Corn
Advice: We advise all corn producers to sell another 10% of 2023-crop in the cash market. This pushes hedgers and cash-only marketers to 60% sold on old-crop.
Price action: December corn rose 3 cents to $4.11 3/4, ending the session above the 10-day moving average.
Fundamental analysis: Corn futures extended Tuesday’s gains, which were somewhat disappointing amid a crude oil rally and extended pressure on the U.S. dollar, which led the greenback to a 3-month low. Confirmation of strong ethanol production from the Energy Information Administration also failed to ignite heavier short-covering, as fund shorts remain steadfast in their pursuit of lower prices.
Meanwhile, Midwest weather conditions over the next ten days are set to include mild temps and multiple rounds of rain, which should help the corn crop progress through pollination. However, recent rains have induced minor to moderate flooding along the Middle Mississippi River this morning, with major flooding along central and southern parts of the Iowa and Illinois border, though water levels are expected to decline next week, according to World Weather Inc.
Earlier today, ethanol production was reported to have averaged 1.106 million barrels per day (bpd) during the week ended July 12, up 52,000 bpd (4.9%) from the previous week and 3.4% above last year. That was the largest ethanol production since the week ended Dec. 22, 2023, and only 2,000 bpd below the record of 1.108 million bpd during the week ended Dec. 1, 2017. Ethanol stocks dropped 443,000 barrels to 23.16 million barrels.
USDA will release its weekly export sales for the week ended July 11. Analysts are anticipating old-crop sales to have ranged from 500,000 to 800,000 MT and net new crop sales between 25,000 and 400,000 MT. Last week, net sales of 538,300 MT were reported for the previous week, which rose 51% from the previous week but were down 13% from the four-week average.
Technical analysis: December corn futures ended the session just above the 10-day moving average, currently trading at $4.11 1/2, for the first time in a month, and will now serve as initial support, with additional support serving at $4.07 1/2 and $4.03, which is backed by psychological support at $4.00. Conversely, initial resistance will now serve at 44.15 1/2, then at $4.20 and again at the 20- and 40-day moving averages of $4.26 1/4 and $4.49 1/2.
What to do: Get current with advised sales.
Hedgers: NEW ADVICE -- Sell another 10% of 2023-crop in the cash market to get to 60% sold.
Cash-only marketers: NEW ADVICE -- Sell another 10% of 2023-crop to get to 60% sold.
Soybeans
Advice: We advise all soybean producers to sell another 10% of 2023-crop in the cash market. This pushes hedgers to 75% sold on old-crop and cash-only marketers to 70% sold.
Price action: August soybeans rose 6 3/4 cents to $10.97 1/4 and near mid-range. September soybean meal closed up $3.40 at $319.40 and near the session high. September soybean oil closed down 81 points at 45.42 cents and near the session low.
Fundamental analysis: Tepid short covering was featured in August soybean futures today after prices hit a contract low Monday. Spreaders appeared to be buying soybean meal and selling soybean oil futures today. Soybean bulls were disappointed the solidly lower U.S. dollar index and good gains in the crude oil market today did not provide better support to the soybean complex.
Weather in the Midwest still leans bearish for soybeans. World Weather Inc. today said Midwest crops benefitted from cooler temperatures Tuesday, while rain, some of which was heavy and caused local flooding, fell from northeastern Kansas to east-central and southeastern Missouri to south-central Indiana and central to parts of northeastern Kentucky. A combination of favorable soil moisture in place today, mild temperatures through much of the next 10 days and multiple rounds of rain in much of the region during the next two weeks will keep growing conditions “favorable and production potentials will remain high,” said the forecaster.
Thursday morning’s weekly USDA export sales report is expected to show U.S. soybean sales of 150,000 to 800,000 MT for 2023-24 and 25,000 to 400,000 MT for 2024-25. That compares to net old-crop sales of 208,000 MT and new-crop sales of 191,255 MT reported last week.
