Corn
Price action: December corn rose 1/4 cent to $4.21, but nearer the session low.
Fundamental analysis: Corn futures saw very modest spillover strength from firmer wheat futures throughout most of the session, which was quite remarkable amid an advance in the U.S. dollar to a seven-week high. Demand prospects continue to remain solid, with USDA reporting daily sales of 126,000 MT to unknown destinations during 2024-25. Meanwhile the Energy Information Administration reported ethanol production rose 23,000 (2.3%) barrels per day (bpd) to 1.038 million bpd during the week ended Oct. 4. Production was also up 32,000 bpd (3.2%) from year-ago, while ethanol stocks plummeted 1.305 million barrels to 22.154 million barrels.
In Brazil, demand could begin ramping up as Inpasa, Brazil’s largest corn ethanol producer, began operations earlier today on an expansion of its main biorefinery, which can now be considered among the world’s largest production units for corn-based ethanol, according to the company. The announcement was made in the wake of efforts by Brazil’s government to increase the footprint of biofuels in the local markets, as President Luiz Inacio Lula da Silva signed a bill known as Fuel of the Future into law today. Corn ethanol production has been growing in the country and is expected to reach around 20% of the country’s total ethanol output in the current cycle.
Early Thursday morning, USDA will release weekly export sales data, which is expected to show net sales between 900,000 MT and 1.7 MMT for the week ended Oct. 3. Last week, net sales of 1.684 MMT were reported for the previous week.
Technical Analysis: December corn future continued to struggle against resistance at the 10- and 100-day moving averages of $4.23 3/4 and $4.25, while the downside was limited by support at Tuesday’s low of $4.19 1/4, which is backed by the 20-day moving average of $4.16 1/4. Bulls continue to hold the near-term technical advantage, with prices in a five-week-old uptrend on the daily bar chart. The next price objective for bulls is to close December futures above $4.50, while bears are looking for a close below $4.10. Resistance will continue to serve at the 10- and 100-day moving averages, then at $4.31 1/2, which is backed by last week’s high of $4.34 1/2, while initial support lies at the 20-day moving average, then at $4.13 3/4 and again at the 40-day moving average of $4.08 1/2, which is backed by 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: November soybeans rose 4 cents to $10.20 1/4 and nearer the session high. December soybean meal dipped $1.80 to $321.20 and nearer the daily low. December soybean oil fell 3 points to 43.06 cents and nearer the session high.
Fundamental analysis: The soybean futures market today saw some mild spillover buying from modest gains in the wheat futures markets. However, a higher U.S. dollar index and weaker crude oil prices were negative “outside-market” elements that limited buying interest in the soy complex.
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.” Such will also likely keep commercial hedge pressure stronger in futures markets as farmers move their crop across the scales at a rapid pace. Meantime, Brazil and Argentina weather is still leaning toward some rain during the next 10 days to two weeks. Expected rains will eventually benefit planting, emergence and crop establishment in both countries.
Soybean traders are awaiting Thursday morning’s weekly USDA export sales report, which is expected to show U.S. soybean sales of 800,000 MT to 1.7 MMT in the 2024-25 marketing year, and sales of zero to 50,000 MT in the 2025-26 marketing year. The monthly USDA supply and demand report is out Friday morning, including fresh updates from the agency on the size of this year’s U.S. soybean crop.
Technical Analysis: The soybean bulls have the overall near-term technical advantage. Prices are in a seven-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 the September high of $10.69 3/4. The next downside price objective for the bears is closing prices below solid technical support at $10.00. First resistance is seen at this week’s high of $10.39 1/2 and then at $10.50. First support is seen at today’s low of $10.11 1/2 and then at $10.00.
Soybean meal prices are still in a seven-week-old uptrend on the daily bar chart, but just barely. The next upside price objective for the meal bulls is to produce a close in December futures above solid technical resistance at the October high of $351.60. The next downside price objective for the bears is closing prices below solid technical support at $310.00. First resistance comes in at today’s high of $327.00 and then at $335.00. First support is seen at this week’s low of $319.60 and then at $315.00.
