Future Outlook
1. Favorable early summer weather did not help the bullish sentiment for soybean prices.
2. The prospect of a short-term rebound in corn prices is gradually weakening.
3. The seasonal low for wheat prices may have been formed.
4. In the absence of positive events for cotton, the upside potential is limited.
CBOT Soybeans
Pro Farmer Fundamental Analysis:
Soybean prices were somewhat supported by the headline results of the USDA report on June 28, but this was offset by a relatively large harvested acreage forecast and bearish corn data and lower corn prices. Moreover, favorable early summer weather did not help bullish sentiment. On the contrary, recent events have caused some private forecasters to cut their harvested acreage forecasts. Bulls can also pin their hopes on the delayed nature of the soybean growing and harvesting season. After all, there is no guarantee that the weather in August-September will be conducive to a bumper harvest. Still, be prepared to take advantage of rebounds to push sales.
Technical analysis: CBOT soybean 2411 contract daily chart
Strong resistance is located at the February 28 low of $11.25, which is reinforced by psychological resistance. This resistance level is further supported by the March 6 low of $11.37. The support area extends from the June 26 low of $11.03 to the psychological level of $11.00, as well as the July 1 low of $10.97. Further declines will bring the potential for a test of the psychological $10.50 area (neither marked).
(Technical analysis chart of CBOT soybean 2412 contract)
Average U.S. soybean basis (August contract)
U.S. soybean export orders (million tons)
CBOT Corn
Pro Farmer Fundamental Analysis:
Surprising USDA planting area and June 1 inventory data on June 28 sent corn futures prices sharply lower, before prices recovered early last week on apparent short covering. With significant rains hitting the hot, dry Corn Belt in early July, prospects for a seasonal rebound expected by industry concerns about corn pollination are fading. As discussed in the "From the Bench" section of Analysis Page 4, the market's reaction to the late June report had a negative impact on the outlook. Bulls can reasonably hope that the current extreme bearishness in market psychology will set the stage for a short-term rebound, but we recommend being quick to take advantage of such an opportunity.
Technical analysis: CBOT corn 2412 contract daily chart
The bearish report reaction on June 28 has turned the support level of the June 27 low of $4.33 into initial resistance. Stronger resistance is expected at the February 26 low of $4.46. The rebound from the solid support level of the June 28 low of $4.12 has established initial support at the July 2 low of $4.1950. The bears will likely target the psychological support level of $4.00 (not marked).
(CBOT corn 2412 contract technical analysis chart)
Average U.S. Corn Basis (September contract)
U.S. corn export orders (million tons)
CBOT Wheat
Pro Farmer Fundamental Analysis:
The USDA's 610,000-acre increase in projected winter wheat harvest area, coupled with the corn market's lead in the decline, dragged down wheat futures prices on June 28. However, the market's continued recovery from the June 26 low suggests that a seasonal low may have been set.
Technical analysis: CBOT wheat 2412 contract daily chart
6 Initial resistance is expected at $6.1850, the high set on March 25. This resistance level is likely to be further supported by the $6.35 high set on April 22. Soft Red Winter Wheat for December delivery found solid support at the March 15 low of $5.7925 and the subsequent bounce has reestablished initial support at the March 19 high of $6.0350.
(CBOT wheat 2412 contract technical analysis chart)
Average U.S. Wheat Basis (September contract)
U.S. wheat export orders (million tons)
ICE Cotton
Pro Farmer Fundamental Analysis:
The recent rally was hampered by the USDA's acreage estimate that exceeded expectations by 841,000 acres. The spring decline already reflected industry expectations of a surge in new crop supplies and continued weak demand. In the absence of a bullish event, upside is limited.
Technical analysis: ICE cotton 2412 contract daily chart
The May 2 low of 74.02 cents constituted a strong resistance level. This resistance level was further supported by the 40-day moving average (green line) around 74.50 cents. Last week, the bears failed to force a close below the initial support of the June 7 low of 72.51 cents. Stronger support was found at the June 10 low of 71.27 cents.
(Technical analysis chart of ICE cotton 2412 contract)
Average Basis of U.S. Cotton (October Contract)
U.S. cotton export orders (thousand bales)
Note: The above content is from the latest views of Pro Farmer, a subsidiary of Farm Futures Magazine, and is updated every weekend. The content of the report is for reference only and does not constitute investment advice.
The article is forwarded from: Jinshi Data
