Corn
Price action: December corn fell 2 cents to $4.13 1/4, closing near the intraday low.
Fundamental analysis: Corn futures retreated from the intraday high in tandem with soybeans as technical pressure continued to curb buying interest. Heavy selling in crude oil cast a shadow over soyoil prices and ultimately limiting corn, as did tepid weekly export sales. For the week ended September 19, USDA reported net sales of 535,100 MT, which were short of analysts’ pre-report expectations ranging from 600,000 MT to 1.3 MMT. However, exports during the week were stable at 1.1 MMT, with Mexico the leading destination during the week.
However, a growing backlog of U.S. rail shipments of grain could inhibit grain movement into Mexico in the near-term as BNSF and Union Pacific railways have suspended grain shipments to Mexico due to Ferromex’s inability to handle rising demand. The embargoes, driven by Mexico’s rail network congestion, have caused delays at key Texas border crossings. Mexico, the largest export market for U.S. agricultural goods, relies heavily on rail for two-thirds of its grain imports. The Surface Transportation Board is monitoring the situation as stakeholders seek a resolution.
Hurricane Helene will keep traders on the edge of their seat as the storm will make landfall this evening in northern Apalachee Bay south of Tallahassee, Florida, as a Category 3 hurricane, with potential to become a Category 4 storm. World Weather Inc. reports the impact of Helene on the Southeast may be comparable to that of Hurricane Michael in 2018. The storm is expected to move inland toward the lower the Midwest into the weekend.
Technical analysis: December corn futures continue to face notable resistance at $4.17 1/2, which is backed by resistance at $4.24 1/2 and the 100-day moving average, currently trading at $4.30 1/2. To regain technical control, bulls need to breach the recent high of $4.23 3/4, while bears continue to look toward the contract low of $3.85, with interim support serving at the 10-, 20- and 40-day moving averages, currently trading at $4.11, $4.08 1/2 and $4.02 3/4.
What to do: Get current with advised sales.
Hedgers: No sales recommended yet for 2024-crop.
Cash-only marketers: No sales recommended yet for 2024-crop.
Soybeans
Price action: November soybean futures sunk 12 1/4 cents to $10.41 and settled near session lows. December meal futures dropped $1.40 to $326.80, settling nearer session lows. December bean oil futures dropped 125 points to 42.90 cents.
Fundamental analysis: Soybeans traded higher overnight but struggled to maintain early session gains, posting losses after marking a fresh for-the-move high this morning. Some rain fell on Rio Grande do Sul, most of southern Paraguay and parts of central and western Santa Catarina Wednesday. Still, high temperatures in the coming days will negate much of the recent rainfall in western, central and northern Brazil, evaporating most of the moisture from the recent showers. Lack of precip is likely to keep planting rates slow, but it is important to remember that 70% of Brazil’s soy planting takes place from Oct. 10 to Nov. 25. However, the recent dryness has slowed Brazilian exports as river levels are low. A widespread drought in Brazil has halted the transport of grains through the Madeira River, an important northern waterway linking key croplands with the country’s ports, regional port terminals association Amport said. The river is a key corridor for shipping products from Rondonia and parts of Mato Grosso, Brazil’s top soy producer, to export terminals located in the country’s northern states. The slow rate of planting and early season dryness has helped spur prices higher, encouraging us to advance sales yesterday.
Harvest is expected to continue at a healthy pace in the coming days. The aftermath of hurricane Helene will bring multiple rounds of moderate to heavy rain to areas from southeastern Missouri to south-central Ohio and Kentucky through Sunday slowing harvest in those areas.
USDA reported weekly soybean sales of 1.575 MMT for 2024-25, within the expected pre-report range of 900,000 MT to 2.0 MMT. Exports during the week totaled 518,000 MT. Export shipments have increased each week so far this marketing year but continue to run well below historically average.
