Corn: December corn prices finished the week ending June 15 down 15 1/4 cents at $3.82 3/4, just three cents above its low for 2018. Obviously, the trend is down after three weeks of sharply lower prices and we all want to know how far down prices will go. The answer depends largely on U.S. weather and so far, crop conditions are good. Another bearish factor for corn prices is that Friday's CFTC data showed noncommercials still heavily bullish in corn with 286,650 net longs as of June 12. On the other hand, USDA's estimate of world ending corn stocks-to-use ratio is the lowest since 1995-96 so we wouldn't expect December corn to fall below last year's low of $3.35 1/4. The 2017 low of $3.79 3/4 may not hold with noncommercials still under pressure to liquidate and so far, there is no technical sign of support yet.
Soybeans: November soybean prices dropped 59 1/4 cents on the week ending June 15 to $9.30 1/2, its lowest close in nearly a year. As with corn, the trend is clearly down, but unlike corn, the soybean market has much weaker fundamental support after China just enacted a 25% tariff on U.S. soybean imports. Also, U.S. soybean crops are off to a good start and may have or be near a record planting in 2018. Technically, prices spent much of April and May challenging their 50% retracement level, but could never sustain their higher prices before buyers finally gave up. Prices are now in a dangerous free fall as the only current hope for potential buyers is adverse summer weather -- something that is not yet in view. One possible level of support is the 2015 low of $8.53 1/4, but keep in mind that U.S. ending soybean stocks of 197 million bushels in 2015-16 were roughly half of the optimistic 385 mb USDA is estimating for 2018-19.
SRW Wheat: September Chicago wheat fell 23.25 cents the week ending June 15, to $5.13 1/2 as the uptrend is in danger of rolling lower. It was just three weeks ago that September prices came within 4 cents of the same month's high in 2017, but have fallen off 57 cents since. The loss of upward momentum has turned the weekly stochastic bearish near a time when wheat prices are known for making seasonal highs. We have noted before that noncommercials failed the last five times they went net long in Chicago wheat and it is looking like this will be No. 6. Friday's CFTC data showed noncommercials net long 49,716 contracts as of June 12.
Comments above are for educational purposes and are not meant to be specific trade recommendations. The buying and selling of grains and grain futures involve substantial risk and are not suitable for everyone.
Todd Hultman can be reached at Todd.Hultman@dtn.com