Corn
Price action: July corn rose 3 cents to $4.45 1/2, notching a high-range close.
Fundamental analysis: Nearby corn futures posted modest short-covering gains in unison with winter wheat, with support from a weaker dollar much of the session. Swift planting efforts in the northern Plains will be followed by rain in the coming days, with heavy amounts expected in the western and central Dakotas, according to World Weather Inc. The remainder of the Midwest is forecast to experience a good mix of rain/sunshine over the next couple of weeks maintaining a very good outlook for fieldwork and crop development.
Meanwhile, in South America, Argentina will see a favorable mix of weather, although some harvest delay is possible Friday into the weekend due to rain. In Brazil, center west and center south crop areas will face net drying conditions for a while. However, subsoil moisture is still rated favorably in many safrinha corn areas, though there are pockets of dryness.
Earlier today, the Energy Information Administration reported weekly ethanol production averaged 993,000 barrels per day (bpd) during the week ended May 9, down 27,000 bpd (2.6%) from the previous week and 7,000 (0.7%) below the same week last year. Nevertheless, ethanol stocks increased 254,000 barrels to 25.445 million barrels.
Technical analysis: July corn held an inside range, and ultimately scored a high-range close, indicating a possible near-term bottom has been forged. Bulls will need to overcome the 10-, 200-, 20-, 40- and 10—day moving averages, layered from $4.53 1/4 to $4.70 1/2 to regain technical traction, while initial support lies at Tuesday’s low of $4.36 1/2, which is backed by support at $4.30 3/4 and $4.25 1/4.
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
Advice: We advise soybean hedgers and cash-only marketers to sell another 10% of 2024-crop production to get to 65% priced in the cash market.
Price action: July soybeans rose 5 1/4 cents to $10.77 3/4, near mid-range and hit a three-month high. July soybean meal fell $1.40 to $291.90, nearer the daily low and hit a five-week low. July soybean oil rose 84 points to 52.32 cents, near the daily high and hit a 1.5-year high.
Fundamental analysis: The soybean market bulls continue to show strength, led by solid gains in soybean oil futures. However, the upside for soybeans is likely to be limited unless soybean meal futures start to perform better on the upside. Soybean traders will continue to monitor the present thaw in the U.S.-China cold war on trade. Continued progress on reducing tariffs would likely continue to put a bid into soybean futures prices.
Weather conditions in the U.S. presently lean a bit price-bearish for soybeans. World Weather Inc. today said rain in the northern Plains “will be great” for soybeans and canola, with some heavy rain in the western and central Dakotas. Most of the U.S. Midwest will experience a good mix of rain and sunshine over the next couple of weeks, “maintaining a very good outlook for fieldwork and crop development.” Meantime, Argentina soybean regions will see a favorable mix of weather, although some harvest delay is possible Friday into the weekend due to rain. Center-west and center-south Brazil will experience net drying conditions for a while, said World Weather.
Thursday morning’s weekly USDA export sales report is expected to show U.S. soybean sales of 300,000 to 900,000 MT in all marketing years, according to a Dow Jones Newswires survey. Sales last week were 386,500 MT for all marketing years.
Technical analysis: The soybean bulls have the overall near-term technical advantage. Prices are in a five-week-old uptrend on the daily bar chart. The next near-term upside technical objective for the soybean bulls is closing July prices above solid resistance at $11.00. The next downside price objective for the bears is closing prices below solid technical support at $10.30. First resistance is seen at today’s high of $10.82 and then at $10.90. First support is seen at $10.67 1/2 and then at this week’s low of $10.52 1/2.
Soybean meal bears have the solid overall near-term technical advantage. Prices are in a downtrend on the daily bar chart. 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 $295.00 and then at $300.00. First support is seen at today’s low of $292.20 and then at $289.70.
Bean oil bulls have the solid overall near-term technical advantage. Prices are in a two-month-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 55.00 cents. Bean oil bears’ next downside technical price objective is closing prices below solid technical support at the May low of 47.29 cents. First resistance is seen at today’s high of 52.16 cents and then at 53.00 cents. First support is seen at today’s low of 51.08 cents and then at 50.00 cents.
