The Grains complex saw follow-through selling from last Friday at Sunday night's open, before markets moved back into the green by early Monday morning.
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Marley's Weather Spirits remains bearish with the Past showing accumulation across most of the US, Present showing more of the same, and the Future non-threatening.
Don’t Miss a Day: From crude oil to coffee, sign up free for Barchart’s best-in-class commodity analysis. Still, with markets in the lower percentages of their respective price distribution ranges, some buying interest could be seen.
Morning Summary: Here we are, another Monday morning[i], this one marking midsummer, and no it’s not a night’s dream. If the last thing you saw before shutting things down Sunday night was the lower open to the Grains sector, then you’ll have a pre-dawn reminder of the Joe Friday Fact: It’s just a fact, the next Friday’s close is more important than Sunday’s open. A look at the Barchart Futures Market Heat Map shows the Grains sector with a cumulative gain, all markets but soybean meal in the green as of this writing. Looking ahead, this week should be filled with talk of weather forecasts and patterns, also bringing to mind Marley’s Weather Spirits (Weather maps: Past (precipitation accumulation), Present (today’s forecast), Future (extended forecast)). Most of the US Plains and Midwest saw rains this past week, in line with the earlier 8-to-10-day forecast. Today’s forecast calls for the heart of the Midwest to be dry, with the latest extended forecast (July 21 to 27) calling for summer temps (believe it or not) and above normal precipitation east of the Missouri River. Outside of the weather, we know Orange Julius will continue to make tariff threats. That’s all he does these days, and Watson seems to have grown bored with the game.
Corn: December corn (ZCZ25) opened Sunday night at $4.1050, down 1.75 cents from last Friday’s close before extending its break to a new low of $4.0750 within the first few minutes of trade. However, a look at the quote screen early Monday morning finds the corn market in the green with December sitting at $4.15 after rallying to an overnight high of $4.1625. Trade volume was moderate with Dec25 showing 26,500 contracts changing hands as of this writing. What do I make of all this? I don’t know. It’s too early in the week. What I do know is the weather was largely beneficial toward the 2025 crop this past weekend, and I don’t see anything to be overly concerned about with the latest 8-to-10-day forecast. That being said, Watson could be in the mood for some short-term short-covering with last Friday’s CFTC Commitments of Traders report showing a decrease in the net-short futures position by 13,764 contracts as of Tuesday, July 8. Of course, that was before corn contracts broke to new lows last Friday and extending those losses at Sunday night’s open. Fundamentally, the bottom line is the National Corn Index was priced near $3.8350 Friday evening, putting available stocks-to-use at 13.3%.
Soybeans: The soybean market saw a similar start to the week as the November issue (ZSX25) opened at $10.03, down 4.25 cents before initially extending the break to a low of $9.9825. From there, though, Nov25 rallied to a high of $10.1275, up 5.5 cents and was within sight of that mark at this writing on overnight trade volume of 24,000 contracts. As with corn, I don’t see anything to get overly excited about, but that’s the fun thing about pre-dawn Monday, the week’s canvas is almost blank, and we don’t know how it will be filled in. A look back at last Friday and we see the National Soybean Index came in near $9.5725 putting available stocks-to-use at 17.1% as compared to the previous 10-year average for the end of July of 15.6%. Also from last Friday, the latest Commitments of Traders report showed Watson held a net-long futures position of 38,068 contracts, a decrease of 3,265 contracts from Tuesday-to-Tuesday. The other thing that stood out to me at last Friday’s close was the increased percent of calculated full commercial carry covered by futures spreads. The North American Nov-January covered 62% as compared to the previous week’s settlement of 55% while the South American March-May covered 45% versus 35%.
Wheat: The wheat sub-sector was also in the green pre-dawn after both winter markets opened lower Sunday night. September HRW (KEU25) initially dropped to a low of $5.1850, down 5.75 cents from last Friday’s settlement before rallying to a high of $5.32 and sitting at $5.30 as of this writing. Similarly, September SRW (ZWU25) opened 3.75 cents lower before sliding as much as 5.0 cents, then rallying 11.25 cents off its session lows through early Monday morning. As I talked about in Weekly Analysis over the weekend, the picture in winter wheat, particular SRW, is getting somewhat cloudy. While both markets tend to extend their downtrends through July and August, we’ve reached the time frame where a seasonal low for both or either National Cash Index is possible. The HRW Index was calculated near $4.7250 last Friday, putting it in the lower 10% of its 5-year price distribution range. That factor alone could be enough to generate some buying interest, regardless of futures spreads continuing to indicate an increasingly bearish supply and demand situation. The latest Commitments of Traders update showed Watson decreased its net-short futures position by a mere 230 contracts as of Tuesday, July 8, leaving it at roughly 27,000 contracts.
[i] A reminder I’ll be participating in the first two meetings of Barchart’s Grain Merchandising and Technology Summer Roadshow next Tuesday and Thursday. You can register for any of the four meeting here: (LINK)
