Corn
Price action: July corn rose 5 1/4 cents to $4.75 1/2, above the 40-day moving average.
Fundamental analysis: Corn futures saw moderate corrective buying in the wake of Tuesday’s selling. Obvious spillover strength also stemmed from short-covering gains in SRW wheat. However, outside market pressure certainly capped heftier gains as crude oil dove for the third straight session, while the U.S. dollar firmed. Nonetheless, additional export demand evidence surfaced earlier today with a flash sale from USDA, totaling 120,000 MT to unknown destinations for 2024-25, countering a bit of the outside noise.
Reuters reported earlier that China will plant four to five times as much genetically modified (GM) corn this year than last, building momentum in a rollout that has been slowed by tight state controls, public skepticism and mixed trial outcomes. China’s GM corn planting area is on track to increase to between 40 and 50 million mu (3.3 million hectares) this year from roughly 10 mu in 2024, according to CITICS Research and three seed industry insiders.
The Energy Information Administration reported weekly ethanol production averaged 1.04 million barrels per day (bpd) during the week ended April 25 around midmorning. The figure was up 7,000 bpd (0.7%) from the previous week and 53,000 bpd (5.4%) above the same week last year. Ethanol stocks declined 92,000 barrels to 25.389 million barrels.
Technical analysis: July corn futures were able to end the session back above the 40-day moving average, currently trading at $4.74 3/4, which will now serve as initial support. However, resistance at the 100-, 20- and 20-day moving averages, layered from $4.79 1/2 to $4.83 1/4 could prove difficult to overcome, pressuring the 40-day. To gain technical traction, bulls will need to overcome the area and secure a close above the April 14 high of $4.97 1/2, while bears will look to secure a close below the March 28 low of $4.50 1/2.
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 8 1/4 cents to $10.44 1/2 and nearer the daily low. July soybean meal fell 20 cents to $298.00 and near mid-range. July soybean oil fell 36 points to 48.97 cents and nearer the daily low.
Fundamental analysis: The soybean complex saw selling pressure today from a risk-off trading day in the general marketplace following some downbeat U.S. economic data. Crude oil prices have dropped sharply this week, which is weighing on all the grain markets. A firmer U.S. dollar index at mid-week was also negative for soybeans.
Weather in U.S. and South American soybean regions leans price-bearish. World Weather Inc. today said weather conditions in Brazil, Argentina and U.S. soybean regions “should be largely beneficial and supportive of crop development and fieldwork” in the coming days.
Thursday’s weekly USDA export sales report is expected to show U.S. soybean sales of 150,000 to 550,000 MT for all marketing years and compares to 276,900 MT reported last week.
Technical analysis: The soybean bulls have the slight overall near-term technical advantage but need to show fresh power soon to keep it. The next near-term upside technical objective for the soybean bulls is closing July prices above solid resistance at $10.75. The next downside price objective for the bears is closing prices below solid technical support at $10.00. First resistance is seen at today’s high of $10.54 1/2 and then at the April high of $10.67 1/2. First support is seen at today’s low of $10.37 1/2 and then at $10.25.
Soybean meal bears have the firm overall near-term technical advantage. 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 today’s high of $300.00 and then at $305.00. First support is seen at this week’s low of $294.20 and then at $289.70.
Bean oil bulls have the overall near-term technical advantage. Prices are in a seven-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 April high of 51.13 cents. Bean oil bears’ next downside technical price objective is closing prices below solid technical support at the April low of 44.25 cents. First resistance is seen at today’s high of 49.50 cents and then at 50.00 cents. First support is seen at today’s low of 48.43 cents and then at 48.00 cents.
What to do: Get current with advised sales. Our next sales target is $11.00 in nearby futures.
Hedgers: You should be 55% sold 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 55% sold on 2024-crop. You should also have 10% of expected 2025-crop production sold for harvest delivery.
Wheat
Price action: July SRW futures rallied 5 1/4 cents to $5.30 3/4 but settled near mid-range. July HRW futures fell 1 1/2 cents to $5.29 1/2, nearer session lows. July spring wheat rose 4 1/4 cents to $5.97.
Fundamental analysis: Winter wheat futures saw corrective buying today after forging fresh contract lows overnight. Prices still closed well off intraday highs as outside market volatility weighed heavily on wheat prices. Front-month crude oil futures looked poised to challenge the multi-year lows posted earlier this month as recent extensive selling pressure has quickly turned the near-term advantage to the bears. The U.S. dollar index has also stabilized following yearly lows mid-month. Traders will look to tomorrow’s export sales report to see how export demand was amid the weakest dollar in several years and relatively low wheat prices. There has been an uptick in global demand and export shipments from the U.S. in the past couple of weeks, but confirmation of that higher demand will be key, as prospects for 2025 U.S. production continues to improve.
Wheat conditions in the Plains are improving and that trend is expected to continue, although portions of Oklahoma are becoming too wet, says World Weather Inc. Soil moisture improvement is expected in the Plains over the course of the next couple of weeks. The forecaster notes much of the SRW wheat in the Midwest is developing favorably.
Technical analysis: July SRW futures posted modest corrective gains today as bears continue to maintain full control of the technical advantage. Bulls tried and failed to overcome 10-day moving average resistance at $5.41 today, which will remain key resistance. Strength above that mark eyes resistance at $5.48. Support comes in at the contract low of $5.23 1/4 on a reversal back lower, which is reinforced by support at $5.17 1/2.
July HRW futures saw relative weakness again today, falling to fresh contract lows as bears retain full control of the technical advantage. Tentative support stands at the contract low at $5.27 1/4, which is quickly reinforced by the psychological $5.25 mark. Resistance at $5.40 capped the upside today, while bulls are looking to challenge the 10-day moving average at $5.48 1/2 on a push above that mark.
What to Do: Get current with advised sales.
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 fell 47 points to 66.02 cents, near mid-range and hit a two-week low.
Fundamental analysis: The cotton futures market continues to break down amid fresh technical selling, sharp losses in the crude oil market this week and continued risk aversion in the general marketplace. The U.S. stock indexes sold off today on some downbeat U.S. economic data, just ahead of Friday’s key U.S. monthly employment report for April.
World Weather Inc. today said west Texas cotton-planting prospects “are improving greatly. Periodic rainfall over the coming two weeks will see to it that planting moisture is present. Some significant rain fell during the weekend. South Texas and the Texas Coastal Bend will receive some rain after May 4.” Excessive soil moisture in a part of the U.S. Delta is expected to limit field work. “The southeastern corner of the U.S. will see some of the best planting weather, along with some areas in California and the southwestern desert region,” said the forecaster.
Cotton traders will closely scrutinize Thursday morning’s weekly USDA export sales report.
Technical analysis: The cotton bears have gained the overall near-term technical advantage. The next upside price objective for the cotton bulls is to produce a close in July futures above technical resistance at 70.00 cents. The next downside price objective for the cotton bears is to close prices below solid technical support at the April low of 62.05 cents. First resistance is seen at 67.00 cents and then at 67.50 cents. First support is seen at today’s low of 65.71 cents and then at 65.00 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.