Crops Analysis | September 25, 2023
Price action: December corn rose 4 cents to $4.81 1/4, ending near the session high.
Fundamental analysis: Corn futures continued in narrow, rangebound trade with early pressure stemming from soybean futures and unsupportive outside markets. However, increasing SRW wheat gains gave life to the grain complex, combined with a solid daily export sale. USDA reported 1.66 MT for delivery to Mexico, with 1.05 MMT for delivery during 2023-24 and 611,389 MT during 2024-25, marking the largest daily corn sale since November 16, 2022. Meanwhile, USDA also reported weekly export inspections of 660,811 MT (26.0 million bu.) for week ended Sept. 21, which were down 15,512 MT from last week’s tally, but within the pre-report range of 400,000 to 800,000 MT. Inspections continue to outpace year-ago by over 15%.
World Weather Inc. indicates eastern Minnesota and Wisconsin to the eastern Corn Belt will see rain and interruptions to fieldwork starting in western areas today and spreading to eastern areas by Wednesday, while most other areas are dry and will see improving to favorable conditions for harvesting. The forecaster notes rain will become infrequent and often light through Oct. 10 and crop maturation and harvest should occur favorably.
Earlier today, AgRural reported farmers in center-south Brazil have planted 25% of the area expected for the first 2024 corn crop, up from 21% a week ago, but below 28% complete last week. World Weather reports weather will continue to be a little tenuous for early corn planting, though there is still time for further improvement.
USDA will update weekly crop condition ratings and harvest progress—traders are expecting conditions to remain unchanged at 51% “good” to “excellent” and harvest efforts to have increased 8 percentage points to 17% as of Sunday, according to a Reuters poll.
Technical analysis: December corn futures increased their technical posture a bit during today’s session, with a close held above the 10-day moving average, with efforts falling just short of the 20-day of $4.81 1/2, which will now serve as initial resistance. From there, resistance stands at the 40-day moving average of $4.86 1/2, with additional resistance serving at the psychological $5.00 area, and then at the 100- and 200-day moving averages of $5.14 1/4 and $5.46 1/4. Conversely, support will serve at the 10-day moving average of $4.78, then at $4.74 3/4, $4.72 1/4 and $4.70 1/2.
What to do: Get current with advised sales.
Hedgers: You should be 100% sold in the cash market on 2022-crop. You should be 50% forward priced for harvest delivery on expected 2023-crop.
Cash-only marketers: You should be 100% sold on 2022-crop. You should be 35% forward priced for harvest delivery on expected 2023-crop production.
Price action: November soybeans rallied 2 cents before ending the day at $12.97 3/, near the session high. December soybean meal futures rallied $4.00 and settled at $389.80, while December soyoil fell 214 points and closed at 57.48 cents.
Fundamental analysis: Soybeans traded lower for most of the session though short covering surged prices higher into the close. Harvest pressure is likely to keep pressure on soybean prices this week as combines start to roll across the Midwest, exemplified by harvested beans estimated at 14% according to a Bloomberg survey, up from just 8% a year ago. Friday’s grain stocks report is the highlight of the week, which will give an in-depth look at just how tight the balance sheet is.
Soybean conditions are expected to come in steady from a week ago at 52% “good” to “excellent” according to a Bloomberg survey. Conditions are unlikely to change much as harvest has kicked off, barring a significant weather event or other outside influence. Rainfall fell on nearly all the western Corn Belt and into western and central Illinois over the weekend, relieving drought slightly and interrupting harvest and field work, World Weather Inc says. The rain is not likely to help current crop conditions but is improving soil conditions. Recent rains are unlikely to have helped river levels much, which are currently low enough that barge restrictions remain in place, dampening export efforts.
For week ended Sept. 21, USDA report export inspections of 481,638 MT (17.7 million bu.) which rose 51,867 MT from the previous week and were within the pre-report range of 375,000 to 775,000 MT. Inspections continue to outpace year ago.
Technical analysis: November soybeans garnered some strength from corn’s large export sale this morning but traded lower most of the session. Futures consolidated under the $13.00 level which will remain key resistance. Additional resistance comes in at $13.01, then $13.08. A daily close above $13.08 would negate the potential bear flag forming on the daily bar chart. Bulls are seeking to hold prices above $12.92 1/2 support, which is backed by today’s low of $12.84 1/2.
December meal futures rose sharply on corrective buying and spreading today, though a downtrend remains on the daily bar chart and the bears retain full control of the technical advantage. Initial resistance stands at $390.00 which capped most of the upside today, with additional backing from $392.00, $395.00, then the psychological $400.00 level. Bulls are seeking to hold initial support of $385.00, else a trip to the $380.00 level is likely.
