Corn
Price action: December corn fell 2 1/2 cents to $4.18 1/2 and marked the lowest close since Sept. 27.
Fundamental analysis: Corn futures faced modest selling throughout the session as technical resistance curbed buying interest despite strength in wheat and crude oil. Meanwhile, demand continues to prove solid, evidenced by USDA’s weekly export sales data early this morning. During the week ended Oct. 3, net sales totaled 1.222 MMT, which were within the pre-report range of estimates from 900,000 MT to 1.7 MMT, while exports during the week totaled 1.059 MMT.
Trade will likely remain subdued into USDA’s October Crop Reports, due out Friday at 11 a.m. CT. The government will provide a fresh look into U.S. production, with analysts expecting 15.155 billion bu. on average using a 183.4 bu. yield, which, if realized, would be a decline from September. Analysts also expect ending stocks of 1.962 billion bu., down from 2.057 billion bu. last month, while world ending stocks are expected to fall to 306.8 MMT, down from 308.4 in September.
Hedge pressure could continue to curb buying interest as harvest progresses throughout the Midwest. World Weather Inc. reports dry weather will be most common over the next two weeks allowing for aggressive harvesting, with unseasonably warm temps expected into Saturday, though a large part of the western Corn Belt will see freezes early next week.
Technical Analysis: December corn ended the session at a near two-week low close as resistance from the 100- and 10-day moving averages, which have both converged around $4.24 1/2. However, the 20-day moving average of $4.17 1/2 limited the downside. Bulls continue to grasp a slight technical advantage but need to show fresh strength. The next upside objective is $4.50, with resistance beginning at the 100- and 10-day moving averages, then at this week’s high of $4.28 and again at last week’s high of $4.34 1/4. Conversely, bears’ next objective is to forge a close below $4.10, with support beginning at the 20-day moving average, with additional support at $4.16 and the 40-day moving average of $4.08 3/4, which is backed by psychological support at $4.00.
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: November soybean futures sank 5 1/2 cents to $10.14 3/4, settling nearer session lows. December meal futures dropped $5.1 to $316.1, nearer session lows. December bean oil futures rebounded 70 points to 43.76 cents.
Fundamental analysis: Soybeans continue to exhibit relative weakness, led lower by weakness in the meal market, which hit a six-week low. Some positioning likely drove trade ahead of tomorrow’s updated Crop Production and Supply and Demand reports from USDA. Traders anticipate production a little lower than September’s forecast, as estimates average 4.579 billion bushels (53.1 bushels/acre) in the Reuters poll, down from 4.586 billion bushels (53.2 bushels/acre) in September. The late season dryness is expected to have taken more off the bean crop than previously anticipated, which is corroborated by the harvest reports we have been hearing. Lower production and lower carry-in led analyst average ending stocks 6 million bushels lower than September to 549 million bushels.
While the U.S. balance sheet is becoming a little more favorable, the world balance sheet is seen as expanding to record levels. A close eye will be kept on Argentina and namely Brazil over the coming growing season. Rain in western, central and northern Brazil is expected to become more regular in the next ten days to two weeks, leaving nearly all the region with increases in soil moisture and notable improvements for planting and crop establishment. The return of wet weather in Brazil as planting is picking up likely weighed heavily on soybeans today.
USDA reported soybean sales of 1.264 MMT during the week ended Oct. 3, which was down 12% from the previous week and 17% from the four-week average. China made the bulk of soybean purchases. Sales were within the pre-report range of expectations from 800,000 MT to 1.7 MMT. Exports totaled 1.705 MMT for the week, which was the most since November of last year. Seeing shipments tick up is a healthy sign that importers are ramping up deliveries.
Technical Analysis: November soybean futures closed lower but traded withing the past two days’ range as positioning continues to drive trade ahead of tomorrow’s reports. Bulls maintain a slight near-term technical advantage. Initial resistance stands at $10.25, which is quickly reinforced by the 40-day moving average at $10.27 3/4, with strength above that mark finding resistance at $10.41. Support lies at Tuesday’s low of $10.11 1/2 then the psychological $10.00 mark.
