Corn
Price action: December corn rose 3 1/2 cents to $4.12 3/4, near the session high.
Fundamental analysis: The corn futures market continued its campaign higher amid continued short covering. A weakening U.S. dollar presented general support across commodities, though counterweighing was extended selling in crude oil futures to a near nine-month low.
A host of supply concerns are beginning to surface as areas of southwestern Russia along with northern and central Ukraine continue to face warm, dry weather, which has harmed some the regions crops, according to World Weather Inc. The area is expected to face another week to 10 days of very warm temps and limited rain. Meanwhile, a push by India to make more corn-based ethanol has turned Asia’s top exporter into a net importer for the first time in decades, squeezing local poultry producers and scrambling global supply chains. The jump in import demand comes after India in January hiked the procurement price of ethanol made from corn to drive a shift away from sugarcane-based ethanol for blending gasoline.
USDA reported the corn crop was 65% “good” to “excellent” and 12% “poor” to “very poor.” On the weighted Pro Farmer crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect), the corn crop dropped 1.4 points to 366.8.
Technical analysis: December corn ended the session just short of resistance at $4.13 1/4 and just short of the session high. While near-term overbought conditions could ignite some corrective selling, solid support lies at the 40-day moving average of $4.03 1/4, which is backed by psychological support at $4.00 as well as the 20- and 10-day moving averages, each trading around $3.97 1/2 and last week’s low of $3.85. However, an extension higher will face additional resistance at $4.17 1/2, $4.24 3/4, with stiff resistance at the 100-day moving average of $4.40 1/2, which is backed by the 200-day moving average of $4.62 1/4.
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
Advice: We advise hedgers to claim the remaining premium in the October $10.50 short-dated serial call options covering 25% of 2023-crop. Our entry was 18.5 cents and our exit was 5.5 cents.
Price action: November soybeans rose 9 1/2 cents to $10.21 1/2, near the session high and closed at a three-week high close. December soybean meal rose $8.50 at $329.30, near the session high and hit a four-week high. December soybean oil fell 82 points to 40.16 cents, nearer the session low.
Fundamental analysis: The soybean and meal futures markets today saw more short covering and perceived bargain hunting. Recent price gains are suggesting the soy complex futures have put in seasonal price bottoms. Solid losses in the U.S. dollar index today were somewhat friendly for the soy complex bulls, but lower crude oil prices that hit a nine-month low today mostly offset the lower greenback. Traders will have to wait until Friday morning for the weekly USDA export sales report because of the Labor Day holiday on Monday.
Tuesday afternoon’s USDA crop progress reports showed the U.S. soybean crop was rated 65% “good” to “excellent” and 10% “poor” to “very poor.” For the Pro Farmer Crop Condition Index, the soybean crop slipped 1.2 points to 361.8 (500 being perfect).
World Weather Inc. today said favorable late-season soybean crop conditions are prevailing in the U.S. Midwest. Rain in the Delta will ease stress on double- cropped soybeans. Center-west Brazil will need rain in late September to support early soybean planting, said the forecaster.
Technical analysis: The soybean futures bears have the overall near-term technical advantage. However, a nearly three-month-old downtrend on the daily bar chart has been negated and prices are now starting to trend up. November soybeans closed above its key 40-day moving average for the first time since late May. The next near-term upside technical objective for the soybean bulls is closing November prices above solid resistance at $10.50. The next downside price objective for the bears is closing prices below solid technical support at the contract low of $9.55. First resistance is seen at this week’s high of $10.24 1/2 and then at the August high of $10.42. First support is seen at $10.00 and then at this week’s low of $9.95 1/4.
Soybean meal prices are starting to trend higher on the daily bar chart to suggest a market bottom is in place. The next upside price objective for the meal bulls is to produce a close in December futures above solid technical resistance at the August high of $335.00. The next downside price objective for the bears is closing prices below solid technical support at $308.00. First resistance comes in at $330.00 and then at $335.00. First support is seen at $320.00 and then at today’s low of $317.60.
