Corn
Price action: December corn futures closed up 2 1/4 cents at $4.17 1/4, near mid-range and hit a more-than-two-week high early on.
Fundamental analysis: The corn futures market today saw more short covering and perceived bargain hunting by speculators. The market bulls also got some support after USDA reported a daily U.S. corn sale of 200,000 MT to unknown destinations for 2024-25. Lower wheat futures prices did limit the upside in corn futures today.
USDA Monday afternoon rated 67% of the U.S. corn crop as “good” to “excellent” and 10% “poor” to “very poor.” On the weighted Pro Farmer Crop Condition Index (CCI; o to 500-point scale, with 500 representing perfect), the corn crop was unchanged at 373.5. Pro Farmer’s crop consultant, Michael Cordonnier, raised his U.S. corn yield forecast by 1.5 bu. an acre as weather has been favorable for the crop.
World Weather Inc. today said that in the Midwest, a favorable mix of rain and sunshine is expected across most of the region, “maintaining a very good summer crop development environment.” There is potential for a few pockets of moisture stress in the far western production areas as time moves along the ground begins to firm up, said the forecaster.
Technical analysis: The corn futures bears still have the overall near-term technical advantage. However, recent sideways price action and today’s upside price “breakout” from that trading range at lower levels begins to suggest a market bottom is in place. The next upside price objective for the bulls is to close December prices above solid chart resistance at the July high of $4.26 1/2. The next downside target for the bears is closing prices below chart support at the contract low of $4.03. First resistance is seen at today’s high of $4.22 1/2 and then at $4.26 1/2. First support is at today’s low of $4.11 3/4 and then at this week’s low of $4.05 1/4.
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 rose 6 3/4 cents to $10.75 1/2, marking a mid-range close, while December soymeal fell 30 cents to $319.10 after notching a two-week high early on. September soyoil fell 14 points to 46.08 cents.
Fundamental analysis: Soybeans extended Monday’s gains, though technical resistance at the 20-day moving average combined with U.S. dollar strength curbed momentum. Meanwhile, USDA left the crop condition rating unchanged at 68% “good” to “excellent,” while the “poor” to “very poor” rating held at 8%. Moreover, 65% of the crop was blooming, ahead of the five-year average of 60%, while 29% was setting pods, also five-points ahead of average.
While crop consultant Dr. Michael Cordonnier bumped up his yield estimate for corn, he left his soybean yield unchanged at 53 bu. per acre and indicated a neutral-to-higher bias going forward. He continues to forecast production at 4.39 billion bu. He did note soybean acreage remains uncertain and is using 750,000 less harvested acres than USDA due to ponding/flooding in the northwestern Corn Belt and hail damage, primarily in Nebraska. Cordonnier noted the soybean crop is now entering its critical six-week period, which will determine soybean production, and while weather has been mostly beneficial this month, it might begin to dry out before the month ends.
World Weather Inc. reports today’s weather outlook continues to appear good in most of the Midwest, Delta and southeastern states crop areas during the next two weeks, although drying is anticipated in the western Corn and Soybean Belt, which should be closely monitored. The forecaster also noted concern over dryness in a part of Indonesia and Malaysia but stated it’s too soon for that to have an impact on oilseeds.
Technical analysis: November soybeans were limited by resistance at the 20-day moving average of $10.81 1/2, while initial support served at the 10-day moving average of $10.55 1/4. Despite gains over the past two sessions, bears, whose sights are set on $10.00, continue to firmly hold the near-term technical advantage. Meanwhile, an extension above the 20-day moving average will give bulls additional leverage in their trek back to $11.00. Additional support below the 10-day moving average serves at $10.50, then $10.30 and again at $10.20, while resistance above $11.00 stands at the 40- and 100-day moving averages of $11.20 1/2 and $11.57 3/4.
