Corn
Price action: December corn rose 8 1/4 cents to $4.09 1/4, closing near the session high and at the highest level since July 29.
Fundamental analysis: Outside markets lent no help in today’s corn rally, which marked the third day of gains, a feat not seen since the latter part of July. Increasing strength as the session progressed found bulls topping the 40-day moving average for the first time since mid-June, enhancing the camp’s technical posture. Crop consultant Dr. Michael Cordonnier lowered his U.S. corn yield estimate by 1 bu. after last week’s extreme heat across the Corn Belt and limited rainfall through much of the Midwest this week. He now estimates a yield of 182.5 bu. per acre and production at 15.09 billion bushels and holds a neutral to slightly lower bias toward the crop going forward.
World Weather Inc. reports most of the Midwest will encounter good weather for late season crop development, maturation and early harvesting, though rainfall will be more frequent and significant in the southeastern states. Temps are expected to remain below normal in the Midwest, Great Plains, Delta and eastern states this coming week, while warmer-than-usual weather will occur in the far western states. Some frost could develop in the upper Midwest late this week and early in the weekend, though no damage is expected, and no significant freezes are likely outside of a few northern Wisconsin and northern Minnesota locations.
Earlier today, USDA reported net export inspections of 965,292 MT (38.0 million bu.) during the week ended Aug. 29, up 47,690 MT from the previous week and within the pre-report range of expectations from 700,000 MT to 1.15 MMT.
Following the close, USDA will release its Grain Crushings Report, with analysts anticipating ethanol use totaled 462.8 million bu. in July, which would be up 4.6% from June and 1.7% above July 2023.
USDA will also release updated condition ratings in its weekly Crop Progress Report, with a Bloomberg poll indicating analysts expect a one-point decline in the crop’s “good” to “excellent” rating to 64%.
Technical analysis: December corn notched the largest daily gain since July 22 and ended the session above the 40-day moving average, currently trading at $4.03 1/4, for the first time since May 29. Initial resistance will now serve at $4.10 3/4, with little resistance serving from there to the 100-day moving average of $4.41 1/4. Conversely, initial support will serve at the 40-day moving average, which is backed by the 20- and 10-day moving averages of $3.97 1/4 and $3.95 1/2, with additional support lying at last week’s low of $3.85.
What to do: Get current with advised sales.
Hedgers: Sell the final 20% of old-crop in the cash market to get to 100% sold on 2023-crop production.
Cash-only marketers: Sell the final 20% of old-crop to get to 100% sold on 2023-crop.
Soybeans
Price action: November soybeans surged 12 cents to $10.12 but closed well off session highs. December meal closed $7.80 higher at $320.80, nearer session highs. December bean oil futures fell 103 points to 40.98 cents.
Fundamental analysis: Soybeans and meal led strength in the ag complex on Tuesday after the long weekend as November beans marked the highest close in about four weeks. November beans marked the third consecutive daily close higher and have closed higher in six out of the last seven sessions. The news surrounding the soybean market has been favoring the bulls all around. Last week’s extreme heat is expected to have weighed on crop conditions, as noted from a Bloomberg poll expected another 1 point drop in “good” to “excellent” ratings in this week’s USDA Crop Progress Report. Meanwhile, USDA today reported another daily sale of 132,000 MT of soybeans for delivery to China during the 2024-25 marketing year and showed net soybean export inspections 496,860 MT (18.3 million bu.), up 77,297 MT from the previous week and near the upper end of the pre-report range of 300,000 to 500,000 MT. There are still two more days’ worth of inspections for the old-crop marketing year. Inspections data indicate exports will at least meet, if not exceed, the current USDA export estimate of 1.7 billion bushels.
Crop consultant Dr. Michael Cordonnier cut his U.S. soybean yield forecasts by 0.5 bu. after last week’s extreme heat across the Corn Belt. He now estimates the soybean yield at 53 bu. per acre and production at 4.57 billion bushels. He has a neutral to slightly lower bias.
Analysts expect USDA to report soybean crush totaled 191.7 million bu. for July, according to a Bloomberg survey. That would be a record for the month and up 4.4% from June and 3.7% above year-ago. USDA will release their monthly Oilseed Crushings report after the close, detailing crush and meal/oil stocks.
Technical analysis: November soybeans surged higher for the third consecutive session but closed well off session highs. Today’s rally negated a potential bear flag on the daily bar chart and indicates an interim low is likely in place. The 40-day moving average at $10.21 1/2 limited gains today and will mark initial resistance. Further strength seeks to overcome resistance at $10.40 3/4. Support stems from the psychological $10.00 mark with further selling pressure seeking to overcome the 10-day moving average at $9.90 1/2.
