Corn
Price action: July corn fell 3 1/4 cents to $4.31 1/2, an eight-month low close.
Fundamental analysis: Corn futures saw short-covering gains early on, in step with wheat futures, after touching a one-week low in early trade. Meanwhile, firmer crude oil futures were able to offset strength in the U.S. dollar, though corn continues to face technical headwinds that will likely keep buyers at bay without a catalyst.
USDA reported corn conditions improved, rising a point on the week to 72% “good” to “excellent.” Nine states improved on the week, while seven states declined and two were unchanged. Most of the improvements were in the western and northern Midwest while most declines were in central areas of the Corn Belt.
Reuters reported earlier today that the U.S. is expected to object this month to a recommendation at the U.N. aviation agency council that Washington says unfairly favor Brazilian corn farmers at the expense of U.S. producers in the development of sustainable aviation fuel (SAF), citing two sources familiar with the matter. The U.S. State Department raised objections in March to a recommendation from an International Civil Aviation Organization (ICAO) technical panel, which has proposed criteria for SAF. The U.S. argued the recommendation unfairly helps Brazil over the reset of the world as it would award a lower carbon score to multicropping, a common practice in the country.
Technical analysis: July corn was pressured by the 10-day moving average, currently trading at $4.38, while initial support served at last week’s low of $4.29 1/4. Bears continue to firmly grasp the near-term technical advantage and are poised to edge below support at $4.22 1/4, while bulls look to secure a close above resistance at $4.64 3/4. However, first resistance stands at the 10-day moving average, then at this week’s high of $4.56 1/2.
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 rose 4 1/4 cents to $10.74, near the session high and at a four-week high close. July soybean meal rose $1.40 to $285.10, nearer the daily high after setting a contract low early on. July soybean oil fell 32 points to 54.79 cents near mid-range and hit a nearly two-year high early on.
Fundamental analysis: The soybean market saw some modest chart-based buying interest today as the near-term technical posture favors the bullish camp. The key outside markets were a mixed bag for the soy complex today as the U.S. dollar index was solidly higher (bearish) but so were crude oil prices (bullish). Soybean oil continues to shine despite today’s pause, which in turn is keeping buying interest in soybean meal futures very limited.
Growing weather in most of the U.S. Midwest remains price-bearish for beans. World Weather Inc. today said ”timely rain either has fallen or will soon fall in key U.S. crop areas, supporting normal crop development.” Portions of eastern Argentina received rain during the weekend and precipitation will be limited to the far northeast for a while supporting better summer crop harvest conditions, said World Weather. South American crop consultant Dr. Michael Cordonnier raised his Argentine soybean production forecast 1 MMT, to 49.5 MMT.
USDA Monday afternoon rated the U.S. soybean crop as 66% “good” to “excellent,” down two points from last week. On the Pro Farmer weighted CCI, the soybean crop slipped 1.5 points to 363.9. Planting was 93% complete, while emergence stood at 84%.
Technical analysis: The soybean bulls have the overall near-term technical advantage. 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 $10.82 and then at $11.00. First support is seen at $10.60 and then at $10.50.
Soybean meal bears have the solid 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 $300.00. The next downside price objective for the bears is closing prices below solid technical support at $275.00. First resistance comes in at $288.00 and then at $290.00. First support is seen at today’s contract low of $283.10 and then at $280.00.
Bean oil bulls have the solid overall near-term technical advantage. The next upside price objective for the bean oil bulls is closing July prices above solid technical resistance at 60.00 cents. Bean oil bears’ next downside technical price objective is closing prices below solid technical support at 50.61 cents, the bottom of a big upside price gap on the daily bar chart. First resistance is seen at today’s high of 55.51 cents and then at 56.00 cents. First support is seen at 54.00 cents and then at 53.00 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 surged 12 1/2 cents to $5.49 and closed nearer session highs. July HRW futures climbed 11 3/4 cents to $5.47 3/4. July HRW futures rose 8 cents to $6.30 3/4.
Fundamental analysis: Wheat futures surged higher today as the overall tone in the grain marketplace was bullish. Prices rose despite relatively bearish news across the marketplace. In the last few days, wheat futures have closed opposite stock indices, indicating that overall “risk-on” and “risk-off” trade is bleeding into the grain markets. As volatility spiked in outside markets today, grains saw buying, contrary to the net-short position that funds hold. As geopolitical strife continues to drag volatility into the marketplace, one can expect this sort of choppy trade to continue.
USDA rated the winter wheat crop as 52% “good” to “excellent,” down two points from last week. Harvest was estimated to be 10% complete, behind the five-year average of 16%. Continued wet conditions in HRW acres continues to weigh on crop conditions. Spring wheat ratings continue to improve, now at 57% “good” to “excellent,” up four points from last week. On our weighted CCI, the spring wheat crop improved 4.3 points to 360.3. The spring wheat crop is now rated above where it was a year-ago in North Dakota, a testament to the crops strong recovery over the past month.
Planting of spring wheat in Russia continues at a healthy clip. Russian farmers have now planted over 11 million hectares, already a million above last year’s total tally. Added production in the world’s top exporter is likely to add competition for U.S. based supplies.
Technical analysis: July SRW futures more than made up for yesterday’s loss in an impressive show of strength. Bulls maintain a modest technical advantage and are looking to close prices above psychological $5.50 resistance before tackling additional resistance at the 100-day moving average at $5.54 1/4. That’s backed by the June 9 high of $5.57 3/4. Support comes in at $5.43 3/4 on a reversal lower, with added selling having bears looking to topple support at $5.40 3/4, the 40-day moving average, which is reinforced by support at yesterday’s low of $5.31 3/4.
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 fell 39 points to 65.05 cents, nearer the session low.
Fundamental analysis: The cotton market saw some selling pressure following U.S. retail sales for May were down a weaker than expected 0.9%, month-on-month, compared to expectations for a dip of 0.6%. A stronger U.S. dollar index today was also a negative for cotton, but that outside market was offset by higher crude oil prices, which is bullish for cotton.
USDA Monday afternoon reported 48% of the U.S. cotton crop was in good to excellent conditions as of last Sunday, which compares to 49% last week and 54% at the same time last year.
World Weather Inc. today said west Texas rainfall will be more limited over the next 10 days, “but crop improvements are likely because of recent rain.” Field conditions in portions of the Delta are still too wet and drier weather is needed. More rain will fall over the coming 10 days to maintain concern over future crop development. Portions of the southeastern U.S. will get rain in the coming week to maintain a mostly favorable crop development environment. Drier and warmer weather is needed, though.
Technical analysis: The cotton futures 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 65.70 cents and then at 66.00 cents. First support is seen at 64.51 cents and then at 64.00 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.