Corn
Price action: December corn rallied 11 3/4 cents to $4.13 1/2, closing near the session high at the highest level since July 25.
Fundamental analysis: Corn futures caught a bid to start the week, with strong gains in the soy complex underpinning prices, despite lacking outside market support. Meanwhile, solid export inspection data for the week ended Sept. 19 exacerbated today’s gains, with net inspections totaling 1.1 MMT (43.3 million bu.) which jumped 533,911 MT from the previous week and exceeded analysts’ expectations which ranged from 475,000 to 900,000 MT.
Today’s rally lifted December corn futures back above the 40-, 20- and 10-day moving averages, increasing bulls’ technical posture, though hedge pressure could intensify as the gut slot of harvest approaches in October, limiting traders’ appetite to buy. Harvest weather should prove favorable throughout much of the Midwest, despite a wetter forecast next week. World Weather Inc. reports the rains are not likely to cause extended delays to harvest as soils are dry enough to absorb a significant amount of rain without becoming saturated.
USDA will update the crop’s condition rating this afternoon in its weekly Crop Progress Report. Analysts expect the crop to have declined a point to 64% “good” to “excellent,” according to a Bloomberg poll.
Technical analysis: December corn advanced steadily higher in overnight trade, which intensified as the day session progressed. A close was held back above the 40-, 20- and 10-day moving averages of $4.02 1/4, $4.04 3/4 and $4.08 1/2, with initial resistance now serving at $4.16, which is backed by the recent high of $4.23 3/4 and the 100-day moving average of $4.32 1/2. Conversely, initial support will now serve at today’s failed resistance levels, then at $3.99 3/4, $3.97 3/4, $3.94 and 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 rocketed 27 1/4 cents higher to $10.39 1/4 and settled near session highs. December meal futures climbed $9.5 to $328.7, near session highs. December bean oil futures firmed 48 points to 41.84 cents.
Fundamental analysis: Soybeans led the ag complex higher today, surging above 40-day moving average resistance and closing November futures at the highest mark since Aug. 5. The technical strength seen in beans was a sight for sore eyes after last week’s lackluster finish in grains. Heat and dryness in Brazil likely played a role in soybeans’ strength today. World Weather Inc notes temperatures are well above normal and are likely to stay above normal in the coming week, with high temperatures in the 80’s and 90’s. Some rain fell in Mato Grosso do Sul and Parana, bolstering soil moisture, but World Weather Inc. notes that many areas will not be able to plant early soybeans without greater rain.
Dryness throughout the Midwest has analysts expecting USDA to lower soybean conditions by one point to 63% “good” to “excellent” in this afternoon’s Crop Progress Report. Harvest is expected to have increased to 13%, which would be up a point from a year ago.
USDA reported weekly export inspections of 485,216 MT (17.8 million bu.), up 11,940 MT from the previous week and within pre-report expectations from 350,000 to 650,000 MT. Inspections continue to run below average for this time of the year. But export demand looks to improve, as noted by USDA reporting a daily sale of 165,000 MT of soybeans for delivery to unknown destinations for the 2024-25 marketing year.
Technical analysis: November soybean futures surged to the highest mark in a month and half as bulls continue to maintain the near-term technical advantage. Prices have struggled to overcome 40-day moving average resistance since its initial test on Sept. 3. Today’s close above that mark cements bull’s edge. Additional resistance lies at $10.42 then the psychological $10.50 mark. Bulls are seeking to hold initial support at $10.31 1/4. Below that mark lies the 40-day moving average at $10.17.
December meal futures surged higher today as well. Bulls continue to hold the technical advantage, but prices remain below their highs from early August and early September. Resistance lies at $328.50, the 100-day moving average, then the Aug. 6 high of $335.00. A reversal lower would find support at $327.20, the psychological $325.00 mark, then the 10-day moving average at $322.30.
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 rose 14 cents to $5.82 1/2. December HRW wheat rose 13 1/4 cents to $5.77 1/4. Both markets closed nearer their session highs. December spring wheat futures rose 11 cents to $6.19.
Fundamental analysis: The winter wheat futures markets rallied today amid solid gains in corn and soybean futures. November soybeans closed at the highest level since late July, with December corn nearly doing the same. Short covering and perceived bargain hunting were featured in wheat futures markets today. The wheat market bulls brushed aside slightly bearish outside markets today that included mild gains in the U.S. dollar index and weaker crude oil prices.
USDA this morning reported weekly U.S. wheat export inspections of 711,073 MT, up 122,288 MT from the previous week and above pre-report expectations.
World Weather Inc. today said U.S. wheat areas are getting sufficient rain to improve planting and emergence conditions from the Great Plains into the southwestern Midwest, and precipitation is possible farther to the east this weekend into next week. Montana has also received significant rain recently to improve winter crop planting and emergence conditions. Meantime, spring wheat harvesting has been disrupted by rain in Europe, but conditions in the CIS have improved. China has seen some rain as well, although no quality decline is suspected. China’s winter wheat region should benefit from rain coming this week in the Yellow River Basin and some beneficial rain already fell in Inner Mongolia last week. Winter wheat conditions “remain tenuous” in Western Australia and they remain good for New South Wales and Victoria. Dryness remains a worry for Russia’s southern region, Kazakhstan and eastern Ukraine as well as a part of Russia’s central region. Argentina still needs significant rain to protect its wheat production.
This afternoon’s USDA crop progress reports are expected to show U.S. spring wheat harvested at 96% complete as of Sunday, versus 92% last week and 96% one year ago at this time. U.S. winter wheat planted is seen at 26% complete as of Sunday, versus 14% last week and 26% last year at the same time.
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. 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 $5.90 and then at $6.00. First support is seen at today’s low of $5.69 and then at last week’s low of $5.64. The HRW bulls’ next upside price objective is closing December prices above solid technical resistance at the September high of $6.04 1/4. The bears’ next downside objective is closing prices below solid technical support at $5.50. First resistance is seen at today’s high of $5.81 3/4 and then at $5.88. First support is seen at last week’s low of $5.61 1/4 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 fell 8 points to 73.44 cents, closing nearer the session low.
Fundamental analysis: Cotton futures traded modestly lower in narrow trade as outside market pressure negated strength from the grain and soy complexes. Meanwhile, some support likely arose from an injection of cash by The People’s Bank of China (PBOC) into the banking system through open market operations. The move came ahead of China’s National Day holidays, set to begin Oct. 1. Authorities announced PBOC Governor Pan Gongsheng will hold a press conference tomorrow on financial support for economic development, alongside two other officials, fueling speculation China is preparing to ramp up economic stimulus.
Recent rains in the U.S. and those expected in the coming week to ten days are increasing concern about possible cotton quality damage in the southeastern states and Delta. A possible tropical cyclone late this week in northwestern Florida could impact cotton from Alabama and Florida into Georgia with wind damage and some production cuts. In West Texas, conditions are expected to be dry over the next ten days while the Blacklands will receive some showers.
USDA will update weekly crop conditions and harvest progress in its weekly Crop Progress Report. Last week, the crop was rated at 39% “good” to “excellent” and 26% “poor” to “very poor,” while harvest was two points ahead of the five-year average at 10% complete.
Technical analysis: December cotton spent the session trading within Friday’s upper range, with resistance serving at the previous session high of 74.23 cents, while initial support lies at 72.81 cents. A move beyond Friday’s high will face additional resistance at 74.94 cents, then at 75.65 cents, which is backed by the 200-day moving average of 76.50 cents. Conversely, additional support will serve at 100-, 10-, 20- and 40-day moving averages of 71.86 cents, 71.42 cents, 70.41 cents and 69.45 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.