Corn
Price action: December corn plunged 10 1/2 cents to $4.04 1/4, the lowest close since December 21, 2020.
Fundamental analysis: Corn futures were limited today by extended selling in SRW wheat and soybean futures, while a switch to cooler temps midweek and scattered showers also curbed buying interest. Solid weekly export inspections data failed to shake off the overarching negativity across the corn market today, with bears ultimately wiping out gains carved at the end of last week.
World Weather Inc. notes favorable soil moisture in place, combined with a lack of widespread heat and often mild temps through the next ten days will keep crop conditions mostly favorable during a drier weather pattern expected Wednesday through July 29, which will leave many areas much drier in two weeks than today.
USDA reported weekly export inspections of 1.08 MMT (42.5 million bu.) during the week ended July 11, up 55,006 MT from the previous week and near the top-end of the pre-report range of expectations ranging from 800,000 MT to 1.1 MMT.
Weekly crop condition ratings will be updated following the close today, with analysts anticipating, on average, one-point increase in the “good” to “excellent” rating to 69%, according to a Reuters poll.
Technical analysis: December corn futures ended the session below support at $4.06 1/4, wiping out last Friday’s gains. Initial support will now serve at last week’s low of $4.03, then at the psychological $4.00 mark, and again at $3.97 3/4 and $3.92 3/4. Conversely, initial support will now serve at today’s failed support area, then at $4.11 1/2 and the 10-day moving average of $4.13 3/4.
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 plunged 25 1/4 cents to $10.40 and closed near session lows. August meal futures skid $5.00 to $333.80. August bean oil futures fell 23 points to 46.42 cents though settled nearer session highs.
Fundamental analysis: Soybeans saw persistent selling pressure throughout today’s selling session as prices settled near session lows. Rains from hurricane Beryl are expected to have improved soybean conditions by 1% in this afternoon’s USDA Crop Progress Report. The storm brought much needed precipitation to the eastern half of the Midwest. Concerns over a significant production boost likely weighed heavily on soybean prices today.
USDA reported inspections of 168,593 MT (6.2 million bu.) of soybeans for the week ended July 11. That was down 125,616 MT from the previous week and below expectations. Inspections were a marketing year low and the lowest since the same week a year ago.
NOPA reported soy crushings of 175.599 million bushels. While that was a record for the month, it was below expectations of 177.6 million bushels from a Bloomberg poll. NOPA soyoil stocks fell more than expected, which indicates demand for soyoil remains quite robust, led by use for biofuels.
The Midwest is expected to trend cooler after being hot today, as high temperatures will drop to the 70s and 80s for most of this week, says World Weather Inc. Scattered showers and thunderstorms are expected throughout the next ten days, supporting crops favorably alongside cooler temps.
Technical analysis: November soybean futures underwent heavy selling pressure and forged a fresh for-the-move low as bears continue to hold the near-term technical advantage. Prices are oversold on the daily bar chart and some profit-taking is possible in the next few days. Bulls are seeking to overcome resistance at the psychological $10.50 mark before tackling last week’s low of $10.59 1/2. Prices are well below the 10-day moving average at $10.81 1/4. Support lies at today’s low of $10.38 3/4 with little support until the psychological $10.25 mark.
August meal futures saw continued selling pressure, marking a three and a half month low as bears continue to hold the near-term technical advantage. Support lies at $330.00 with further selling seeking to overcome the contract low at $328.60. Bulls are seeking to overcome initial resistance at $335.90 then $338.80, with further buying seeking to take out the 10-day moving average at $343.20.
August bean oil futures saw sharp selling pressure overnight though rebounded during today’s session, closing nearer session highs. Initial resistance stems from the 10-day moving average at 46.70 cents with additional buying targeting resistance at 47.25 cents. Continued selling pressure finds stiff support at 46.12 cents, the 20-day moving average, then 45.68 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 19 1/4 cents to $5.56 1/2. December HRW wheat dropped 14 1/4 cents to $5.72 1/4. Both markets closed nearer their session lows and hit contract lows today. December spring wheat futures sunk 16 cents, closing at $6.01 1/4.
Fundamental analysis: Technical selling was featured again today as the near-term charts remain in fully bearish postures for winter wheat futures. A firmer U.S. dollar index and weaker crude oil prices were bearish daily “outside market” forces working against the wheat futures markets to start the trading week.
World Weather Inc. today said U.S. harvest weather “will be sufficient enough to allow some fieldwork to occur around showers and thunderstorms.” However, spring wheat development “will continue stressed in the U.S. Pacific Northwest and western Canada, where some yield loss is possible especially in unirrigated areas of Canada.” Eastern portions of the northern U.S. Plains and eastern Canada’s wheat will remain in favorable condition along with eastern Canada’s Prairies crops, said the forecaster.
USDA this morning reported U.S. wheat export inspections of 533,828 MT during the week ended July 11, up 190,469 MT from the previous week and above the pre-report range of expectations.
This afternoon’s weekly USDA crop progress reports are expected to show U.S. spring wheat condition at 75% “good” to “excellent” as of Sunday, compared to 75% in the same categories last week and 51% one year ago at the same time. U.S. winter wheat harvested is expected at 74% complete as of Sunday versus 63% last week and 56% a year ago.
Technical analysis: The winter wheat futures bears have the solid overall near-term technical advantage and gained fresh power today. A six-week-old downtrend on the daily bar chart for December SRW has been restarted. 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 today’s high of $5.76 1/2 and then at Friday’s high of $5.94 1/4. First support is seen at today’s contract low of $5.56 1/4 and then at $5.50.
The HRW bulls’ next upside price objective is closing December prices above solid technical resistance at the July high of $6.17 3/4. The bears’ next downside objective is closing prices below solid technical support at $5.50. First resistance is seen at today’s high of $5.87 1/2 and then at $6.00. First support is seen at today’s contract low of $5.68 3/4 and then at $5.60.
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 117 points to 72.44 cents, a near two-week high close.
Fundamental analysis: Cotton futures extended Friday’s gains, overcoming recent technical pressure at the 10- and 20-day moving averages. Returned strength in equities likely supported the natural fiber, offsetting modest gains in the U.S. dollar. Meanwhile, traders are seemingly disregarding forecasts of mostly favorable weather conditions throughout most of the U.S. World Weather Inc. notes U.S. crops are developing better than expected this season, and the trend is likely to continue for a while. Big yields are expected, although far western states are enduring excessive heat which may lead to smaller bolls if it lasts much longer.
However, USDA’s condition ratings have somewhat proven the U.S. crop has faced headwinds per the notable reductions in recent “good” to “excellent” ratings. Last week, the cotton crop was rated 45% “good” to “excellent,” down five points from the previous week, while the “poor” to “very poor” rating jumped six points from the previous week.
Technical analysis: December cotton bulls came alive today, forging a close above the 10- and 20-day moving averages of 71.62 cents at 72.44 cents. Initial resistance will stand at 72.81 cents and is backed by the 40-day moving average of 73.66 cents. Meanwhile, initial support will serve at today’s failed resistance levels, then at 71.04 cents, 70.61 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.