December soyoil fell sharply on the session as prices resume the recent downtrend. Bears retain control of the technical advantage, though some corrective buying is possible as prices are near significant support levels. Bulls are targeting resistance at 58.50 cents which capped most of the downside last week, as well as all the selling in August. Firmer resistance stands at 60.00 cents. Bears are seeking to take out 57.50 support which capped most of the downside today, additional support comes in at 57.00 cents.
What to do: Get current with advised sales.
Hedgers: You should be 100% sold in the cash market on 2022-crop. You should be 45% forward sold for harvest delivery on expected 2023-crop production.
Cash-only marketers: You should be 100% sold on 2022-crop. You should be 40% forward sold for harvest delivery on expected 2023-crop production.
Price action: December SRW wheat rose 9 1/2 cents at $5.89 and near the session high. December HRW wheat gained 3 1/4 cents to $7.14 1/2 and closed nearer the session high. Prices hit a two-year low early on. December spring wheat futures fell 1 1/2 cents to $7.69.
Fundamental analysis: Short covering was featured in the wheat futures markets today. Wheat markets were also supported by gains in corn futures to start the trading week. A stronger U.S. dollar index that hit a 6.5-month high today did limit the upside in wheat futures.
The wheat markets were also lifted on news Ukrainian grain exports from Sept. 1-24 totaled 1.57 MMT, down sharply from the 3.21 MMT during the same period a year ago.
USDA reported weekly export inspections for U.S. wheat at 451,004 MT, which were up 28,365 MT from the previous week and near the upper end of market expectations. Weekly wheat inspections have stabilized but are still behind the normal pace of recent years.
This afternoon’s weekly USDA crop progress report is expected to show U.S. spring wheat harvested at 97% complete versus 93% last week and 96% one year ago at this time. U.S. winter wheat planted is seen by analysts at 27% complete compared to 15% last week and 31% last year.
Technical analysis: Winter wheat futures bears have the solid overall near-term technical advantage. Prices are in two-month-old downtrends on the daily bar charts. SRW bulls' next upside price objective is closing December prices above solid chart resistance at $6.20. The bears' next downside objective is closing prices below solid technical support at $5.50. First resistance is seen at $5.91 and then at $6.00. First support is seen at the contract low of $5.70 and then at $5.60. The HRW bulls' next upside price objective is closing December prices above solid technical resistance at the September high of $7.54 1/4. The bears' next downside objective is closing prices below solid technical support at $7.00. First resistance is seen at $7.25 and then at last week’s high of $7.44 1/2. First support is seen at today’s low of $7.03 and then at $7.00.
What to do: Get current with advised sales.
Hedgers: You should be 50% sold in the cash market on 2023-crop production.
Cash-only marketers: You should be 50% sold on 2023-crop production.
Price action: December cotton rose 226 points to 88.17 cents--the highest closing price since Sept. 12.
Fundamental analysis: December cotton futures shrugged off last week’s losses to post a sizeable gain, with bulls capturing an increased technical position. The move came despite mostly sideways trade in crude oil futures and a reach to a 6.5-month high in the U.S. dollar. Traders are becoming increasingly concerned over supply curbs in key U.S. growing regions.
World Weather Inc. notes outside of rain in the Blacklands into the Coastal Bend into Tuesday, little rain of significance is expected through the next two weeks in the Southern Plains, with cotton maturation and harvesting occurring in a mostly favorable environment. Meanwhile, the forecaster states rain from Tropical Storm Ophelia should not have caused any serious damage to crops in North Carolina or Virginia.
USDA will update weekly crop ratings and harvest progress following the close. Last week, the government pegged the crop 29% “good” to “excellent,” with harvest progress at 9%.
Technical analysis: December cotton ended the session near the top end of the recent trading range, breaching the 40-, 10- and 20-day moving averages and marking the highest close since Sept. 12. Initial resistance will now serve at 88.86 cents, then at the Sept. 1 high of 90.00 cents. Meanwhile, support will now serve at today’s failed resistance at the 40-, 10 and 20-day moving averages of 86.27, 87.13 and 87.28 cents, respectively, then at 85.18 cents, 84.44 cents and the 100-day moving average of 83.39 cents.
What to do: Get current with advised sales.
Hedgers: You should be 100% priced on 2022-crop in the cash market. You should have 60% of expected 2023-crop production forward sold for harvest delivery.
Cash-only marketers: You should be 100% priced on 2022-crop. You should have 60% of expected 2023-crop production forward sold for harvest delivery.
