Corn
Price action: December corn fell 6 3/4 cents to $3.91 1/4, nearer the session low.
Fundamental analysis: Corn futures gave up gains carved over the past two sessions amid profit-taking and mostly favorable weather conditions throughout the Corn Belt. Meanwhile, tepid weekly export sales data cast a further shadow over the corn market, as net old-crop sales of 437,800 MT during the week ended July 11, landed below analysts’ pre-report expectations of 500,000 to 800,000 MT. However, new-crop sales totaled 485,700 MT, while exports for the week rose 26% to 1.1 MMT.
World Weather Inc. reports a combination of favorable soil moisture in place today, mild temps through much of the next ten days and multiple rounds of rain in much of the Midwest during the next two weeks will keep conditions for corn pollination and crop development favorable. The U.S. National Weather Service released its 30- and 90-day outlooks this morning, which indicated warmer-than-usual weather will dominate the next 90 days in much of the contiguous United States, with temps in the upper Midwest and northern Plains closest to normal. Rainfall is expected to be above normal in the southeastern states, Delta and Tennessee River Basin during August and above normal from the central Plains to the Great Basin and Pacific Northwest, while all other areas have equal chances for above, below and near normal precip.
Technical analysis: December corn bears continued to prove their dominance today, with a close held below support at $4.08 3/4 and $4.06. Initial support will now serve at $4.03 3/4, which is backed by last week’s low of $4.03 and psychological support at $4.00. Conversely, initial resistance will now serve at today’s failed support levels, then at the 10-day moving average of $4.10 1/4 and again at $4.16 and the 20-day moving average of $4.22 3/4.
What to do: Get current with advised sales.
Hedgers: Sell another 10% of 2023-crop in the cash market to get to 60% sold.
Cash-only marketers: Sell another 10% of 2023-crop to get to 60% sold.
Soybeans
Price action: November soybean futures firmed 2 cents to $10.43 and settled nearer session high. August meal futures slid $1.9 to $337.2 and settled nearer the intraday low. August bean oil futures firmed 24 points to 46.45 cents.
Fundamental analysis: The soybean complex saw limited volatility today as November soybeans continue to base sideways. The reversal from a fresh for-the-move low was encouraging today though bulls struggled to garner much bullish momentum throughout the session.
This morning, USDA reported daily sales of 510,000 MT of soybeans and 150,000 MT of soybean cake and meal to unknown destinations for the 2024-25 marketing year. That helped spark today’s corrective buying efforts though traders will continue to look for increased purchases, particularly out of China, who has been slow to purchase beans for 2024-25 delivery. While many speculate that China is behind the unknown destination purchases, there is no way to be sure who the buyer is until those purchases are switched to the actual buyer, sometime later in the marketing year. It is not uncommon for traders in countries other than China to opt to be listed as “unknown.”
USDA reported weekly soybean exports sales of 360,100 MT for 2023-24 and 375,000 MT for 2024-25. Both were within analysts’ range of estimates. Old-crop sales for the week rose 73% from the previous week and 13% from the four-week average, while exports totaled 200,800 MT, down 25% from the previous week and 38% from the four-week average.
The Delta is expected to remain wet over the coming week, with rains increasing this weekend, keeping the area saturated, notes World Weather Inc. The central and eastern Midwest will receive minimal rainfall through Monday, though cooler than average temperatures will limit evaporation. Showers are expected to increase next week. The National Weather Service released its longer-term forecasts today. Warmer than usual weather will dominate much of the contiguous U.S. while rainfall forecast to be below average in portions of the western Soybean Belt with equal chances to above average east of the Mississippi.
Technical analysis: November futures saw a failed breakdown overnight and limited buying efforts throughout today’s session as bears continue to retain the near-term technical advantage. The $10.45 mark has attracted a significant amount of volume the past couple of sessions, marking that as initial resistance. Further buying seeks to overcome the psychological $10.50 mark then the 10-day moving average at $10.63 3/4. Bulls are seeking to hold support at $10.40 then today’s for-the-move low of $10.31 3/4.
August meal futures gave up about half of Wednesday’s gain as bears continue to hold the near-term technical edge. Bulls are seeking to overcome initial resistance at $340.6, the 10-day moving average, which limited gains today. Further buying seeks to overcome $345.0 resistance. Meanwhile, support stands at $335.9 then the for-the-move low of $332.2.
August bean oil futures posted modest gains. Prices have struggled to garner much bullish or bearish momentum the past couple of weeks. Resistance serves at the 10-day moving average at 46.58 cents then yesterday’s high of 47.37 cents. Bulls are seeking to hold support at 46.20 cents, while further weakness eyes the 40-day moving average at 45.79 cents.
What to do: Get current with advised sales.
Hedgers: 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: 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 fell 3 1/2 cents to $5.60 and nearer the session low. December HRW wheat rose 1 1/2 cents to $5.79 and near mid-range. December spring wheat futures rose 8 3/4 to $6.20 1/4.
Fundamental analysis: The winter wheat futures markets are in pause mode late this week after setting contract lows earlier this week. A rally in the U.S. dollar index today limited buying interest in the wheat markets.
Wheat market bulls today did not get much upside traction from better USDA weekly U.S. wheat export sales. The agency reported 578,500 MT in sales for the week ended July 11, which were up notably from the previous week and up 1% from the four-week average. Net sales were near the top end of analysts’ range of estimates. Exports during the week totaled 630,900 MT, up from the previous week and up 96% from the four-week average.
World Weather Inc. today said weather in U.S. wheat country “will be good enough to allow some fieldwork to occur around showers and thunderstorms.” 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.
Technical analysis: Winter wheat futures bears have the solid overall near-term technical advantage. Six-week-old downtrends are in place on the daily bar charts. 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 $5.70 and then at $5.80. First support is seen at the contract low of $5.50 1/4 and then at $5.35. 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 this week’s high of $5.87 1/2 and then at $6.00. First support is seen at the contract low of $5.63 and then at $5.50.
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 futures dropped 14 points to 71.93 cents and settled near mid-range.
Fundamental analysis: Cotton futures continue to trade within Monday’s range as prices consolidate on the daily bar chart. While prices continue to firm from last week’s low, bulls have failed to break prices above Monday’s high as prices consolidate and the range tightens on the daily bar chart. Slow purchases for new crop cotton continue to draw skepticism to the USDA estimates that show a sharp increase in cotton exports year over year. As the marketing year winds down, new crop sales fell to just 31,000 bales for the week ended July 11. Exports dipped to 117,400 bales, the lowest since November. While it is common for both sales and shipments to slow down at the end of the marketing year, this year’s decline came earlier than average and was a steeper decline than usual. That has weighed heavily on cotton prices in recent months.
Cotton’s failure to rally in the wake of a weakening dollar is a testament to the bearish views held by traders that a weaker dollar and cheaper cotton will do much to stir up demand. Both President Biden and former President Trump are tough on trade and have vowed to be hard on China if elected in November. That continues to draw concern to U.S. exports of cotton to China, the world’s top importer of the natural fiber.
Technical analysis: December cotton futures continue to trade within Monday’s range, consolidating before the next move. Bulls are seeking to overcome resistance at 72.21 cents, the 20-day moving average, which has limited gains thus far this week. Further strength finds resistance at 73.33 cents. Support comes in at 71.80 cents, the 10-day moving average, which is bolstered by short-term uptrend support at 71.50 cents. Further selling seeks to overcome the July 9 for-the-move low close at 70.55 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.