Crops Analysis | November 15, 2023
Price action: December corn fell 7 1/2 cents to $4.70 3/4, ending nearer the session low.
Fundamental analysis: Corn futures gave up a bit more of Monday’s gains as profit-taking in soybeans combined with outside market pressure weighed on prices. A daily export sale for the third day in a row provided little support, even as Japan stepped up to buy 124,000 MT for the 2023-24, the first daily corn sale outside of Mexico since October 12, bringing total corn sales for the week to 369,382 MT. Meanwhile, the Ethanol Information Administration resumed its ethanol data releases after a pause last week and reported ethanol production in week ended Nov. 10 averaged 1.047 million barrels per day (bpd), which was up 5,000 bpd from the previous week and 3.6% higher than the same week last year. Ethanol stocks declined to 21,000 million barrels.
USDA will release its weekly Export Sales Report with data from the week ended Nov. 9 early Thursday morning. Traders are expecting sales to range from 900,000 MT to 1.55 MT for 2023-24. Last week, sales totaled 1.015 MMT, which were up 36% from the previous week and 4% from the four-week average.
Technical analysis: December corn bears were able to notch a close below initial support at $4.74 1/4 and the 10-day moving average of $4.72 1/4. Initial support will now serve at $4.70, with further support lying at $4.67 1/4 and then Monday’s low of $4.61. Conversely, initial support will now serve at today’s failed support levels, then at $4.77, then the 20-day moving average of $4.78 1/2, again at $4.81 1/4 and the 40-day moving average of $4.82 1/2. From there, resistance serves at $4.84, $4.88 1/4 and at the 100-day moving average of $4.93 3/4.
What to do: Get current with advised sales.
Hedgers: You should be 50% sold in the cash market on 2023-crop.
Cash-only marketers: You should be 35% sold on 2023-crop production.
Price action: January soybeans fell 4 3/4 cents to $13.85 and nearer the session low after hitting a 2.5-month high early on. March soybean meal dropped $4.00 to $436.90 and nearer the session low. March bean oil rose 33 points to 52.03 cents, near mid-range and hit a three-week high.
Fundamental analysis: The soybean and meal futures markets saw some routine profit-taking pressure amid near-term price uptrends that remain in place. A rebound in the U.S. dollar index at mid-week, along with lower crude oil prices, also lent some outside-market selling pressure to soybeans and meal, as did losses in corn futures today.
Today’s NOPA crush report for October came in at 189.774 million bushels, up 24.318 million bushels from September. It was a record crush and well above the October 2022 crush of 184.464 million. The NOPA soybean oil stocks totaled 1,099.086 million pounds and down 8.551 million pounds from last month’s report.
World Weather Inc. today reported several more days of hot weather and dry is expected in center-west, center-north and northeastern Brazil, but showers and thunderstorms increasing late this weekend and next week will ease crop stress. Pockets of crop damage and losses are expected because of poor soil moisture already. “Crops in areas with favorable soil moisture are likely to make it through the moisture stress and should recover nicely next week if rain is widespread and significant,” said the forecaster. More flooding rain is expected in southern Brazil this week and in neighboring areas of southern Paraguay and far northeastern Argentina. Argentina weather is expected to be mixed over the next ten days but favoring summer crop planting and early development.
Traders are awaiting Thursday morning’s weekly USDA export sales report, which is expected to show U.S. soybean sales of 2.9 million to 4.5 million MT in the 2023-24 marketing year, and sales of zero to 100,000 MT in the 2024-25 marketing year.
Technical analysis: The soybean futures bulls have the overall near-term technical advantage. Prices are in a four-week-old uptrend on the daily bar chart. The next near-term upside technical objective for the soybean bulls is closing January prices above solid resistance at $14.00. The next downside price objective for the bears is closing prices below solid technical support at $13.00. First resistance is seen at $13.86 and then at $14.00. First support is seen at Tuesday’s low of $13.68 1/2 and then at $13.50.
The meal bulls have the solid overall near-term technical advantage. Prices are in a six-week-old uptrend the daily bar chart. The next upside price objective for the meal bulls is to produce a close in March futures above solid technical resistance at $460.00. The next downside price objective for the bears is closing prices below solid technical support at $408.00. First resistance comes in at the contract high of $445.10 and then at $450.00. First support is seen at Tuesday’s low of $428.20 and then at $420.00.
Soybean oil futures bears have the overall near-term technical advantage. However, a 2.5-month-old downtrend on the daily bar chart has been negated. The next upside price objective for the bean oil bulls is closing March prices above solid technical resistance at 55.00 cents. Bean oil bears' next downside technical price objective is closing prices below solid technical support at 45.00 cents. First resistance is seen at today’s high of 52.56 cents and then at 53.00 cents. First support is seen at Tuesday’s low of 50.72 cents and then at 50.00 cents.