December meal futures continue to lead price action as bears maintain the near-term technical edge. Prices have sunk for seven consecutive sessions. Further selling pressure finds initial support at today’s low of $314.4 then $310.0, while robust support lies at the psychological $300.0 mark. Corrective buying would find resistance at $319.6 then the 40-day moving average at $324.9.
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 4 3/4 cents to $6.03 3/4 and near mid-range. December HRW wheat gained 2 1/4 cents to $6.11 and nearer the session low. December spring wheat futures rose 3/4 cents to $6.49.
Fundamental analysis: Mild chart-based buying from the speculators was featured in the winter wheat futures markets today, amid friendly technicals that include price uptrends in place on the daily bar charts. However, gains in wheat today were limited by lower corn and soybean futures prices. A firmer U.S. dollar index today that is near this week’s seven-week high is also a bearish “outside-market” element for wheat.
USDA this morning reported U.S. wheat export sales of 433,600 MT during the week ended Oct. 3, down 2% from the previous week but up 31% from the four-week average and within trade expectations. U.S. wheat export shipments totaled 359,700 MT for the week.
World Weather Inc. today said that in U.S. HRW country “another seven days of mostly dry weather is expected going into the middle part of next week. This will lead to more concern over conditions for winter wheat planting and establishment. It is becoming more likely that this dry weather pattern ends in the Oct. 18-20 timeframe, though.” At that time a storm system could promote meaningful precipitation in at least some of the region, including the northern Plains, “which would be beneficial and needed,” said the forecaster.
Wheat traders will closely examine Friday morning’s monthly USDA supply and demand report, to get an update on U.S. wheat stockpiles, which are expected just slightly higher from the September report.
Technical Analysis: Winter wheat futures prices are in six-week-old uptrends on the daily bar charts. SRW bulls’ next upside price objective is closing December prices above solid chart resistance at last week’s high of $6.17 1/4. The bears’ next downside objective is closing prices below solid technical support at $5.50. First resistance is seen at today’s high of $6.09 1/4 and then at $6.17 1/4. First support is seen at Wednesday’s low of $5.94 1/4 and then at this week’s low of $5.84. The HRW bulls’ next upside price objective is closing December prices above solid technical resistance at $6.50. The bears’ next downside objective is closing prices below solid technical support at $5.80. First resistance is seen at last week’s high of $6.23 1/2 and then at $6.35. First support is seen at $6.00 and then at this week’s low of $5.92.
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 futures climbed 39 points before settling at 74.75 cents, nearer session highs.
Fundamental analysis: Cotton futures traded on either side of unchanged before rallying into the close. Prices have traded in a tight downtrend following the Sept. 24 peak. Hurricane Milton is now past Florida with minimal impact to cotton production areas and the aftermath of Helene is still largely unknown. However, a disaster report from USDA shows little change is expected in cotton production due to the storm, despite ripping through near harvest-ready cotton in Georgia. The rain produced by the hurricane could even have been beneficial for later maturing crops. Still, conditions in top producer Texas continue to be quite poor, which could lead to heightened abandonment, especially considering how far futures have fallen since insurance pricing periods earlier this year. Analysts expect USDA to cut their domestic cotton production estimate by 240,000 bales in tomorrow’s report. Ending stocks are seen as coming in just 20,000 bales below September at 3.98 million bales. The poor export outlook, as shown in sales this morning coming in at just 98,700 bales, which was down 6% from a week ago and 13% from the four-week average, left analysts ending stocks forecast largely unchanged.
Technical Analysis: December cotton futures managed to score a corrective bounce after marking a four-week low earlier this week. Bulls maintain a slight overall near-term technical advantage. Initial resistance stands at 72.77 cents though bulls are ultimately looking to close prices above resistance at 73.50 cents on report driven strength. Support comes in at the 40-day moving average at 71.68 cents, which limited losses today, then Tuesday’s low of 71.11 cents on continued selling pressure.
What to do: Get current with advised sales.
Hedgers: You should also have 25% of expected 2024-crop production forward sold for harvest delivery.
Cash-only marketers: You should also have 25% of expected 2024-crop production forward sold for harvest delivery.