Corn
Price action: July corn futures rose 7 cents to $4.54 1/2, near the session high and at a two-week high close.
Fundamental analysis: The corn futures bulls have come back to life despite price-bearish weather in most of the Corn Belt. Risk-off attitudes in the general marketplace so far this week have not deterred the corn bulls. These are signs of underlying price strength in the corn market. A weaker U.S. dollar index today was also friendly for corn futures. Solid gains in the winter wheat futures markets today also spilled over into buying interest in corn.
USDA Monday afternoon reported U.S. corn was 78% planted, five points ahead of the five-year average. Emergence was estimated at 50%.
World Weather Inc. today said a large part of the Midwest was dry Monday morning and afternoon “and some planting likely occurred before rain increased Monday evening into this morning and fell from much of the western Corn Belt into Indiana, with some of the rain welcome in the drier areas of the northwestern Corn Belt.” Moderate to locally heavy rain will continue into Wednesday in a large part of the northern into the eastern Midwest, inducing relief from dryness in the drier areas, bolstering soil moisture, and slowing fieldwork. “Much of the Midwest will be left with favorably moist soils after rain comes to an end Wednesday and crops should develop in a highly favorable environment.”
South American crop consultant Michael Cordonnier raised his Brazilian corn crop forecast by 2 MMT, to 129 MMT, with the safrinha crop accounting for 1.91 MMT of the increase. He projects the safrinha crop at 99.8 MMT. Record yields are reported in Minas Gerais, Sao Paulo, Goias, Mato Grosso, Bahia, Rondonia and Tocantins. Cordonnier left his Argentine corn crop estimate unchanged at 50 MMT.
Technical analysis: The corn futures bears still have the overall near-term technical advantage but a four-week-old downtrend on the daily bar chart is in jeopardy. The next upside price objective for the bulls is to close July prices above solid chart resistance at $4.70. The next downside target for the bears is closing prices below chart support at the May low of $4.36 1/2. First resistance is seen at today’s high of $4.54 1/2 and then at $4.58 3/4. First support is seen at $4.50 and then at today’s low of $4.44 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 2 1/4 cents to $10.53, ending near mid-range, while July soymeal rose $1.50 to $292.60. July soyoil rose a modest 6 points to 49.50 cents.
Fundamental analysis: Soybeans continued to edge sideways in consolidative trade, with solid technical support at the near convergence of the 100- and 200-day moving averages. An extended short-covering rally in grains also supported the soy complex, along with a weaker U.S. dollar.
A notable U.S. planting pace continues to dampen the soybean market bulls, with USDA estimating 66% of the crop was planted as of Sunday, up 18 points from last week and 13 points ahead of average. Of the top 13 production states, South Dakota, Minnesota and North Dakota continue to lead the planting charge. Meanwhile, emergence was estimated to be 34%, 11 points ahead of average. Dry conditions that have allowed for swift planting progress in the Northern Plains has been followed by timely rains, creating nearly ideal growing conditions.
World Weather Inc. reports Topsoil moisture that was rated poorly a week ago in the Northern Plains and western Midwest has been bolstered by recent precip, though subsoil moisture is still low in the northern and central Plains and in portions of the northwestern and west-central Corn and Soybean Belt. However, the forecaster stated the “situation has improved enough for a short-term bout of more aggressive early season crop development and planting as drier days resume.”
Meanwhile, the marketplace will continue to closely monitor weather in Argentina, which has recently experienced flooding in Buenos Aires province. Nonetheless, South American crop consultant Dr. Michael Corddonier left his production estimates unchanged for both Brazil and Argentina, at 169 MMT and 50 MMT in his weekly update.
Technical analysis: July soybean bulls have the near-term technical advantage, with the camp looking toward securing a close above the May high of $10.82, with bears focused on a close below support at $10.20. However, bulls will first need to overcome resistance at $10.67 1/2, then $10.75, while bears will face a battle first at $10.45 3/4 and the May low of $10.36 1/2.
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 surged 17 cents higher to $5.46 today and closed near session highs. July HRW futures climbed 13 1/2 cents to $5.36 1/4, near session highs. July spring wheat futures rose 12 1/4 cents to $5.97 3/4.
Fundamental analysis: Wheat futures posted impressive strength today, pushing to fresh highs amid deteriorating crop conditions. USDA rated the U.S. winter wheat crop at 52% “good” to “excellent” and 18% “poor” to “very poor.” On the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop slipped 0.2 point to 328.4. The SRW crop inched 0.1 point lower to 374.8. The modest declines came despite improvements in the top producers for both crops – Kansas for HRW and Illinois for SRW. Dryness across the region weighed on crop conditions, but after last week’s jump higher, it was not all that surprising to see conditions slip somewhat. World Weather Inc. released a special report today noting that recent precip greatly improved topsoil moisture in the northern Plains. The report also noted that subsoil moisture is still low in the northern and central Plains though, but cool temps should keep conditions favorable in the next several days for winter crops.
Attention is quickly turning to China, where excessive heat and drought are weighing heavily on crop conditions. Extreme highs into the 100’s occurred Monday and precip is not expected for at least ten days, says World Weather Inc. Some relief from hot temps is expected over the next few days. China historically does not import a lot of wheat and when they do it generally comes from Australia, Canada, the U.S., (more recently) Russia and Kazakhstan. China importing more wheat amid production declines could quickly bid up prices on the world market, which can partially explain some of the recent rally from multi-year lows.
Technical analysis: July SRW futures surged today, breaking several key resistance levels. Prices closed above the 20-day and 40-day moving averages at $5.34 1/4 and $5.43 respectively, marking those areas as support. Bulls’ next objective is closing prices above the psychological $5.50 mark, which is reinforced by resistance at $5.61, the 100-day moving average.
July HRW futures have climbed in tandem with SRW futures the last couple of days, though strength has not quite been as impressive. Bulls closed prices above the 20-day moving average at $5.33 today, marking that as initial support. Weakness below that mark would seek to challenge psychological $5.25 support. Bulls are seeking to challenge resistance at $5.43 before tackling the 40-day moving average at $5.48 1/4 on continued strength.
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 48 points to 66.12 cents and forged a high-range close.
Fundamental analysis: Cotton futures firmed in tandem with the grain complex, with support from a weaker U.S. dollar and lagging planting efforts. The natural fiber was able to shake off downbeat economic news from China, which led monetary officials to lower interest rates overnight.
USDA Monday reported cotton plantings advanced 12 points last week to 40% complete as of Sunday, which was three points behind average. Planting stood at 35% in Texas (38% average) and 41% in Georgia (45%).
World Weather Inc. maintains field conditions are too wet in the northern Delta 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.
Technical analysis: July cotton futures ended the session in a high-range close despite pressure from the 10-, 20- and 40-day moving averages, layered from 66.28 cents to 66.29 cents. Oversold conditions could lend bulls some support in edging above initial resistance, though the 100-day moving average of 68.06 cents will surely serve up additional resistance. Bears will continue to look towards breaching the April 4 low of 62.05 cents, with initial support layered at 65.00 cents, 64.35 cents and 63.83 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.