Corn
Price action: December corn futures closed up 3/4 cent at $4.08 1/2 and near mid-range.
Fundamental analysis: The corn futures market today saw tepid short covering after the December contract hit a more-than-three-year low on Monday. Gains in corn were limited by solidly lower soybean and meal futures prices today. However, firmer winter wheat futures prices today did keep corn sellers at bay.
Monday afternoon USDA rated 68% of the U.S. corn crop as “good” to “excellent” and 9% “poor” to “very poor.” The weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect), saw the corn crop rise 3.0 points to 375.3. Pro Farmer crop consultant Michael Cordonnier kept his U.S. corn production forecast at 14.77 billion bu.
World Weather Inc. today said in the Midwest favorable soil moisture in place today, with rain in the driest areas into Wednesday, and mostly mild temperatures through Friday, “will keep crop conditions mostly favorable during a drier weather pattern expected during next two weeks that will leave many western areas much drier in two weeks than today.” Some warming may occur July 19-23 “and by that time topsoil moisture should be much lower than today in many areas, leaving much of the region in need of greater rain late in the month to maintain high production potentials.”
Corn traders are awaiting Friday morning’s USDA monthly supply and demand report that is expected to show just slightly higher U.S. corn production than in the June report.
Technical analysis: The corn futures bears have the solid overall near-term technical advantage. The next upside price objective for the bulls is to close December prices above solid chart resistance at the July high of $4.26 1/2. The next downside target for the bears is closing prices below chart support at $4.00. First resistance is seen at today’s high of $4.12 3/4 and then at $4.18. First support is at this week’s low of $4.05 3/4 and then at $4.00.
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 soybeans fell 19 1/2 cents to $10.80, a three-year low close, while August soymeal fell $4.70 to $345.30, closing nearer the session low. August soyoil plunged 214 points to 46.95 cents.
Fundamental analysis: Soybean futures faced follow-through selling to a three-year low as profit-taking in soyoil hovered over the complex. Meanwhile, a slight improvement in USDA’s condition rating and a stronger U.S. dollar were also likely culprits of extended selling efforts across the soy complex. USDA rated the soybean crop as 68% “good” to “excellent,” up a point from last week, while the “poor” to “very poor” rating remained unchanged at 8%. On the Pro Farmer CCI, the crop improved 2.4 points to 365.4.
Soybeans continue to face export headwinds as top importer China has no confirmed new-crop sales on the books, despite a $1.50 selloff from the May 7 high. The marketplace will continue to monitor export sales as well as the dollar.
Notable rains from remnants of Hurricane Beryl are seemingly keeping the marketplace at east, despite forecasts of heavy rains in several areas. The rains will improve soil moisture in the driest areas into Wednesday, and mostly mild temps through Friday will keep crop conditions mostly favorable during a drier weather pattern expected during the next two weeks, which will leave many western areas much drier two weeks that today, according to World Weather Inc.
Technical analysis: November soybeans have lost more than 50 cents over the past two sessions as the 10-, 20- 40- and 100-day moving averages, currently trading at $11.07 3/4, $11.23 3/4 and $11.59 continue to limit the appetite for buying. However, a push into near-term oversold conditions and a multi-year low could spur some corrective buying. An extension lower, though, will face support at today’s low of $10.77 1/2, then at $10.75 1/4 and $10.56 1/2.
August meal futures ended the session below support at $364.90, but managed to hold a close above $343.90, which will now serve as initial support. From there, support will serve at $338.70 and the April 3 low of $330.40. Conversely, initial resistance will serve at today’s failed support level, then at the 10- and 20-day moving averages of $349.50 and $351.10 and again at $355.10.
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 futures closed a penny higher to $5.95 1/2 though settled nearer session lows. December HRW futures rose 1/2 cent to $5.96 1/4, also nearer session lows. December spring wheat fell 1/4 cent to $6.36 1/4.
Fundamental analysis: Wheat futures saw modest corrective buying following the big selloff on Monday. Prices still closed well off intraday highs and appear to be consolidating in a bear flag on the daily bar chart. Harvest pressure is likely to continue to weigh heavily on prices as expectations for a bumper crop persist along with the speedy harvest. In yesterday’s Crop Progress Report, USDA reported that the winter wheat harvest is 63% complete as of July 7, ahead of the five-year average of 52%. USDA rated the spring wheat crop as 75% “good” to “excellent,” up three points from a week ago. On the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect), the spring wheat crop rose 1.2 points to 383.5.
Conditions remain quite favorable for continued rapid harvest of the winter wheat crop. Net drying will occur in spring wheat acres over the next week, says World Weather Inc. Montana is in need of additional moisture while rain in Minnesota and northeastern North Dakota will keep soil moisture plentiful, the forecaster says.
Technical analysis: December SRW futures saw modest corrective buying though gains faded into the close. Bears continue to hold the near-term technical advantage as prices consolidate in a bear flag on the daily bar chart. Bulls are seeking to overcome initial resistance at $6.00 which is quickly backed by the 10-day moving average at $6.04 1/4, while further strength targets resistance at $6.15. Bulls are seeking to hold support at yesterday’s low of $5.90, which is backed by $5.82 3/4.
December HRW futures posted modest gains but settled near recent lows. Bulls have struggled to overcome the 10-day moving average in recent rally attempts, which lies at $6.08 1/2. Strength above which eyes resistance at $6.26 1/2. The downside has bene largely capped by support at $5.95, while additional support lies at yesterday’s low of $5.90 3/4.
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 fell 50 points to 70.55 cents, the lowest close since October 2021.
Fundamental analysis: Cotton futures traded in narrow, consolidative trade, with sellers hesitant to extend below technical support, while U.S. dollar strength and crude weakness curbed buying. Meanwhile, traders were anticipating comments from Fed Chair Jerome Powell as well as the latest Consumer Price Index and Producer Price Index readings, due out Thursday and Friday, respectively.
USDA trimmed the crop’s “good” to “excellent” rating an additional 5 points to 45%, while the “poor” to “very poor” rating rose six points to 23%. The cotton crop in Texas was rated 35% in the top two categories and 32% in the bottom two.
World Weather Inc. reports western Texas and southwestern Oklahoma will see a warmer and drier pattern through the next two weeks and as moisture from recent rain is lost to evaporation, stress to dryland cotton is likely to increase. The Coastal Bend and south Texas will see isolated showers most days through Saturday that will slow drying rates and keep conditions for cotton mostly favorable when drier weather occurs Sunday through July 23. The Blacklands will we infrequent and light showers through the next two weeks and stress to cotton should steadily increase and eventually expand into areas that received significant rain during the past weekend.
Technical analysis: December cotton futures ended near the session low and at recent support of 70.55 cents. Additional support lies at 70.06 cents, which is backed by the June 17 low of 70.00 cents. Conversely, initial resistance will continue to serve at 71.26 cents, then at 71.75 cents and the 10- and 20-day moving averages, currently trading at 72.53 and 72.82 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.