Corn
Price action: July corn rose 4 cents to $4.47 1/2, marking a high-range close.
Fundamental analysis: Corn futures covered shorts to start the week, after fund managers increased their net short position through May 13 to 85,000 contracts, the most bearish stance since last October. Weekend rains in the Northern Plains were likely a driver, after the region encountered dry conditions which has made for swift planting, along with a fast-approaching safrinha harvest in Brazil. Though as the U.S. growing season commences, volatility is certain amid tight global stocks and a snug situation in the U.S. However, economic uncertainty continues to hang in the shadows, along with forecasts of ramped up oil production, which diminishes the importance of ethanol production.
While trade tensions have seemingly eased, demand evidence will need to surface to lend the corn market some solace. That may come in the form of ethanol shipments to India for blending with gasoline, people familiar with the situation told Bloomberg. If realized, it would ultimately be a change from current rules that promote domestic supply and permit overseas purchases of ethanol only for non-fuel use. Any relaxation of rules by India, however, could undermine the country’s efforts to cut a huge energy import bill that leaves it heavily dependent on outside nations and at the mercy of fluctuating markets.
A rebound in weekly corn inspections was supportive for corn today, with USDA reporting net inspections of 1.72 MMT, up 419,000 MT from the previous week and just short of topping analysts’ pre-report range of 1.0 to 1.75 MMT. Corn inspections continue to outpace year-ago inspections by 29%.
Technical analysis: July corn edged sideways in consolidative trade as the 10-day moving average of $4.47 3/4 saddled momentum. Bears continue to hold the near-term technical advantage, and continue to look toward breaching support at $4.25, though first support lies at $4.40 1/4, then at last week’s low of $4.36 1/2. Meanwhile, bulls will need to apprehend a close above resistance at $4.70, with resistance at the 200-, 20- and 40-day moving averages, trading at $4.61 1/2 and $4.68 1/2, likely posing a problem for bulls.
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 closed 1 1/2 cents higher at $10.47 3/4 and near mid-range. July meal fell 80 cents to $291.1. July bean oil climbed 51 points to 49.44 cents and closed nearer session highs.
Fundamental analysis: Soybeans struggled to reciprocate strength in the grain markets today and continue to languish near last week’s lows. There will not be another fundamental catalyst outside of any potential trade deal in the next couple of weeks. Planting continues to run at a healthy clip, as analysts polled by Bloomberg expect USDA to report plantings at 64% completed in this afternoon’s Crop Progress Report. That would be up from 48% a week ago and well above 52% last year. Rain fell across most of the western Soy Belt in the last day while heavy precip is expected to roll into the eastern half of the Midwest in the next day or two. That will give crops a highly favorable environment to develop when drier weather occurs over the next couple of weeks, says World Weather Inc.
USDA reported soybean inspections of 217,842 MT (8.0 million bu.) for the week ended May 15, down 221,703 MT from the previous week and short of the pre-report range of 300,000 to 550,000 MT. Inspections were running above average for the past couple of months but have quickly begun to slow. We are anticipating there will likely be more weeks with weaker inspections similar to this week. To hit the current USDA export estimates of 1.85 billion bushels, inspections need to average a little over 10.0 million bushels per week, a reasonable assumption, especially given current sales.
USDA reported daily soymeal sales of 145,000 MT to the Philippines during 2024-25.
Technical analysis: July soybeans traded on either side of unchanged today as indecisive trade has once again grabbed hold of the market. Resistance at the 10-day moving average at $10.55 3/4 capped the upside today and is reinforced by resistance at $10.65 1/4. The 40-day moving average has capped most of the downside the past three sessions and continues to serve up support at $10.47 3/4. Selling below that mark likely challenges support at $10.41.
July meal futures continue to grind lower in a persistent, orderly downtrend on the daily bar chart. Today’s for-the-move low marks initial support at $290.3 and is quickly backed by the contract low of $289.7. Resistance stands at $294.0, the 10-day moving average, then $298.5 on a bounce.
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 rose 4 cents to $5.29, near mid-range. July HRW wheat gained 6 1/4 cents to $5.23 4/4, near mid-range. July spring wheat futures saw relative strength, surging 12 1/4 cents to $5.85 1/2.
