Corn
Price action: December corn plunged 16 1/4 cents to $4.07 3/4, marking the lowest close since March 30, 2021.
Fundamental analysis: An early morning daily export flash and solid uptick in weekly inspections failed to lend support to a falling corn market today. Broad-based selling across soybeans and wheat futures deepened selling efforts as the session progressed, as the marketplace largely viewed rains from Hurricane Beryl as positive when combined with forecasts of little to no heat stress over the next ten days. However, World Weather Inc. reported flooding and windy conditions will likely occur through eastern Texas to southeastern Missouri and southern Illinois, but noted damage to agricultural areas is expected to be limited. Also weighing on prices were reports of rapidly advancing safrinha harvest efforts in Brazil. AgRural reported harvest was 63% complete as of last Thursday, more than double last year’s pace for the same date and the fastest since AgRural began tracking data in 2013.
Earlier today, USDA reported a daily sale of 135,636 MT to unknown destinations. Of the total 50,800 MT is for delivery during 2023-24 and 84,836 MT is for 2024-25. Moreover, weekly export inspection data was also released this morning, with net inspections totaling 1.024 MMT (40.3 million bu.) during the week ended July 4, up 192,710 MT from the previous week and near the upper end of pre-report estimates from 600,000 MT to 1.1 MMT.
Weekly crop conditions will be updated this afternoon, with analysts expecting the “good” to “excellent” rating to remain unchanged at 67%, according to a Reuters poll.
Technical analysis: December corn bears continued to prove their dominance, edging the contract to the lowest intraday level since January 2021 in an apparent downside breakout, despite heavily oversold conditions. Initial support will serve at $4.00, then at $3.95 1/2, while resistance will stand at $4.15 and $4.20 1/2 and again at the 10-day moving average of $4.27 3/4.
What to do: Get current with advised sales.
Hedgers: You should be 50% sold in the cash market on 2023-crop.
Cash-only marketers: You should be 50% sold 2023-crop.
Soybeans
Price action: November soybean futures plunged 30 1/4 cents to $10.99 1/2 and settled nearer session lows. August meal futures sunk $7.20 to $350.00 and closed on session lows. August bean oil closed 46 points lower at 49.09 cents.
Fundamental analysis: The soybean complex was not immune to the broad-based selling pressure seen across the commodity markets today as November beans gave up all of last week’s gain. Prices gapped lower on the overnight open and saw steady selling pressure through midday when prices stabilized and saw a modest bounce into the close. Crush margins surged in the selloff though, which could continue to drive additional demand to crush, though given current crush capacities, it will not be enough to offset the likely increase in production or make up for lackluster exports. China has still yet to make initial purchases for the 2024-25 marketing year, something that has not happened by this date for decades. USDA reported soybean export inspections of 273,321 MT (10.0 million bu.) during the week ended July 4, down 46,507 MT from the previous week and near the low-end of the pre-report range from 200,000 to 400,000 MT.
Crop development has moved along favorably across the Midwest as temperatures have been seasonable and rain has fallen across the Midwest giving a boost to soil moisture where needed, says World Weather Inc. Some heat could move into the Soy Belt over the coming week though current soil moisture should be enough to carry the crop through the period with minimal adverse effects.
USDA is set to release their weekly Crop Progress Report this afternoon. A Bloomberg poll estimated the soybean crop as rated 67% “good” to “excellent,” steady with a week ago but up from 51% last year. Analysts expectations ranged from 64% up to 69% “good” to “excellent.”
Technical analysis: November soybean futures fell under heavy selling pressure as prices scored a fresh for-the-move low. Bears continue to hold the near-term technical advantage. Initial resistance stems from $11.10 with backing from the 10-day moving average at $11.16 3/4. That is reinforced by the 20-day moving average at $11.29, which capped gains Friday. Bulls are seeking to hold initial support at $10.97, which is backed by today’s low of $10.94 1/4, then $10.90.
August soybean meal futures saw heavy selling pressure today though continue to trade relatively sideways, as neither bull nor bear holds the technical advantage. Bulls are seeking to overcome initial resistance at $351.10, which is backed by $356.40, then Friday’s high of $359.70. Support stems from $348.7, with stout backing from $345.00.
