Corn
Price action: July corn fell 1 3/4 cents to $4.37, near the session low.
Fundamental analysis: Corn futures held a rather subdued tone despite solid outside market support, as traders tread cautiously amid talks with China and ahead of USDA’s June crop report, due out tomorrow.
Record ethanol production during the week ended June 6, reported earlier today seemingly left traders unimpressed, as corn whirled around unchanged most of the session. Ethanol production averaged 1.12 million barrels per day (bpd), an all-time record, and rose 15,000 bpd (1.4%) from the previous week and 97,000 bpd (9.5%) above the same week last year. Meanwhile, implied usage over the last four weeks also hit record highs, pushing ethanol stocks to a 23-week low of 23.734 million barrels, down 706,000 barrels.
Brazil’s bumper corn crop has been a limiting factor for corn prices, though domestic demand as the country ramps up ethanol production may limit how much is available on the global market. Dow Jones reported on research from the University of Illinois, which points to reduced Brazilian corn exports amid “rising domestic demand for animal feed producers and the expanding corn ethanol industry.”
USDA will also release its weekly export sales data early Thursday morning, with analysts expecting net sales to have ranged from 700,000 MT to 1.2 MMT during the week ended June 5.
Technical analysis: July corn held an inside range, limited by the 20-day moving average of $4.46 3/4, while initial support held at $4.35 3/4. Bears have the overall near-term technical advantage, and have sights set on securing a close below $4.15, while bulls look to overcome resistance at $4.50. First support lies at $4.39, then at $4.35, while initial resistance is at $4.45 3/4.
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 fell 7 1/4 cents to $10.50 1/2, near the session low. July soybean meal fell $1.70 to $294.20, near the daily low. July soybean oil rose 23 points to 48.02 cents, near mid-range.
Fundamental analysis: The soybean futures market continues to languish as crop weather in most of the U.S. leans price-bearish, while traders continue to monitor trade negotiations between the U.S. and its counterparts—namely China. A lower U.S. dollar index and higher crude oil prices today were bullish outside-market forces that could provide no help to the soybean bulls.
U.S. and Chinese officials said that after two days of meetings in London they had agreed on a framework deal to keep the trade truce intact and remove China’s export restrictions on rare earths. U.S. Commerce Secretary Howard Lutnick said the framework deal puts “meat on the bones” of an agreement reached last month in Geneva to ease U.S.-China trade tensions.
World Weather Inc. today said timely rain either has fallen or will soon fall in key U.S. soybean crop areas, “supporting normal crop development.” Meantime, southern portions of center-south Brazil will receive additional rain over the coming week that will further bolster soil moisture. Center-west crop areas will not see much moisture and crop stress is expected to increase. Argentina will see drier weather for a while, supporting good or improving harvest conditions.
Thursday comes the monthly USDA supply and demand report and weekly USDA export sales. The June monthly supply and demand report is expected to show U.S. soybean production at 4.340 billion bushels, according to the average of a Bloomberg survey of analysts. That’s unchanged from the May report. Weekly USDA export sales are seen coming in at 100,000 to 500,000 MT in the 2024-25 marketing year and zero to 200,000 MT in the 2025-26 marketing year.
Technical analysis: The soybean bulls and bears are on a level overall near-term technical playing field amid recent choppy trading. The next near-term upside technical objective for the soybean bulls is closing July prices above solid resistance at the May high of $10.82. The next downside price objective for the bears is closing prices below solid technical support at the June low of $10.32 1/2. First resistance is seen at this week’s high of $10.63 3/4 and then at $10.73 1/4. First support is seen at $10.50 and then at $10.40.
Soybean meal futures see recent sideways and choppy price action is likely basing that has put in a market bottom. The next upside price objective for the meal bulls is to produce a close in July futures above solid technical resistance at $300.00. 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 today’s high of $298.00 and then at $300.00. First support is seen at $292.50 and then at $290.00.
Bean oil bulls and bears are on a level overall near-term technical playing field. The next upside price objective for the bean oil bulls is closing July prices above solid technical resistance at 50.00 cents. Bean oil bears’ next downside technical price objective is closing prices below solid technical support at the June low of 45.74 cents. First resistance is seen at today’s high of 48.27 cents and then at 49.00 cents. First support is seen at today’s low of 47.47 cents and then at 47.00 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
Price action: July SRW futures fell 1/4 of a cent to $5.34 1/4, nearer session lows. July HRW futures slid a penny to $5.26 1/4. July spring wheat saw relative strength, climbing 4 cents to $6.17 1/4.
