Corn
Price action: December corn rose a penny to $4.07 1/4, ending near the session high.
Fundamental analysis: Corn futures found some strength as the session progressed, likely stemming from soybeans and corrective gains in crude oil futures. However, gains continued to be limited by recent technical resistance. Meanwhile, it’s probable that trade across the grain and soy complexes will remain relatively sideways into Thursday’s Crop Reports. However, a drier weather bias across the Midwest could garner attention as a drier bias persists over the next ten days, while a strong disturbance in the western Gulf of Mexico is becoming better organized and should reach hurricane intensity prior to reaching the Louisiana coast late Wednesday. The storm could bring heavy rains to the Delta and Southeast.
Earlier today, USDA reported export inspections during the week ended Sept. 6 fell 129,931 MT to 836,413 MT (32.9 million bu.) but were within pre-report expectations which ranged from 600,000 MT to 1.25 MMT.
USDA will update weekly crop conditions in its weekly Crop Progress Report. Analysts expect a one percent decline in the “good” to “excellent” rating to 64%.
Technical analysis: December corn traded narrowly to begin the week, with support at the 40- and 10-day moving averages of $4.03 and $4.01 1/4 serving as initial support, while initial resistance served at $4.09 1/4. To gain momentum, bulls need to secure a close above resistance at $4.23 3/4, while bears’ next downside target is holding a close below the contract low of $3.85, with support layered at $4.00 and $3.95.
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 rallied 13 cents to $10.18, closing back above the 40-day moving average and near the session high, while December soymeal rose 60 cents to $325, forging a low-range close. December soyoil closed 85 points higher at 40.48 cents, closing near the session high.
Fundamental analysis: Soybean futures took back a portion of Friday’s losses, though technical resistance and U.S. dollar strength curbed momentum. Fading soymeal gains as the session progressed also pared momentum. USDA did release a daily sale of 132,000 MT of soybeans to China for 2024-25, though the rate of daily sales fading as of late has seemingly tempered some optimism, especially amid increased deflationary conditions in China.
On the global logistic front, Mississippi River levels may get a boost from Potential Tropical Cyclone Six, which will bring heavy rain and some flooding to the Delta into Thursday, with moderate to heavy rain extending to the east into Georgia and northern Florida into Friday, while South America continues face record low levels in the Paraguay River amid severe drought. Meanwhile, the Parana River in Argentina is also low around the grain export hub at Rosario. Both Paraguay and Parana Rivers start in Brazil and are important routes for soybeans and other agricultural products. Low water levels are affecting shipments, though the impact was capped as it is not a peak export season.
Earlier today, USDA reported weekly export inspections of 354,166 MT (13.0 million bu.) for the week ended Sept. 6, which were down 148,278 MT from the previous week but within the range of pre-report expectations from 350,000 to 650,000 MT.
USDA will release its weekly Crop Progress Report following the close, with analysts expecting the “good” to “excellent” rating to decline two percentage points to 63%, according to a Reuters poll.
Technical analysis: November soybeans ended the session back above the 40-day moving average of $10.12 1/4, though resistance at $10.23 continued to curb momentum. Meanwhile, the 10-day moving average of $10.01 3/4 served up initial support, with backing from psychological support at $10.00 as well as the 20-day moving average of $9.86 1/2. In the event bulls are able to extend gains above $10.23, additional resistance will serve first at $10.41, then at $10.50 3/4, with solid resistance serving at the 100-day moving average, currently at $11.01 1/2. Conversely, a move below the 20-day moving average will find notable support at the Aug. 16 low of $9.55.
December soymeal ended the session modestly firmer, though well off the session high amid looming resistance at $330.10. The downside was limited, however, by support at $321.30, which is backed by the 10-, 40- and 20-day moving averages of $317.90, $314.90 and $311.60 as well as the Aug. 14 low of $298.50. Meanwhile, a move above initial resistance will find bulls facing resistance at $335.70 and the 100- and 200-day moving averages of $337.60 and $348.50.
