Corn
Price action: December corn rallied 6 3/4 cents to $4.24 3/4, marking a monthly and quarterly high close.
Fundamental analysis: USDA’s lighter-than-expected Sept. 1 stocks figure stirred bulls’ enthusiasm this morning, as December corn futures rallied to a near three-month high shortly after the government’s Quarterly Grain Stocks Report hit the airwaves. Meanwhile, earlier strength in wheat futures persisted, lending additional support along with decided gains in the soy complex following overnight and early morning weakness.
On average, analysts were expecting Sept. 1 corn stocks of 1.844 billion bu., while USDA reported stocks of 1.76 billion bu., compared to 4.992 billion bu. on June 1 and 1.360 billion bu. on Sept. 1, 2023. Of the total, 780 million bu. (44.3%) are stored on farm and 980 million bu. (55.7%) are stored off-farm. Implied disappearance in the final quarter of the 2023-24 marketing year is 3.24 billion bu., up 18.2% from the same period last year. USDA made only minor revisions to the 2023 corn-for grain and corn-for-silage production estimates.
Earlier today, USDA also released weekly export inspection data for the week ended Sept. 26, which showed a modest 10,226 MT drop from the previous week to 1.14 MMT (44.9 million bu.). Analysts expected inspections to range from 500,000 MT to 1.15 MMT.
Crop Conditions and harvest progress will be updated in this afternoon’s Crop Progress Report. Analysts are expecting corn conditions to remain largely unchanged and harvest to have advanced to 23% as of Sunday.
Technical analysis: December corn soared to a three-month high, with bulls grasping a close over the June 24 high of $4.23 3/4, breaking out of the September trading range. Resistance will now serve at today’s high of $4.27 3/4, then at the 100-day moving average of $4.29 1/4, then at the 200-day, currently trading at $4.53 1/4. Conversely, initial support will serve at $4.21 1/2, then at $4.16 1/4 and the 10-, 20- and 40-day moving averages of $4.12 3/4, $4.10 1/2 and $4.03 3/4.
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.
Soybeans
Price action: November soybeans fell 8 3/4 cents to $10.57, while December meal closed down $2.50 at $341.60, each closing near the session low. December soyoil rallied 95 points to 43.31 cents, closing near the session high and above the 100-day moving average.
Fundamental analysis: Soybeans advanced last week’s gains after gapping lower overnight and floundering around unchanged in early morning trade. However, an early morning flash sale of 116,000 MT soybeans to China lent some support along with solid weekly export inspections. USDA reported soybean inspections during the week ended Sept. 26 rose 177,163 MT from the previous week to 675,749 MT (24.8 million bu.), which were within the pre-report range of 350,000 MT to 1.0 MMT.
While corn and wheat led the ag complex today, USDA’s Sept. 1 soybean stocks were somewhat bullish at 342 million bu., compared to pre-report expectations of 351 million bu. However, stocks were up (29%) from 264 million bu. on Sept. 1, 2023, which likely pressured the complex into the close. Of the total, 111 million bu. (32.5% are stored on-farm and 231 million bu. (67.5%) are stored off-farm. Implied disappearance in the final quarter of the 2023-24 marketing year for soybeans was 628 million bu., up 18% from the same period last year. USDA made only minor revisions to the 2023 soybean production estimate.
In Brazil, the soybean planting pace continues to lag amid lingering heat and dryness through central production areas. AgRural reported soybeans were 2% planted as of last Thursday, behind last year’s pace of 5.2% for the same date last year. World Weather Inc. reports the only round of organized rain outside of southern Brazil during the next two weeks will occur Oct. 9-11, when nearly all areas receive enough rain to induce at least temporary improvements for summer crop planting and establishment, but if follow-up rains do not occur, the soil will soon dry out again.
USDA will release its weekly Crop Progress Report following the close. Analysts expect soybean conditions to be unchanged from a week ago, while harvest is anticipated to be 24% complete as of Sunday.
Technical analysis: November soybeans notched a three-month high and are now trending higher with support serving at $10.43 1/2 and then at the 10-, 20- and 40-day moving averages of $10.34 1/4, $10.22 1/4 and $10.04 1/2. Initial resistance will continue to stand at the 100-day moving average of $10.78 1/4, which is backed by resistance at 10.91 3/4, $11.00, $11.14 and the 200-day moving average of $11.3 1/2.
