Corn
Price action: December corn rose 2 cents to $4.06 3/4 after trading at the lowest intraday level since Sept. 12.
Fundamental analysis: Corn futures were able to rebound from this morning’s low amid general corrective strength across the grain and soy complexes. Corn demand continues to prove solid, with USDA reporting daily sales of 298,190 MT, of which 197,180 MT were to Mexico and 101,000 MT to unknown destinations during 2024-25, though the soy complex was the likely source of today’s rise. Soymeal and soyoil each rallied impressively despite a continued decline in crude oil futures and persisting strength in the U.S. dollar, which reached an 11-week high today. Meanwhile, wheat futures were also able to shake off weakness, amid reports from the National Oceanic and Atmospheric Administration (NOAA) of warmer-and-drier-than-normal weather in the central U.S. Plains this winter, which could worsen drought conditions in the country’s top winter wheat-producing area.
Earlier today the Energy Information Administration reported ethanol production averaged 1.042 million barrels per day (bpd) during the week ended Oct. 11, up 4,000 bpd (0.4%) from the previous week and 7,000 bpd (0.7%) above last year. Ethanol stocks rose 121m000 barrels to 22.275 million barrels.
USDA will release its Weekly Export Sales Report early Friday morning, with analysts expecting net sales to have ranged from 1.2 to 2.2 MMT during the week ended Oct. 10.
Technical analysis: December corn ended the session just shy of the session high, limited by resistance at $4.07 1/4, which is backed by the 40-day moving average of $4.10. Conversely, although support at $4.01 1/2 was tested for the third straight session, the level held and will continue to serve as initial support, though bears will likely continue to battle for a sub $4.00 close, with sights set on the contract low of $3.85. The bull camp will continue to look toward the recent high of $4.34 1/4.
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 rose 8 3/4 cents to $9.88 3/4, closing near session highs. December meal futures climbed $4.40 to $318.10. December bean oil futures closed 91 points higher, closing near session high.
Fundamental analysis: Soybean futures marked a for-the-move low in early trade, though buying interest increased as the session went on, with nearby November futures leading the complex higher. Calendar spreads have been working higher over the past week and a half, an early indicator that an early market bottom was near at hand. Confirmation is needed for a low, but today’s strength gives bulls some hope a near-term bottom is at hand. Crush spreads worked higher today as well, contrary to recent weakness. The next few days will affirm whether today’s strength was corrective in nature or more lasting.
Some rain is expected in the Midwest over the coming week, which is likely to modestly slow the rapid harvest at least momentarily, says World Weather Inc. Much of Brazil saw dry and improving conditions for fieldwork, with exceptions in a large part of the region from central and eastern Goias to southwestern to southeastern Minas Gerais as well as several other locations scattered across northern, central, and a few locations in southern Brazil.
USDA will release its delayed weekly export sales report tomorrow morning. Traders anticipate sales between 1.0 and 2.2 MMT. Last week, sales totaled 1.234 MMT.
Technical analysis: November soybean futures moved higher the latter portion of today’s session, ending the day on session highs. Bears continue to own the near-term technical advantage. Bulls are seeking to build on today’s strength and close prices over psychological $10.00 resistance before challenging the 10-day moving average at $10.05 1/4. A resurgence of selling pressure finds support at $9.80, the psychological $9.75 mark, then today’s low of $9.68 1/4.
December meal futures closed higher for the second consecutive session today, though bears maintain the near-term advantage. Gains stopped just shy of 10-day moving average resistance at $319.1 today, which is reinforced by resistance at $322.0. Bulls are seeking to hold prices above support at $311.8, else a trip to this week’s low of $308.8 seems likely.
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 1/2 cents to $5.89 1/2 and nearer the daily high. December HRW wheat gained 7 1/4 cents to $5.96 and nearer the session high. December spring wheat futures closed 8 cents higher at $6.28 3/4.
Fundamental analysis: The winter wheat futures bulls made some headway today on short covering and some corrective buying, and also as the corn and soybeans were a bit firmer as bulls try to stabilize those markets. A higher U.S. dollar index and weaker crude oil prices today were negative outside markets for wheat and did somewhat limit the upside for wheat.
World Weather Inc. today said significant rain is expected in the U.S. HRW region Saturday-Sunday. The greatest rain will occur in eastern Colorado, far western Kansas, the northwestern Texas Panhandle and the western part of the Oklahoma Panhandle. Elsewhere in the region, “some topsoil moisture improvement is expected, but not to the extent of the western crop areas,” said the forecaster, adding “the rain will be important for leading to better winter wheat planting, emergence, and establishment.” Meantime, partial relief from dryness is expected through the weekend in eastern Ukraine and Russia’s southern region, where winter crops “may become a little better established. Follow up rain will still be imperative, but there is not much being advertised. That may leave crops poorly established when seasonal cooling pushes crops into dormancy in November,” said the forecaster.
Friday morning’s weekly USDA export sales report (delayed one day by the holiday Monday) is expected to show U.S. wheat sales of 250,000 to 550,000 MT in the 2024-25 marketing year, and sales of zero to 50,000 MT in the 2025-26 marketing year.
Technical analysis: Seven-week-old price uptrends on the daily bar charts for winter wheat futures have stalled out. SRW bulls’ next upside price objective is closing December prices above solid chart resistance at the October 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 $6.00 and then at last week’s high of $6.11 1/4. First support is seen at this week’s low of $5.75 1/4 and then at $5.64. The HRW bulls’ next upside price objective is closing December prices above solid technical resistance at the October high of $6.23 1/2. The bears’ next downside objective is closing prices below solid technical support at $5.60. First resistance is seen at $6.00 and then at this week’s high of $6.05. First support is seen at this week’s low of $5.79 1/4 and then at $5.70.
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 fell 49 points to 72.85 cents.
Fundamental analysis: Cotton futures fell under selling pressure today though did close well off session lows. Outside markets weighed heavily on the cotton market today as the U.S. dollar index was over 600 points higher. Despite the Federal Reserve recently cutting rates, the longer-term bond futures continue to price in higher rates. That could be traders anticipating a return of higher inflation, more optimistic traders look at heightened interest rates indicating robust growth of the U.S. economy in the longer term. The narrative surrounding the cotton market continues to focus on the demand side of the balance sheet. With domestic use making up just a small portion of demand, exports have been the main focus. Chinese demand remains abysmal and other countries have been slow to pick up the baton to make up for the lack of purchases from the world’s top importer.
Technical analysis: December cotton futures succumbed to modest selling pressure today as bears continue to maintain the near-term technical advantage. Yesterday’s corrective bounce was capped by the 40-day moving average, which will remain resistance at 71.57 cents. Further strength seeks to overcome resistance at yesterday’s high of 72.00 cents. Continued selling pressure finds support at 70.62 cents, which is reinforced by today’s low of 70.16 cents, then the psychological 70.00 cent mark.
What to do: Get current with advised sales.
Hedgers: You should be 35% in the cash market on 2024-crop.
Cash-only marketers: You should be 35% sold on 2024-crop.