Corn
Price action: December corn futures closed up 3/4 cent at $4.21 1/4 and nearer the session low.
Fundamental analysis: The corn futures market so far this holiday-shortened trading week is seeing tepid short covering after recent steep losses. The market may have also received mild support at USDA today reported a daily U.S. corn sale of 100,000 MT to Colombia for 2023-24.
USDA Monday afternoon rated 67% of the U.S. corn crop in “good” to “excellent” condition and 9% “poor” to “very poor” condition. On the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect), the corn crop dropped 2.1 points to 372.3, but is still 32.7 points higher than last year at this time.
Present weather conditions in the Midwest and the forecasts lean bearish for corn prices. The window for a “weather-market” rally in corn prices is starting to close. World Weather Inc. today said heavy rain fell on portions of the southwestern Corn Belt Monday. “Much of the southwestern to the eastern Corn Belt will benefit from mild to seasonable temperatures and multiple rounds of rain by Monday, resulting in increases in soil moisture and improvements in conditions for newly planted crops with shallow root systems.” Temperatures will be near to below normal overall through early next week in the west and near to above normal in the east with today and Wednesday.” A drier weather pattern will return July 9-16 and much of the Midwest will dry down significantly while soil moisture in place should support corn pollination and general crop development,” said the forecaster.
Technical analysis: The corn futures bears 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 $4.41. The next downside target for the bears is closing prices below chart support at $4.00. First resistance is seen at today’s high of $4.26 1/2 and then at $4.30. First support is at this week’s low of $4.14 3/4 and then at the June low of $4.12.
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 2 cents to $11.13, closing near the session low, while August meal rose $1.30 to $350.30 after gapping higher at the open. August soyoil rose 101 points to 47.04 cents, marking the highest close since April 10.
Fundamental analysis: Corrective gains in soybeans faded as the session progressed as looming technical resistance continues to hinder earnest buying ahead of the Fourth of July holiday. Meanwhile, better-than-expected crop conditions ratings from USDA likely also limited today’s price action, with the “good” to “excellent” rating as of June 30 unchanged from last week at 67%. Moreover, the “poor” to “very poor” rating also unchanged at 8%. On the weighted Pro Farmer Crop Condition Index, the soybean crop held at 363.00 and was 34.5 points above year-ago. The top five rated soybean states are Nebraska, Louisiana, Arkansas, Mississippi and Missouri, while the lowest rated states are North Carolina, North Dakota, Wisconsin, Michigan, while Kentucky and Illinois are tied.
Dr. Michael Cordonnier is now using UDA’s planted acreage figure cut harvested area 750,000 acres to 84.511 million acres (99.0% of planted area) and kept his yield estimate at 52 bu. per acre. That reduced his soybean production forecast to 4.39 billion bu. Cordonnier noted dryness in the southeastern U.S. from Virginia to Georgia should be monitored despite the area not being a notable soybean producing area. However, he reports Virginia, North and South Carolina and Georgia have a combined 2.72 million acres of soybeans. The near-term forecast for the region is generally dry with increased changes of rain in the 6–10-day period. World Weather Inc. reports a close watch will be made on the distribution of showers and thunderstorms in the area from July 11-16, with early indications suggesting most areas will receive at least some rain that will slow drying rates and delay the onset of greater crop stress if rain does not increase soon.
Technical analysis: November soybean gains were limited by resistance at the 10-day moving average of $11.15, which is backed by the 20-day moving average of $11.33 3/4, while initial support served at $11.07, backed by psychological support at $11.00 as well as Monday’s low of $10.97. More pronounced buying efforts above the 10- and 20-day moving averages, will then face stiff resistance at the 100- and 40-day moving averages, which have nearly converged around $11.69. From there resistance stands at the psychological $12.00 level and again at the 200-day moving average of $12.11 1/4. Conversely, a move below Monday’s low will face additional support at $10.85 and again at $10.50.