December meal futures surged higher today, closing at the highest mark since Aug. 6. Bulls are holding a modest uptrend on the daily bar chart. The 10-day moving average crossed above the 20-day in a golden cross, a bullish indicator indicating a shift in momentum to the bulls. The 10-day has been below the 20-day since early June. Initial resistance stems from the intraday high of $324.00 with further strength looking to overcome the 100-day moving average at $331.30. Selling pressure finds support at $317.20, the 40-day moving average, then $311.90.
December bean oil futures failed to rally on bullish meal and soybean markets as crude oil futures underwent heavy selling pressure throughout the session. Bulls are looking to overcome initial resistance at 41.65 cents, the 40-day moving average, before tackling last week’s high at 42.68 cents. Further selling pressure has bears looking to overcome support at 40.79 cents, which capped most selling pressure today, then the psychological 40.00 cent mark.
What to do: Get current with advised sales.
Hedgers: You should be 100% sold in the cash market on 2023-crop with 25% reowned in October $10.50 short-dated serial call options at 18 1/2 cents. 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 15 1/4 cents to $5.66 3/4, near the daily high. December HRW wheat gained 11 cents to $5.76 1/4 and nearer the session high. Both markets hit three-week highs. December spring wheat futures rose 6 3/4 cents to $6.07 1/4.
Fundamental analysis: The winter wheat markets bulls put in an impressive price performance today, as short covering and perceived bargain hunting were highlighted. Wheat market bulls brushed aside bearish daily outside-market forces that included a weaker U.S. dollar index and a sharp drop to a seven-month low in crude oil prices. Bulls finally have some decent technical momentum on their side, too.
USDA this morning reported decent U.S. wheat export inspections that totaled 577,944 MT during the week ended Aug. 29, up 28,477 MT from the previous week and within the pre-report range of expectations.
World Weather Inc. today said “harvesting of small grains in the U.S. northern Plains, Pacific Northwest and Canada’s Prairies is looking favorable. Lower yields are expected from central through southwestern parts of the Prairies and in a few northwestern Plains locations because of dryness in July and early August. Good yields are likely in other areas,” said the forecaster.
This afternoon’s weekly USDA crop progress report is expected to show U.S. spring wheat harvested at 68% complete as of Sunday, compared to 51% last week at the same time and 74% done one year ago at the same time. U.S. winter wheat planted is seen at 2% completed as of Sunday compared to 1% last year at this time.
Technical analysis: Today’s solid gains in winter wheat futures, following last Friday’s bullish weekly high closes, are good clues the markets have put in near-term lows. Winter wheat futures bears do still have the overall near-term technical advantage. However, price downtrends 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 the contract low of $5.20 3/4. First resistance is seen at the August high of $5.74 3/4 and then at $5.80. First support is seen at $5.50 and then at today’s low of $5.44 1/4. 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 the contract low of $5.27 1/4. First resistance is seen at $5.80 and then at $5.90. 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 rose 51 points to 70.50 cents, marking a high-range close.
Fundamental analysis: Cotton futures rallied to begin the week amid spillover optimism from the grain and soy complexes, while outside markets were largely unsupportive. Meanwhile, U.S. manufacturing rose from an eight-month low in July amid some improvement in employment, though the overall trend continued to point to subdued factory activity. The remainder of the week will include several reports, including a Job Openings and Labor Turnover (JOLTS) report on Wednesday and monthly U.S. employment report on Friday.
World Weather notes rain in West Texas during the long weekend was impressive and new bolls may be set, but the growing season will have to last longer than usual to get those bolls to open and mature properly before a freeze occurs. A little rain in the Delta recently was good for some cotton, but drier weather is needed to protect fiber quality in bolls that may be opening. Rain in the southeastern states of Georgia, Florida and Alabama this week will be helpful in easing recent dryness.
USDA will release updated crop conditions in its weekly Crop Progress Report. Last week, the cotton crop was rated 40% “good” to “excellent” and 28% “poor” to “very poor.”
Technical analysis: December cotton retreated from the session high but held a close over recent resistance at 70.43 cents, with initial resistance now serving at 70.86 cents, then at 71.35 cents, which is backed by the 100-day moving average of 72.95 cents. Conversely, initial support will now lie at today’s failed resistance level, then at 10-, 40- and 20-day moving averages of 69.92 cents, 69.42 cents and 68.85 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.