Corn
Price action: December corn rose 3 1/2 cents to $4.32 1/2, the highest close since June 27.
Fundamental analysis: December corn extended gains above the 100-day moving average, notching a fresh near-term high despite strength in the U.S. dollar. Strong wheat gains certainly supplied optimism to the grain complex today, while selling in soymeal pressured the upside in both soybean and corn futures.
Meanwhile, USDA’s updated corn-for-ethanol use in its monthly Grain Crushings Report was stronger than expected at 472.7 million bu. during August. Ethanol use dropped 11.2 million bu. (2.3%) from the sharply revised July figure but was 31.0 million bu. (7.0%) above last year. Corn ethanol use totaled 5.71 billion bu. in 2023-24, up 295 million bu. (5.7%) from last year and 6 million bu. more than USDA’s September estimate.
The Energy Information Administration reported weekly ethanol production averaged 1.015 million barrels per day (bpd) during the week ended Sept. 27, up 21,000 bpd (2.1%) from the previous week and 6,000 bpd (0.6%) above last year. Ethanol stocks dropped 65,000 23.459 barrels.
Early Thursday morning USDA will release its weekly export sales data, with traders expecting net sales to have ranged from 600,000 MT to 1.0 MMT during the week ended Sept. 26. Last week, net sales of 535,100 MT were reported for the previous week.
Technical analysis: December corn extended to a fresh near-term high, though resistance at $4.33 3/4 limited bull efforts. However, the 100-day moving average of $4.28 1/4 served up notable support. While corn futures are trending higher, bulls will need to work towards and close above $4.50 to maintain the technical advantage. Near-term overbought conditions could hinder a move higher, which may lead to sideways consolidation, though support at the 100-day will be backed by support at $4.23, then the 10-, 20- and 40-day moving averages of $4.16 1/2, $4.12 1/2 and $4.05 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 soybeans fell 1 1/4 cents to $10.56. December soybean meal dropped $7.10 to $340.40. December soybean oil rose 73 points to 43.64 cents. All three markets closed near mid-ranges.
Fundamental analysis: Soybean and meal futures markets today saw selling pressure from a higher U.S. dollar index and some risk aversion in the general marketplace. Soybean bulls were disappointed that gains to multi-month highs in the corn and winter wheat futures markets failed to provide any spillover support for soybeans and meal. Soybeans and meal futures likely saw some profit-taking from the shorter-term speculators. Soybean oil was supported by this week’s rally in crude oil prices, although crude did back well down from today’s highs due to reports OPEC-plus is likely to roll back some of its oil-production cuts in the coming months.
World Weather Inc. today said good harvest weather is expected in the Midwest for the next 10 days to two weeks. The good harvest weather is keeping combines rolling and keeping commercial hedging pressure on futures prices.
Thursday morning’s weekly USDA export sales report is expected to show U.S. soybean sales of 1.0 to 1.6 MMT in the 2024-25 marketing year, and sales of zero to 50,000 MT in the 2025-26 marketing year.
Technical analysis: The soybean bulls have the overall near-term technical advantage. Prices are in a six-week-old uptrend on the daily bar chart. The next near-term upside technical objective for the soybean bulls is closing November prices above solid resistance at $11.00. The next downside price objective for the bears is closing prices below solid technical support at $10.00. First resistance is the September high of $10.69 3/4 and then at $10.86 3/4. First support is seen at today’s low of $10.42 1/2 and then at $10.31 1/4.
Soybean meal prices are in a six-week-old uptrend on the daily bar chart. The next upside price objective for the meal bulls is to produce a close in December futures above solid technical resistance at $370.00. The next downside price objective for the bears is closing prices below solid technical support at $325.00. First resistance comes in at $345.00 and then at $350.00. First support is seen at $335.00 and then at today’s low of $332.00.
Soybean oil bulls have the overall near-term technical advantage. Prices are in an 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 47.00 cents. Bean oil bears’ next downside technical price objective is closing prices below solid technical support at 40.00 cents. First resistance is seen at today’s high of 44.28 cents and then at the September high of 44.86 cents. First support is seen at today’s low of 42.80 cents and then at this week’s low of 41.92 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
Advice: We advise all wheat producers to sell another 10% of 2024-crop in the cash market and an additional 10% of expected 2025-crop for harvest delivery next year. This pushes sales to 70% for 2024-crop and 20% for next year’s production.
