Corn
Price action: December corn rallied 10 1/4 cents to $4.15, marking the highest close since July 5.
Fundamental analysis: Corn futures faced notable buying interest in the overnight session, which extended into the day session as December futures ultimately ended the day with the largest daily gain since early June. Strong gains in soybeans spurred corrective buying in corn as did a daily sale of 133,000 MT for delivery to Mexico during 2024-25. Varying weather throughout the U.S. likely lent additional support, along with fading production forecasts in the European Union. Meanwhile, USDA reported weekly export inspections of 970,539 MT (38.2 million bu.) for the week ended July 18, which were down 121,692 MT from the previous week but within the pre-report range of expectations between 795,000 MT and 1.15 MMT.
World Weather Inc. reports western production areas and the Great Plains will be drying out this week and slowly heating up, with some crop stress possibly evolving. The forecaster indicates the Delta and southeastern states have seen frequent rain, with more expected over the coming 10 days to two weeks. The eastern Midwest will see favorably mixed weather for a while.
USDA will release its weekly crop condition ratings after the close, with analysts expecting the “good” to “excellent” rating to remain unchanged from a week ago at 68% as of Sunday.
Technical analysis: December corn faced solid buying, with bulls securing a close at the session high and above the 10-day moving average of $4.09 as well as resistance at $4.13 1/4. Initial resistance will now serve at $4.15 3/4, which is backed by the 20-day moving average of $4.18 1/2. Little resistance stands from there to the 40-day moving average of $4.43 3/4, with additional resistance serving at the 100-day moving average of $4.61 1/2. Conversely, initial support will serve at today’s failed resistance levels, then at $4.02 1/4, which is backed by psychological support at $4.00.
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 soybean futures surged 32 3/4 cents to $10.68 3/4 and settled on session highs. August soymeal futures jumped $6.80 to $343.60, near session highs. August bean oil futures climbed 44 points to 47.00 cents, closing nearer session highs.
Fundamental analysis: Soybean bulls built on overnight price strength, breaking November futures’ above downward trendline resistance and posting a bullish technical reversal. Bulls will seek to build on strength as bullish runs have been short lived in recent weeks. Market watchers have been keyed in on President Biden’s withdrawal from the election race. The dropout had little effect on markets today as the S&P 500 saw remarkable strength and crude oil and precious metals both saw limited volatility. Both President Biden and former President Trump hold a “tough on trade” stance which has strained relationships with China. That has led to a glut of soybeans hitting the Chinese mainland as worries of tariffs and another trade war have led China to import a surplus of soybeans over the summer. It is still up for question who Biden’s replacement will be, but participants could be anticipating a “friendlier” with China nominee.
A favorable mix of rain and sunshine is forecast across the Midwest maintaining a very good summer crop development environment, says World Weather Inc. Limited rainfall fell over the weekend throughout the Midwest though temperatures were relatively cool, limiting evaporation.
USDA reported soybean export inspections of 327,061 MT (12.0 million bu.), up 151,734 MT from the previous week and near the upper end of the pre-report expectations from 130,000 to 400,000 MT. Inspections rebounded strongly from a week ago and are running ahead of the required pace to hit the current USDA export forecast.
USDA will release their weekly Crop Progress Report after the close. Analysts expect soybean conditions to remain steady at 68% “good” to “excellent.” That continues to pace well above year-ago at 54% “good” to “excellent.”
Technical analysis: November soybean futures surged on the session, though bears retain the technical edge. Bulls are seeking to build on strength, targeting initial resistance at $10.67 3/4 then the 20-day moving average at $10.80 1/2. Prices closed above the 10-day moving average for the first time since July 5, which will stand as initial support at $10.60, with further backing from the psychological $10.50 mark then $10.40, which capped most of the downside last week.
August meal futures posted strong gains today as well, though bears continue to hold the near-term technical advantage. Initial resistance stands at the 20-day moving average at $343.9, with further buying to overcome stiff resistance at $345.00. Further strength finds resistance at $343.80. Support lies at the 10-day moving average at $340.50 then $336.80 on resurgent selling pressure.
August soyoil futures saw modest gains as prices continue to consolidate from the surge higher in the first week of July. Bulls own a modest near-term advantage. Resistance lies at 47.25 cents then the July 12 high of 47.80 cents. Support lies at the 10-day moving average at 46.67 cents then last week’s low close of 46.21 cents.
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 rose 5 cents to $5.73 and near mid-range. December HRW wheat gained 1 1/4 cents to $5.88 and near mid-range. December spring wheat futures rose 10 3/4 cents to $6.40 1/4.
Fundamental analysis: The winter wheat futures markets saw some tepid short covering today, but the bulls were disappointed in wheat’s lackluster performance as the corn and soybean markets posted solid gains to start the trading week. A slightly weaker U.S. dollar index today also did not provide much support to wheat futures.
World Weather Inc. today said that in U.S. HRW country, net drying in the next seven days with warmer-trending temperatures “will be good for remaining winter wheat harvesting and for summer crop maturation. Some crops will likely become stressed in unirrigated fields though.” In the northern Plains, conditions in Montana and the western Dakotas “are a concern due to more unusual heat and dryness that will occur the next seven days. Hot temperatures in western production areas will be particularly extreme Wednesday through Friday.” Spring wheat yields will likely slip lower, said the forecaster.
U.S. wheat export inspections during the week ended July 18 were a disappointing 237,965 MT, down 382,742 MT and below the pre-report range of expectations.
This afternoon’s USDA crop progress reports are expected to show U.S. winter wheat harvested at 81% complete as of Sunday, compared to 71% last week and 68% at the same time last year. U.S. spring wheat is expected to be in 76% “good” to “excellent” condition, versus 77% last week and 49% one year ago at the same time.
Technical analysis: Winter wheat futures bears have the solid overall near-term technical advantage. Seven-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 last week’s high of $5.81 and then at $5.95. First support is seen at $5.60 and then at the contract low of $5.50 1/4. 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 last week’s high of $5.95 1/4 and then at $6.00. First support is seen at Friday’s low of $5.73 1/4 and then at the contract low of $5.63.
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 3 cents to 70.67 cents, a near three-week low close.
Fundamental analysis: Cotton futures extended last week’s losses, though selling was limited by technical support at the mid-June low. Outside markets lent minimal support as crude oil faced mild selling while the U.S. dollar was modestly weaker to begin the week.
World Weather Inc. reports West Texas cotton areas will benefit from coming rain and mild temps, which will lead to a need for eventual warming. Meanwhile, the Texas Blacklands will be wet for a while, and that moisture may be good for some crops. South Texas and the Texas Coastal Bend may be harmed by rain falling in open boll fields in the coming week to ten days. Some fiber quality decline is possible in parts of southern Texas. The forecaster notes wetter weather in the southeastern U.S. and Delta should be welcome for a while as long as drier and warmer conditions return again later this month, or in early August. Crops in the far western U.S. are stressed from the year’s heat and boll size may be reduced.
USDA will update weekly condition ratings this afternoon. Last week, cotton conditions stabilized at 45% “good” to “excellent,” while the “poor” to “very poor” rating stood at 23%.
Technical analysis: December cotton marked the lowest close since July 9 after extending to the lowest intraday level since June 17, which served up initial support at 70.00 cents. Additional support lies at 69.52 cents and 68.50 cents. Conversely, initial resistance at the 10-day moving average of 71.28, then at 71.72 cents and again at the 20- and 40-day moving averages of 72.20 and 73.13 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.