Corn
Price action: December corn futures rose 3 cents to $4.13 3/4 and nearer the session high.
Fundamental analysis: The corn futures market today saw short covering and perceived bargain hunting from the speculators. Solid gains in the winter wheat futures markets today also provided some spillover buying interest for corn. The outside markets leaned a bit bearish for corn today as crude oil prices were weaker and hit a four-week low, while the U.S. dollar index was slightly up.
USDA Monday afternoon reported the U.S. corn harvest was 81% complete as of Oct. 27, well ahead of the five-year average of 64%. Corn harvest winding down means peak commercial hedging pressure has likely passed, which should alleviate one bearish element in the corn market.
Pro Farmer’s South American crop consultant Michael Cordonnier left his Brazilian corn crop estimate unchanged at 125 MMT. Cordonnier also left his Argentine corn crop estimate unchanged at 48 MMT. World Weather Inc. today said South America corn region weather “has been and will likely continue mostly good for a while longer. Some areas in southern Argentina are still a bit too dry and rain in center-west Brazil is expected to increase to the benefit of recently planted crops over time.”
Technical analysis: The corn futures bulls and bears are on a level overall near-term technical playing field amid recent choppy and sideways trading. The next upside price objective for the bulls is to close December prices above solid chart resistance at last week’s high of $4.24. The next downside target for the bears is closing prices below chart support at the October low of $3.99. First resistance is seen at $4.18 and then at $4.21. First support is at this week’s low of $4.10 and then at $4.05.
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 8 3/4 cents to $9.65 1/4, the lowest close since Aug. 22. January soybeans fell 7 cents to $9.79. December soymeal closed down $3.00 to $301.80, nearer the session low. December soyoil rose 11 points to 42.80 cents.
Fundamental analysis: Soybean futures saw extended selling for the fourth straight session after modestly favoring the upside early in the session amid support from corrective buying in soyoil. Meanwhile, soymeal edged lower for the sixth consecutive session, largely offsetting any support from soyoil and the grain complex. Harvest continues to advance well ahead of the five-year average, with USDA reporting soybeans were 89% harvested as of Oct. 27.
In South America, World Weather Inc. indicates Mato Grosso, Brazil and some neighboring areas have not been receiving as much rain as desired, although planting is advancing and the impact has been low. However, the 30-day outlook suggests near- to below normal precip in November for Mato Grosso and immediate neighboring areas and above to normal rainfall for Sao Paulo and Minas Gerais. Rio Grande do Sul, eastern Argentina, Uruguay and southern Paraguay are expected to receive near to below normal rainfall in November as well.
Technical analysis: November soybeans took out the Oct. 17 low of $9.68 1/4 in midmorning trade, though support at $9.65 1/2, which is backed by the August low of $9.55 curbed selling momentum. However, the 10-day moving average of $9.83 1/2 continued to serve up notable resistance, with backing from 20-, 40- and 100-day moving averages of $10.02 1/2, $10.13 1/2 and $10.38.
December soymeal edged to the lowest intraday level since Aug. 26, with support serving at $300.30, which is backed by the Aug. 14 low of $298.50. Bears ultimately secured a close below initial support at $32.50, which will now serve as initial resistance, with further resistance standing at $307.20, $309.70 and $311.90.
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 futures surged 11 3/4 cents higher to $5.70 1/2 and settled nearer session highs. December HRW futures climbed 12 3/4 cents to $5.74 1/4. December HRS rallied 11 1/4 cents to $6.06 1/2.
Fundamental analysis: Wheat futures surged higher today, supported by both fundamental and technical strength as winter wheat ratings were issued at the second lowest mark since the ratings began in 1986. USDA’s initial winter wheat conditions rated the crop 38% “good” to “excellent,” down nine points from last year. The amount of crop rated “poor” to “very poor” was 23%, up five points from last year. On the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop started the growing season with a 293.8 rating, down 24.9 points from last year and 22.8 points below the five-year average. The initial SRW CCI rating was 356.4, down 13.5 points from last year and 1.2 points below the five-year average. SRW acres are not experiencing as severe or a drought as their HRW counterpart. Poor condition ratings help sparked today’s rally.
Rainfall is expected to pour into the central U.S. this weekend and into early next week. Areas from western Texas through Oklahoma and southeastern Kansas to Missouri, northwestern Illinois and southeastern Iowa will be wettest, with flooding rainfall possible, says World Weather Inc. Key will be how the winter wheat crop responds to upcoming rains and if they negate some of the poor conditions seen.
Technical analysis: December SRW futures surged higher today, though bears maintained the near-term technical advantage. Bulls are eyeing resistance at the 10-day moving average at $5.74 3/4, which coincides with downward trendline resistance at $5.75 stemming from the early October highs. A break above that mark would indicate a technical breakout, a bullish reversal signal. Continued weakness finds support at yesterday’s low of $5.57 3/4, which is reinforced by support at $5.50.
December HRW futures continue to tightly track their SRW counterpart. Initial resistance comes in at $5.80, the 10-day moving average. Additional strength finds downtrend resistance at $5.87. Support comes in at yesterday’s close at $5.61 1/2, which sees little backing until the psychological $5.50 mark.
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 20 points to 70.56 cents and near mid-range.
Fundamental analysis: December cotton attempted to recapture Monday’s losses, though technical resistance curbed stronger short-covering efforts. However, today’s strength, albeit modest, occurred despite lacking outside market support, which included a reach to a three-month high in the U.S. dollar and modestly weaker crude oil prices following Monday’s sharp selloff. Likely lending support was a drop in U.S. crop conditions, with USDA pegging the crop as 33% “good” to “excellent,” which was a four-point decline from last week, while the “poor” to “very poor” rating rose three points to 36%. Meanwhile, harvest was reported to have advanced to 52% complete as of Oct. 27, which was six-points ahead of the five-year average.
Rain in portions of southwestern Oklahoma, the Texas Panhandle and West Texas over the next ten days is raising some concern of discoloring of cotton and delays to maturation and harvesting, as there is some potential for heavy rain this weekend into next week. Moreover, production potentials could be affected if the moisture causes cotton to string out of their bolls, according to World Weather Inc. Harvest in the Blacklands may also be disrupted, with unharvested crops also vulnerable to some moderate rain.
Technical analysis: December cotton found support at Monday’s low of 69.93 cents, though resistance at the 100-, 10-, 40- and 20-day moving averages, layered from 70.95 cents to 71.84 cents continued to limit an earnest move to the upside. An extension below Monday’s low, will find bears facing additional support at 69.85 cents, 69.33 cents and 68.74 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.