Corn
Price action: December corn futures fell 3 1/2 cents to $4.24 3/4, nearer the daily low but on the week up 6 3/4 cents.
5-day outlook: The corn futures market saw some profit-taking pressure late this week, but the bulls still had a good week. Prices Wednesday hit a three-month high and are trending higher on the daily bar chart. That suggests some more technical buying will surface next week. Worrisome for the corn market bulls in the near term is elevated risk aversion in the general marketplace amid the heightened Middle East tensions. Any escalation in the Israel-Iran conflict would likely squelch speculator buyer interest in the grain markets, including corn. World Weather Inc. reports mostly dry weather will continue in the U.S. Midwest the next 10 days to allow corn harvest to progress rapidly. That will keep farmers busy bringing their crop across the scales, which will also result in active hedging pressure from commercials that may keep any price rallies muted. The latest monthly USDA supply and demand report comes next Friday, Oct. 11. Traders will get their next look at the agency’s U.S. corn crop production forecast.
30-day outlook: Crude oil prices today hit a five-week high above $75.00 a barrel. The Middle East turmoil will likely keep crude oil prices elevated in the coming weeks, which should be a supportive outside-market element to at least keep a floor under corn futures prices. By early November the U.S. corn harvest will be winding down and the marketplace should have a better idea of the size of this year’s crop. The early-November U.S. elections will also likely have an impact on grain market prices, especially regarding how the new U.S. administration plans on dealing with China.
90-day outlook: USDA today reported a daily corn U.S. sale of 198,000 MT to unknown destinations for 2024-25. USDA Thursday morning reported weekly U.S. corn export sales of 1.684 million MT for the week ended Sept. 26, beating analysts’ expectations. For the present rally in corn futures to be extended, U.S. corn sales abroad will have to remain solid. The recent strong rebound in the U.S. dollar index, which today hit a six-week high, won’t make it any easier for better U.S. corn sales abroad in the coming months. Longer-term support for the corn market will come from 2023-24 U.S. corn stockpiles that came in below expectations in the Sept. 30 USDA quarterly grain stocks report, while monthly and weekly reports on ethanol use have been strong.
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 1/4 cents to $10.37 3/4 and marked a 28-cent loss on the week, while December soymeal closed $2.00 lower at $330.50 and down $13.60 week-over-week. December soyoil fell 56 points to 43.97 cents and for the week, rose 161 points.
5-day outlook: Soybean futures extended Thursday’s selling pressure, with former support at the 10-day moving average paring momentum as the U.S. dollar surged to a seven-week high. However, modest corrective buying in soymeal combined with a third day of gains in soyoil helped prop up the complex early on, though faded as the session progressed. Escalating tensions in the Middle East have recently boosted crude oil futures and ultimately vegoils, with soyoil rallying to a two-and-a-half month high in overnight trade, however technical resistance continues to dampen price action despite bulls grasping the near-term technical advantage. Into next week, look for traders to continue to focus on the geopolitical conflict. In the event of expanding opposition over the weekend, risk aversion throughout the marketplace is likely to ensue, though a resurgent rally in soyoil could help curb selling efforts.
30-day outlook: On Monday, USDA reported 26% of the soybean crop had been harvested as of September 29, marking a 13-point advance from the previous week and ahead of year-ago by 8 percentage points. An earlier-than-usual spring through much of the Midwest combined with rising confidence in early-planted soybean resilience and yields are the result of a quickly advancing harvest, though many areas faced wetter conditions, which extended plantings, leaving later planted soybeans at the mercy of late-season heat and dryness. As harvest progresses, the marketplace will continue to focus on yield reports, with many areas experiencing adverse effects from recent torrential rains from Hurricane Helene. While the new-crop balance sheet is at comfortable levels, a reduction in crop size will heighten the focus on South American plantings, which are currently lagging in Brazil amid persisting heat and dry conditions.
90-day outlook: The recent rally from the mid-August low could largely be attributed to an uptick in demand for U.S. soybean exports, making business abroad a longer-term focus. However, as the presidential election nears, risk-off sentiments could build. Currently, U.S. export sales are outpacing year-ago by nearly 3% as China has been a persistent purchaser in preparation for a possible trade war. Meanwhile, stronger-than-expected jobs data released today sent the dollar rocketing higher, with sentiments of a stronger economy and therefore inflation, which could hinder the oilseeds’ competitiveness on the global marketplace.