Fundamental analysis: Wheat futures struggled to follow through on overnight strength today as prices marked a modest loss on the day. Still, bulls defended yesterday’s lows, a line in the sand for bulls to defend tomorrow as volatility is likely to pick up given USDA reports. USDA will give their most recent old-crop and new-crop balance sheets tomorrow. Old-crop is likely to see just minor adjustments as the marketing year has ended. USDA has increased their winter-wheat crop estimate for ten consecutive years. A Bloomberg poll of analysts pegged old-crop stocks at 845 million bushels and new-crop stocks at 925 billion bushels. In May, USDA was at 841 million bushels and 923 million bushels, respectively. USDA will release their weekly Export Sales Report tomorrow morning for the week ended June 5. Expectations call for sales totaling -100,000 to 500,000 MT for 2024-25 and 400,000 to 600,000 MT for 2025-26. Last week sales totaled -49,114 MT and 444,857 MT, respectively.
A state of emergency will be declared in ten districts of the Rostov region in Russia, which is the top growing wheat region in the country. Over 1.25 million acres have been affected by the ongoing drought. The state of emergency will allow the government to better support the affected producers. Meanwhile, wetness in HRW acres in the Plains continues to be a concern. From north-central Texas to south-central Kansas, new rainfall will continue to be a concern, says World Weather Inc. A drier outlook in the latter half of the two-week outlook will be beneficial.
Technical analysis: July SRW futures traded within yesterday’s range as prices trade sideways on the daily bar chart. Bulls struggled to maintain early gains today, stalling at the 10-day moving average, which remains resistance at $5.39. Strength above that mark would target resistance at $5.45. Meanwhile, support comes in at yesterday’s low of $5.30 3/4 then the psychological $5.25 mark on persistent selling pressure.
July HRW futures saw relative weakness today. Prices broke below yesterday’s low, contrary to July SRW. Initial resistance stands at $5.34 1/2, the 10-day moving average, which capped gains today. Strength above that mark eyes resistance at $5.41 1/2. Support persists at $5.25 then the May 27 low of $5.23.
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 5 points to 65.47 cents, near mid-range.
Fundamental analysis: The cotton market saw some very tepid short covering today and some position evening ahead of Thursday’s monthly USDA supply and demand report. The key outside markets were also supportive for cotton futures today, as the U.S. dollar index was lower and crude oil prices were higher.
On the world trade front, U.S. and Chinese officials said after two days of meetings in London they had agreed on a framework deal to keep the trade truce intact.Commerce Secretary Howard Lutnick said the framework deal puts “meat on the bones” of an agreement reached last month to ease trade tensions between the world’s two largest economies..
World Weather Inc. today said west Texas showers and thunderstorms recently improved crop and field conditions for better late season planting and aggressive early season crop development. Field conditions in the Delta are still too wet and more rain is expected over the next ten days that will maintain concern over crop conditions. Portions of the southeastern U.S. will get rain in the coming week with coastal areas of the Carolinas and a part of eastern Georgia wettest. Much of Florida will also get significant rain while the interior crop areas of the southeastern states may not get as much moisture.
Thursday comes the monthly USDA supply and demand report and weekly USDA export sales. The June monthly supply and demand report is expected to show U.S. cotton production at 14.63 million bales, according to the average of a Bloomberg survey of analysts. That compares to a production forecast of 14.50 million bales in the May report. U.S. cotton exports are expected at 12.58 million bales annually, which is slightly above the May forecast. Ending stocks are seen at just slightly above 5 million bales in the current marketing year.
Technical analysis: The cotton bears have the overall near-term technical advantage. However, trading has been choppy and sideways and there is strong chart support just below the market. The next upside price objective for the cotton bulls is to produce a close in July futures above technical resistance at 67.00 cents. The next downside price objective for the cotton bears is to close prices below solid technical support at the May low of 64.51 cents. First resistance is seen at this week’s high of 66.29 cents and then at 66.79 cents. First support is seen at today’s low of 65.05 cents and then at 64.51 cents.
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.