Corn
Price action: December corn futures slid 4 1/2 cents to $4.06 1/4 and settled near session lows, though the contract still gained 5 1/4 cents on the week.
5-day outlook: Corn futures surged higher on this morning’s open, fueled higher by better-than-expected export sales, but underwent steady selling pressure thereafter as risk-off trading dominated the marketplace. Asset classes saw across the board selling today as BLS reported the slowest jobs growth in August since 2017, adding just 142,000 non-farm payroll positions in August. Once again, the prior month’s job growth was revised lower, with July adding just 89,000 jobs. While December corn futures fell the past two sessions, prices remained largely within Wednesday’s range and still posted strong gains on the week. The relatively low volume on today’s drop shows lack of conviction, which opens the door for continued strength over the coming week. Continued support at the 40-day moving average further bolsters that claim. Traders will eye updated production and balance sheet estimates from USDA on Thursday (9/12). We anticipate a lower yield than USDA did in their August report, which could prove to be price supportive, as well as higher old-crop use, but some of that could already be priced in.
30-day outlook: Combines have already started to roll but harvest will continue to accelerate over the coming month. With harvest will come yield reports that will give a better idea as to how big this year’s crop actually is. Given that some producers are still selling old-crop corn could lead to some extended harvest selling pressure as farmers are both selling off the combine and selling to make room in bins. The Mississippi river is also fairly low and is expected to continue dropping, which has led to traffic closures in the southern portion of the river. Lack of rain could lead to additional closures further upstream as well, exacerbating the supply glut.
90-day outlook: Demand improving over the final quarter of the 2023-24 marketing year to bring carryout back below 2.0 billion bushels has helped fuel the recent leg higher, but strong production and an estimated record yield is likely to keep ending stocks rising in 2024-25. Soybeans have garnered a lot of attention for export sales, but corn has proven quite strong as well. For the week ended Aug. 29, USDA reported net corn sales reductions of 173,100 MT for 2023-24 — a marketing-year low. It is common to see cancellations at the end of a marketing year. Net sales totaled 1.823 MMT for 2024-25, which were well above expectations. Traders expected sales to range from (100,000) to 100,000 MT for 2023-24 and 700,000 Mt to 1.4 MMT for 2024-25. Exports totaled 1.061 MMT. New-crop sales have topped expectations for four consecutive weeks despite there not being a whole lot of daily sales for corn. Importers continue to accumulate purchases, a healthy sign of improving demand. Quarterly Grain Stocks at the end of the month will give insight into whether feed use has increased substantially over the last quarter as well. Improving demand has helped keep a floor under corn prices recently, which could make it difficult for prices to work much lower in the coming quarter.
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 closed 18 1/2 cents to $10.05 but managed to rise a nickel on the week. December soymeal fell $2.10 to $324.40 but notched an $11.40 week-over-week gain, while December soyoil tumbled 154 points, bringing this week’s total losses to 238 points.
5-day outlook: Soybean futures edged lower following five straight days of gains, with soyoil leading the complex lower to end the week. Today’s price action encompassed an outside day down and a move back below the 40-day moving average following a reach to a one-month high in early trade. Fresh Brazilian crop estimates likely spurred some selling after a Reuters poll projected the country’s soybean crop could rise 14% for the 2024-25 season, compared to last year. The bolstered prospects were the result of heightened optimism regarding rains in the last quarter of the year. While current projections lean toward record production, Brazilian consultancy Safras & Mercado stated growth will be much slower than what has been seen in recent years, when the average growth rate was 5%.
As next week approaches, though, the marketplace will return its focus on yield reports as harvest begin to pick up across the U.S., though near-term overbought conditions could provoke additional selling efforts.