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 futures fell 13 3/4 cents to $5.89 3/4 and nearer the daily low. For the week, December SRW gained 9 3/4 cents. December HRW wheat futures dropped 13 1/2 cents to $5.98, nearer the daily low and for the week up 21 1/4 cents. December spring wheat fell 7 3/4 cents to $6.38 1/2 but rose 30 1/4 cents on the week.
5-day outlook: The winter wheat futures bulls laid an egg to end the trading week. Bulls will have to step up and show fresh power next week in order to keep the near-term price uptrends alive and keep the speculators interested in playing the long side of the markets. One factor that may work against the grain market bulls next week is a “risk-off” trading mentality in the general marketplace as the military confrontation between Israel and Iran may escalate next week. The latest monthly USDA supply and demand report is next Friday, Oct. 11. Wheat traders will closely examine the agency’s latest balance sheet. With the U.S. corn harvest in high gear, wheat traders will likely continue to look to the corn market for daily price direction. Crude oil prices today hit a five-week high above $75.00 a barrel. The Middle East tensions will likely keep crude oil prices elevated in the near term, which should be a supportive outside-market element for the wheat markets.
30-day outlook: Traders in the coming weeks will continue to monitor weather in major global wheat-producing regions. World Weather Inc. today said drying in the U.S. Plains “is beginning to raise concern over winter wheat establishment, despite some significant rain in hard red winter wheat areas during mid-September.” Not much rain is expected for the next ten days and temperatures will continue quite warm, resulting in slow emergence and establishment in unirrigated fields. Meantime, drought “remains a serious concern from eastern Ukraine into western Kazakhstan.” Greater rain is still needed in Australia production areas over the next few weeks “to ensure the best yields.” Argentina will remain dry-biased into the weekend with rain expected in some of the drier areas in the west and north next week. Southern Brazil crops will stay mostly in good shape, said the forecaster.
90-day outlook: USDA Thursday reported weekly U.S. wheat export sales of 443,700 MT for the week ended Sept. 26, up noticeably from the previous week and exceeded analysts’ pre-report expectations. U.S. wheat sales abroad will have to continue to improve to support sustained price uptrends in winter wheat futures markets. However, the U.S. dollar index today hit a six-week high. The USDX has been supported by geopolitical tensions and also by today’s solid U.S. jobs report. The recent sharp rally in the USDX only makes U.S. wheat less competitive on the world trade markets.
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 54 points to 73.27 cents and rose 55 points on the week.
5-day outlook: December cotton futures continue to trade sideways, limited by resistance at the 10-day moving average, with the marketplace seemingly relieved Hurricane Helene lacked a larger impact on the U.S. cotton crop. However, as the storm leaned farther eastward than expected, cotton in the Carolinas is likely still being assessed. Recent estimates by analysts suggest anywhere from a 300,000 to 800,000 RB reduction to the crop, though it will likely take some time to measure losses. Next week, USDA will release fresh supply and demand estimates on October 11, at 11 a.m. CT, which could provide some insight.
30-day outlook: USDA reported 20% of the cotton crop was harvested as of September 29, ahead of average by 4 percentage points, though with 80% of harvest remaining, weather will continue to be focus. World Weather Inc. reports drying in the Delta and southeastern states is improving crop conditions after recent excessive rainfall, though some fiber quality was compromised due to heavy rain. Meanwhile, dry weather in West Texas and the Texas Blacklands will be good for maturing crops and supporting fieldwork, though some computer models are predicting significant rain in western Texas and southwestern Oklahoma October 13-16. The forecaster stated the period should be closely watched, while also noting these models are likely exaggerating rainfall potentials.
90-day outlook: Demand for U.S. cotton has waned in recent months, with upland cotton commitments trailing year-ago by around 12.5% as top importer, China, struggles to combat deflationary economic conditions. However, a move to stimulate the economy could bolster demand for the natural fiber, though BMI, a unit of Fitch Solutions, expects the recent Chinese stimulus measure will likely only fuel short-term support for agriculture. Moreover, today’s stronger-than-expected jobs data sent the dollar higher amid rising sentiments of increasing hawkishness from the Federal Reserve, further buckling demand prospects.
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.