Corn
Price action: December corn futures plunged 10 3/4 cents to $4.10, though still eked out a 9 1/4 cent gain on the week.
5-day outlook: Corn futures gave up most of this week’s gain, falling back below notable support and confirming bears’ technical grasp. Bulls challenged significant resistance each day from Tuesday onward this week, though sellers reemerged in the latter half of the sessions, driving prices from intraday highs. The overnight session and this morning both saw little buying interest, contrary to every other day this week. Bulls will need to hold support at $4.04 and the psychological $4.00 mark early next week. Followthrough selling to the latter mark is likely given today’s weakness, though the $4.00 has acted as a key support and resistance level on the long-term chart. If bulls can maintain that support next week, it is likely that it will continue to support prices into the August Supply and Demand reports released from USDA on August 12.
30-day outlook: The coming month will provide a lot of insight to the supply side of the new-crop balance sheet. USDA will use FSA data to update planted acres in the August Crop Production and WASDE reports. That will give insight into how many of the 3.356 unplanted acres in the June Acreage Report ended up being planted. USDA is likely to adjust their harvested percentage as well, given significant damage to acres in the upper Corn Belt from flooding earlier this summer. Meanwhile, strong crop conditions could warrant an adjustment to yield as well. Our studies indicate that strong crop conditions this late in the summer typically are followed by strong yields, with this year’s conditions indicating a record yield by a wide margin. The combination of a likely decrease in harvested acres has us projecting another 150 million bushels on top of USDA’s July estimate of 15.100 billion bushels. Late season weather problems or greater negative effects from the wet growing season could hinder production prospects, but given the current data we have, record supplies look likely.
90-day outlook: Once the supply outlook is better hashed out in the coming months, focus will return to demand and the continued expansion of the balance sheet. USDA has been quick to adjust use higher along with anticipated higher supply for the 2024-24 marketing year. Export sales for new-crop have been rather unremarkable so far but are in line with a year ago. Lower prices have drawn additional demand for feed and ethanol use has been strong in recent months, helped by lower prices and strong demand for ethanol. USDA is penciling in record corn use for new-crop and we are even more optimistic. Still the expanding balance sheet due to a fruitful growing season and record supplies is likely to continue to weigh heavily on prices over the coming quarter.
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 plunged 31 cents to $10.48 1/2 but managed to gain 12 1/2 cents on the week. December soymeal closed $4.50 lower but marked a week-over-week gain of $17.20. September soyoil fell 218 points to 43.01 cents and closed down 264 points on the week, marking the third straight weekly decline.
5-day outlook: Notable selling was featured in the soy complex to end the week, as heavy pressure in soyoil and corn each weighed on soybeans throughout the session. However, losses in soymeal were limited by comparison, amid likely spreading, curbing downside momentum. Meanwhile, weather concerns in the western Corn Belt have eased as both the European and GFS models and their ensembles are in agreement in suggesting the ridge, which has induced rising temps and dryness, will move back to the west after a brief period of hotter weather during mid-week next week. Traders will continue to closely monitor the weather pattern into next week and continue to take direction from corn and soy derivatives.
30-day outlook: In the coming month, traders will not only tune in for USDA’s August supply and demand update, but also for FSA’s acreage data, and the annual Pro Farmer Crop Tour. Each will provide greater detail to the marketplace for a more accurate estimation of U.S. production potentials. However, weather throughout the month of August will play an especially crucial role as the crop progresses through pod-setting.
90-day outlook: U.S. soybean exports will continue to gather trade interest long-term as the new-marketing-year approaches. Top importer, China, has been slow to purchase new-crop soybeans, with purchases well behind average. USDA released weekly export sales data for the week ended July 18 on Thursday, which showed new-crop sales of 829,700 MT, most of which were for unknown destinations. Traders will continue to closely eye purchases from China as well as the U.S. dollar, which will largely determine buying interest from importing countries.
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 futures fell 14 cents to $5.48 1/2, near the session low and closed at a contract low close. For the week, December SRW fell 19 1/2 cents. December HRW wheat futures dropped 16 cents to $5.62, near the session low and closed at a contract low close. For the week, December HRW lost 24 3/4 cents. December spring wheat futures slid 14 1/2 cents to $6.07 1/2 and closed down 22 cents on the week.
5-day outlook: The new contract lows and technically bearish weekly low closes today in the winter wheat futures markets set the stage for follow-through, chart-based selling pressure from the speculators early next week. Commercial hedging pressure as the U.S. winter wheat harvest progresses is likely to continue next week, to keep a lid on prices. However, the winter wheat harvest will be winding down in the next few weeks. Spring wheat futures may see selling pressure next week after scouts on the annual Wheat Quality Council HRS tour this week found an average yield of 54.5 bu. per acre. That’s the highest yield since tour records began in 1992.
30-day outlook: Weather conditions in major global wheat-producing regions will remain in focus in the coming weeks. World Weather Inc. today said concern remains for late-season spring wheat in Canada’s Prairies, amid dry and warm weather that depleting soil moisture. Spring wheat in Russia and Ukraine does not look quite as threatened by heat and dryness as it once was, said the forecaster. Too much rain in the eastern Russia New Lands may be raising the potential for wet weather disease and drying is going to be needed along with some warmer temperatures. Crops in Europe are also some better conditions recently. Argentina will need greater rain in the early spring or late winter to induce better root and tiller development, said World Weather.
90-day outlook: With corn and soybeans still in their growing seasons, including soybeans just entering the critical part of their growing season, wheat traders in the next couple months will likely be looking more to corn and soybean futures markets for daily price direction, just like they did today. For winter wheat futures to exit their present bear markets, U.S. wheat export sales numbers need to improve.
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 91 points to 67.99 cents, and for the week lost 271 points.
5-day outlook: Cotton futures extended recent selling pressure, forging a more-than-two-year-low close. Strength in equities and mild weakness in the U.S. dollar were largely offset by extended selling in crude oil futures amid looming demand concerns. However, despite today’s multi-year low-close, selling was limited by support at this week’s low of 67.50 cents. Near-term oversold conditions could spur some corrective buying next week, though technical resistance will likely continue to curb the natural fiber’s upside potential.
30-day outlook: Recent weather has proven mostly positive for the U.S. cotton crop, with West Texas having seen rains and mild weather. However, World Weather Inc. reports drier weather is now expected for much of the next ten days and temps will be more seasonable, resulting in quick crop development rates and a generally better environment for cotton development in areas that have sufficient soil moisture or are irrigated. Some hot weather may evolve in another week, according to the forecaster. Meanwhile, rain in South Texas and the Texas Coastal Bend this week has been and will continue to delay harvesting, with the wetter bias likely impacting fiber quality in several areas. Next week’s harvest progress should advance better due to drier weather. The Blacklands will experience a few showers and warm weather into the weekend before there is a more definitive period of dry and warm biased conditions next week and into the following weekend. The Delta and southeastern states will favor a wet bias, which will prevail through the weekend, though the Delta will trend drier for a bit next week, according to the forecaster.
90-day outlook: As the marketing year winds down, old-crop cotton sales will likely continue to wane. USDA reported weekly net reductions of upland cotton at 74,200 RB for the week ended July 18 in its weekly Export Sales Report on Thursday, while net new crop sales totaled 285,900 RB. However, traders will continue to closely monitor China’s economy as well as the U.S. dollar, which will each play a role in U.S. cotton exports.
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.