30-day outlook: U.S. harvest weather as well as conditions in South America will both captivate traders over the next month, as planting efforts begin to ramp up in South America. While much of the U.S. has endured recent heat, which has lowered some expectations of later planted soybeans, Brazil and Argentina have each endured dryness, which is expected to persist in the next ten days. World Weather Inc. reports dryness in Argentina will be relentless over that timeframe, though some improved rainfall is expected late in September and October. Meanwhile, Center South and Center West Brazil will also continue to experience net drying conditions for the next ten days, with light rainfall expected late in the month. The forecaster maintains improved soil moisture for early planting must occur late in the month and in October to induce favorable planting and early season crop development potential.
90-day outlook: Earlier today, USDA released its weekly export sales report, which showed net new crop sales of 1,658,700 MT for the week ended Aug. 29 following an uptick in recent export demand amid low prices and a weakening U.S. dollar. However, an unsettled political landscape and faltering global economy could ultimately pause demand, namely from China, especially amid a Reuters report this week that noted the country is demanding the U.S. should immediately lift all tariffs on Chinese goods. Look for heightened uncertainty into the November election, with traders keying in on trade relations and the state of the U.S. and global economy into the new year.
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 lost 7 3/4 cents and settled at $5.67, though they still gained 15 1/2 cents on the week. December HRW future tumbled 11 1/4 cents to $5.77 1/2, but the Friday close still represented a 12 1/4 cents weekly rise.
5-day outlook: Wheat futures traded similarly to corn today, firming this morning before outside markets dragged prices lower. The last couple days of selling pressure have allowed wheat futures to cool off after climbing for six consecutive sessions. The recent uptrend is still very much alive and well and bulls managing to keep prices above 40-day moving average support today indicates that more upside could still be on the table. Next week’s reports from USDA are likely to show little change from August. September is historically more of a bullish month for wheat which has played out so far. The coming week will help show whether the recent rally is transient or if it has longer legs.
30-day outlook: The Small Grains Summary released at the end of September will give final production for 2024-25 and will include any revisions for winter wheat and an updated spring wheat crop estimate. Basis levels have jumped for high quality spring wheat in the past month in Minnesota, which could be due to a potentially lower quality crop, smaller than expected production or simply higher demand. The reports at the end of the month should help determine what is driving HRS prices higher, either production or demand, which would be noted in the quarterly Grain Stocks report from USDA.
90-day outlook: As the winter months come into focus, the market will be largely focused on demand. Who wins the upcoming election could have an impact on trade. China is increasing trade tensions with several of their trading partners. While they do not purchase a particularly large amount of U.S. wheat, Heightening U.S.-China tensions would ultimately bring struggle across the agricultural complex. Exports are keeping the wheat balance sheet from drifting too high in the new-crop marketing year and if exports do not live up to current expectations, wheat prices could again struggle to find a bottom.
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 slipped 156 points to 67.88 cents and marked a 211-point drop on the week.
5-day outlook: Cotton futures ended the week on a low note, extending Thursday’s losses to the lowest level since mid-August. Outside market pressure certainly weighed on the natural fiber as crude oil edged to a 14-month low, while equities continued to liquidate, and the U.S. dollar modestly favored the upside. Today’s Jobs Report rustled general demand concerns throughout the marketplace, and increased speculation that the Fed may adjust rates more than previously expected. Look for cotton to continue to take direction from outside markets, though there is minimal support serving between today’s close and the Aug. 16 low, which is indicative of additional price pressure in the coming week.
30-day outlook: Traders will continue to eye U.S. weather over the next month as harvest progresses. World Weather Inc. reports recent rain in West Texas proved impressive, and may allow new bolls to 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. Meanwhile, a little rain in the Delta 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.
90-day outlook: USDA reported weekly upland cotton export sales of 207,500 RB for the week ended Aug. 29, with top purchasers including Pakistan, India and Turkey, while exports during the week totaled 164,100 RB. Upland commitments are lagging year-ago by 12.5% as top purchaser, China looks to South America for fresh supplies despite a dwindling U.S. dollar. Export demand will surely be the main market driver over the longer-term, with special attention on the state of trade relations between the U.S. and China, which could intensify into the November Presidential election.
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.