Corn
Price action: December corn futures rose 1 3/4 cents to $4.12 1/2 and near the session high.
Fundamental analysis: The corn futures market continues to languish in a sideways and choppy trading range that has been in place since July. The key outside markets were a mixed bag for corn today as higher crude oil prices were a positive but a firmer U.S. dollar index was a negative. The looming harvest of a bountiful U.S. corn crop and the related commercial hedge pressure are very likely to keep any rally attempts in corn futures muted in the coming weeks.
USDA on Monday afternoon USDA reported 65% of the U.S. corn crop as “good” to “excellent” and 12% “poor” to “very poor.” On the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect), the corn crop held unchanged at 368.2.
World Weather Inc. today said weather in the U.S. Midwest will be supportive of corn crop maturation and some harvest progress, although rain developing in the western and northern Midwest this weekend into next week will slow the processes. Recent flooding rain may have set back fieldwork from the northern U.S. Delta through the Tennessee River Basin, said the forecaster.
Technical analysis: The corn futures bears have the overall near-term technical advantage. However, extended sideways price action suggests a market bottom is in place. The next upside price objective for the bulls is to close December prices above solid chart resistance at the July high of $4.23 3/4. The next downside target for the bears is closing prices below chart support at the contract low of $3.85. First resistance is seen at last week’s high of $4.14 and then at the September high of $4.16. First support is at $4.05 and then at $4.00.
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 soybeans rose 1 1/2 cents to $10.06 but ended nearer the session low. December soymeal fell $2.30 to $321.50, while December soyoil rose 77 points to 39.88 cents.
Fundamental analysis: Soybeans favored the upside again but continued to move sideways in consolidative trade as technical pressure and soymeal weakness offset strength from soyoil futures. Meanwhile, the U.S. soybean crop continues to be rated quite favorably at 64% “good” to “excellent” as of Sunday, down one point from last week, while the “poor” to “very poor” rating increased one point to 11%. Crop consultant Dr. Michael Cordonnier notes recent hot and dry weather is not encouraging for pod filling, especially at the top of the plant and it could lead to smaller and lighter seeds. Moreover, recent and expected rains could slow harvest progress following recent flooding from the northern Delta through the Tennessee River Basin to southwestern Georgia and northwestern Florida, while rains are developing in the western and northern Midwest this weekend.
No changes have been in made in South American weather, with west-central and northern Argentina along with center west Brazil still looking at drier than usual weather through the balance of September. However, favorable rainfall is expected in southern Brazil and some southern and eastern-central parts of Argentina.
Earlier today, the Brazilian Association of Vegetable Oil Industries (Abiove) reported the ‘Fuels of the Future’ bill could increase the soybean crushing f or biodiesel production to 55.8 MMT in 2025, up from the current 31 MMT forecasted for 2024. The current total crushing estimate for 2024 is 54.4 MMT, according to Abiove’s latest supply and demand forecast.
Conab also released 2024-25 projections this morning of a 166.28 MMT soybean crop, which would be up 12.82% from last year if realized.
Technical analysis: November soybeans were limited today by the 10-day moving average of $10.09 1/2, which is backed by resistance at $10.11 1/4. Meanwhile, initial support continued to serve at $9.98 1/4, which is backed by the 20-day moving average of $9.85 3/4. Bears continue to have their sights on the August low of $9.55, while bulls need a close above $10.21 to gain technical traction.
December meal futures continued to face resistance at the 10-day moving average of $323.40, while support continued to serve at $320.70. Bears continue to maintain the technical advantage, with the camp maintaining their sights on the August low of $298.50, while bulls need a close above the August high of $335.00.
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 futures sunk 2 3/4 cents to $5.75 3/4 and closed near mid-range. December HRW futures fell 1/2 cent to $5.93, nearer session lows. December spring wheat rose 1 1/4 cents to $6.21.
Fundamental analysis: SRW futures struggled to maintain overnight gains, ultimately closing lower for the second consecutive session. Continued reports of lower production out of both the European Union and the Black Sea have failed to continue to support prices as much of the news could be largely priced in. Still, modestly weaker prices on low volume does little to negate the recent uptrend and does not dismay the bulls’ advantage, with recent weakness being chalked up to profit taking. France’s farm ministry cut its estimate for the country’s 2024 SRW crop to 25.78 MMT, which is in line with most private crop estimates. That would be 27% below last year’s crop.
Dryness in winter wheat acres across the northern hemisphere could lead to some major exporters cutting winter wheat plantings, further tightening the world balance sheet in 2025-26. A Reuters report indicated Ukraine had planted 6.9% of its winter grain area as of Sept. 16, well below average. Drought is limiting planting activity and could cut acres, the report says. Some needed rain is expected in U.S. HRW acres over the next week, but more rain will be necessary to help support winter crops, most of which will be sown in October.
Technical analysis: December SRW futures saw modest selling pressure throughout the session. Bulls continue to hold the near-term technical advantage. Initial resistance stands at today’s high of $5.84 1/4 and is backed by the 100-day moving average at $5.93, which capped gains the past couple sessions. Support lies at $5.74 1/2, the 10-day moving average, with firmer backing from $5.69 3/4. A breakdown below that mark targets support at $5.60 1/2.
December HRW futures saw muted volatility and traded on either side of unchanged today. Initial resistance stems from the psychological $6.00 mark, with backing from the 100-day moving average at $6.15 3/4. Support comes in at $5.89 1/4, the 20-day moving average, which is reinforced by the Sept. 9 low at $5.83 3/4.
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 fell 66 points to 72.16 cents, forging a near mid-range close.
Fundamental analysis: Cotton futures held a narrow range, with U.S. dollar strength pressuring today’s price action, while another day of crude oil gains limited selling interest.
Today marks the start of the Federal Reserve’s Open Market Committee meeting, which will wrap up tomorrow, with a statement and press conference from Fed Chairman Jerome Powell. The marketplace is expecting a rate cut, with increased sentiments of a half-point cut.
USDA reported the cotton crop as 39% “good” to “excellent” as of Sunday, down one point from last week, while the “poor” to “very poor” rating dropped two points to 26%. The Texas crop was rated 28% in the top two categories and 26% in the bottom two. USDA reported 54% of the cotton crop had bolls opening, four points ahead of average, including large amounts in the Delta and Southeast where remnants from Hurricane Francine dumped heavy rainfall during the weekend. Meanwhile, cotton harvest advanced two points to 10%, which was two points ahead of average for the period.
Technical analysis: December cotton bulls were able to end the session above the 100-day moving average of 72.04 cents for the second straight session, though resistance stood at Monday’s high of 72.99 cents, which is backed by resistance at 73.90 cents. Bulls’ next objective is to reach the August high of 75.84 cents, while bears continue to focus on the August low of 66.26 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.