support will now serve at the March 6 low of $5.69 3/4, then at $5.50. Meanwhile, corrective buying will face resistance at today’s failed support levels, then at the 10- and 20- day moving averages of $6.03 and $6.19 1/4, which are backed by the 100-day moving average, currently trading at $6.40 1/2.
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 closed up 38 points at 70.93 cents and near mid-range. December futures prices hit a three-week low early on today. Nearby cotton futures this week dropped to a nearly four-year low.
Fundamental analysis: The cotton futures market today saw tepid short covering in a bear market. Friendly outside markets that included record highs in the S&P 500 and Nasdaq stock indexes again today, a weaker U.S. dollar index and higher crude oil prices all limited selling interest in the natural fiber today.
World Weather Inc. today said west Texas will get periodic showers and see seasonable temperatures over the next couple of weeks, “resulting in nearly ideal weather conditions” for cotton. Crop conditions in the Delta and southeastern states are rated mostly good. Excessive heat in California and the southwestern desert region may be stressing crops in a significant manner with no relief this week, said the forecaster.
Cotton traders will closely examine Thursday morning’s weekly USDA export sales report, especially for demand for U.S. cotton coming from China.
Friday morning’s USDA monthly supply and demand report is expected to lean bearish, showing higher U.S. cotton production and higher U.S. ending stocks, according to a survey of analysts.
Technical analysis: The cotton futures bears still have the solid overall near-term technical advantage. The next upside price objective for the cotton bulls is to produce a close in December futures above technical resistance at the June high of 75.84 cents. The next downside price objective for the cotton bears is to close prices below solid technical support at the June low of 70.00 cents. First resistance is seen at today’s high of 71.65 cents and then at 72.00 cents. First support is seen at today’s low of 70.21 cents and then at 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.