December soymeal futures faced resistance at the 20-day moving average of $322.60, which is backed by resistance at $327.70, and the 40- and 100-day moving averages of $338.90 and $346.90. Conversely, initial support served at $315.60, which is backed by the 10-day moving average of $313.40 and support at $311.40, $303.50 and psychological support at $300.00.
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 futures fell 5 1/4 cents to $5.67 3/4 and settled nearer session lows. December HRW futures slid 4 3/4 cents to $5.83 1/4. December HRS futures fell 7 1/4 cents to $6.33.
Fundamental analysis: Wheat futures continue to struggle maintaining any bullish momentum, dragging both corn and soybeans off intraday highs. The expanding balance sheet continues to weigh heavily on wheat prices. USDA is anticipating a substantial bump in wheat exports to make up for increased production this year. Importers have made it well known that they will forego U.S. wheat, even if the FOB price is cheaper, for other nations as shipping costs are much lower. That, paired with concerns over another trade war, has put a damper on export projections, further expanding the balance sheet. Agriculture and Agri-Food Canada (AAFC) released updated forecasts for wheat production yesterday. Increased production prospects for wheat will provide added competition to U.S. exports as well.
The Wheat Quality Council’s annual HRS tour through North Dakota, along with far western Minnesota and far northern South Dakota kicked off this morning. We’ll highlight scout reports through the week. Final yield results will be released Thursday afternoon, along with a North Dakota production guesstimate from Tour scouts.
Extreme heat is expected in Montana and the western Dakotas today through Thursday with some extremes approaching 110 degrees, says World Weather Inc. That is likely to stress crops, increasing evaporation and could cause spring wheat yields to slip lower. USDA released their weekly Crop Progress Report yesterday afternoon and left the spring wheat rating as 77% “good” to “excellent.”
Technical analysis: December SRW futures struggled to maintain early bullish momentum today. Bears continue to hold the near-term technical advantage. Initial resistance persists at the 10-day moving average at $5.72 3/4, which capped rally attempts the past three sessions. Further buying seeks to close prices above $5.80 resistance. Meanwhile, support lies at $5.63 1/2 then the contract low at $5.55 1/2.
December HRS futures saw modest selling pressure today as bears continue to hold the technical advantage. Resistance stands at $5.85 3/4 with further buying seeking to topple the psychological $6.00 mark. Support lies at $5.80 then the July 16 for-the-move low close of $5.67.
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 tumbled 114 points to 69.48 cents, marking the lowest close since July 2022.
Fundamental analysis: December cotton edged lower for the third consecutive session to a more than two-year low. Outside markets continued to pressure the natural fiber as crude oil futures extended to a six-week low, while the U.S. dollar rose modestly. The marketplace is likely looking ahead to late-week U.S. economic data, which will include the GDP report on Thursday and personal income and outlays report, including its inflation indicators from the Bureau of Labor Statistics, on Friday morning.
Cotton conditions improved from a week ago, as reported by the USDA in its weekly Crop Progress Report. The crop’s “good” to “excellent” rating jumped eight percentage points to 53%, while the “poor” to “very poor” rating improved 5 points from a week ago to 18%. The Texas crop was rated 46% in the top two categories and 25% in the bottom two, up 12 points and down seven points, respectively from last week.
World Weather Inc. reports West Texas cotton areas have benefited from recent rain and mild temps, while warming is expected and a return of dry weather will be good for crops, as well as the Texas Blacklands will be wet for a while, with the moisture proving beneficial for some crops. South Texas and Texas Coastal Bend crops may be harmed by rain falling in open boll fields in the coming week to ten days, which could lead to fiber quality decline in parts of southern Texas.
Technical analysis: December cotton ended the session below the June 17 low of 70.00 cents, leaving the door open for extended selling for the remainder of the week. Initial support will now serve at 69.47 cents, then at 68.87 cents and again at today’s low of 68.72 cents. Conversely, initial resistance will serve at today’s failed support level, then at the 10-day moving average of 71.13 cents and again at the 20- and 40-day moving averages of 71.99 cents and 72.89 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.