Corn
Price action: December corn rallied 7 3/4 cents to $4.26 1/4, the highest close since Oct. 3.
Fundamental analysis: A surging U.S. dollar to a four-month high did little to deter corn bulls at midweek, with December futures impressively shaking off overnight weakness. A knee-jerk reaction overnight, amid increasing odds of a changing administration, included widespread selling across commodities, though corrective buying quickly ensued shortly after this morning’s open. With the presidential election now behind us, the marketplace is focusing on this week’s FOMC Meeting as well as Friday’s production, supply and demand updates from USDA. Traders are expecting declines in production and ending stocks, while the recent surge in global end-sure demand is expected to prompt a higher export forecast.
Meanwhile, some global supply uncertainties loom as Russia’s corn harvest progressed to 82% complete as of Nov. 5, with yields reportedly below the five-year average. The current average yield is down 27% from this time a year ago and the lowest since 2018. However, improving weather conditions in Brazil could ease some supply concerns as the country’s first-crop plantings gather steam, though the growing season will last into February.
Earlier today, the Energy Information Administration reported weekly ethanol production averaged 1.105 million barrels per day (bpd) during the week ended Nov. 1, up 23,000 bpd (2.1%) from the previous week and 63,000 bpd (6.0%) above last year. Ethanol stocks rose 249,000 barrels to 22.020 million barrels.
USDA will detail weekly export sales early Thursday morning, with analysts expecting net sales to range from 1.7 MMT to 2.5 MMT during the week ended Oct. 31. Last week, net sales of 2.34 MMT were reported for the previous week.
Technical analysis: December corn futures ended the session above the resistance at $4.20 1/2, $4.22 1/4, and $4.24 3/4, marking a for the move high, with next resistance serving at the Oct. 2 high of $4.34 1/4 and then at the 200-day moving average of $4.42 1/2. Support will now serve at today’s failed resistance levels, which are backed by the 10-, 40-, 20- and 100-day moving averages.
What to do: Get current with advised sales.
Hedgers: You should be 20% sold in the cash market on 2024-crop.
Cash-only marketers: You should be 20% sold on 2024-crop.
Soybeans
Price action: January soybeans rose 2 cents to $10.03 3/4, near the session high. December soybean meal fell $1.10 to $298.40, nearer the daily high and hit a contract low early on. December soybean oil rose 135 points to 46.34 cents, nearer the session high and hit a four-month high.
Fundamental analysis: Soybean and meal futures saw limited buying interest today due in part to worries that a Trump presidency would see more trade tariffs against China, a major U.S. soybean buyer. A strong rally in the U.S. dollar index today was a significantly bearish “outside-market” element for soybeans and meal. Soybean oil saw solid price gains today as spreaders were once again buying soybean oil and selling soybean meal.
World Weather Inc. today said South America soybean weather “has been and will likely continue to be mostly good over the next two weeks. Recent rain in southern Argentina was ideal for improving topsoil moisture, though more is needed in Santa Fe and immediate neighboring areas. Parts of center-west Brazil still need greater rain, but a large portion of the region is getting enough timely rain to support planting and emergence.” Greater rain is still needed in the drier areas, said the forecaster.
Thursday morning’s weekly USDA export sales report is expected to show U.S. soybean sales of 1.2 million to 2.2 million MT in the 2024-25 marketing year, and sales of zero to 100,000 MT in the 2025-26 marketing year. Traders are also awaiting Friday morning’s monthly USDA supply and demand report, which is expected to show just a very slight decline in U.S. soybean production from last month’s estimate from the agency.
Technical analysis: The soybean bears have the overall near-term technical advantage. However, a price downtrend on the daily bar chart has stalled out and there are stiff technical support layers that lie just below the market. The next near-term upside technical objective for the soybean bulls is closing January prices above solid resistance at $10.50. The next downside price objective for the bears is closing prices below solid technical support at the contract low of $9.73 1/2. First resistance is seen at last week’s high of $10.08 3/4 and then at $10.18. First support is seen at the October low of $9.77 1/4 and then at $9.73 1/2.
The next upside price objective for the soybean meal bulls is to produce a close in December futures above solid technical resistance at $315.00. The next downside price objective for the bears is closing prices below solid technical support at $285.00. First resistance comes in at this week’s high of $302.50 and then at $308.00. First support is seen at today’s contract low of $293.10 and then at $290.00.
Soybean oil bulls have the overall near-term technical advantage. Prices are in a three-month-old uptrend on the daily bar chart. The next upside price objective for the bean oil bulls is closing December prices above solid technical resistance at the July high of 48.89 cents. Bean oil bears’ next downside technical price objective is closing prices below solid technical support at 42.50 cents. First resistance is seen at today’s high of 46.90 cents and then at 47.50 cents. First support is seen at 45.00 cents and then at today’s low of 44.34 cents.
