Corn
Price action: July corn rose 6 1/2 cents to $4.61, the highest close since May 2.
Fundamental analysis: Corn extended gains for a third straight session, bolstered by followthrough strength in wheat futures and a fading U.S. dollar. However, unsurprisingly, technical resistance at the 200-day moving average proved a force, as it’s backed by the 40- and 100-day moving averages.
A healthy planting pace combined with rains in dry areas of the upper Midwest had recently weighed on prices, though excessive moisture in other parts of the U.S., and a relatively resilient tone in soybeans, could have some producers pondering acreage switches or prevent-plant as the calendar quickly advances toward June. Moreover, the planting delays have primarily occurred in the lower Midwest, where many cotton producers opted to plant corn amid suppressed prices. But the exact degree to which this occurs, will likely prove an unknown through much of the growing season.
Meanwhile, some concerns are cropping up in Brazil, with later-planted safrinha corn areas facing an increased stress in drier biased areas, which may lead to yield declines, most notably in center-west areas.
Earlier today, the Energy Information Administration reported weekly ethanol production averaged 1.036 million barrels per day (bod) during the week ended May 16, up 43,000 bpd (4.3%) from the previous week and 17,000 bpd (1.7%) above the same week last year. Ethanol stocks declined 501,000 barrels to 24.944 million barrels.
First thing Thursday morning, USDA will release its weekly Export Sales Report, with analysts expecting net sales to have ranged from 700,000 MT to 1.6 MMT during the week ended May 15. Last week, net sales of 1.68 MMT were reported for the previous week.
Technical analysis: July corn futures were able to forge a close above the 20-day moving average for the first time since late April, though resistance at the 200-, 40- and 100-day moving averages, layered at $4.60 1/2, $4.74 1/4 and $4.8 1/2 will now serve as resistance, giving bulls a run for their money in their efforts to advance. Meanwhile, bears will look to take out the May 13 low of $4.36 1/2, though initial support lies at the 10-day moving average of $4.56 1/4, then at $4.40 3/4 and $4.36 3/4.
Hedgers: You should be 70% sold in the cash market on 2024-crop. You should have 20% of expected 2025-crop production forward sold for harvest delivery.
Cash-only marketers: You should be 70% sold on 2024-crop. You should have 20% of expected 2025-crop production forward sold for harvest delivery.
Soybeans
Price action: July soybeans rose 9 3/4 cents to $10.62 3/4, nearer the session high. July soybean meal rose $1.50 to $294.10, nearer the daily high. July soybean oil rose 33 points to 49.83 cents, nearer the daily low.
Fundamental analysis: The soybean futures market saw some chart-based buying today and were also helped by rallies in corn and winter wheat futures markets. A sharply lower U.S. dollar index today also aided the soybean bulls. Bulls are also hopeful that there will be a continued thawing of U.S-China trade relations that could mean more China purchases of U.S. soybeans.
World Weather Inc. today said U.S. soybean crop weather “is expected to be favorably mixed over the next two weeks to support most planting, emergence and establishment needs. However, a few areas in the lower Midwest, northern Delta and Tennessee River Basin will remain too wet.” Meantime, Argentina harvesting will advance around some infrequent precipitation. Yield potentials may slip lower in some for the driest center-west Brazil crop areas, but much of that was already factored into the market trade earlier this season.
Thursday morning’s weekly USDA export sales report is expected to show U.S. soybean sales of 100,000 to 300,000 MT in the 2024-25 marketing year, and sales of 90,000 to 400,000 MT in the 2025-26 marketing year.
Technical analysis: The soybean bulls have the overall near-term technical advantage. Prices are in a six-week-old uptrend on the daily bar chart. The next near-term upside technical objective for the soybean bulls is closing July prices above solid resistance at $11.00. The next downside price objective for the bears is closing prices below solid technical support at the May low of $10.36 1/2. First resistance is seen at today’s high of $10.67 1/2 and then at the May high of $10.82. First support is seen at today’s low of $10.52 3/4 and then at this week’s low of $10.45 3/4.
Soybean meal bears have the solid overall near-term technical advantage. Prices are in a downtrend on the daily bar chart. However, there are solid chart support levels just below present prices. The next upside price objective for the meal bulls is to produce a close in July futures above solid technical resistance at the April high of $308.10. The next downside price objective for the bears is closing prices below solid technical support at the contract low of $289.70. First resistance comes in at this week’s high of $294.50 and then at $300.00. First support is seen at today’s low of $291.50 and then at $289.70.
Bean oil bulls have the firm overall near-term technical advantage. Prices are in a nine-week-old uptrend on the daily bar chart. The next upside price objective for the bean oil bulls is closing July prices above solid technical resistance at the May high of 52.62 cents. Bean oil bears’ next downside technical price objective is closing prices below solid technical support at the May low of 47.29 cents. First resistance is seen at today’s high of 50.30 cents and then at 51.00 cents. First support is seen at today’s low of 49.50 cents and then at 49.00 cents.