August soyoil futures saw profit-taking from last week’s strong gain, though bulls continue to maintain full control of the near-term technical advantage. Initial resistance stems from Friday’s close at 49.55 cents then the psychological 50.00 cent mark. Support lies at 48.12 cents, the 200-day moving average, then 47.00 cents.
What to do: Get current with advised sales.
Hedgers: You should be 65% 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 60% 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 19 cents to $5.94 1/2 and nearer the session low. December HRW wheat lost 20 1/4 cents to $5.95 3/4, nearer the session low and hit a more-than-three-month low. December spring wheat closed 14 1/2 cents lower at $6.36 1/2.
Fundamental analysis: The wheat futures markets today were caught in the downdraft of a broad sell-off in the grain markets and in most of the raw commodity sector. Commercial hedge pressure amid the progressing U.S. winter wheat harvest was also featured to start the trading week. Chart-based speculators were also on the sell sides in wheat markets today, amid still-bearish technicals.
USDA this morning reported U.S. wheat export inspections of 341,005 MT during the week ended July 4, up 5,770 MT from the previous week but near the low-end of the pre-report expectations.
World Weather Inc. today said U.S. winter wheat harvest weather “should improve in the central Plains this week and in the Midwest during the weekend and next week. Tropical Storm Beryl’s moisture will delay harvesting in the Midwest for a little while.” Canada’s wheat production is “looking very good, despite some hotter and drier weather in the west this week.” Warmth could prove problematic later in the month. Meantime, central and northern Europe rain may slow winter grain harvest progress and could restore worry over the quality of unharvested crops. Spring cereals in Russia and Ukraine may be at risk of lower yields due to building dry and warm weather, said the forecaster.
This afternoon’s weekly USDA crop progress reports are expected to show the U.S. winter wheat harvest at 66% complete as of Sunday, compared to 54% last week and 46% at this time last year. The spring wheat condition is expected to show 72% of the crop “good” to “excellent” as of Sunday, versus 72% last week and 47% at the same time last year.
Friday’s monthly USDA supply and demand report will be the data points of the week for the grain markets.
Technical analysis: Winter wheat futures bears have the solid overall near-term technical advantage. Prices are in five-week-old downtrends on the daily bar charts. Bear flag or pennant patterns have formed on the daily bar charts. SRW bulls’ next upside price objective is closing December prices above solid chart resistance at $6.40. The bears’ next downside objective is closing prices below solid technical support at the March low of $5.65 3/4. First resistance is seen at $6.00 and then at last week’s high of $6.15 1/4. First support is seen at the June low of $5.79 and then at $5.65 3/4. The HRW bulls’ next upside price objective is closing December prices above solid technical resistance at $6.25. The bears’ next downside objective is closing prices below solid technical support at the March low of $5.69 3/4. First resistance is seen at $6.00 and then at last week’s high of $6.03 3/4. First support is seen at today’s low of $5.90 3/4 and then at $5.80.
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 7 points to 71.05 cents, closing near the session low.
Fundamental analysis: Cotton futures remained subdued to begin the week as looming technical pressure continued to curb buying as did lacking support from outside markets. The marketplace is likely anticipating Fed Chairman, Jerome Powell’s speech to Congress on Tuesday and Wednesday, as well as Consumer Price Index (CPI) and Producer Price Index (PPI), due out Thursday and Friday, respectively.
Crop damage from Hurricane Beryl is expected to be nominal in South Texas and the Texas Coastal Bend, according to World Weather Inc, keeping a lid on the natural fiber. Meanwhile, the forecaster reports West Texas will get additional rainfall early this week, while crop conditions in the Delta and southeastern states are rated mostly good. Excessive heat in California and the southwestern desert region may be stressing crops in a significant manner with no relief expected this week.
USDA will update weekly condition ratings this afternoon. Last week, cotton was estimated to be 97% planted, while the “good” to “excellent” rating was pegged at 50%, down six percentage points from the previous week.
Technical analysis: December cotton faced resistance at 72.12 cents, which is backed by the 20-, 10- and 40-day moving averages of 72.65 cents, 73.12 cents and 74.15 cents. However, initial support at 70.34 cents, backed by the recent low of 70.00 cents continues to limit a move lower, likely indicating a near-term low has been forged.
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.