What to do: Get current with advised sales.
Hedgers: You should be 55% priced in the cash market on 2023-crop production. You should have 10% of expected 2024-crop production sold for harvest delivery next fall.
Cash-only marketers: You should be 50% priced on 2023-crop production. You should have 10% of expected 2024-crop production sold for harvest delivery next fall.
Price action: December SRW wheat fell 11 1/2 cents to $5.60 1/2, the lowest close since Oct. 31. December HRW was unchanged at $6.39 3/4, while December spring wheat rose 3/4 cent to $7.35 1/4.
Fundamental analysis: SRW wheat led the wheat complex lower today as strong overhead resistance and returned strength in the U.S. dollar following Tuesday’s sharp losses crimped optimism. Earlier reports from France’s ag ministry cast a shadow over prices due to an increase in the country’s soft wheat exports outside the European Union in 2023-24, and lifted its season-end stocks estimate to a six-year high on lower forecasts for intra-EU shipments and domestic livestock feed demand. Strong demand from China and Egypt prompted the ministry to raise its outlook for shipments outside the EU.
World Weather Inc. reports rain would be welcome for India and far southern Ukraine, while rain is still needed in west-central and southwestern U.S. hard red winter areas and in the Pacific Northwest, while recent warming is helping winter crops in Montana to resume emergence and establishment after very cold late October weather. The forecaster notes recent rains in Argentina and that coming over the next two weeks will favor later season winter crop development, while Brazil’s wheat harvest is poor due to too much rain, with additional damage possible in Rio Grande do Sul and Santa Catarina in the coming week due to frequent heavy rainfall.
USDA will release its weekly export sales data early Thursday morning. Traders are expecting sales to range from 250,000 to 500,000 MT. Last week net sales of 354,298 were reported for the previous week, which were up 29% from the previous week but were down 26% from the four-week average.
Technical analysis: December SRW wheat bears continued to prevail in today’s session, with a close held below initial support at $5.66 1/2 and $5.61. Initial support will now serve at $5.51 3/4, then at the Sept. 29 low of $5.40. Meanwhile, corrective buying efforts will face initial resistance at today’s failed support levels, with stiff resistance serving at the 40-, 10- and 20-day moving averages of $5.73 1/4, $5.74 1/4 and $5.74 3/4. From there resistance stands at $5.81 1/4, $5.90 1/2 and $5.96.
December HRW wheat futures continue to consolidate sideways mostly between support at $6.34 1/2 and the 20-day moving average of $6.48 1/4. A break below initial support will face additional support at $6.29 1/2 and $6.22 1/4, while a turn above the 20-day will battle further resistance at $6.54 1/2, $6.59 1/2 and at the 40-day moving average of $6.65 1/2.
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: March cotton fell 14 points to 81.01 cents and near mid-range.
Fundamental analysis: The cotton futures bulls could show no follow-through buying strength after Tuesday’s decent short-covering gains. Lower grain futures markets today, a rebound in the U.S. dollar index and lower crude oil prices were all bearish daily outside-market influences on cotton futures. However, selling interest was limited by better general trader and investor risk appetite in the marketplace at mid-week, following some tame U.S. inflation data this week that rallied the U.S. stock indexes to multi-week highs.
World Weather Inc. today said West Texas cotton harvesting will not be seriously disrupted by precipitation anytime soon, although a few showers are expected infrequently. U.S. Delta harvesting is winding down and should conclude soon. Cotton harvesting in the southeastern U.S. will be disrupted by rain today and Thursday with a few more showers this weekend, said the forecaster. Rain will impact the Delta and southeastern states during the middle to latter part of next week slowing fieldwork once again. The far western U.S. will experience good harvest conditions, although some rain delay will occur briefly in the next few days as scattered showers evolve. South Texas and the Texas Coastal Bend received significant rain earlier this week, boosting topsoil moisture for improved planting potentials in March 2024.
Traders are awaiting Thursday morning’s weekly USDA export sales report, with the bulls hoping for a third straight week of good U.S. sales abroad and hopefully led by China.
Technical analysis: The cotton futures bears have the overall near-term technical advantage. A six-week-old downtrend is in place on the daily bar chart. The next upside price objective for the cotton bulls is to produce a close in March futures above technical resistance at 85.00 cents. The next downside price objective for the cotton bears is to close prices below solid technical support at the November low of 77.66 cents. First resistance is seen at this week’s high of 81.92 cents and then at 82.50 cents. First support is seen at 80.00 cents and then at this week’s low of 79.00 cents.
What to do: Get current with advised sales.
Hedgers: You should have 60% of 2023-crop production forward sold in the cash market.
Cash-only marketers: You should have 60% of 2023-crop production sold.
