Corn
Price action: December corn futures slid a quarter of a penny to $4.04 3/4, marking a 10-cent loss on the week.
5-day outlook: Corn futures struggled to build on bullish overnight momentum as prices closed near unchanged. Prices struggled to overcome downtrend resistance stemming from the July 5 high this week, as it sparked Monday and Thursday’s selloffs, then ignited selling during today’s rally. A portion of today’s selling could be due in part to a tech outage affecting banks, media companies, emergency services, airlines and more worldwide. The cause of the outage was traced to an update from the cybersecurity software company called CrowdStrike and impacted millions of Microsoft Windows devices. While that may not directly correlate with grain prices, volume today was the lowest since June 5. The outage had an impact on market participants and limited liquidity, certainly no help to bulls attempting to overcome stiff resistance. While funds appear content with holding short positions, prices continue to hold above psychological $4.00 support in December futures and are near oversold levels on the daily bar chart, both of which can continue to limit the downside as prices consolidate, awaiting a catalyst to breakout of the recent tightening range.
30-day outlook: Inclement weather and severe storms have become the norm rather than the exception in recent years, most recently evidenced by this week’s windstorm blowing through the Corn Belt. While the storm did not hold a candle to the derecho of 2020, it was a stark reminder that these storms can pop up rather quickly and do significant amounts of damage. Portions of the northern Corn Belt have been drenched with too much rain, causing flooding, with an unknown amount of lost acres, while Nebraska has been pounded by hail. Still, the crop looks great in other portions of the country. Forecasts for the coming week call for cooler-than-normal temperatures and multiple waves of rain. Temperatures are expected to warm into next weekend, though excessive heat is not in the outlook until at least early August. Temperatures are expected to be above average in the 90-day forecast from the National Weather Service and the western Corn Belt is called to see below average precipitation.
90-day outlook: Demand will continue to draw the eyes of traders as production is better realized. USDA is penciling in record use for 2024-25 and a large portion of that demand comes from exports. The election is quickly coming into focus with both frontrunning candidates being tough on trade. Trade deals will continue to play an important role, particularly with China. China is one of the top importers of U.S. corn, though they have favored purchases of sorghum and South American corn the last few years. If the U.S. can keep China (and their bloc partners) in the U.S. market, it could be supportive for prices, though if the election spurs additional trade wars, it could drive the balance sheet wider, weighing heavily on corn prices.
What to do: Get current with advised sales.
Hedgers: You should be 60% sold in the cash market on 2023-crop.
Cash-only marketers: You should be 60% sold on 2023-crop.
Soybeans
Price action: November soybeans fell 7 cents to $10.36 and lost 29 1/4 cents on the week. December meal futures fell $4.00 to $307.50 a posted a $6.60 week-over-week loss and closed lower for the eighth straight week. August soyoil rose 11 points to 46.56 cents but closed 9 cents lower on the week.
5-day outlook: Soybean gains faded as the session progressed, most contracts finishing just shy of the session low. Another back-to-back daily soymeal sale of 105,000 MT to unknown destinations during 2024-25 boosted meal futures, though news of an oversupply of soybeans in China likely cast a shadow over today’s price activity. Reuters reported earlier today that importers in the country have ramped up soybean deliveries, fearing a return to a trade war in the U.S. despite poor crush margins and weak demand from the livestock sector. Price action throughout this week has been mostly consolidative in nature, indicating a pronounced move is imminent. With bears firmly holding the near-term technical advantage, next week’s trade activity is likely to be sideways to lower, though additional sales to China could help spur some buying.
30-day outlook: The U.S. soybean crop will begin to enter its most crucial growth stage rather quickly. Weather over the next 45 days will certainly be a market focus, as traders continue to closely gauge production prospects. World Weather Inc. On Thursday, the National Weather Service released its 30- and 90-day outlooks, which indicated warmer-than-usual temps will dominate the next 90 days in much of 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, Tennessee River Basin during August and below normal from the central Plains to the Great Basin and Pacific Northwest, while all over areas have equal changes for above, below and near normal precip.
90-day outlook: U.S. exports will be the longer-term trade focus for the soybean market. Weaker livestock demand in China, combined with weak crush margins and rising expectations of a U.S./China trade war could certainly curb China’s interest in purchasing soybeans for import during the U.S.’s peak shipping season from September to December. As of July 11, there were only 20,000 MT of new-crop soybean sales to China on the books, which compares to the five-year average o 3.746 MMT and is the lowest level in 19 years.