December soymeal extended to a more than three-month intraday high but ended the session near the session low and back below the 200-day moving average of $343.70, which will serve as initial resistance. Meanwhile, initial support will remain at $338.30, with additional support serving at the 100-, 10-, 20- and 40-day moving averages of $333.00, $327.90, $325.60 and $318.00.
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 rose 4 cents to $5.84 and near mid-range. December HRW wheat gained 7 cents to $5.83 3/4 and nearer the session high. December spring wheat futures rallied 11 cents to $6.19 1/4.
Fundamental analysis: The wheat futures markets today got a lift from a rally in corn futures to start the trading week. December corn futures today hit a three-month high and closed at a technically bullish monthly and quarterly high close. With wheat futures traders likely to look to the corn market for direction in the near term, today’s developments in corn futures pleased the wheat market bulls.
Today’s USDA quarterly grain stocks report contained no big surprises for wheat and showed U.S. wheat stocks in all positions on Sept. at 1.986 billion bu., up 219 million bu. From one year ago and just slightly above market expectations. Meantime, in its annual small grains summary the agency estimated the U.S. winter wheat crop at 1.349 billion bu., down 12 million bu. from August. The winter wheat yield is estimated at 51.7 bu. per acre. USDA’s other spring wheat crop estimate declined 2 million bu. from August to 542 million bu. on a yield of 52.5 bu. per acre.
World Weather Inc. today said drying in the U.S. Plains “will be great for winter wheat planting, although there is some growing concern about dryness in the region and that possibly slowing emergence and establishment. Recent rain in the Midwest, however, has improved the moisture profile in southern wheat areas for planting in October.” Meantime, drought remains a serious concern from eastern Ukraine into western Kazakhstan. Western Australia may get some welcome rain in the coming ten days. Argentina will remain dry-biased, while southern Brazil crops stay mostly in good shape. Western Europe weather deteriorates for the wheat crops because of too much rain, said the forecaster.
USDA early this morning reported U.S. wheat export inspections of 536,929 MT, down 185,679 MT but within the pre-report range of expectations from 400,000 to 675,000 MT.
This afternoon’s weekly UDSA crop progress reports are expected to show U.S. winter wheat planted at 40% complete as of Sunday, versus 25% last week and 40% done one year ago at this 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 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 $5.90 3/4 and then at $6.00. First support is seen at today’s low of $5.75 1/2 and then at last week’s low of $5.69. 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 last week’s high of $5.90 3/4 and then at $6.00. First support is seen at today’s low of $5.71 1/4 and then at last week’s low of $5.61 1/4.
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 89 points to 73.61 cents, marking a high-range close.
Fundamental analysis: Cotton futures held a fairly narrow range to start the week, with technical support limiting losses. Modest strength in crude oil futures offset some pressure from weaker equities and a stronger U.S. dollar. However, some spillover optimism following USDA’s Quarterly Stocks Report likely pulled the natural fiber from the session low. Meanwhile, demand prospects continue to improve as officials in China induced more economic stimulus into the world’s second-largest economy by ordering lending institutions to lower mortgage rates for consumers with existing loans. The news mustered a rally in China’s stock markets and many of its raw commodity markets, though a large portion of the country will be closed for a public holiday this week, which could equate to lighter volume trade.
With Hurricane Helene ripping through southeastern areas of the U.S., damages, which are reported to be significant, are currently being assessed. Fiber quality and production cuts will likely begin this week, while harvesting disruptions will occur through many key-cotton growing states.
USDA will release its weekly Crop Progress Report following the close. Last week, the cotton crop was estimated to be 37% “good” to “excellent” and 33% “poor” to “very poor,” while harvest was estimated to be 14% complete.
Technical analysis: December cotton forged a high-range close after a test of the 10-day moving average of 73.00 cents early on. Resistance at 73.89 cents continues to curb buyer interest for now, though solid support at the 100-, 20- and 40-day moving averages, currently trading at 71.76 cents, 71.31 cents and 70.01 cents should continue to limit the downside. Moreover, additional resistance will serve at last week’s high of 74.55 cents, then at 75.05 cents, and the 200-day moving average of 76.48 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.