Fundamental analysis: The wheat futures markets saw some tepid short covering today and were also supported by firmer corn and soybean futures prices. A lower U.S. dollar index today was also a friendly outside market for wheat futures. Gains in wheat were limited by more of a risk-off trading day in the general marketplace, evidenced by weaker U.S. stock indexes.
USDA reported upbeat U.S. wheat export inspections of 423,785 MT for the week ended May 15, up 18,615 MT from the previous week. Net inspections were within the pre-report range of market expectations.
World Weather Inc. today said that in U.S. HRW country, more net drying will occur in southwestern production areas into Saturday. “Subsoil moisture from previous rain events will continue to support non-irrigated crops, but the need for greater rain will begin to increase as topsoil firms. Rainfall will be more meaningful and able to counter evaporation in eastern and northern production areas. Some relief to dryness has already occurred in Nebraska from weekend rain, though this week’s precipitation will add to the improving trend.” A severe weather outbreak is expected today near the eastern fringes of the region and will include large hail, tornadoes and a potential for damaging winds. Some frost is expected in Nebraska and northeastern Colorado Wednesday and Thursday mornings, said World Weather. In the northern Plains, precipitation in the next seven days “will be great for further increasing soil moisture in areas such as Montana. However, the central and western Dakotas do not need more rain and could become wetter than preferred. Temperatures will also be below to well below average which will likely temporarily cool the soil and potentially delay crop development in some areas.
This afternoon’s weekly USDA crop condition reports are expected to show U.S. winter wheat at 54% in good to excellent conditions as of Sunday, the same as the week-prior and compares to 49% good to excellent at the same time last year. U.S. spring wheat planted is seen at 80% versus 66% last week and 79% at the same time last year.
Technical analysis: Recent price action begins to suggest market bottoms are in place in the winter wheat futures. Winter wheat bears still have the overall near-term technical advantage. Prices are in downtrends on the daily bar charts. SRW bulls’ next upside price objective is closing July prices above solid chart resistance at the May high of $5.48. The bears’ next downside objective is closing prices below solid technical support at $5.00. First resistance is seen at today’s high of $5.36 and then at $5.48. First support is seen at $5.20 and then at the contract low of $5.06 1/4.
HRW bulls’ next upside price objective is closing July prices above solid chart resistance at $5.50. The bears’ next downside objective is closing prices below solid technical support at $5.00. First resistance is seen at last week’s high of $5.30 1/4 and then at $5.40. First support is seen at today’s low of $5.16 and then at $5.10.
Hedgers: You should be 85% sold in the cash market on 2024-crop. You should have 20% forward sold for harvest delivery in 2025.
Cash-only marketers: You should be 85% sold on 2024-crop. You should have 20% forward sold for harvest delivery in 2025.
Cotton
Price action: July cotton rose 75 points to 65.64 cents, a near mid-range close.
Fundamental analysis: Cotton futures notched corrective gains following recent losses. A weaker U.S. dollar played a role in today’s upside price action, along with persisting rains in the Delta. However, lingering trade and economic woes continue to hover across the marketplace, with weekend comments from U.S. Treasury Secretary Scott Bessent stating in an interview that trade tariffs would go back to April 2 levels if countries don’t negotiate with the U.S. “in good faith.” This comes after Moody’s rating agency downgraded the United States’ long-term credit rating last Friday, citing sustained increases in federal debt and chronic fiscal deficits.
World Weather Inc. notes field conditions in the Delta are a little too wet and drying will be interrupted periodically by more rain during the next ten days. Meanwhile, West Texas, South Texas and the Texas Coastal Bend all need rain, and another week will pass before any moisture falls. However, south-central areas of the U.S. received some needed moisture, south-central areas and some southwestern Georgia and eastern South Carolina locations did not receive much moisture.
Technical analysis: July cotton firmed but continued to face technical headwinds from the 10-, 20- and 40-day moving averages, with the latter two trading around 66.99 cents. However, last Friday’s low of 64.75 cents served as initial support, which is backed by support at 64.46 cents, 64.04 cents and 63.32 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.