Corn
Price action: December corn plunged 7 cents to $4.05 3/4, marking the largest daily loss since July 30.
Fundamental analysis: Corn futures fell victim to losses in wheat futures combined with U.S. dollar strength, despite headlines of global production hiccups. Earlier today, Ukraine’s agricultural producers’ UAC forecasted the country’s corn production would fall to 21 MMT to 22 MMT in 2024-25, down sharply from year-ago amid a plunge in production due to poor weather. UAC reported 5 MMT of production would be used domestically, leaving 15 MMT to 17 MMT for export. Meanwhile, the International Grains Council (IGC) also cut its 2024-25 world corn crop outlook 2 MMT to 1.224 billion metric tons.
However, U.S. corn exports have trailed off as of late, causing concern over demand in the coming months. Though this morning USDA reported net corn sales totaled 847,400 MT for the week ended Sept. 12, which were near the low-end of pre-report expectations ranging from 550,000 MT to 1.4 MMT, but up notably from the previous week. Exports during the week totaled 572,900 MT.
Weather throughout the Midwest continues to prove unseasonably warm and dry, though World Weather Inc. reports a wetter weather pattern will begin to form in much of the Midwest outside of some northwestern areas through Monday, leaving all areas with at least a temporary increase in soil moisture. Fieldwork will likely be interrupted by the rain, but soils are dry enough to absorb much of the moisture without becoming excessively muddy and harvesting should quickly when drier weather resumes Tuesday through Oct. 3
Technical analysis: Bears showed their dominance today, with December corn ending the session below the 10-day moving average of $4.08 1/4, while additional support at the 40- and 20-day moving averages of $4.02 1/4 and $4.03 curbed heavier selling efforts. However, a push below the levels will likely increase selling efforts toward the contract low of $3.85. Conversely, the 10-day moving average will now serve as initial resistance, followed by $4.10 3/4 and $4.14 3/4, with bulls needing a close above resistance at $4.23 3/4 in order to reclaim the technical advantage.
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 fell 3/4 cent to $10.13 1/4 and closed near mid-range. December meal futures climbed 20 cents to $321.60, near mid-range. December bean oil futures climbed 62 points to 40.93 cents.
Fundamental analysis: Soybean futures saw action on either side of unchanged before closing slightly lower on the day. November futures continue to struggle breaking above 40-day moving average resistance which has limited nearly all of the upside in September. Reports of slowed soy exports out of Argentina did little to support prices today. Grain ships loaded with soybeans and corn at Argentina’s major inland river ports around Rosario are hauling less cargo as water levels drop to near record lows due to a major drought upstream in Brazil. The Parana River, which carries almost 80% of Argentina’s grains and oilseeds for export, is at the second lowest level for this time of year since 1970, behind only a major decline in 2021, data from the Rosario Grain Exchange showed.
China continues to be a strong purchaser of U.S. soybeans despite heightening tensions between China and many of its trade partners. China has not slowed purchases in recent weeks despite heightening tensions between both the E.U. and Canada. An optimist might view this as healthy for the U.S. and Chinese trade relationship. As China ramps up tensions with other countries, it could drive additional buying to U.S. commodities from the world’s largest raw commodity importer. China once again led soy purchases this morning, buying 973,900 MT of soybeans in the week ended Sept. 12. USDA reported net sales of 1.748 MMT, which were above expectations of 500,000 MT to 1.4 MMT for 2024-25. Historically, the late summer and early fall is when the U.S. ships the majority of soybeans for the marketing year. Shipments have been slow to start the marketing year, which is concerning and could be playing a role in November beans struggle to break above technical resistance.
Technical analysis: November soybeans showed relative strength to falling corn and wheat futures today but struggled to hold onto gains throughout the session. Volume has been relatively over the past week, with the exception of yesterday’s surge higher, which was largely due to short covering. Bulls objective is scoring a daily close above resistance at $10.16, the 40-day moving average. Further strength would find resistance at $10.24 3/4. Support at $10.05 1/4, the 10-day moving average, has limited most of the downside over the past week. A break below that mark finds support at the psychological $10.00 mark then $9.95 1/4.
