Corn
Price action: December corn rose 2 3/4 cents to $4.20 3/4, closing nearer the session high.
Fundamental analysis: Corn futures extended higher for a fourth straight session, though continued to face resistance at Wednesday’s high. However, gains held as soybeans strengthened and crude oil made an about-face from early morning lows as the session progressed. Weakness in the U.S. dollar also supplied a bit of optimism across commodities today, as did USDA’s weekly new-crop sales data. For the week ended July 18, net old-crop sales totaled 331,400 MT, down 24% from the previous week and 29% from the four-week average, though net sales for 2024-25 totaled 745,200 MT, topping analysts pre-report range of 100,000 to 600,000 MT. Exports during the week totaled 1.21 MMT, rising 10% from the previous week and 19% from the four-week average.
Meanwhile, weather conditions are evolving across the U.S., and while conditions through the next seven days are expected to be mostly favorable, a close monitoring of the forecast will be warranted for the western 25% of the Midwest, due to a possible expansion of extreme heat and dryness from the west, according to World Weather Inc. The forecaster notes concerns are low right now due to favorable soil moisture and the likely position of the high-pressure ridge, but temps and rainfall trends will need to be monitored. The western Corn Belt will likely be on the northeastern fringes of the heat dome from the ridge, and this may allow enough rain and thunderstorms to prevent crop stress from becoming a more serious issue, at least in the near future.
Technical analysis: December corn faced resistance at Wednesday’s high of $4.23 3/4, though the 20- and 10-day moving averages, currently trading at $4.12 and $4.14 1/2 served up support. Recent basing action could indicate a near-term bottom has formed in December futures, with bulls needing to secure a close above resistance at $4.26 1/2, while bears continue to eye a close below psychological support at $4.00, though interim support lies at Wednesday’s low of $4.14 1/2, then at $4.10.
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 15 1/2 cents to $10.79 1/2, though nearby August futures only climbed a nickel to $11.16. Each settled nearer session highs. August soymeal jumped $9 to $352.40, closing on session highs. August bean oil futures sunk 21 points to 45.81 cents.
Fundamental analysis: Soybean futures surged higher today on robust new-crop demand. USDA reported weekly export sales of 88,600 MT, which was below pre-report expectations. The story of the morning though was new-crop exports. USDA reported new-crop sales of 745,200 MT. The bulk of that was to unknown destinations and was announced last week via a daily export sales announcement. USDA reported another daily sale of 264,000 MT of soybeans for delivery to unknown destinations during the 2024-25 marketing year this morning. There is broad speculation that the recent spur of purchases done by “unknown destinations” is China, though there is of course no way to know for sure until it is declared or shipped. New-crop sales continue to run at the slowest pace in nearly two decades but strong purchases in recent weeks are encouraging traders of strong demand for the crop.
Forecasts call for mostly favorable conditions over the coming week though some concerns are arising about potential dryness and extreme heat in the western quarter of the Midwest, says World Weather Inc. Favorable soil moisture is currently in place and will likely be able to carry the crop through potential dryness, but there is potential for some crop stress.
Technical analysis: November soybean futures surged higher though struggled to overcome Tuesday’s high. Bears continue to hold the near-term technical edge, though their advantage has waned in recent days. Bulls are seeking to build upon strength above the 20-day moving average, currently at $10.78 3/4. Resistance stands at Tuesday’s high of $10.86 3/4 then the psychological $11.00 mark. Resurgent selling pressure finds support at the 10-day moving average at $10.66, which is reinforced by support at $10.52.
August soymeal futures showed remarkable strength today, scoring a more than two-week high. The 100-day moving average at $352.9 capped most gains today and will remain resistance, while further buying seeks to overcome stiff resistance at $359.0. Support lies at $348.0, the 40-day moving average, then $343.6.
August soyoil futures saw relative weakness and closed at the lowest mark in over three weeks. Neither bull nor bear owns the near-term advantage as prices continue to trade largely sideways. Resistance comes in at 45.92 cents, 46.41 cents, then 47.25 cents, which has capped most of the upside recently. Support comes in at 45.20 cents then the psychological 45.00 cent mark.
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 fell 8 1/2 cents to $5.62 1/2 and near the session low. December HRW wheat lost 5 3/4 cents to $5.78 and near mid-range. September spring wheat futures sunk 7 cents to $6.03 3/4.
Fundamental analysis: The wheat futures markets bulls were disappointed again today as wheat sold off despite gains in corn and soybean futures. Still, with wheat at present being the weak sister in the grain markets, any sustained wheat price gains will very likely need help from up-trending corn and soybean prices.
Weaker weekly U.S. wheat export sales today also limited buying interest. USDA this morning reported weekly U.S. wheat sales of 309,300 MT during the week ended July 18, down 47% from the previous week and down 46% from the four-week average. Net sales were at the low end of market expectations. Exports for the week totaled 271,500 MT, down 57% from the previous week.
Scouts on the second day of the Wheat Quality Council’s annual HRS tour found strong yield potential in north-central and northwestern North Dakota. World Weather Inc. today more extreme heat will occur in Montana and the western Dakotas today with some extremes of potentially 110 Fahrenheit and a little higher. Some locations in eastern Montana and the western Dakotas could reach or come very close to their all-time record maximum temperatures today. The extreme temperatures will cause more crop stress and may lead to lower spring wheat yields. Conditions in the eastern Northern Plains will not be as harsh, with cooler temperatures and greater rain, said the forecaster.
Technical analysis: Winter wheat futures bears have the solid overall near-term technical advantage. However, seven-week-old downtrends on the daily bar charts have at least temporarily stalled out. 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 the contract low of $5.50 1/4 and then at $5.35. 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 today’s low of $5.72 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 futures firmed 25 points to 68.90 cents, settling nearer session highs.
Fundamental analysis: Cotton futures saw modest profit-taking as prices continue to trend lower on the daily bar chart. Corrective gains in front-month crude oil futures helped spark buying in cotton today. Crude has faced substantial selling pressure in the last three weeks, which has fueled selling efforts in cotton. USDA reported net sales reductions of 74,300 bales this morning for 2023-24, a marketing year low. Sales are likely to remain abysmal ahead of the conclusion of the marketing year on July 31. It is not uncommon for hefty carryover sales in cotton as the bulk of current outstanding sales of 2,779,300 bales will be rolled over to new crop. USDA reported new crop sales of 290,800 bales with Mexico, Vietnam and Turkey leading purchases. China has begun making new crop purchases as well, which could spark some optimism in the cotton market.
Recent rains and mild weather in West Texas have been good for cotton, evidenced by the jump in condition ratings this week. Drier weather is expected in the coming ten days and temperatures will be more seasonable, resulting in quick crop development and a good environment for areas that have adequate moisture, notes World Weather Inc.
Technical analysis: December cotton futures rebounded though traded within Wednesday’s range. Bears continue to hold the near-term technical advantage in cotton futures. Resistance stems from the June 17 low of 70.00 cents, quickly backed by July 9 close at 70.55 cents. Further strength looks to overcome the 20-day moving average at 71.17 cents. Support lies at yesterday’s close of 68.65 cents then the contract low of 67.50 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.