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 wheat rose 1 1/2 cents to $5.68 1/2 and near the daily high. December HRW wheat fell 1 3/4 cents to $5.75 3/4 and near mid-range. December spring wheat futures fell 7 cents to $6.06 3/4.
Fundamental analysis: The winter wheat futures markets today saw some chart consolidation following recent good gains. Buying interest was limited by a rally in the U.S. dollar index today.
Wheat bulls got little help from lower Canadian wheat stocks and lower projections for the Russian wheat crop. Canadian wheat stocks fell 18.5% from year-ago to 4.6 MMT as of July 31, according to Statistics Canada. However, it is important to note Canada made revisions back three years to its supply and demand data. While Canada wheat stocks are down from last year, Stats Canada today revised last year’s stocks up from 3.51 MMT to 5.625 MMT. Thus, traders actually viewed today’s Stats Canada data as bearish. USDA will adopt the new Stats Canada numbers for its world wheat supply and demand. That should show bearish monthly revisions for Canada in Thursday’s USDA supply and demand report. Traders are expecting Thursday’s USDA report to forecast U.S. and global wheat stockpiles little changed from the August report. Meantime, the IKAR agricultural consultancy lowered its forecast for Russia’s wheat crop to 82.2 MMT from 83.8 MMT.
World Weather Inc. today said “planting moisture is limited in southern Russia and Ukraine, where rain will be needed soon to ensure the crops get established favorably prior to winter dormancy. Planting moisture is also needed in the U.S. Plains, although there is plenty of time for that to evolve.” Meantime, spring wheat in parts of Europe may be suffering from too much moisture, The eastern CIS New Lands needs drier weather to protect grain quality and to expedite harvesting. Canada’s Prairies will see good harvest weather this week, “but conditions may start to deteriorate late in the week and last into next week as more frequent rain evolves. The moisture will be good for winter crops produced in the region,” said the forecaster.
USDA this morning reported decent U.S. wheat export inspections of 586,687 MT, down 16,003 MT from the previous week and near the low-end of the pre-report range of expectations.
This afternoon’s weekly USDA crop progress reports are expected to show U.S. spring wheat harvested at 83% complete as of Sunday, compared to 70% done last week. U.S. winter wheat planted is seen at 8% complete versus 2% done last week.
Technical analysis: Recent price action still suggests the winter wheat markets have put in near-term lows. Winter wheat futures bears do still have the overall near-term technical advantage. 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 September high of $5.82 3/4 and then at $5.90. First support is seen at today’s low of $5.60 1/2 and then at $5.50. 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 today’s high of $5.80 1/4 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 fell 19 points to 67.69 cents, nearer the daily low and hit a three-week low.
Fundamental analysis: The cotton futures market saw technical selling featured today as the near-term chart posture for the fiber has been deteriorating the past few trading sessions. A higher U.S. dollar index today also aided the cotton market bears. Selling interest in cotton was somewhat muted by higher crude oil prices and a rebound in U.S. stock indexes from Friday’s sell off following a downbeat monthly U.S. jobs report.
Recent weaker economic data from China, a major cotton importer, is an underlying bearish element for the U.S. cotton market.
World Weather Inc. today said west Texas rainfall “is not likely to be very great during the next ten days and the same is expected of the Blacklands and interior Coastal Bend.” Weather in the Delta may deteriorate later this week if potential tropical cyclone six moves into the region during mid-week. Cotton in the southeastern states may also experience greater rainfall later this week after already experiencing rain during the weekend. “Some fiber quality decline may occur because of wet weather in the Delta and southeastern states, while west Texas and the Blacklands of Texas continue poised for a good late season crop development.
Cotton traders are awaiting Thursday’s monthly USDA supply and demand report, which traders expect to show a slight rise in U.S. production, to 15.31 million bales, according to a Reuters survey.
Technical analysis: The cotton futures bears have the firm overall near-term technical advantage. The next upside price objective for the cotton bulls is to produce a close in December futures above technical resistance at the August high of 71.36 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 68.31 cents and then at 69.00 cents. First support is seen at 67.00 cents and then at 66.26 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.