While soybean oil bears still have the overall near-term technical advantage, a price downtrend on the daily bar chart has been negated and prices are starting to trend up. The next upside price objective for the bean oil bulls is closing December prices above solid technical resistance at 44.00 cents. Bean oil bears’ next downside technical price objective is closing prices below solid technical support at the contract low of 37.66 cents. First resistance is seen at today’s high of 41.38 cents and then at 42.00 cents. First support is seen at today’s low of 40.00 cents and then at 39.00 cents.
What to do: Get current with advised sales.
Hedgers: NEW ADVICE -- Claim the remaining premium in the October $10.50 short-dated serial call options covering 25% of 2023-crop. Our entry was 18.5 cents and our exit was 5.5 cents. 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 $5.80 3/4, while December HRW futures rose 16 3/4 cents to $5.93. December HRS futures rose 16 1/4 cents to $6.23 1/2. Each closed near the session high.
Fundamental analysis: Wheat futures notched short-covering gains for the sixth straight session, with a fading U.S. dollar underpinning commodities. Since last week’s low, wheat futures have achieved 50- to 60-cent gains across the complex, with HRW wheat leading gains in the wake of last week’s bullish key reversal. A rise in export demand combined with reduced production prospects in areas of the U.S., France and Germany have stimulated short covering. World Weather Inc. notes harvesting of small grains in the U.S. northern Plains, Pacific Northwest and Canada’s Prairies is looking favorable, though lower yields are expected from central though southwestern parts of the Prairies and in a few northwestern Plains locations due to dryness in July and early August. Good yields are likely in other areas, according to the forecaster. Meanwhile, spring cereals in Western Europe may suffer a quality decline because of greater rain in the next week and northeastern Europe will also trend wetter. Drier weather will evolve in the CIS New Lands this week to slowly improve crop conditions, while frost and freezes in some eastern New Lands production areas recently may have reduced grain quality because of too much rain recently, which has kept crop from maturing normally. Moreover, dryness in parts of Russia’s southwestern spring wheat areas has also been a concern with lower yields likely in unirrigated areas.
Technical analysis: December SRW wheat ended the session above resistance at $5.74 3/4, though looming resistance at the 100- and 200-day moving averages, currently trading at $6.18 3/4 and $6.23 1/4, could bring some pause to the recent rally. However, support at the 40-, 20- and 10-day moving averages of $5.57 3/4, $5.51 1/4 and $5.45 1/2 should curb selling interest.
December HRW wheat ended the session above resistance at $5.84 1/2 for the first time since July 22, though resistance at the 100- and 200-day moving averages of $6.31 and $6.28 1/2 could prove difficult to overcome and limit in the upside. However, solid support at the 40-, 20- and 10-day moving averages of $5.68 1/2, $5.59 1/2 and $5.56 1/2 should limit earnest selling.
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 69 points to 69.81 cents and near mid-range.
Fundamental analysis: The cotton market saw selling pressure today from the recent steep downdraft in crude oil prices that today dropped to a nine-month low below $70 a barrel. Losses in cotton were somewhat limited by solid selling pressure on the U.S. dollar index today.
World Weather Inc. today said recent rain in West Texas “was impressive and new bolls may be set. However, 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, said the forecaster.
Tuesday afternoon’s weekly USDA crop progress reports showed the U.S. cotton crop in 24% very poor to poor condition, with 32% fair and 44% good to excellent condition. As of Sunday, 37% of cotton bolls were opening versus 30% one year ago. There was 95% setting bolls compared to 93% one year ago.
Technical analysis: The cotton futures bears have the overall near-term technical advantage. However, a 2.5-month-old downtrend on the daily bar chart has been negated to suggest a market bottom is in place. The next upside price objective for the cotton bulls is to produce a close in December futures above technical resistance at 73.00 cents. The next downside price objective for the cotton bears is to close prices below solid technical support at the August low of 66.26 cents. First resistance is seen at today’s high of 70.49 cents and then at the August high of 71.36 cents. First support is seen at 69.00 cents and then at last week’s low of 68.27 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.