December meal futures’ range continues to tighten on the daily bar chart. A move is likely to begin in the next couple of days which will determine the intermediary direction of meal futures, which could bleed over to soybeans as well. A close above resistance at $325.00 would indicate a bullish breakout, with next resistance standing at $329.50, the 100-day moving average. A break below support at $319.40 would indicate a breakdown, eyeing support at $317.20 then $313.60.
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 10 1/4 cents to $5.65 1/2. December HRW wheat fell 14 cents to $5.64 1/2. Both markets closed nearer their session lows and closed at two-week-low closes. Spring wheat futures sunk 8 3/4 cents to $6.07 3/4.
Fundamental analysis: The winter wheat market bulls have faded this week amid fresh chart-based selling pressure from the speculators as technical postures have deteriorated. Solid losses in the corn futures market today also spilled over into selling pressure in the wheat futures. Wheat traders are likely to continue to look to the corn market for daily price direction, as U.S. corn harvest is set to commence with a big crop expected.
USDA this morning reported U.S. wheat export sales of 246,300 MT for the week ended Sept. 12, down 48% from the previous week and 46% from the four-week average. Net sales were below pre-report range of expectations. However, export shipments during the week reached a marketing-year high of 642,100 MT.
World Weather Inc. today said that in U.S. HRW regions, rainfall in the next seven days “will further benefit the region with more rise in topsoil moisture and better winter wheat planting prospects.” The rain will be significant in some areas Saturday into Sunday and may lead to some localized flooding. Drier weather with unusual warmth is expected in the second week of the outlook though and follow-up rainfall in October “will be very important and needed,” said the forecaster. Meantime, in the northern Plains, World Weather said conditions through the next two weeks will be mostly favorable for the region with temperatures often being above average and little to no rain. “The environment will be great for aggressive late season fieldwork progress.”
Technical analysis: While recent price action still suggests the winter wheat markets have put in near-term lows, the fledgling price uptrends on the daily bar charts have been negated and the bulls are fading. 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 $5.40. First resistance is seen at today’s high of $5.77 1/4 and then at $5.84 1/4. First support is seen at $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 $6.00. The bears’ next downside objective is closing prices below solid technical support at $5.50. First resistance is seen at today’s high of $5.80 1/4 and then at $5.88. First support is seen at $5.60 and then at $5.50.
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 futures surged 176 points to 73.03 cents, though settled well off session highs.
Fundamental analysis: December cotton futures surged to a fresh for-the-move high today, negating losses from the past couple of days. Cotton prices were supported by a surging equity market today that saw the S&P 500 breaking record highs. Higher crude oil futures were also supportive for cotton bulls. Outside markets were reeling from the implications of the Federal Reserves 50 basis point cut yesterday afternoon. A weaker bond market today (higher interest rates) led the U.S. dollar index higher in early trade, though strong gains faded as the session went on. China remains a slow buyer of U.S. cotton as noted in today’s Export Sales Report. China currently has around 301,800 bales of outstanding sales of upland cotton, less than a third of a year ago. Exports to China so far this marketing year are about a fifth of what they were last year at this time. Vietnam, Pakistan and India have made up a portion of the decreased Chinese sales, but a slowing Chinese economy has worldwide implications. If the Chinese economy continues to slow, it will be difficult for cotton prices to rebound much.
USDA reported net sales of 120,800 bales, down 5% from the previous week and 20% from the four-week average. Exports of 134,500 bales were up 6% from a week ago but down 14% from the four-week average.
Technical analysis: December cotton futures marked a fresh for-the-move high today but closed well off intraday highs. Bulls are maintaining an uptrend on the daily bar chart stemming from the Aug. 16 low. Initial resistance stems from the Sept. 16 close of 72.82 cents, which is backed by today’s highs of 73.55 cents. Support comes in at the 100-day moving average at 72.16 cents then 70.93 cents, which limited selling pressure earlier this week.
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.