Corn
Price action: December corn rose 1/4 cent to $4.12 3/4, marking a mid-range close.
Fundamental analysis: Corn futures mostly favored the downside in generally directionless trade as the general marketplace remained subdued ahead of the Federal Reserve’s rate decision and comments from Fed Chair Jerome Powell. Meanwhile, likely hovering over prices was a drop in China’s corn imports to the lowest level in several years following an intense phase of imports earlier this year as reported by Fastmarkets. That country’s corn imports in August were reported at 430,000 MT, according to the General Administration of Customs (GASC), the lowest monthly volume since March 2020 and down sharply from July’s 1.09 MMT and the 1.19 MMT imported in August 2023. However, it was noted that recent unfavorable weather conditions in China could potentially lead to a poorer-than-expected harvest, which could reignite demand for corn imports. Traders will closely monitor USDA’s weekly Export Sales Report, due out first thing Thursday morning, with analysts expecting net sales to have ranged from 550,000 MT to 1.4 MMT during the week ended Sept. 12. Last week, net sales totaled 666,458 MT.
In the U.S., harvest weather continues to prove favorable, although World Weather Inc. notes there is likely to be some rain disruption in the central and western production areas in the coming week. The second week may be a little drier again depending on the tropics.
This morning, the Energy Information Administration reported ethanol production averaged 1.049 million barrels per day (bpd) during the week ended Sept. 13, down 31,000 bpd (2.9%) from the previous week but up 69,000 bpd (7.0%) from last year. Ethanol stocks increased 71,000 barrels to 23.785 million barrels.
Technical analysis: December corn futures continued to consolidate in sideways trade as resistance at $4.14 1/4 and $4.15 3/4 limited buying interest, while initial support continued to serve at $4.09 1/2, which is backed by the 10-day moving average of $4.08 3/4. Meanwhile, additional support stood at the convergence of the 20- and 40-day moving averages, each trading at $4.03. While bears continue to grasp the technical advantage, bulls are gaining confidence that a near-term bottom is in place. However, the camp will need a close above $4.23 3/4 to recapture the technical advantage, while bears continue to look to the contract low of $3.85.
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 8 cents to $10.14 and near mid-range. December soybean meal fell 10 cents to $321.40 and nearer the session low. December soybean oil rose 43 points to 40.31 cents and near mid-range.
Fundamental analysis: Soybean and soybean meal futures markets remain trapped in well-defined trading ranges. Looming harvest pressure and the related commercial hedging is keeping the upside limited but improved technical postures and ideas seasonal market bottoms may be in place are limiting the downside.
This afternoon’s more aggressive 0.5% interest rate cut by the Federal Reserve modestly lifted soybeans in late trading and should be friendly for the soy complex in the near term, possibly inviting better speculator buying interest.
World Weather Inc. today said “good maturation and harvest weather continues in the U.S. Midwest, although there is likely to be some rain disruption in the central and western production area in this coming week. “The second week may be a little drier again depending on the tropics. The southeastern U.S. could be threatened by another tropical cyclone next week, though confidence is still very low,” said the forecaster.
Thursday morning’s weekly USDA export sales report is expected to show U.S. soybean sales of 500,000 to 1.6 million MT for the 2024-25 marketing year and sales of zero to 50,000 MT for the 2025-26 marketing year.
Technical analysis: The soybean bean bears have the overall near-term technical advantage. However, recent sideways-to-higher price action suggests a market bottom is in place. The next near-term upside technical objective for the soybean bulls is closing November prices above solid resistance at $10.50. The next downside price objective for the bears is closing prices below solid technical support at the contract low of $9.55. First resistance is seen at today’s high of $10.22 and then at the September high of $10.31 1/4. First support is seen at $10.00 and then at $9.95 1/2.
Recent price action in soybean meal also suggests a market bottom is in place. The next upside price objective for the meal bulls is to produce a close in December futures above solid technical resistance at the August high of $335.00. The next downside price objective for the bears is closing prices below solid technical support at $308.00. First resistance comes in at today’s high of $327.00 and then at $332.60. First support is seen at $316.70 and then at $312.00.
Soybean oil bears have the overall near-term technical advantage. The next upside price objective for the bean oil bulls is closing December prices above solid technical resistance at the September high of 42.68 cents. Bean oil bears’ next downside technical price objective is closing prices below solid technical support at the contract low of 37.66 cents. First resistance is seen at today’s high of 40.84 cents and then at 42.00 cents. First support is seen at 39.50 cents and then at this week’s low of 38.64 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 was unchanged at $5.75 3/4, while December HRW wheat fell 1 1/2 cents to $5.78 1/2, each forging low-range closes. December spring wheat fell 4 1/4 cents to $6.16 3/4.
