Corn
Price action: July corn climbed 6 cents to $4.44 1/2 and closed near session highs. That marked a 2 cent gain on the week.
5-day outlook: Corn futures forged a slow climb as soybeans shot higher this morning, but eventually posted solid gains on the session and closed at the highest mark so far this month. Bulls managed to close prices above the 10-day moving average for the first time since May 27, a level that had capped all gains earlier this week. Both corn and beans closing above technical resistance opens the door for followthrough buying next week. The corn market has largely ignored how robust demand has been over the past several months and this could be the catalyst the market needs to break higher. Followthrough buying early next week will be needed to confirm that claim, marking next week as rather important technically. We hold a bullish bias, but persistent fund selling could continue to persist despite today’s technical strength.
30-day outlook: As expected, USDA upped their old-crop export forecast in this week’s WASDE. While they left ethanol use unchanged, this week’s record ethanol production showcases how strong demand has been on that front as well. That begs the question, why are both futures and the cash market showing persistent weakness? One clue could be a larger than expected 2024 crop. The June 30 quarterly Grain Stocks report will provide insight on that score. The market is largely anticipating a bump to old-crop production, so if that proves not to be the case, the market could perceive that as bullish. June 30 will also entail the June Planted Acreage report, which will show how many of the intended 95+ million acres ended up being planted.
90-day outlook: Weather will continue to be a key driver in price action over the coming quarter. Once the Grain Stocks and Acreage reports are in the rear view mirror, pollination will be right around the corner. While precip has been ample so far this spring for most of the Corn Belt, late season precipitation will be needed to continue to support the crop. As of June 10, 18% of corn acres were experiencing drought, including most of Nebraska. Recent years have been rather dry throughout July and August, which has pressured yield and led to low test weights last year. A summer weather scare is more the norm rather than the exception, so we will actively be looking to take advantage of any potential weather driven rally.
What to do: Wait to get current with advised sales.
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 rallied 27 1/2 cents to $10.69 3/4, marking the first back-to-back weekly gain since January. July meal fell $2.60 to $291.90 and down $3.80 for the week, while July soyoil closed up the 300-point limit at 50.61 cents, and scored a 311-point weekly gain.
5-day outlook: Recirculated rumors of a lower biodiesel mandate were squashed today, as EPA proposed record RFS levels early this morning. Soyoil surged the limit, as the long-awaited proposal included a 67% increase in biomass diesel, typically made from soybeans and used cooking oil. The new proposal not only swallows the previous mandate, but it also incentivizes use of domestic feedstocks for production as opposed to imports. Some followthrough can be expected next week in the wake of today’s strong gains.
30-day outlook: USDA reported soybean plantings had advanced to 90% complete as of June 8, marking a 6-point advance from the previous week. Meanwhile, 68% of the crop was rated “good” to “excellent,” and 5% “poor” to “very poor.” While the rating is fairly strong, the growing season has only just commenced, making weather a longer-term focus. World Weather Inc. reports timely rain has either fallen or will soon fall in key U.S. crop areas, supporting normal crop development through at least the end of June.
90-day outlook: Today was a monumental day for domestic demand, though trade deals, export demand and the global economy will be key as the calendar year progresses. While the U.S. and China were able to reach a trade agreement this week, China ensured themselves leverage in the event tensions resurface. Rising geopolitical tensions in the Middle East could also elevate volatility in the coming months.
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
Price action: July SRW wheat futures rose 17 1/4 cents to $5.43 3/4 and near the daily high. For the week, July SRW fell 11 cents. July HRW wheat gained 18 cents to $5.40 3/4 and near the daily high. On the week, July HRW fell 9 1/2 cents. Both markets hit four-week lows early on today. July spring wheat futures rose 13 1/2 cents to $6.34 1/4, but lost a penny on the week.
5-day outlook: The wheat futures markets were boosted today by short covering and by gains in corn and solid gains in soybean futures. A sharp rise in crude oil prices today also supported speculator buying interest in wheat futures. Today’s technically bullish “outside days” up on the daily bar chart also suggest some follow-through chart-based buying early next week. Key next week for the grain markets will be the level of risk aversion in the general marketplace. If the Israel-Iran conflict continues to escalate, buying in the grain futures markets would be squelched as long as tensions remain high.
30-day outlook: The coming weeks tend to find weather patterns impacting the corn and soybean markets more. Wheat will likely be more of a follower of corn and beans in the coming weeks, especially if weather markets develop in corn and soybeans. More years than not, some degree of a weather market in corn and soybeans occurs.
Weather in world wheat-growing regions has been and will continue to be a mixed bag in the coming few weeks, as U.S. winter wheat harvest moves into higher gear. World Weather Inc. today said Canada’s Prairies and northern Montana “are too dry and crop stress continues to rise as each day goes by.” There is potential for rainfall in these areas later this week into next week. Meanwhile, southern parts of the U.S. Plains are trending too wet and the wet bias will prevail for a little while longer, impacting Oklahoma and northern Texas most significantly. “Wet weather disease and lower protein levels are possible without a return to warmer and drier weather soon.” Nebraska, Colorado and northern Kansas crops will benefit from rain and warmer weather in the next ten days. USDA’s latest crop condition ratings indicate the U.S. spring wheat crop has improved steadily, though current ratings remain well behind last year. Moisture will be key as the growing season progresses.
90-day outlook: Geopolitics and global trade will be a main drivers of wheat markets price action in the coming few months. That timeframe will likely garner the marketplace a clearer view on the progress, or lack thereof, in trade agreements major countries reach with the U.S. The 800-pound gorilla in the global trade arena is U.S.-China relations. There has been some thawing in the U.S.-China trade war, but the coming months will determine how much success will be achieved. Much of the fate of grain markets prices lies in this balance.
Hedgers: You are 100% sold in the cash market on 2024-crop production. You should be 20% forward sold for harvest delivery in 2025.
Cash-only marketers: You are 100% sold on 2024-crop production. You should be 20% forward sold for harvest delivery in 2025.
Cotton
Price action: July cotton rose 22 points to 65.36 cents, but lost 26 points on the week.
5-day outlook: Cotton futures continued to edge sideways in consolidative trade, despite surging crude oil as technical resistance continues to crimp buyer interest. Meanwhile, USDA’s monthly supply and demand update also failed to ignite optimism, despite pegging old- and new-crop carryover figures well below the average trade estimates. However, earlier in the week, China reported a drop in cotton imports for 2024-25 due to U.S. tariffs, which will likely keep a lid on price action into next week.
30-day outlook: USDA reported 76% of the cotton crop was planted as of June 8, which was four points behind average. Notable delays continue to affect Mississippi, Alabama and Tennessee as saturated conditions have kept fieldwork limited for an extended period. However, World Weather Inc. notes field conditions in parts of the Delta are improving, though more rain is expected soon, which will maintain concern over crop conditions. Meanwhile, showers in West Texas have improved crop and field conditions for late season planting and aggressive early season crop development. Drier weather should now evolve, favoring more routine field operations.
90-day outlook: U.S. acreage and demand will be the longer-term focus, along with the state of the domestic and global economy. Meanwhile, a confirmed trade deal including ramped up purchases of U.S. cotton would certainly bode well for prices.
What to do: Get current with advised sales.
Hedgers: You should be 35% sold in the cash market on 2024-crop.
Cash-only marketers: You should be 35% sold on 2024-crop.