What to do: Get current with advised sales.
Hedgers: You should be 75% 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 70% 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 futures rose 8 cents to $5.68, near mid-range and for the week down 7 3/4 cents. December HRW wheat futures gained 7 3/4 cents to $5.86 3/4, near mid-range and for the week up 1/4 cent. December spring wheat futures rose 9 1/4 cents to $6.29 1/2 and rose 12 1/4 cents on the week.
5-day outlook: Today’s technically bullish weekly high closes in December SRW and HRW wheat futures suggest follow-through technical buying from the speculators early next week. The winter wheat markets late this week made decent rebounds from their contract lows scored early in the week. Bulls have more work to do in the near term to begin to suggest major market bottoms are in place. Continued winter wheat harvesting and the related commercial hedge pressure may limit the upside for the wheat futures markets in the near term. However, the harvest is generally over 75% complete in all but the northern tier of U.S. states, which suggests declining harvest hedge pressure on prices.
30-day outlook: Weather in major global wheat-producing regions in the coming weeks will remain near the front burner of the wheat futures markets. World Weather Inc. today said Canada’s Prairies weather is “trending too warm and dry” as wheat is reproducing and filling. “Crop stress is expected to increase due to dryness and heat resulting in lower yields in some of the drier areas.” U.S. winter wheat harvest will continue with mostly favorable weather. Spring wheat development “will continue stressed in the U.S. Pacific Northwest and western portions of the northern Plains where some yield loss is possible,” said the forecaster. Europe harvesting of winter grain will advance around periods of rain and there has been at least some grain quality concerns this season. Wheat harvesting in the western CIS is advancing well, although spring cereals have been stressed by dryness recently. China’s spring wheat is doing well and expected to yield favorably. Australia’s winter wheat and barley is suspected of being favorably established, despite low soil moisture in a few production areas. Argentina may get some very important rain late this week into early next week that could greatly improve establishment, said World Weather.
90-day outlook: With U.S. corn and soybean crops in the middle of their growing seasons, the wheat markets are likely to take keener direction from those markets in the next two months. The most critical growing month for most of the U.S. soybean crop is August, which means wheat and corn prices may follow the lead of the soybean market during August.
Key outside markets will continue to influence the wheat markets in the next few months. The U.S. dollar index this week hit a five-week low and is trending lower. Continued pressure on the greenback would be price-friendly for wheat futures. Possibly offsetting the weaker U.S. dollar could be weaker crude oil prices in the coming weeks. Nymex crude oil futures closed at the lowest price level of the month today and are down around $4.00 from the July high. Wheat traders will continue to monitor both of these markets closely, for daily price direction.
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 slid 123 points to 70.70 cents and posted a 57-point weekly loss.
5-day outlook: Cotton futures extended Thursday’s weakness, with outside market pressure stemming from heavy selling in crude oil futures and equities combined with a second straight day of strength in the U.S. dollar. Weekly export sales this week proved to be rather tepid, which is limited buying interest. Look for additional sideways to lower trade into next week, though corrective trading in outside markets could spur some light buying.
30-day outlook: U.S. weather will continue to be the focus over the next month as the growing season progresses. World Weather Inc. reports western Texas and southwestern Oklahoma will benefit from isolated to scattered showers most days through next Tuesday before drier weather returns Wednesday through Aug. 2 when most days are dry with a few light showers on occasion. Meanwhile, the Blacklands, Coastal Bend and south Texas will see showers and thunderstorm through July 26, bringing much needed rain to the Blacklands while the moisture is timely elsewhere and helps perpetuate favorable soil conditions in early August. The forecaster notes big yields are likely in the U.S., although the far western states are enduring excessive heat, which may lead to smaller bolls if the heat lasts much longer.
90-day outlook: U.S. cotton sales continue to wane as importers look to fresh South American supplies as both Argentina and Brazil continue to harvest. USDA reported net upland export sales at a marketing year low for the week ended July 11, at a paltry 27,200 RB. Net sales were down 50% from the previous week and 76% from the four-week average, while exports of 113,100 RB were down 30% from the previous week and 33% from the four-week average. Traders will continue to closely monitor demand over the next several months, especially amid increasing U.S. production prospects.
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.