Corn
Price action: December corn futures plunged 13 cents to $4.20 3/4, losing 32 1/2 cents on the week.
5-day outlook: Corn futures continue to undergo heavy selling pressure as a bearish cocktail of data released from USDA kept prices under pressure. USDA’s website crashed at 11 a.m. CT and reports were seemingly delayed. The Grain Stocks Report was not available on the website for quite some time after the report was published. When numbers were eventually released, prices quickly underwent selling pressure. Stocks came in above expectations of 4.874 billion bushels at 4.993 billion bushels. Feed and residual use has underperformed historically by a significant margin. Feed and residual use remaining quite low despite the low prices seen in the first half of the year is a concern of flagging demand. While ethanol and exports continue to outperform, they have failed to pick up the slack for poor residual demand—a category that historically overperforms when prices are low. Prices marked a fresh for-the-move low and December futures traded a near-three year low. If December futures do not attempt to rally in the coming week, it is unlikely a rally will surface the remainder of the summer according to our analysis, which was noted in this week’s Pro Farmer Newsletter.
30-day outlook: Weather is likely to play a significant role in price action over the coming month. Temperatures are turning cooler after being warmer that average across the Corn Belt the last couple of weeks. Forecasts call for rains and mild to seasonal temps across the Corn Belt in the next couple of weeks. Dry southern and eastern areas of the region will see an improvement in soil moisture as early pollination begins, while northern areas will remain quite saturated. The western Corn Belt continues to receive largely favorable weather which is likely to maintain high yield potential. A close watch will be kept on the middle of the month as early indications suggest a drier weather pattern should evolve.
90-day outlook: USDA estimated corn plantings at 91.475 million acres, up 1.439 million acres from March intentions and 1.122 million acres more than analysts’ average and topping the highest estimate. USDA estimated harvested acres at 83.438 million acres (91.2% of plantings), down 3.075 million acres from last year. It is important to note that recent flooding had no impact on this report, as flooding occurred after surveying was already finished. Old-crop use running below expectations and acres coming in higher does not bode well for new crop corn prices. Barring any significant weather issues in the coming month, the expanding balance sheet and favorable crop outlook is likely to continue to weigh heavily on corn prices over the course of the next three months. Harvest pressure will begin to weigh on prices in the latter half of that period as well. Producers continue to hold a large amount of old-crop stocks as well, which is likely going to limit any rallies in the interim.
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 3/4 cent to $11.04 and lost 16 cents on the week. August soymeal fell $2.10 to $346.00, marking a $2.70 week-over-week loss. August soyoil rose 34 points to 44.07 cents and marked a 13-point loss on the week.
5-day outlook: Soybean gains faded as the session progressed in the wake of mostly neutral acreage and June 1 stocks data from USDA. Higher-than-expected quarterly stocks of 970 million bu. largely negated lower-than-expected acres of 86.1 million, which were also down 410,000 acres from March intentions. Meanwhile, harvested acres were estimated at 85.261 million acres, up 2.905 million acres from year-ago. However, in a special note, USDA reported based on their survey conducted from May 30 to June 16, 12.8 million acres of soybeans, or nearly 15%, were left to be planted. Traders will continue to process today’s data into next week, which includes the Fourth of July holiday next Thursday. Look for possible short-covering, though the midweek holiday could keep result in sideways prices action as technical hurdles continue to pressure prices.
30-day outlook: With USDA’s data out of the way, the marketplace will turn its attention back toward weather as the growing season progresses. Flood waters in the upper Midwest are receding, according to World Weather Inc., though more rain is expected. Meanwhile, the forecaster indicates early indications suggest a drier weather pattern will evolve around July 6-12. With earlier soybean plantings, late July weather will likely become increasingly important as a portion of the crop enters its most important reproduction phase.
90-day outlook: Lackluster export business has certainly cast a shadow over soybeans throughout the marketing-year, as higher prices and an elevated U.S. dollar, amid persisting inflation, have hamstrung the oilseed’s competitiveness on the global market. Moreover, a recent retreat in the Brazilian Real certainly exacerbates the export issue. Look for traders to continue to monitor global economic data and the Federal Reserve’s inflation battle, which will drive the direction of the dollar, in order to gauge future export business for soybeans and commodities alike.
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 futures fell 4 1/2 cents to $5.97 and for the week fell 2 3/4 cents. December HRW wheat lost 8 1/4 cents to $6.03 1/4 and for the week were unchanged from last Friday’s close. September spring wheat futures fell a nickel to $6.13 and lost 5 cents on the week.
5-day outlook: Today was one of the biggest USDA report days of the year for the grains. USDA lowered all U.S. wheat plantings, though estimated harvested acreage actually increased. The bulk of the change came from winter wheat, which saw a 330,000 decrease in planted acreage, but a 610,000 increase in estimated harvested acreage. In terms of spring wheat, durum plantings are seen slightly higher than intentions, while other spring wheat acres fell slightly from March prospective plantings. Spring wheat crops are still estimated to have historically normal abandonment.
June 1 U.S. wheat stocks in all positions came in 18 million bu. above the average pre-report trade estimate and are up 23.2% from June 1 last year.
The big sell-off in the corn futures market today, in which prices hit new lows for the year, will likely limit buying interest in wheat next week, especially if the corn futures market continues to erode.
30-day outlook: Commercial hedge pressure in the winter wheat markets will likely continue to depress futures prices in the coming weeks. World Weather Inc. today said that in U.S. HRW country conditions in the next seven days will continue to be favorable in a majority of the region. However, there will be some pockets that receive too much rain, leading to winter wheat harvest delays.
90-day outlook: U.S. wheat export sales have improved a bit recently. USDA Thursday reported U.S. wheat export sales of 667,200 MT for the week ended June 20, exceeding pre-report expectations for the second straight week. Wheat traders will continue to monitor the value of the U.S. dollar on the foreign exchange market. The U.S. dollar index today scored a two-month high. If the greenback continues to appreciate, that could be a drag on continued improvement in U.S. wheat sales abroad.
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 189 points to 72.69 cents but managed to post a 48-point gain on the week.
5-day outlook: Recent cotton gains were negated by USDA’s acreage data, which showed a much larger number than the marketplace was expecting. USDA reported cotton acres of 11.67 million, up from 10.23 million from March intentions and 840,000 more than traders were expecting. Moreover, cotton seedings jumped 1.44 million acres from year-ago. Look for traders to continue to mull over today’s planting data, though weather will quickly return to focus as the growing season progresses.
30-day outlook: World Weather Inc. reports cotton in South Texas and the Delta has been improving, though continues to be stressed in portions of the southeast. The forecaster notes some timely rain is expected in the Delta and southeastern states in the coming week, although it will be lighter than usual, making it difficult for a significant boost in soil moisture to take place. Net drying will be quick to resume. Meanwhile, rain in West Texas is expected to be quite restricted for a while and temps will be warm to hot.
90-day outlook: U.S. cotton sales continue to fade as U.S. dollar strength curbs the natural fiber’s competition in the global marketplace. Meanwhile, cotton harvest in South America is also likely curbing interest in U.S. supplies. Traders will continue to closely monitor cotton exports, which will ultimately drive prices into the marketing year.
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.