Corn
Price action: December corn futures closed up 4 1/2 cents at $4.08 3/4 and nearer the session high.
Fundamental analysis: The corn futures market saw more short covering and some perceived bargain hunting today, following recent selling pressure. The bulls need to put together at least two solid up-days in a row to begin to suggest a market bottom is finally in place.
Weather still leans bearish, even though some high winds and locally heavy rains hit the eastern Corn Belt Monday afternoon and evening. Damage assessments are still being tallied. World Weather Inc. today said some crops in the southwestern Corn Belt were stressed by hot and dry conditions Monday while temperatures mostly were mild to warm elsewhere, with rain noted in most areas from central and southern Minnesota to central to east-central and southeastern Iowa to Michigan and into Ohio. Today’s forecast is wetter for Monday into Wednesday of next week, “with favorable soil moisture in place today, mild temperatures through much of the next ten days, and multiple rounds of rain in much of the region, conditions for corn pollination and other crop development will be favorable and production potentials will remain high,” said the forecaster.
USDA Monday afternoon rated 68% of the U.S. corn crop as “good” to “excellent” and 9% “poor” to “very poor” as of last Sunday. On the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 representing perfect), the corn crop declined 1.9 points to 373.4.
Technical analysis: The corn futures bears still have the solid overall near-term technical advantage. The next upside price objective for the bulls is to close December prices above solid chart resistance at the July high of $4.26 1/2. The next downside target for the bears is closing prices below chart support at $4.00. First resistance is seen at this week’s high of $4.16 and then at $4.20. First support is at the July low of $4.03 and then at $4.00.
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 soybeans rose 3 1/4 cents to $10.43 1/4, a near mid-range close, while December soymeal rose $1.80 to $310.10 after losing more than $24.00 over the previous six sessions. August soyoil rose 28 points to 46.70 cents.
Fundamental analysis: Soybeans were able to notch modest corrective gains after extending to a fresh near-term low in early trade and a near 90-cent loss over the past seven sessions. Corn strength aided soybeans as did combined strength in meal and oil futures, though outside market pressure continued to crimp more notable buying interest. Meanwhile, USDA updated its weekly condition and pegged the soybean crop at 68% “good” to “excellent,” unchanged from last week, though there was a one-point decline in the top category, while the “poor” to “very poor” rating held at 8%. USDA reported 51% of the crop was blooming and 18% were setting pods, each well ahead of average. Weather will become increasingly crucial over the next several weeks, as a large portion of the crop begins to enter its most crucial growth phase. World Weather Inc. reports mild temps will be most common over the next ten days, with multiple rounds of rain expected, which should bode well for crop development.
Earlier today, Brazil’s Abiove increased its 2024 soybean production forecast by 700,000 MT to 153.2 MMT, based on higher yields. However, the export outlook was unchanged at 97.8 MMT.
Technical analysis: November soybeans faced resistance at $10.47 1/2 throughout today’s session, which is backed by resistance at $10.56 1/2. However, returned selling efforts will now face initial support at today’s low of $10.37 1/4, which is backed by support at $10.31, $10.22 and $10.05 1/2. Looming technical resistance at the 10- and 20-day moving averages, currently trading at $10.82 3/4 and $10.99 3/4, continue to lend bears fodder for an extension lower despite near-term oversold conditions.
December soymeal closed higher for the first time in seven sessions, with today’s low of $306.70 serving as initial support. From there, additional support lies at $305.40, $302.50 and $299.60. Meanwhile, followthrough buying will face initial resistance at $313.10, then at $317.90, which is backed by the 10-day moving average of $319.40.
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 futures sunk a penny to $5.55 1/2 though settled near mid-range. December HRW futures fell 5 1/4 cents to $5.67 and settled nearer session lows. December HRS futures fell 4 cents to $5.97 1/4.
Fundamental analysis: Wheat futures failed to capitalize on strength seen in the corn and soybean markets today as prices consolidated near recent lows. Dry weather throughout Russia and Ukraine continues to weigh on the area, with dryness and warm temperatures expanding the dryness over the past couple of weeks. Frost impacted much of the winter wheat crops from eastern Ukraine to western Kazakhstan, but recent dryness has begun to have more of an effect on spring wheat crops as well, says World Weather Inc.
Spring wheat crops in the U.S. continue to improve, as USDA rated 77% of the spring wheat crop as “good” to “excellent” and 3% “poor” to “very poor.” On the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 representing perfect), spring wheat improved 0.6 point to 384.1. Winter wheat harvest was estimated to be 71% harvested as of Sunday, ahead of the five-year average at 62%.
Scattered showers in the northern Plains are expected in the coming week, further supporting the spring wheat crop, says World Weather Inc. Meanwhile, conditions in Montana will continue to dry out as rain is sparse and unusually warm temperatures increase evaporation rates.
Technical analysis: December SRW futures saw modest selling pressure as prices scored a fresh contract low. Bears continue to hold the near-term technical advantage. Initial resistance stands at $5.65 3/4 then the psychological $5.75 mark. Further selling finds support at today’s low of $5.50 1/4 then $5.37 1/2.
December HRW futures continue to trend lower as well. Initial resistance stands at the psychological $5.75 mark then $5.80. Bulls are looking to hold today’s contract low of $5.63, else a trip to psychological $5.50 support is likely.
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 107 points to 71.37 cents, nearer the session low.
Fundamental analysis: Cotton futures took back the biggest portion of Monday’s gains as outside market pressure weighed on the natural fiber. Meanwhile, USDA rated the cotton crop as 45% “good” to “excellent,” unchanged from last week, while the “poor” to “very poor” rating held at 23%, though there was a one-point increase in the bottom category. The Texas crop was rated 34% in the top two categories and 32% in the bottom two.
World Weather Inc. reports western Texas and southwestern Oklahoma will benefit from isolated to scattered showers most days from Wednesday through July 25, before drier weather returns July 26-30. While soaking rains are not expected in many areas, a lack of significant heat through early next week will ease stress cotton, buying the crop more time before greater stress evolves. However, the lack of a soaking rain will raise the need for follow-up rain soon, especially with warmer temps likely during the middle to late part of next week. The Blacklands, Coastal Bend and south Texas will see a few light showers today with much of the region dry before showers increase, beginning tomorrow thru July 25, which will bring much needed rain to the Blacklands, while the moisture will be timely elsewhere, bolstering soil conditions.
Technical analysis: December cotton ended the session below the 10-day moving average of 71.45 cents, with initial support now serving at 71.25 cents, which is backed by the June 17 low of 70.00 cents. Conversely, returned buying will face initial resistance at the 10-day moving average and again at the 20- and 40-day moving averages of 72.40 cents and 73.56 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.