Corn
Price action: July corn rose 3/4 cent to $4.18, a near three-week-high close.
Fundamental analysis: Corn futures extended gains for a third straight day, a feat that has not occurred in two months, as outside markets lent support, though technical resistance continued to limit earnest buying. Meanwhile, weather throughout most of the Midwest will continue to prove favorable, including periodic rainfall and mild temps during the balance of the week. World Weather Inc. notes showers are expected to continue into the weekend and next week as warming occurs for a little while. However, some drying is anticipated for the western Corn and Soybean Belt and should continue to be closely monitored.
Earlier today, the Energy Information Administration reported ethanol production during the week ended July 19 totaled 1.095 million barrels per day (bpd), down 11,000 bpd (1.0%) from the previous week but 0.1% above last year. Ethanol stocks rose 563,000 barrels to 23.723 million barrels.
USDA will release its weekly export sales data early Thursday morning for the week ended July 18. Analysts are expecting net sales to range from 200,000 to 700,000 MT for 2023-24 and between 100,000 and 600,000 MT for 2024-25. Last week, net old-crop sales of 437,800 MT were reported for the previous week along with new-crop sales of 485,700 MT.
Technical analysis: December corn futures continued to face resistance at $4.22 1/2 but were able to notch the highest intraday level since July 8 in early trade. This area will continue to serve as initial resistance, with additional resistance serving at $4.27 3/4 and $4.33 1/4, then at the 40-day moving average of $4.40 1/2. Conversely, initial support will continue to serve at the 20-day moving average, currently trading at $4.15 3/4, which is backed by the 10-day moving average of $4.11 1/2 and the July 12 low of $4.03.
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 11 1/2 cents to $10.64 and near the session low. September soybean meal gained 70 cents to $326.10, nearer the session low and hit a more-than-two-week high early on. September soybean oil closed down 80 points at 45.28 cents and nearer the session low.
Fundamental analysis: Soybean bulls were disappointed today as November soybeans posted losses despite a lower U.S. dollar index today and as the corn and wheat futures markets were able to at least hold onto recent gains, albeit prices were down from their daily highs. Meal futures price gains this week have been more impressive. Spreaders have been featured buying meal and selling bean oil futures. More decent gains in meal futures this week would suggest a near-term bottom is in place for meal, as well as a likely bottom being in place for the soybean market.
Weather in the U.S. leans bearish for soybeans, heading into the critical growing timeframe for most of the crop. World Weather Inc. today said a favorable mix of rain and sunshine is expected across most of the Midwest in the coming days, “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, said the forecaster.
Thursday morning’s weekly USDA export sales report is expected to show U.S. soybean sales during the week ended July 18 to have ranged from 100,000 to 400,000 MT for 2023-24 and between 500,000 and 600,000 MT for 2024-25. Last week net old-crop sales of 228,111 MT and new-crop sales totaling 507,025 MT were reported for the previous week.
Technical analysis: The soybean bears have the solid overall near-term technical advantage. Prices are in a two-month-old downtrend on the daily bar chart. The next near-term upside technical objective for the soybean bulls is closing November prices above solid resistance at $11.00. The next downside price objective for the bears is closing prices below solid technical support at the July low of $10.31 3/4. First resistance is seen at today’s high of $10.80 1/4 and then at this week’s high of $10.86 3/4. First support is seen at $10.50 and then at $10.40.
The soybean meal futures bears still have the overall near-term technical advantage. However, recent price gains have negated a downtrend on the daily bar chart, to suggest a market bottom is in place. The next upside price objective for the meal bulls is to produce a close in September futures above solid technical resistance at the July high of $339.50. The next downside price objective for the bears is closing prices below solid technical support at the July low of $313.00. First resistance comes in at today’s high of $331.70 and then at $335.00. First support is seen at today’s low of $322.70 and then at $320.00.
Soybean oil bears have the overall near-term technical advantage. Prices are trending down on the daily bar chart. The next upside price objective for the bean oil bulls is closing September prices above solid technical resistance at 47.50 cents. Bean oil bears’ next downside technical price objective is closing prices below solid technical support at the June low of 42.82 cents. First resistance is seen at today’s high of 46.08 cents and then at this week’s high of 46.62 cents. First support is seen at the July low of 44.94 cents and then at 44.00 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 3 1/4 cents to $5.71, while December HRW wheat rose 1/2 cent to $5.83 3/4. Both forged near mid-range closes. December HRS futures fell 4 3/4 cents to $6.28 1/4.