Technical analysis: The soybean bears still have the solid overall near-term technical advantage. Prices are in a seven-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 $10.50. First resistance is seen at today’s high of $11.02 1/2 and then at $11.19. First support is seen at the contract low of $10.75 3/4 and then at $10.60.
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 this week’s high of $319.50 and then at $325.00. First support is seen at today’s low of $315.00 and then at the contract low of $313.00.
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 this week’s high of 46.78 cents and 47.00 cents. First support is seen at 45.50 cents and then at the July low of 44.94 cents.
What to do: Get current with advised sales.
Hedgers: NEW ADVICE -- Sell another 10% of 2023-crop in the cash market to get to 75% sold. You should have 10% of expected 2024-crop production sold for harvest delivery next fall.
Cash-only marketers: NEW ADVICE -- Sell another 10% of 2023-crop to get to 70% sold. You should have 10% of expected 2024-crop production sold for harvest delivery next fall.
Wheat
Price action: December SRW wheat rose 8 cents to $5.63 1/2, while December HRW wheat rose 10 1/2 cents to $5.77 1/2, both closed nearer the session high. December spring wheat rallied 14 1/4 cents to $6.11 1/2.
Fundamental analysis: Wheat futures saw an upside price correction today after edging lower the past three sessions. U.S. dollar weakness lent price support throughout the session, though strength faded from the midmorning high as technical resistance continues to curb earnest buying efforts. Meanwhile, World Weather Inc. indicates some relief to the warm and dry bias in the western CIS is expected this weekend and especially next week as the dominating high pressure ridge present in the region breaks down. The forecaster notes cooling will be the most important change that takes place and spring and summer crop stress will be reduced, though greater rain will be needed before any change in production potential would be possible.
In the U.S. and Canada, spring cereal development will continue stressed in the Pacific Northwest and western Canada, where some yield loss is possible, especially in unirrigated areas of Canada. However. eastern portions of the northern U.S. Plains and eastern Canada’s wheat will remain in the favorable condition along with eastern Canada’s Prairie crops.
USDA will release its weekly export sales data for the week ended July 11, early Thursday morning. Analysts are expecting net sales to have ranged from 225,000 to 600,000 MT for the week. Last week, net sales of 240,351 MT were reported for the previous week.
Technical analysis: December SRW wheat ended the session above resistance at $5.61 1/2, and will now serve as initial support, with further support serving at this week’s low of $5.50 1/4, then at $5.44 1/4 and $5.38 1/2. However, followthrough buying will now face initial resistance at $5.67 1/4, then at $5.72 3/4, which is backed by the 10- and 20-day moving averages of $5.83 1/4 and $5.92.
December HRW ended the session above resistance at $5.75, which will now serve as initial support, with additional support serving at Tuesday’s low of $5.63, then at $5.55 and $5.47. Extended buying efforts will face initial resistance at $5.83, which is backed by the 10- and 20-day moving averages of $5.92 ¾ and $6.01 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 closed up 70 points at 72.07 cents and near mid-range.
Fundamental analysis: The cotton futures market saw more short-covering today, following recent selling pressure. The market also saw some speculative buying support amid bullish daily “outside-market” forces that included a solidly lower U.S. dollar index and good gains in crude oil futures prices. Sharply lower S&P 500 and Nasdaq stock indexes today did somewhat limit the upside potential in the cotton market.
Weather conditions in the U.S. lean bearish for cotton. World Weather Inc. today said the crop is developing “better than expected this season and the trend is likely to continue for a while. Big yields are expected, although the far western states are enduring excessive heat which may lead to smaller bolls if the heat lasts much longer,” said the forecaster.
Thursday morning’s weekly USDA export sales report will be closely scrutinized by cotton traders. Recent U.S. sales have been disappointing. Cotton bulls are worried the U.S. presidential election’s negative-China rhetoric from both sides may prompt officials of the world’s second-largest economy to curtail U.S. commodity purchases, including cotton.
Technical analysis: The cotton futures bears still have the firm 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 this week’s high of 73.00 cents and then at 74.00 cents. First support is seen at today’s low of 71.32 cents and then at this week’s low of 70.93 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.