Price action: December SRW wheat rallied 16 1/4 cents to $6.15 1/4, while December HRW futures surged 21 cents to $6.19 1/4. Both contracts closed above their respective 100-day moving average. December spring wheat rose 11 cents to $6.45 3/4.
Fundamental analysis: HRW wheat led the grain complex today, hitting the highest level since June 20, which was quite a feat given strength in the U.S. dollar. Lingering global supply concerns and mounting geopolitical tensions continue to spur buyer interest near-term, though if tensions continue to escalate, traders could look to remove risk in apprehension of a broader Middle East conflict.
Earlier today, Russia’s state weather forecast agency noted conditions for winter crops in some key producing regions were “worse than usual” in October due to a lack of precipitation, specifically noting the Central, Southern, North Caucasus and parts of the Volga regions. “A precipitation deficit will persist, and conditions for the emergence and growth of winter crops in most areas will be worse than usual,” the agency said. Moreover, Russia’s exporter union said export volumes for the first quarter of 2024-25 were excessive and called for limits to be imposed through a quota mechanism to limit shipments.
Meanwhile, underscoring heightened geopolitical tensions was a Russian drone attack that damaged a grain facility in Ukraine near its Danube River border with Romania, combined with additional war risk as the marketplace continues to monitor the military escalation in the Middle East.
Technical analysis: December SRW wheat futures ended the session above the 100-day moving average, currently trading at $6.06 1/4, for the first time mid-June, though bulls lacked adequate momentum to conquer the 200-day moving average of $6.16. 1/4 after an earlier breach of the level. The 200-day will now serve as initial resistance, with initial support lying at the 100-day, which is backed psychological support at $6.00, then $5.92 3/4, and the 10-, 20- and 40-day moving averages of $5.84 1/2, $5.80 1/2 and $5.65 3/4.
What to do: Get current with advised sales.
Hedgers: NEW ADVICE -- Sell another 10% of 2024-crop in the cash market to get to 70% sold. Also, sell and an additional 10% of expected 2025-crop for harvest delivery next year to get to 20% forward sold.
Cash-only marketers: NEW ADVICE -- Sell another 10% of 2024-crop to get to 70% sold. Also, sell and an additional 10% of expected 2025-crop for harvest delivery next year to get to 20% forward sold.
Cotton
Price action: December cotton rose 31 points to 73.40 cents and nearer the daily high.
Fundamental analysis: The cotton futures market is pausing at present being supported by rallies in the grain futures markets recently. Some technically related buying has also stemmed from speculators amid concerns about how much Hurricane Helene cut U.S. cotton production combined with the recent rally in crude oil prices. However, gains in cotton have been limited this week by keener risk aversion in the marketplace and the resulting selling pressure in the U.S. stock market amid escalating Middle East tensions.
Peter Egli, an independent consultant to the cotton industry, says between 400,000 to 800,000 cotton bales may have been lost due to Hurricane Helene. However, he said it will take at least four to six weeks to get more clarity. That would represent as much as 5.5% of total U.S. production for this season, according to a calculation based on USDA data.
World Weather Inc. today said dry weather in western Texas will prevail over the next 10 days and good drying conditions will also occur in the Texas Blacklands. Drying in the Delta and southeastern states is improving crop conditions after recent excessive rainfall.
Cotton traders will closely examine Thursday morning’s weekly USDA export sales report, with bulls hoping the U.S. cotton sales numbers are markedly better this week than those seen recently.
Technical analysis: The cotton futures bulls have the overall near-term technical advantage as prices are in a six-week-old uptrend 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 75.00 cents. The next downside price objective for the cotton bears is to close prices below solid technical support at 70.00 cents. First resistance is seen at this week’s high of 74.00 cents and then at the September high of 74.55 cents. First support is seen at today’s low of 72.42 cents and then at 72.00 cents.
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.