What to do: Get current with advised sales.
Hedgers: You should be 20% sold in the cash market on 2024-crop.
Cash-only marketers: You should be 20% sold on 2024-crop.
Wheat
Price action: December SRW wheat rose 3/4 cent to $5.73 1/4, while December HRW fell 2 3/4 cents to $5.74. Both marked high-range closes. December HRS futures fell a nickel to $6.05 1/2.
Fundamental analysis: While wheat futures were able to rally from overnight selling, the response was a bit more muted in comparison to corn and soybean futures. A rocketing U.S. dollar to a four-month high dampened buyer interest, as did lingering technical resistance and expectations of greater rains in U.S. HRW wheat areas over the next several days. Though global supply concerns also remain amid lackluster growing conditions in many key production areas.
World Weather Inc. reports rains will saturate the topsoil across Colorado, Kansas and parts of Nebraska, though the additional moisture will not be welcome in Oklahoma, but no serious crop damage is expected in the region. Meanwhile, recent rain and snow in Russia’s Southern Region, eastern Ukraine and Kazakhstan was welcome, though much more is needed along with warmer temps to induce better establishment. South and Western Australia are expected to continue to miss significant rain, though changes in production potential is low. However, Russia and neighboring areas are unlikely to see much change in establishment and winterkill will remain a concern, despite a few more showers.
USDA will detail weekly export sales for the week ended Oct. 31, with analysts expecting net sales to range from 250,000 to 550,000 MT. Last week net sales of 411,424 MT were reported for the previous week.
Technical analysis: December SRW wheat futures continued to battle resistance at the 100- and 20-day moving averages of $5.74 3/4 and $5.77 1/2, though support at $5.67 continued to curb a downward move. A move above initial resistance will face an additional battle at $5.80, then at the 40-day, currently trading at $5.81 3/4 and again at $5.85 1/2. Conversely, an extension below initial support will find further support at $5.61 1/2 and $5.57 3/4.
What to do: Get current with advised sales.
Hedgers: You should be 70% sold in the cash market for 2024 crop. You should have 20% forward sold for harvest delivery in 2025.
Cash-only marketers: You should be 70% sold for the 2024 crop. You should also be 20% sold for harvest delivery for expected 2025-crop.
Cotton
Price action: December cotton fell 26 points to 69.69 cents, nearer the daily high and hit a seven-week low early on.
Fundamental analysis: The cotton market saw mild selling pressure today following a Trump victory for president, which may see the new administration enacting new trade tariffs against China. A strong rally in the U.S. dollar index today also limited buying interest in cotton. The positive for the cotton market today was that U.S. stock indexes rallied strongly, including the S&P 500 hitting a new record high. That’s a positive for consumer demand for apparel heading into the holidays.
World Weather Inc. today said rain in West Texas during the weekend “disrupted the harvest of cotton and may have been great enough in some areas to induce some discoloring of the fiber.” Additional rain is possible Thursday into Saturday morning to return more concern. “The additional moisture is not welcome, although it probably will not cause nearly as much concern as that of the weekend,” said the forecaster. Some parts of the Blacklands will also be impacted by the additional rain. Meantime, harvesting in the Delta is winding down, but it too may have been hindered by recent rain and that which comes over the next week. The U.S. southeastern states are expecting rain later today into Friday from an insurgence of tropical moisture from northwestern Florida into Georgia and southwestern South Carolina that will interfere with harvesting and raise some fiber quality concerns, said World Weather.
Traders will closely examine Thursday’s weekly USDA export sales report, especially for U.S. cotton demand coming from China. Friday’s monthly USDA supply and demand report is the next data point on deck for the cotton market. Traders expect the agency to show just very slightly less U.S. cotton production than forecast in the October report.
Technical analysis: The cotton futures bears have the overall near-term technical advantage. Prices are in a six-week-old downtrend on the daily bar chart. The next upside price objective for the cotton bulls is to produce a close in December futures above technical resistance at 73.00 cents. The next downside price objective for the cotton bears is to close prices below solid technical support at the contract low of 66.26 cents. First resistance is seen at this week’s high of 70.99 cents at 72.00 cents. First support is seen at today’s low of 68.95 cents and then at 68.00 cents.
What to do: Get current with advised sales and hedges.
Hedgers: You have 15% of 2024-crop production hedged in December futures at 69.84 cents. You should be 35% sold in the cash market on 2024-crop.
Cash-only marketers: You should be 35% sold on 2024-crop.