Corn
Price action: December corn fell 2 1/2 cents to $4.10 3/4, a near-mid range close.
Fundamental analysis: Corn futures took back a portion of Friday’s gains, though losses stemming from notable selling across wheat futures were limited by supportive outside markets. Meanwhile, USDA’s Weekly Export Inspection Report and weaker-than-expected NOPA crush data ultimately cast a further shadow as the session progressed, although technical support at the 10-day moving average limited seller efforts.
However, economic woes in China could have a more prolonged impact on commodities as the country faces oversupply and waning demand, challenging global agriculture. Earlier today, weekly corn inspection data showed a second-straight weekly decline, dropping 318,180 MT (20.5 million bu.) from the previous week to 521,118 MT, though were still within the expected pre-report range of 250,000 MT to 1.0 MMT.
In general, the marketplace is preparing for this week’s Federal Open Market Committee (FOMC) meeting, which will begin on Tuesday and end Wednesday afternoon with a statement and press conference from Fed Chairman Jerome Powell. After recently favoring a 25-basis point rate cut, market expectations are now leaning more toward a half-point cut.
Following the close, USDA will update the corn crop’s condition ratings in its Crop Progress Report. Traders are expecting a one-point decline in the “good” to “excellent” rating to 63%, according to a Bloomberg poll of analysts.
Technical analysis: December corn held an inside range, with selling efforts limited by support at the 10-day moving average of $4.08 1/2, which is backed by the 40- and 20-day moving averages of $4.03 1/4 and $4.01 1/2. However, resistance at Friday’s high of $4.14 will continue to serve up resistance, as will the $4.16 area, which has proven difficult since the end of July. Bears continue to grasp the near-term technical advantage and continue to have their sights set on the contract low of $3.85, while bulls need a close above resistance at $4.23 3/4 in order to garner technical momentum.
What to do: Get current with advised sales.
Hedgers: You are 100% sold on 2023-crop production.
Cash-only marketers: You are 100% sold on 2023-crop.
Soybeans
Price action: November soybean futures sunk 1 3/4 cents to $10.04 1/2, settling nearer session lows. October meal futures climbed $1.70 to $320.10 and closed nearer session highs. October bean oil futures firmed 22 points to 39.75 cents.
Fundamental analysis: Soybeans saw a relatively quiet day of trading, with rallies being sold and dips being bought. The bull flag in November futures is getting long in the teeth, which is concerning for bulls. Prices held up fairly well despite NOPA crush use falling far more than anticipated. Monday’s NOPA crush report for August came in at 158.008 million bushels, down 24.873 million bushels from July and the worst since Sept. 2021. It was bearish against expectations. Crush was below trade forecasts of 171.325 million bushels from Reuters. That brings the 2023-24 soybean crush use down to around 2.286 billion bushels, below USDA’s September estimate of 2.295 billion bushels. Despite low crush, soyoil use remains quite robust. The slowdown in crush is likely indicative of plants taking downtime for seasonal maintenance, an typical occurrence in August. Crush should rebound sharply in September and continue to ramp up through the fall as additional plants come online.
USDA is poised to release their weekly Crop Progress Report this afternoon. Analysts expect conditions to tick down a point to 64% “good” to “excellent” given heat and excessive dryness over the past week. USDA will also report how much of the bean crop has been harvested as well, which is estimated at 5%, according to a Bloomberg poll.
USDA reported weekly soybean export inspections of 401,287 MT (14.7 million bu.), up 36,284 MT from the previous week and within the pre-report range of 325,000 to 650,000 MT.
Technical analysis: November soybeans traded on both sides of unchanged throughout today’s session. Bulls continue to hold the near-term technical advantage. Resistance stems from downtrend line resistance at $10.07 then the 40-day moving average at $10.17. Support comes in at the 20-day moving average at $10.03, which capped most losses today, the psychological $10.00 mark, then $9.95 1/2.
October meal futures pivoted near unchanged most of the session before settling modestly higher. Bulls continue to hold a slight technical advantage. Resistance stems from $322.5 and is reinforced by resistance at $324.0, then the 100-day moving average at $327.2. Bulls are seeking to hold support at $316.4, the 40-day moving average, then last week’s low of $312.3 on a pullback.
October bean oil futures saw modest corrective buying today, though bears retain full control of the technical advantage. Bulls are looking to close prices above resistance at 40.32 cents, the 10-day moving average, then last week’s high of 41.29 cents. Support stems from today’s low of 39.26 cents, which is reinforced by support at 38.89 cents.
What to do: Get current with advised sales.
Hedgers: You should be 100% sold in the cash market on 2023-crop. You should have 10% of expected 2024-crop production sold for harvest delivery next fall.