Fundamental analysis: Winter wheat futures favored the upside today, with support stemming from U.S. dollar weakness, though continued to trade in a mostly sideways, consolidative pattern. Meanwhile, spring wheat futures were unchanged to modestly weaker as scouts on the annual Wheat Quality Council’s HRS tour reported record yield potential in southern and east-central North Dakota. Samples collected averaged 52.5 bu. per acre, up from 48.1 bu. on similar routes last year and the five-year average (excluding 2020 as the tour was cancelled due to Covid) of 42.2 bu. per acre. However, offsetting this news were forecasts of extreme heat that will occur in Montana and the western Dakotas today and Thursday. World Weather Inc. reports temps could reach as high as 110 degrees Fahrenheit, with more extreme heat to occur in South Dakota Friday. The forecaster reports some locations in eastern Montana could reach all-time record maximum temps and warns the extreme temps will notably raise crop and livestock stress and may lead to lower spring wheat yields. Conditions in the eastern Northern Plains will not be as harsh, though some drying and warming will occur this week, with beneficial rains expected in the Dakotas and Minnesota over the weekend.
Traders largely ignored possible production losses amid rains in western Europe after cheap Black Sea supplies were offered by Black Sea exporters, though demand from purchase tenders this week exacerbated the issue. Market estimates of the French wheat harvest are well below the farm ministry’s initial forecast of a soft wheat crop of 29.7 MMT, which was already 15% lower than last year. Moreover, Germany has faced persistent rains, which have slowed harvest progress and raised quality concerns.
USDA will release weekly export sales data for the week ended July 18 early Thursday morning. Analysts are expecting net sales to have ranged range from 300,000 to 625,000 MT. Last week, USDA reported net sales of 578,500 MT for the previous week.
Technical analysis: December SRW wheat continued to face resistance at $5.74 3/4, which is backed by the 20-day moving average of $5.83 1/2, though initial support continued to serve at $5.63 1/4. A move above the 20-day moving average could lend bulls the needed momentum to edge above psychological resistance at $6.00 and ultimately toward the July 5 high of $6.15 1/4. However, an extension of the recent sideways pattern will continue to find support layered from $5.63 1/4 to the July 16 low of $5.50 1/4.
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 closed down 83 points at 68.65 cents, near mid-range and hit a fresh contract low.
Fundamental analysis: The cotton futures market sold off again today and hit a new for-the-move low amid a big sell-off in the U.S. stock market that could dampen consumer demand for apparel heading into the fall—if the selling pressure in equities continues. Cotton bulls got no traction today from a lower U.S. dollar index and higher crude oil prices.
Recent, beneficial rains in Texas cotton country are also limiting buying interest in cotton futures. World Weather Inc. today said west Texas cotton areas “have benefited from recent rain and mild temperatures. Warming is expected and a return of dry weather that will be good for crops, as well.” The southeastern Texas Blacklands will be wet for a while and that moisture may be good for some crops. South Texas and Texas Coastal Bend crops may be harmed by rain falling in open-boll fields through the weekend, but next week looks to be much drier, said the forecaster. Some fiber quality decline is possible in parts of southern Texas. Meantime, portions of the Delta and southeastern states “have become too wet and need a little break.” The Delta should see drier weather next week, but showers and thunderstorms will continue in the southeastern states most of next week, said World Weather.
Cotton traders are awaiting Thursday morning’s weekly USDA export sales report, with the bulls hoping the U.S. cotton sales pace picks up from the recent poor weekly readings.
Technical analysis: The cotton futures bears have the solid overall near-term technical advantage. Prices are in a seven-week-old downtrend on the daily bar chart. The next upside price objective for the cotton bulls is to produce a close in December futures above technical resistance at 73.00 cents. The next downside price objective for the cotton bears is to close prices below solid technical support at 65.00 cents. First resistance is seen at today’s high of 69.53 cents and then at 70.00 cents. First support is seen at today’s contract low of 67.50 cents and then at 67.00 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.