Corn
Price action: December corn rose 2 1/4 cents to $4.12 1/4, ending near the session high.
Fundamental analysis: Corn futures gathered mild strength as the session progressed amid easing pressure across the grain and soy complexes. Outside market pressure hovered over commodities to begin the week, as crude oil faced extended selling, while the U.S. dollar edged higher. Meanwhile, USDA’s weekly export inspection data lent some optimism, with inspections totaling 1.06 MMT during the week ended July 25, up 67,665 MT from the previous week and near the upper end of the pre-report range of 700,000 MT to 1.06 MMT.
U.S. weather continues to prove mostly favorable as later planted corn progresses through pollination and earlier crops begin the grain filling process. World Weather Inc. reports frequently varying weather in the Midwest Corn and Soybean Belt will generate timely rain for most areas over the next ten days, with no excessive heat in key production areas. However, some net drying is possible in parts of the southwestern Corn Belt and in the Delta.
USDA will update crop conditions this afternoon, with analysts expecting a one-point decline to 66% in the crop’s “good” to “excellent” rating, according to a Reuters poll.
Technical analysis: December corn continued to face support at $4.05 1/2, which is backed by the recent low of $4.03 and psychological support at $4.00. While futures rebounded from the session low today and ultimately ended just short of the intraday high, resistance continued to stand at the 10- and 20-day moving averages of $4.12 1/4 and $4.13. Bears will need to forge a close below the recent low to gain momentum, while bulls will face additional resistance at the 40- and 100-day moving averages, currently trading at $4.35 1/2 and $4.59 1/2 given an extension above the 10- and 20-day moving averages.
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 sunk 9 cents to $10.39 1/2 though settled nearer session highs. September meal futures rose 70 cents to $335.0 and near session highs. September bean oil futures fell 43 points to 42.58 cents.
Fundamental analysis: Soybeans led the ag markets lower today as soyoil said staunch selling pressure as well, while meal saw relative strength. Old-crop futures led weakness in soybeans despite inspections coming in strong this morning. USDA reported soybean inspections of 403,268 MT, up 65,013 MT from last week and above pre-report expectations. Inspections continue to run above the necessary pace to reach the current USDA export forecast with a little over five weeks until the end of the marketing year.
Beneficial rains fell over much of Iowa, Illinois and Indiana into portions of Missouri and Minnesota over the weekend, which continues to support favorable crop development across the region. Forecasts call for additional rain across the Midwest this week and no excessive heat is forecast in key production areas, says World Weather Inc. Some net drying is possible in parts of the southwestern Midwest and in the Delta, but conditions are forecast to remain favorable overall.
USDA is poised to release their weekly Crop Progress Report after the close. A poll done by Reuters estimates soybean crop conditions at 67% “good” to “excellent,” which would be down one percentage point from a week ago.
Technical analysis: November soybean futures saw sharp selling pressure though rebounded into the close. Bears continue to hold the near-term technical advantage. Bulls managed to close prices above the previous for-the-move low close at $10.36, marking that as key support. Further selling targets the psychological $10.25 mark then today’s low of $10.18. Bulls look to close prices above resistance at $10.43 1/4, which is reinforced by the 10-day moving average at $10.58 1/2.
September meal futures saw relative strength today and managed to close on session highs. Bears still hold the near-term technical edge. Resistance lies at $335.1, the 40-day moving average, which capped gains last week. Further strength finds resistance at $340.0. Support comes in at $328.2, the 10-day moving average, then $322.5.
September bean oil futures marked a fresh contract low as bears continue to hold the near-term technical advantage. Selling today took out stiff prior support at 43.00 cents, which will stand as stiff resistance. Further strength finds resistance at 44.40 cents. Support lies at 42.20 cents then today’s contract low of 41.44 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 6 3/4 cents to $5.55 1/4 and near the session high. December HRW wheat gained 7 1/4 cents to $5.69 1/4 and nearer the session high. September spring wheat futures firmed 3 cents to $5.94 1/2.
Fundamental analysis: December HRW and SRW wheat futures markets saw tepid short covering today after prices hit new contract lows overnight. Modest gains in corn futures to end the day, after solid overnight losses, helped out the wheat bulls. However, losses in the soybean futures market today did limit buying interest in wheat, as did a firmer U.S. dollar index and lower crude oil prices.
The weekly USDA export inspections report showed better U.S. wheat inspections, at 431,233 MT in the latest reporting week, compared to 252,610 MT reported last week.
World Weather Inc. today said good wheat harvest weather is expected in the central U.S, and rain in the Midwest “should be infrequent enough to protect its harvest, although drier weather will be desirable.” There is concern about Canada and the northwestern U.S. Plains wheat crops because of dryness. There is also some concern about spring wheat in Russia and Ukraine, although recent cool weather and the prospects for some showers have reduced some of the concern, said the forecaster.
The weekly USDA crop progress reports this afternoon are expected to show U.S. winter wheat harvested at 83% complete as of Sunday, compared to 76% last week. Spring wheat in “good” to “excellent” conditions is expected at 75% for both, versus 77% last week.
Technical analysis: Winter wheat futures bears have the solid overall near-term technical advantage. Two-month-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 $5.81. The bears’ next downside objective is closing prices below solid technical support at $5.00. First resistance is seen at last Friday’s high of $5.65 3/4 and then at $5.80. First support is seen at today’s contract low of $5.39 1/2 and then at $5.25. The HRW bulls’ next upside price objective is closing December prices above solid technical resistance at $6.00. The bears’ next downside objective is closing prices below solid technical support at $5.25. First resistance is seen at last Friday’s high of $5.82 and then at $5.95 1/2. First support is seen at contract today’s low of $5.57 1/4 and then at $5.50.
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 rose 122 points to 69.21 cents, closing nearer the session high.
Fundamental analysis: Cotton futures recovered Friday’s losses despite lacking outside market support. Traders are likely anticipating this week’s flood of data, including the FOMC meeting, which begins Tuesday and ends Wednesday, along with the Job Openings and Labor Turnover (JOLTS) Report Tuesday and the monthly Jobs Report on Friday.
USDA will update condition ratings as of Sunday following the close. Last week, USDA reported the crop was 53% “good” to “excellent,” while the “poor” to “very poor” rating stood at 18%. For this week, World Weather Inc. reports today’s weather hasn’t changed much from that of Friday—southeastern states are a little too wet and cloudy, which will continue for a while. Meanwhile, the Delta is expected to dry down beneficially, and a good mix of rain and sunshine is expected for most of the Texas crop areas. Less heat in California will reduce some of the plant stress that has been prevailing for weeks, although bolls sizes are still destined to be a little smaller than usual due to the heat.
Technical analysis: December cotton ended the session below resistance of 68.79 cents, which will now serve as initial support. Initial resistance will now serve at 69.58 cents, and is backed by the 10-, 20- and 40-day moving averages of 70.09 cents, 70.86 cents and 71.98 cents. Conversely, additional support will serve at last week’s low of 67.50 cents, then at 66.82 cents and again at 66.03 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.