What to do: Get current with advised sales. Our next sales target is $11.00 in nearby futures.
Hedgers: NEW ADVICE -- Sell another 10% of 2024-crop production to get to 65% priced in the cash market. You should also have 10% of expected 2025-crop production sold for harvest delivery.
Cash-only marketers: NEW ADVICE -- Sell another 10% of 2024-crop production to get to 65% priced. You should also have 10% of expected 2025-crop production sold for harvest delivery.
Wheat
Price action: July SRW futures closed 7 1/2 cents higher at $5.24 3/4 and near session highs. July HRW surged 11 1/4 cents to $5.23. July spring wheat saw relative weakness, falling 3 3/4 cents to $5.77.
Fundamental analysis: Wheat futures saw strength throughout today’s session after trading lower overnight, posting the second consecutive high-range close for the first time since February. Wheat seeing a little strength mid-week has been promising but how prices end the week will be key. We have reported on the world balance sheet and the lack of importing from what are historically the world’s top importers. Imports remain slow and until that changes wheat prices are likely to remain on multi-year lows.
Crop scouts on the first day of the Wheat Quality Council’s annual HRW tour of Kansas found a higher yield from field samples than last year across northern areas of the state. The average yield for HRW wheat found in fields between Manhattan, Kansas and Colby was estimated at 50.5 bu. per acre, up from 49.9 bu. on similar routes last year and the five-year average of 45.1 bu. per acre. That was the tour’s highest Day 1 yield estimate since 2021. There were a few other crop estimates out for winter wheat crops over the last day. The Nebraska wheat board estimates the state’s winter wheat yield at 40 bushels per acre and production at 34 million bushels, while Colorado officials estimated the state’s yield at 35 bu. per acre and production at 65 million bushels. USDA pegged Nebraska production at 32.3 million bushels and Colorado at 71.4 million bushels in this week’s Crop Production Report.
Technical analysis: Winter wheat futures continue to trend lower on the daily bar chart as bears continue to hold the technical advantage. July SRW bulls are seeking to overcome resistance at $5.25, which capped the upside today. Strength above that mark finds resistance at the 10-day moving average at $5.27 1/4, which is reinforced by resistance at $5.34 1/2. Support comes in at $5.23 1/4 then Monday’s contract low close of $5.15 1/4 on continued selling pressure.
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 80 points to 65.48 cents, near the session low and hit a four-week low.
Fundamental analysis: The cotton futures market saw technical pressure today as prices the past seven trading sessions in a row have closed low-range. An uptrending U.S. dollar index recently has limited buying interest in cotton. However, the solid rebound in the crude oil market recently has mostly offset the bearish aspect for cotton of a rally in the U.S. dollar index. Cotton bulls have been disappointed that the better trader/investor risk appetite in the general marketplace this week has not benefited cotton more.
World Weather Inc. today said West Texas planting prospects have improved due to early month rain, although more rain is needed especially in the dryland areas of the southwest. Some fieldwork will be accelerated in the coming week, although warmer temperatures will begin depleting soil moisture. South Texas and the Texas Coastal Bend will be dry-biased over the next 10 days as will west Texas. Meantime, field conditions in the Delta “are a little too wet and drying will be interrupted periodically by more rain during the next 10 days.” The southeastern corner of the U.S. received some needed rain recently, although some Georgia and South Carolina locations did not get very much rain, said World Weather.
Thursday morning’s weekly USDA export sales report will be closely scrutinized by cotton traders. The bulls want to see new U.S. cotton sales on a weekly basis that are north of 300,000 bales.
Technical analysis: The cotton bears have 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 the April high of 69.75 cents. The next downside price objective for the cotton bears is to close prices below solid technical support at the March low of 63.80 cents. First resistance is seen at 66.00 cents and then at today’s high of 66.71 cents. First support is seen at 65.00 cents and then at 64.50 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.