Corn
Price action: December corn rose 2 1/2 cents to $4.19, marking a two-week high close above the 100-day moving average.
Fundamental analysis: Corn futures displayed decided strength as the session progressed, despite no outside market support as the U.S. dollar edged to a 12-week high, while crude oil faced corrective selling. Support continues to stem from persisting export demand, with USDA reporting a flash sale of 100,000 MT to unknown destinations today, which marked the sixth consecutive daily sale. Meanwhile, harvest continues to advance quickly across the U.S. amid dry conditions, which are expected to continue for a while longer, according to World Weather Inc.
Earlier this morning, the Energy Information Administration reported weekly export production averaged 1.081 million barrels per day (bpd), the second highest level ever for the week ended Oct. 18. Production rose 39,000 bpd (3.7%) from the previous week and 41,000 bpd (3.9%) above last year. Ethanol stocks declined 52,000 barrels to 22.223 million barrels.
Early Thursday morning, USDA will detail weekly export sales for the week ended Oct. 17, with analysts anticipating net sales to have ranged from 2.2 MMT to 3.3 MMT. Last week, net sales totaled 2.23 MMT, up 82% from the previous week and noticeably from the four-week average.
Technical analysis: December corn futures ended the session above the 100-day moving average of $4.18 for the first time since Oct. 3, with initial resistance now serving at $4.22 1/2, which is backed by $4.28 1/4, the Oct. 2 high of $4.34 1/4 and the 200-day moving average of $4.52 1/2. Conversely, initial support will now serve at the 40-day, then at the 10- and 20- day moving averages of $4.16 1/2 and $4.12 1/2 and again at $4.05 1/4, with 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: January soybeans rose 4 1/2 cents to $10.05, nearer the session high. December soybean meal closed down $2.70 at $315.00 and near the daily low. December soybean oil fell 30 points to 43.39 cents and nearer the session low.
Fundamental analysis: Soybean markets today saw tepid short covering amid a price downtrend. Gains were limited by lower soybean meal prices, a higher U.S. dollar index and lower crude oil prices. Strong profit-taking pressure in the gold and silver markets today also somewhat weighed on the entire raw commodity futures sector, including the grains.
Soybean bulls got a little help today as USDA reported a daily sale of 259,000 MT of U.S. soybeans for delivery to unknown destinations and 130,000 MT of soybeans for delivery to China--all for delivery in the 2024-25 marketing year.
Also, with the U.S. soybean harvest in its final stretch, as USDA estimated it at 81% complete as of last Sunday, commercial hedging pressure in the futures, from farmer cash sales, is likely to recede in the near term.
World Weather Inc. today said most of the U.S. soybean harvest is moving along swiftly due to dry weather and that will continue for a while longer. Meantime, west central and southern Argentina will get some much needed rain today and Thursday, improving summer crop planting moisture. Brazil’s center-west and center-south crop areas will continue to receive needed moisture for the planting of early soybeans in the driest areas of center-west. Center-south Brazil planting is advancing relatively well, and it is accelerating in center-west crop areas.
Thursday morning’s weekly USDA export sales report is expected to show U.S. soybean sales of 1.2 MMT to 2.4 MMT in the 2024-25 marketing year, and sales of zero to 100,000 MT in the 2025-26 marketing year.
Technical analysis: The soybean bears have the overall near-term technical advantage. Prices are still in a three-week-old downtrend on the daily bar chart. However, 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 $10.12 1/2 and then at last week’s high of $10.24. First support is seen at today’s low of $9.94 1/4 and then at $9.80.
Soybean meal futures prices are in a three-week-old downtrend 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 $335.00. The next downside price objective for the bears is closing prices below solid technical support at the August low of $298.50. First resistance comes in at last week’s high of $323.30 and then at $330.00. First support is seen at today’s low of $314.10 and then at the October low of $308.80.
Soybean oil bulls and bears are on a level overall near-term technical playing field. The next upside price objective for the bean oil bulls is closing December prices above solid technical resistance at the October high of 45.29 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 44.00 cents and then at 44.50 cents. First support is seen at 43.00 cents and then at Tuesday’s low of 42.26 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 2 1/2 cents to $5.78 1/2, while December HRW futures fell a penny to $5.85 1/2, each ending nearer the session high. December spring wheat fell 1 3/4 cents to $6.14 3/4.
Fundamental analysis: Wheat futures were able to rebound from the overnight low during the today’s session despite lacking outside market support as the U.S. dollar continued its recent trek higher. However, technical resistance continued to crimp the upside, though subpar weather conditions in many key growing areas limited seller interest. World Weather Inc. maintained dryness remains a concern in U.S. HRW wheat production areas, the Pacific Northwest in unirrigated areas, Western Australia and crop areas from eastern Ukraine into western Kazakhstan. The forecaster noted each of these areas have seen “some” rain recently, but not enough to ease long term dryness, and some concern over production potential remains, though there is time for improvement. Meanwhile, in Argentina, strong rains have occurred this week, which have given a huge boost to the farming sector after a tough period of drought, “turning the game around” for wheat farmers who had been facing deep losses, according to the Rosario grains exchange earlier today. The rains reportedly arrived at a “crucial” time in the last weeks of wheat yield development, the exchange said.
Early Thursday morning, USDA will release its Weekly Export Sales Report, with analysts expecting net sales to have ranged from 350,000 to 650,000 MT during the week ended Oct. 17. Last week, net sales of 504,100 MT were reported for the previous week, which were up 16% from the week prior and 57% from the four-week average.
Technical analysis: December SRW wheat futures continued to be limited by resistance at the 40-, 10-, 100- and 20-day moving averages, layered from $5.80 1/2 to $5.89 1/4. Conversely, near-term oversold conditions are limiting the downside, with support serving at $5.73 1/2, then at $5.68 1/4, $5.60 1/2 and $5.55 1/4.
December HRW wheat found support at Tuesday’s low of $5.77 1/4, while firm resistance at the 40-, 10-, 100-, and 20-day moving averages, layered from $5.85 3/4 to $5.94 1/2 continued to curb upside momentum. However, near-term oversold conditions are limiting selling, with additional support serving at $5.79 1/4, $5.72, $5.66 3/4 and the Sept. low of $5.61 1/4.
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 rose 43 points to 72.51 cents and nearer the daily high.
Fundamental analysis: The cotton futures market today saw more short covering and perceived bargain buying. Gains were limited by lower crude oil prices and a stronger U.S. dollar index, as well as a sell-off in the U.S. stock market.
Underlying support for the cotton market comes from recent economic and monetary stimulus measures enacted by China, a major cotton user and importer. China’s cotton futures markets have seen solid rallies this week.
World Weather Inc. today said U.S. cotton areas “should not be plagued with rain issues in the coming week, although a few showers are possible in the Delta and southeastern states. West Texas may encounter a little shower activity during the latter part of next week, although confidence is low. California and Arizona harvest weather will remain fine.”
The cotton market bulls are hoping Thursday morning’s weekly USDA export sales report will show better U.S. cotton sales abroad, following disappointing sales numbers abroad for the U.S. fiber in recent weeks.
Technical analysis: The cotton futures bulls and bears are on a level overall near-term technical playing field. The next upside price objective for the cotton bulls is to produce a close in December futures above technical resistance at the September high of 74.55 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 73.00 cents at 73.50 cents. First support is seen at Tuesday’s low of 71.72 cents and then at this week’s low of 71.00 cents.
What to do: Get current with advised sales.
Hedgers: You should be 35% sold in the cash market on 2024-crop.
Cash-only marketers: You should be 35% sold on 2024-crop.