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 7 3/4 cents to $6.04 3/4 and settled nearer session lows. December HRW futures fell 6 1/2 cents to $6.08 3/4, settling near mid-range. September HRS futures sunk 1 1/4 cents to $6.31.
Fundamental analysis: Winter wheat futures gave up a significant portion of Monday’s gains as prices continue to consolidate from the June sell-off. Wheat fell despite strength seen in both corn and soybeans this morning, though each settled off intraday highs. Volume was relatively light today and is likely to remain low into the weekend as traders opt to take a long weekend surrounding the fourth of July, which likely means that prices will continue to consolidate nearer recent lows. The continued selling pressure in wheat despite the early bounce in corn prices today is particularly concerning as wheat prices are unlikely to post a rally in a of itself in the near future and will need to be supported by corn.
Weather has been favorable and is expected to continue to be fruitful for spring wheat, boosting production potential. Some areas in the eastern Dakotas and Minnesota will be too wet for a little while this week though precip is expected to relent this weekend and into next week, says World Weather Inc.
USDA rated 72% of the spring wheat crop as “good” to “excellent” and 4% “poor” to “very poor,” up one point above a week ago and better than expectations that expected a one-point decline. On our CCI, spring wheat improved 8.6 points to 382.2. The winter wheat crop fell one point to 51% “good” to “excellent” and advanced to 54% harvested.
Technical analysis: December SRW futures fell under selling pressure. Bears continue to hold the near-term technical advantage as prices appear to consolidate in a bear flag formation on the daily bar chart. Bulls are seeking to hold support at $6.00, a break below which likely accelerates selling pressure, targeting last week’s low of $5.79. Resistance at the 10-day moving average, currently at $6.09 3/4, limited gains today. Further buying targets resistance at $6.21 3/4.
Bears continue to hold the near-term technical advantage in December HRW futures as well. HRW futures have shown relative strength to SRW in the past week. Bulls are seeking to keep prices above support at $6.04, which is reinforced by $5.96. Resistance steams from the 10-day moving average at $6.17 1/4, which is reinforced by the psychological $6.25 mark.
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 40 points to 72.70 cents, below the 20-day moving average.
Fundamental analysis: December cotton edged mostly sideways in subdued trade as technical resistance combined with limited outside market support continued to pressure futures. Meanwhile, a decline in USDA’s condition ratings failed to lend much support, as the “good” to “excellent” rating slipped six points from a week ago to 50%, while the “poor” to “very poor” rating rose three points to 17%. Respectively, the Texas and Georgia crops were rated 44% and 49% “good” to “excellent.” Planting efforts as of June 28 advanced three percentage points to 97% complete, two percentage points behind the five-year average for the end of June. Moreover, 43% of the crop was estimated to be squaring, while 13% was setting bolls, each outpacing the five-year average.
World Weather Inc. reports western Texas and southwestern Oklahoma will see a restricted rainfall pattern along with warm to hot temps most often through the next two weeks, drying out the soil while stress to dryland cotton increases overall, with a period of cooler temps and daily showers Thursday into Sunday temporarily improving conditions. Soil moisture in much of the Coastal Bend and south Texas is adequate to support crop needs through the next two weeks, with a growing need for rain during the second half of the month. Stress to cotton may increase during the next two weeks in the Blacklands where soil has become short of moisture and beneficial rain Friday into Monday likely offers only temporary relief from dryness.
Technical analysis: December cotton ended the session below the 20-day moving average of 72.94 cents, with additional resistance at the 10-day moving average of 73.39 cents pressuring the upside. However, initial support continued to serve at 72.34 cents. More prominent buying efforts will face additional resistance at the 40-day moving average of 74.49 cents, then at 75.06 cents and again at 76.00 cents, 79.45 cents and the 100-day moving average of 78.97 cents. Meanwhile, returned selling efforts will find additional support at 71.59 cents, 70.98 cents and at 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.