Corn
Price action: December corn fell 2 1/4 cents to $4.11 1/2, marking a low-range close.
Fundamental analysis: Corn continued to face technical challenges at midweek despite a corrective bounce in both wheat and soybeans and notable outside market support. Moreover, USDA reported an additional daily flash sale, totaling 273,048 MT to unknown destinations during 2023-24, which marked the 10th daily sale in the past 11 market days and continues to indicate robust global end-user demand. Meanwhile, domestic ethanol production continues to progress at a seasonally strong clip, as the Energy Information Administration reported production rose 1,000 barrels per day (bpd) to 1.082 million barrels per day during the week ended Oct. 25. Compared to the same week a year ago, production was up 30,000 bpd (2.9%), while ethanol stocks dropped 452,000 barrels to 21.771 million barrels from the previous week.
World Weather Inc. reports flooding rain is possible in the central U.S. this weekend into early next week. Areas from western Texas through Oklahoma and southeastern Kansas to Missouri, northwestern Illinois and southeastern Iowa will be the wettest. In South America, weather has been and will likely continue to be mostly good for a while longer, though 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 the recently planted crop over time.
USDA will release its weekly Export Sales Report early Thursday morning, with analysts expecting net sales to have ranged from 1.8 to 3.5 MMT during the week ended Oct. 24. Last week, net sales of 3.6 MMT for the previous week.
Technical analysis: December corn ended the session below the 10-day moving average of $4.12 3/4 as pressure from the 40-, 20- and 100-day moving averages of $4.13 3/4, $4.14 3/4 and $4.15 1/2 continued to bode well for bears. However, losses were limited by support at $4.10 3/4, which is closely backed by support at $4.10, $4.08, $4.06 1/4, with psychological support serving 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 climbed 12 1/4 cents to $9.91 1/4 and settled on session highs. December meal futures sunk 20 cents to $301.6. December bean oil futures followed crude higher today, rising 101 points to 43.81 cents.
Fundamental analysis: Soybean futures led strength in the grain markets today, negating Tuesday’s loss. Soybeans were supported by news of a 24-hour strike by transportation unions in Argentina that is blocking ships from docking or departing from the grain ports in Rosario, a major ports chamber announced on Wednesday. Soybeans were also supported by a weaker U.S. dollar index, which continues to base near the Oct. 23 highs. A downturn in the dollar index would make U.S. origin beans more competitive on the world market, but importers are likely to await results of next week’s election before making any other significant, large purchases of beans.
Conditions continue to turn more favorable for Brazil in terms of weather. Rain will impact most of Brazil during the next two weeks with center-west and northern parts of center-south getting rain most frequently and significantly later this week and especially next week, according to World Weather Inc. Planting will be often interrupted by rain with Mato Grosso to Minas Gerais and Espirito Santo wettest, but some fieldwork should advance between rounds of rain.
USDA will release their weekly export sales report tomorrow morning. Analysts expect 2024/25 soybean sales between 1.6 and 2.8 MMT for the week ended Oct. 24. Last week, sales totaled 2.152 MMT. USDA reported daily sales of 1.083 MMT for the week ended Oct. 24. Today, USDA reported daily soybean sales of 132,000 MT to China and 132,000 MT to unknown destinations – both for 2024-25.
Technical analysis: January soybean futures posted modest corrective gains today. Bears continue to own the near-term technical advantage and are seeking to break prices below support at today’s low at $9.77 1/4, which is reinforced by the Aug. 17 low at $9.73 1/2. Continued strength would have bulls looking to overcome resistance at the 10-day moving average at $9.96 1/2, which is quickly reinforced by the psychological $10.00 mark, then $10.05.
December meal futures traded in a narrow range around unchanged today as bears continue to hold the near-term advantage. Bulls are seeking to hold prices above the psychological $300.00 mark, which is reinforced by support at the Aug. 14 low of $298.5. Bulls are eyeing resistance at today’s high of $304.0, which is backed by the 10-day moving average at $309.1.
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 3/4 cents to $5.73 1/4, while December HRs rose 1 1/2 cents to $5.75 3/4, each forging mid-range closes. December HRS futures rose 1 1/4 cents to $6.07 3/4.
Fundamental analysis: Wheat futures extended Tuesday’s short covering but continued to face technical headwinds. Meanwhile, a weaker U.S. dollar helped prop up commodities as did looming global supply uncertainties. However, Russia’s Southern Region and western Kazakhstan are advertised wetter today relative to that of Monday and Tuesday. World Weather Inc. notes, however, no general soaking rain is expected. Rain is also expected in some of the drier areas of the U.S. Central and southwestern Plains, Midwest and a few Pacific Northwest crop areas in the coming week. In Argentina, central and southern wheat production areas received significant rain recently and crops should be reproducing and filling in much better environment except in far southern Argentina where it still too dry.
USDA will release its weekly Export Sales Report on Thursday, which is expected to show net sales ranging from 300,000 to 600,000 MT during the week ended Oct. 24. Last week, net sales of 532,885 MT were reported.
Technical analysis: December SRW wheat futures’ attempt to successfully breach the 10- and 100-day moving averages of $5.74 1/4 and $5.79 1/2 ultimately proved futile, though support at $5.67 continued to curb bear efforts. Moreover, bulls are looking toward the Oct. 2 high of $6.17 1/4, though additional resistance at the 40- and 200-day moving averages of $5.82 1/4 and $6.08 1/4 will continue to impede efforts. Conversely, further support at $5.52 1/4, $5.46 1/2 will slow bears, whose sights are set on the Aug. 27 low of $5.20 3/4.
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
Advice: We advise hedgers to hedge 15% of 2024-crop production in December futures to limit downside risk. Our fill was 69.84 cents.
Price action: Cotton futures turned lower again Wednesday, with nearby December futures falling 64 points to close at 69.92 cents.
Fundamental analysis: Forecast rains over the Southwest might be interpreted as supportive or negative for cotton prices, since the rain might improve conditions somewhat, whereas the moisture may also reduce the quality of cotton in open bolls. Today’s decline suggests traders view the rain as improving conditions, and possibly yields, as the more important factor. Today’s U.S. dollar weakness could be viewed as supportive, but the fact that it follows a vigorous rally from the greenback’s Sept. 30 low can’t be helping the cotton market due to its heavy reliance on export demand. Today’s crude oil bounce might be viewed as supportive as well, but bulls’ inability to close the chart gap created by Monday’s breakdown likely limited the bounce’s impact upon the other commodity markets. Bears may also be anticipating decreased cotton export opportunities if the polls implying a Donald Trump election victory presage renewed trade strife.
Technical analysis: Today’s price drop likely strengthened the bears’ short-term technical advantage in December cotton futures, because it carried the contract price below the pivotal 70.00-cent low at the close. This will have bears targeting likely initial support around the July 26 high of 69.00 cents, then the Sept. 9 low of 67.51 cents. The 70-cent level now represents initial resistance. That’s backed by the July 23 high of 71.03, with formidable backing from the confluence of the 40-day moving average near 71.64 cents and the extended uptrend line across the contract’s August and September low, now near 71.75 cents.
What to do: Get current with advised sales and hedges.
Hedgers: NEW ADVICE -- hedge 15% of 2024-crop production in December futures. Our fill was 69.84 cents. You should be 35% sold in the cash market on 2024-crop.
Cash-only marketers: You should be 35% sold on 2024-crop.