Corn
Price action: December corn futures fell 1 3/4 cents to $4.11 3/4, nearer the session low after hitting a two-month high early on.
Fundamental analysis: The corn futures market today saw a corrective pullback on “Turnaround Tuesday” after good gains posted Monday and in the overnight trade. Losses in corn were limited today by friendly “outside-market” forces that included a lower U.S. dollar index and higher crude oil prices.
Monday afternoon’s USDA crop progress reports showed that as of Sunday the agency rated 65% of the U.S. corn crop as “good” to “excellent” and 12% “poor” to “very poor,” while harvest was 14% complete. On the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 being perfect), the corn crop dropped 2.2 points to 366.0. Pro Farmer crop consultant Michael Cordonnier kept his U.S. corn yield and production forecasts at 182.5 bu. per acre and 15.09 billion bu., respectively. He maintained a neutral-to-lower bias toward the crop.
World Weather Inc. today said U.S. Corn Belt weather will continue dry for a few more days “until the remnants of Hurricane Helene and an upper-level low pressure center combine over the Midwest, northern Delta and Tennessee River Basin to bolster soil moisture and delay fieldwork.”
Technical analysis: The corn futures bears have the overall near-term technical advantage. However, recent 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 today’s high of $4.18 1/4 and then at $4.23 3/4. First support is at $4.07 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 3 cents to $10.42 1/4, while December soymeal fell $2.80 to $325.90, each forging low-range closes. December soyoil rallied 150 points to 43.34 cents, closing above the 100-day moving average and at a two-month high.
Fundamental analysis: Soybeans extended Monday’s gains but backed off the session high as soymeal strength eased after edging near the 100-day moving average, though soyoil strength underpinned the complex, curbing soybean losses. Meanwhile, weakness in the U.S. dollar also propped up the grain and soy complexes.
Soybean conditions continue to hold up, with USDA leaving the “good” to “excellent” at 64% along with the “poor” to “very poor” rating at 11%. Harvest had advanced seven points on the week to 13%, five points ahead of average. On the Pro Farmer Crop Condition Index, the soybean rating slid 0.7 point to 358.5. However, crop consultant Dr. Michael Cordonnier lowered his yield estimate 0.5 bu. per acre to 52 bu. per acre, and maintained a neutral to lower bias going forward. He noted the best soybean yields this year will be from the earliest planted soybeans because they developed ahead of the late summer dryness. Seed size and the number of seeds per pod will likely be negatively affected due hot, dry conditions from mid-August to mid-September, a critical time for pod filling for later planted soybeans.
Technical analysis: November soybeans forged a low-range close after reaching a near two-month intraday high early on, setting somewhat of a dour tone after Monday’s strong close. Initial resistance will continue to serve at $10.50 and $10.60 3/4, which are backed by the 100-day moving average of $10.84 1/2. Conversely, initial support will continue to serve at $10.31, then at $10.20 1/4 and the 10-, 20- and 40-day moving averages of $10.14 3/4, $10.09 and $10.01 1/2.
December meal edged to the highest level since early August, though sellers stepped in upon an approach of the 100-day moving average, currently trading at $334.60, and August high of $335.00. However, initial support at the 10-, 20-and 40-day moving averages of $322.80, $320.80 and $316.40 curbed selling efforts. Bears remain focused on the August low of $298.50, while bulls need a move above the 100-day moving average and the August high to gain momentum.
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 4 1/2 cents to $5.78 and closed near session lows. December HRW futures dropped 6 1/4 cents to $5.71. December HRS futures slipped 7 1/4 cents to $6.11 3/4.
Fundamental analysis: The grain markets struggled to build on overnight bullish momentum, with wheat futures leading to the downside during daytime trade. Wheat futures fell today despite weakness in the U.S. dollar index. The last few weeks, swings in wheat prices have correlated strongly with moves in the U.S. dollar. Weakness in wheat today despite a weaker dollar is concerning and could point to a break of that trend.
Weather throughout most of Russia and Ukraine remains unfavorable for winter wheat sowing. Drought conditions continue in much of Russia’s southern and central regions and eastern Ukraine. Warm temperatures are further hurting soil moisture levels. Analyst APK-Inform noted that most Ukrainian regions have not had any rain for several weeks and the upper soil layer is completely dry, which will make it difficult for winter crop establishment.
Winter wheat planted in the U.S., which reached 25% as of Sept. 22, is facing similar challenges to that of Russia and Ukraine. Net drying will occur over HRW acres in the coming week and likely the following week as well, says World Weather Inc. Recent precip has been good for establishment but more will be needed to support crop development into dormancy.
Technical analysis: December SRW futures reversed overnight gains and closed nearer session lows. Bulls retain a slight overall technical advantage. The 10-day moving average, currently at $5.74 1/2, did limit the downside today and will remain support. A break below that mark eyes support at $5.70 3/4 then last week’s low of $5.64. Resistance lies at yesterday’s close of $5.82 1/2 then today’s high of $5.89 1/4.
December HRW futures continue to tightly mimic their SRW counterpart. Bulls retain a slight overall technical advantage. Resistance stems from $5.77, the 40-day moving average, which has limited gains over the past week. Additional buying eyes resistance at $5.84 1/2. Continued selling pressure finds support at last week’s low of $5.64, which sees little backing until the psychological $5.50 mark.
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 65 cents to 74.09 cents, closing nearer the session high.
Fundamental analysis: Cotton futures extended gains to a near three-month high with solid support stemming from supportive outside markets as the U.S. dollar waned and crude oil futures extended higher. The natural fiber is also being supported by a half-point rate cut by China’s central bank, which is the biggest easing move by the country since the pandemic. The People’s Bank of China said it expects another 20 to 50 basis points to be shaved off by year-end. The stimulus is likely to prompt more demand for raw commodities.
In the U.S., rising concerns around possible production cuts due to the soon arrival of Hurricane Helene has been putting a premium into the market recently, according to World Weather Inc, with the process likely continuing as concerns build over the fate of the Georgia and Florida crop. Cotton in the Delta may experience some additional rain to maintain a lower fiber quality situation. Meanwhile, West Texas is expected to be dry and warm for a while which may be good for late season boll development, although some timely rain might be welcome soon.
On Monday, USDA reported the cotton crop as 37% “good” to “excellent,” down two points from last week, while the “poor” to “very poor” rating rose 7 points. As of Sunday, cotton harvest had advanced to 14% complete, two points ahead of average. More specifically, harvest efforts had reached 26% complete in Texas, while Georgia’s harvest had advanced to only 1%.
Technical analysis: December cotton bulls extended gains to a three-month high close, with solid support beginning at 73.10 and 72.76 cents, then at 10, 100- 20- and 40-day moving averages of 72.02 cents, 71.85 cents, 70.61 cents and 69.57 cents. Conversely, initial resistance will now serve at 74.44 cents and again at 74.78 cents and the June high of 75.84 cents, which is backed by the 200-day moving average of 76.48 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.