What to do: Get current with advised sales. Our next sales target is $11.00 in nearby futures.
Hedgers: You should be 65% priced in the cash market on 2024-crop. You should also have 10% of expected 2025-crop production sold for harvest delivery.
Cash-only marketers: You should be 65% priced on 2024-crop. You should also have 10% of expected 2025-crop production sold for harvest delivery.
Wheat
Advice: We advise all wheat producers to sell the final 15% of 2024-crop production to get to 100% sold.
Price action: July SRW futures rose 3 1/4 cents to $5.49 1/4. July HRW wheat gained 4 1/4 cents to $5.40 1/2. Both markets closed near mid-range and well off their daily highs. July spring wheat futures rose 7 cents to $6.04 3/4.
Fundamental analysis: Wheat futures worked higher again today and challenged key technical resistance, marking gains in six out of the last seven sessions. Wheat futures took a bit of a backseat to corn and soybeans today, which led the ag complex higher. It was good to see that shift, as one market leading the way higher has proved to be unsustainable in the past. SovEcon raised their 2025 Russian wheat production forecast by 1.2 MMT to 82.6 MMT today, which would total above 81.0 MMT in 2024. That increase comes despite high temps and a lack of rain in Russia’s largest grain region Rostov. The crop in this key production region has quickly gone from frosts over last weekend to concerns over heat and drought, undoubtedly weighing on crop conditions.
The heat wave in northern China continues to garner a lot of market attention. It prompted authorities to issue alerts and roll out measures to ensure water supply and protect food production. The National Meteorological Center issued a yellow alert – the third highest – warning temperatures could exceed 40 degrees Celsius (104 F) in parts of Shaanxi, Shanxi, Henan and Hubei provinces and persist through Thursday. It is important to remember that 80% or more of China’s wheat crop is irrigated and the country is likely to boast an impressive wheat crop regardless of adverse weather challenges.
Technical analysis: July SRW futures posted gains today though closed well off session highs. Bulls maintain a modest technical advantage on the daily bar chart and are looking to tackle initial resistance at today’s high of $5.56 1/4. Strength above that mark targets the 100-day moving average at $5.60 3/4. Meanwhile, persistent selling pressure has bears eyeing the 40-day moving average at $5.43 1/4, which is bolstered by support at $5.36.
July HRW futures continue to trade in tandem with SRW futures. Gains stopped shy of the 40-day moving average today, which remains resistance at $5.47 3/4. Additional resistance comes in at the psychological $5.50 mark. Support comes in at the 20-day moving average at $5.33 3/4 on persistent selling pressure, which is backed by support at $5.28 1/2.
What to do: Get current with advised sales. Be prepared to make additional 2025-crop and initial 2026-crop sales when the rally shows signs of stalling.
Hedgers: NEW ADVICE -- Sell the final 15% of 2024-crop production to get to 100% sold in the cash market. You should be 20% forward sold for harvest delivery in 2025.
Cash-only marketers: NEW ADVICE -- Sell the final 15% of 2024-crop production to get to 100% sold. You should be 20% forward sold for harvest delivery in 2025.
Cotton
Price action: July cotton fell 5 points to 66.07 cents, nearer the session high.
Fundamental analysis: The cotton futures market continues to languish in a choppy trading range. Bulls were disappointed that cotton prices got no upside traction from rallies in the grain markets and a sharply lower U.S. dollar index. A risk-off trader and investor mentality this week that has halted the recent rallies in the U.S. stock indexes likely limited buyer interest in cotton futures today.
World Weather Inc. today said a large part of the Delta and the Southeast saw dry and improving-to- favorable conditions for fieldwork Tuesday, with rain noted in a few locations in Delta as well as from east-central and northeastern Mississippi to northern Georgia to southwestern and south-central Virginia. The Delta and the Southeast will see steady increases in cotton planting into Saturday in advance of a period of wet weather Sunday into next Wednesday, before planting increases again during another period of drier weather expected May 29-June 4. “Rain Sunday into next Wednesday will maintain moist soils in much of the region, with the rain beneficial from southeastern Alabama into southern Georgia and nearby Florida, where some areas have not seen a full restoration of soil moisture,” said World Weather.
Thursday morning’s weekly USDA export sales report will be closely scrutinized by cotton traders. Weekly U.S. cotton sales abroad likely need to show marked improvement for a price uptrend in the cotton futures market to be sustained.
Technical analysis: The cotton bears have the overall near-term technical advantage. A bear flag pattern has formed on the daily bar chart. The next upside price objective for the cotton bulls is to produce a close in July futures above technical resistance at the April high of 69.75 cents. The next downside price objective for the cotton bears is to close prices below solid technical support at the March low of 63.80 cents. First resistance is seen at 67.00 cents and then at 67.50 cents. First support is seen at the May low of 64.75 cents and then at 64.00 cents.
What to do: Get current with advised sales and hedges.
Hedgers: You should be 35% sold in the cash market on 2024-crop.
Cash-only marketers: You should be 35% sold on 2024-crop.