Technical analysis: November soybeans rejected from technical resistance, closing near session lows, though bulls continue to own the near-term technical advantage. Price dropped below the psychological $10.50 mark, which will stand as initial resistance. Further strength seeks to overcome the 100-day moving average at $10.64 1/2, which capped gains today. Continued selling pressure finds initial support at $10.39 1/4, yesterday’s low of $10.31 1/4, then the 40-day moving average at $10.20 3/4.
December meal futures continue to lead weakness. Prices struggled against the Sept. 4 close at $329.30, which coincides with the 100-day moving average at $329.10. Strength above those levels finds resistance at this week’s high of $334.50. Initial support lies at $324.40, the 10-day moving average, which is reinforced by yesterday’s low of $322.10.
What to do: Get current with advised sales.
Hedgers: You should be 20% sold in the cash market on 2024-crop.
Cash-only marketers: You should be 20% sold on 2024-crop.
Wheat
Price action: December SRW wheat fell 5 cents to $5.84 1/4. December HRW wheat fell 2 cents to $5.79. Both markets closed nearer their session lows. December spring wheat futures fell 2 cents to $6.15.
Fundamental analysis: The winter wheat futures markets continue to languish in sideways trading action, with stiff chart resistance located around the $6.00 level in both December SRW and HRW contracts. Weaker corn and soybean futures prices today also limited buying interest in wheat futures. The key “outside markets” for wheat today offset each other, as the U.S. dollar index was lower but so were crude oil prices. This week’s breakdown in crude oil prices is especially worrisome to the grain market bulls, given that crude is the leader of the raw commodity sector.
USDA this morning reported disappointing weekly U.S. wheat export sales of 158,900 MT for 2024-25, a marketing-year low, down 36% from the previous week and down 60% from the four-week average. Sales were below the range of market expectations. However, U.S. wheat exports during the latest reporting week totaled 710,500 MT, the second-highest for the marketing year.
World Weather Inc. today said recent rain in the U.S. central Plains “has been a boon to wheat planting, emergence and establishment, although more is needed. Dry weather over the next ten days will be a great opportunity for aggressive fieldwork.” Rain in the Midwest late this week and during the weekend will improve soil moisture for autumn planting, while the Pacific Northwest needs moisture to improve autumn planting conditions, said the forecaster.
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 stalled out. 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 $5.96 1/4 and then at $6.00. First support is seen at this week’s low of $5.69 and then at $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 $5.90 3/4 and then at $6.00. 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 futures fell 18 points to 73.02 cents and settled nearer session lows.
Fundamental analysis: Cotton futures have struggled to followthrough to the upside despite continued worries over hurricane Helene barreling into Georgia cotton acres. Cotton had a similar subdued price reaction following hurricane Michael. It took ten days for prices to peak following the landfall of the hurricane as it took time to inspect just how bad the damage was. Considering 68% of Georgia’s cotton had bolls opening as of Sept. 22 with just 1% of the crop being harvested, Georgia cotton is highly susceptible to storm damage, which could spark buying efforts in the coming week. Cotton prices were also dragged lower by a sinking crude oil market, which has dropped over $5 from the Tuesday high.
Downtrodden demand likely plays a role in the subdued price response. USDA reported net cotton sales of 98,600 bales for the week ended Sept. 19—a marketing year low. That is down 18% from the previous week and 37% from the four-week average.
Technical analysis: December cotton futures traded on either side of unchanged before settling modestly lower on the day. Bulls continue to hold a slight near-term technical advantage. Initial resistance stems from 73.52 cents, with reinforcement from the Sept. 24 for-the-move high close at 74.09 cents. Support comes in at the 10-day moving average at 72.52 cents with additional backing from 71.53 cents.
What to do: Get current with advised sales.
Hedgers: You should also have 25% of expected 2024-crop production forward sold for harvest delivery.
Cash-only marketers: You should also have 25% of expected 2024-crop production forward sold for harvest delivery.