Soybean oil bulls have the slight overall near-term technical advantage. However, a price uptrend on the daily bar chart has stalled out. 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 today’s high of 43.58 cents and then at 44.00 cents. First support is seen at today’s low of 42.34 cents and then at 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
Price action: December SRW wheat rose 4 1/4 cents to $5.99 but ended nearer the session low. December HRW wheat rose a nickel to $6.08 3/4, forging a close above the 100-day moving average. December spring wheat advanced 3 1/4 cents to $6.48 1/4.
Fundamental analysis: Wheat futures were the undeniable bright spot in the grain markets today, with the largely modest price action nothing short of impressive amid an extended runup in the U.S. dollar. Global demand prospects continue to firm, while supply concerns continue to loom amid shaky growing conditions in key growing regions.
World Weather Inc. reports partial relief from dryness is expected during mid-week next week in eastern Ukraine and western Russia, where winter crops may have become a little better established, though follow up rain will be imperative. Australia also needs greater volumes of rain in Western and South Australia while conditions in Victoria and New South Wales are quite favorable. Argentina will benefit from rain in the next ten days, although a full restoration of yield potential may not be possible. However, wheat in southern Brazil should remain favorably rated. U.S. crops are expected to remain quite dry in the Great Plains while recent drier conditions in the lower Midwest, Delta and southeastern states will be good for future planting. The forecaster notes rain is needed soon in the Great Plains, Pacific Northwest and northern and western parts of the Midwest where crop moisture stress is expected for a while in early planted areas while emergence and establishment are delayed until significant rain falls.
USDA will release its Weekly Export Sales Report early Thursday morning, with traders expecting net sales to have ranged from 250,000 to 550,000 MT during the week ended Oct. 3. Last week, net sales of 443,700 MT were reported for the previous week, which were up noticeably from the previous week and 46% from the four-week average.
Technical Analysis: December SRW wheat futures continued to be limited by the 100-day moving average of $6.00 1/2, though the 10-day moving average of $5.94 1/4 continued to serve up solid initial support. Bulls are looking to secure a close above $6.50, with resistance layered first at the 100-day moving average, then at $6.05 1/4, $6.11 1/2 and the 200-day moving average of $6.14 3/4, which is backed by the recent high of $6.27 1/4. Meanwhile, bears are looking towards breaching support at $5.64, with first support at the 10-day moving average, and again at the 20- and 40-day moving averages of $5.86 1/2 and $5.70 1/2.
December HRW wheat futures ended the session just above the 100-day moving average of $6.08 1/2, with initial resistance now serving at $6.14 3/4, which is backed by the 200-day moving average of $6.20 3/4 and the recent high of $6.23 1/2. Meanwhile, initial support will now serve at the 100-day moving average, then at 10-day moving average of $5.98 1/4, then at $5.92 3/4 and again at the 20- and 40-day moving averages of $5.88 1/4 and $5.75 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
Price action: December cotton fell 2 points to 72.25 cents and nearer the daily low.
Fundamental analysis: The cotton market paused today following recent selling pressure that has inflicted some near-term technical damage. Buying interest in cotton was limited by bearish outside markets that included a firmer U.S. dollar index that hit a seven-week high today, and weaker crude oil prices.
Also a negative for cotton is the highly anticipated economic briefing by China’s National Development and Reform Commission Tuesday that underwhelmed China’s markets. The briefing offered little new in the way of new stimulus measures. China’s Shanghai Composite lost 6.6% Wednesday, while the CSI 300 fell over 7%. Hong Kong’s Hang Seng also closed 1.7% lower after Tuesday’s 9% loss. Weaker China economic growth likely means less demand for U.S. cotton coming from China.
World Weather Inc. today said U.S. cotton areas “will experience dry-biased weather for the next 10 days, favoring crop maturation and some harvesting. Hurricane Milton is not likely to impact cotton areas in the southeastern states. Cool temperatures next week may bring a threat of soft frost to the northern Delta, Virginia and North Carolina, but most likely the airmass will moderate prior to getting into those areas.”
Traders are awaiting Thursday morning’s weekly USDA export sales report, with bulls hoping for better U.S. sales numbers abroad than what has been reported lately. Reports said U.S. cotton export sales in August were the lowest in 10 years.
Technical Analysis: The cotton futures bulls have lost their overall near-term technical advantage. A six-week-old price uptrend on the daily bar chart has been negated. 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 then at this week’s high of 74.14 cents. First support is seen at this week’s low of 71.11 cents and then at 70.00 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.