Cash-only marketers: You should be 100% sold on 2023-crop. You should have 10% of expected 2024-crop production sold for harvest delivery next fall.
Wheat
Price action: December SRW wheat fell 16 1/4 cents to $5.78 1/2. December HRW wheat fell 19 1/2 cents to $5.80 1/2. Both markets finished nearer their session lows. December spring wheat futures closed down 15 3/4 cents at $6.19 3/4.
Fundamental analysis: The winter wheat futures markets saw hefty profit-taking pressure from the shorter-term futures traders to start the trading week, after both markets hit two-month highs last Friday. Some needed rains in the forecast for the U.S. plains later this week were also a negative for futures price action today. Wheat bulls got no help today from friendly daily “outside-market” forces that included a lower U.S. dollar index and higher crude oil prices. Weakness in corn and soybean futures prices today likely added to the selling pressure in wheat.
USDA this morning reported U.S. wheat export inspections of 556,901 MT for the week ended Sept. 12, down 63,901 MT from the previous week but near the upper end of pre-report expectations.
World Weather Inc. today said rain is needed for winter wheat crop establishment in southern Russia and parts of Ukraine, but none is expected for a while. Rain in U.S. hard red winter wheat areas later this week into next week will be welcome. There is still some concern about drying in Western Australia while timely rain occurs in New South Wales, Victoria and South Australia. Dryness remains a concern for west-central Argentina and too much rain could threaten wheat in Parana, Brazil. Planting prospects look good for China, said the forecaster.
This afternoon’s weekly USDA crop progress reports are expected to show U.S. spring wheat harvested at 92% complete as of Sunday versus 85% last week and 93% one year ago at the same time. U.S. winter wheat planted is seen at 13% complete versus 6% last week and 15% a year ago.
Technical analysis: Recent price action still suggests the winter wheat futures markets have put in near-term lows. Prices are still trending higher on the daily bar charts. SRW bulls’ next upside price objective is closing December prices above solid chart resistance at $6.00. The bears’ next downside objective is closing prices below solid technical support at $5.50. First resistance is seen at $5.85 and then at today’s high of $5.96. First support is seen at last week’s low of $5.60 1/2 and then at $5.50. The HRW bulls’ next upside price objective is closing December prices above solid technical resistance at the July high of $6.17 3/4. The bears’ next downside objective is closing prices below solid technical support at $5.50. First resistance is seen at $5.94 and then at $6.00. First support is seen at last week’s low of $5.70 and then at $5.60.
What to do: You should have claimed profits on the 2024-crop hedges in July SRW futures. Wait on a corrective rebound to increase sales.
Hedgers: You should be 60% sold on 2024-crop in the cash market. You should also have 10% of anticipated 2025-crop production forward sold for harvest delivery next year.
Cash-only marketers: You should be 60% sold on 2024-crop. You should also have 10% of anticipated 2025-crop production forward sold for harvest delivery next year.
Cotton
Price action: December cotton rose the 300-point limit to 72.82 cents, closing above the 100-day moving average and at the highest level since July 1.
Fundamental analysis: Cotton futures kicked off the week jumping the limit amid notable outside market support and increasing sentiments of a half-point rate cut at this week’s FOMC meeting. Short-covering efforts were extended above the 100-day moving average, a technical level not tested since mid-April, improving bulls’ near-term technical posture.
USDA will update cotton condition ratings following the close. Last week’ the crop’s “good” to “excellent” rating declined four points from the previous week to 40%, while the “poor” to “very poor” rating rose four points to 28%. World Weather Inc. reports West Texas cotton remains in good condition following warm- to hot weather over the weekend, with expected rains proving beneficial for new boll development. Good harvest weather continued in the Texas Coastal Bend, while the Blacklands crop of Texas was still rated favorably during the weekend. Meanwhile, in the Delta, drier weather will return, which will help crops improve following recent rain. However, the forecaster notes too much rain may have occurred during the weekend in part of Alabama, southwestern Georgia and northwestern Florida, although the situation should improve this week.
Technical analysis: December cotton bulls showed their dominance today, as evidenced by a close above the 100-day moving average of 72.10 cents, a feat not achieved since April 10. Bulls now have their sights set on the June 27 high of 75.84 cents, with additional resistance serving at the 200-day moving average of 76.61 cents. Conversely, initial support will now serve at the 100-day moving average, which is backed by support at 71.44 cents, 70.63 cents and the 20-, 10- and 40-day moving averages of 69.67 cents, 69.62 cents and 69.00 cents.
What to do: Get current with advised sales.
Hedgers: You should be 100% sold on 2023-crop. You should also have 25% of expected 2024-crop production forward sold for harvest delivery.
Cash-only marketers: You should be 100% sold on 2023-crop. You should also have 25% of expected 2024-crop production forward sold for harvest delivery.