Fundamental analysis: SRW wheat futures edged lower for the third straight session, though technical support limited selling. Meanwhile, looming global supply uncertainties continue to hover over prices in the wake of fresh cuts from France’s ag ministry to the country’s 2024-25 soft wheat exports outside of the EU, which would be down 61% from last year due to the smallest crop since 1986. The export forecast within the bloc was trimmed 500,000 MT to 6 MMT, now expected to be 4.5% below 2023-24. Moreover, Ukrainian state news agency Ukrinform quoted the ag minister as saying Ukraine’s exportable grain surplus is seen at 43.2 MMT for 2024-25, which would be down 7.5 MMT (14.8%) from 2023-24. In Russia, Black Sea consulting firm SovEcon also cut its forecasts for Russia’s wheat exports to 48.1 MMT in 2024-25, down from its estimate of 52.4 MMT last year. The firm now expects Moscow to impose wheat export quotas for the second half of the year, though it doesn’t know how restrictive it will be.
Areas of Russia and Ukraine continue to face dry conditions, with rain needed for winter crop establishment, though none is expected for a while. In the U.S. Rain in HRW wheat areas overnight and that expected periodically in the coming week will be welcome. However, concerns linger over drying in Western Australia and recent frost and freezes in southeastern Australia, which may have burned back some new crop development. Wheat in South Africa will benefit from rain this week as will crops in far southern Brazil and southern and eastern Argentina, though dryness remains a concern for west-central Argentina and too much rain could threaten wheat in Parana, Brazil.
USDA will release its weekly Export Sales Report early Thursday morning, with analysts expecting net sales to have ranged from 300,000 to 650,000 MT for the week ended Sept. 12. Last week, net sales totaled 474,875 MT, up 40% from the previous week and 11% from the four-week average.
Technical analysis: December SRW wheat ended the session below the 10-day moving average of $5.77 1/4, which has served as recent support, while initial resistance stood at $5.82 3/4. Initial support will now serve at $5.69 3/4, which is backed by the 20- and 40-day moving averages of $5.61 1/2 and $5.59 1/2, while initial resistance will now stand at the 10-day moving average. From there, resistance will be layered from $5.82 3/4 to the 100- and 200-day moving averages of $6.14 1/2 and $6.20 1/4.
December HRW futures continued to face resistance at the 10-day moving average $5.83 3/4, though initial support continued to serve at $5.75 1/4, which is backed by the 20- and 40-day moving averages of $5.70 1/4 and $5.68 3/4. However, corrective buying efforts will face additional resistance of $5.91 3/4 and $5.96 1/2, which is backed by the recent high of $6.04 1/4.
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 89 points to 71.27 cents and near mid-range.
Fundamental analysis: The cotton market faced more selling pressure today after the false upside technical price breakout on the daily bar chart seen on Monday. However, futures prices did move well off their daily lows in late trading after the Federal Reserve initiated a more aggressive 0.5% interest rate cut this afternoon that sunk the U.S. dollar index. Lower U.S. interest rates mean lower borrowing costs, which are likely to mean better consumer demand for apparel this fall and into the holiday season.
World Weather Inc. today said cotton conditions in West Texas remain good and a few showers in the coming week “will be welcome and beneficial for late-season boll development.” Drier weather has returned to the U.S. Delta this week and that will help crops improve after recent rain. “Too much rain may have also occurred during the weekend in a part of Alabama, southwestern Georgia and northwestern Florida, although the situation should improve this week as drier weather resumes.” Good harvest weather continued in the Texas Coastal Bend and the Blacklands crop of Texas was still rated favorably during the weekend, said the forecaster.
Cotton traders will closely scrutinize Thursday morning’s weekly USDA export sales report, especially for China’s buying interest in the U.S. fiber.
Technical analysis: The cotton futures bears have the overall near-term technical advantage as price action this week saw a failed upside breakout attempt. The next upside price objective for the cotton bulls is to produce a close in December futures above technical resistance at this week’s high of 72.99 cents. The next downside price objective for the cotton bears is to close prices below solid technical support at the August low of 66.26 cents. First resistance is seen at 72.00 cents and then at today’s high of 72.57 cents. First support is seen at 71.00 cents and then at 70.00 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.