Daily Commodity Market Analysis -- 07/20/2026
- Clayton Pope
- 6 days ago
- 5 min read
Updated: 4 days ago
Contract | Close | Net Change |
Sept '26 Corn | 449 1/2 | +4 3/4 |
Dec '26 Corn | 473 | +5 1/2 |
Aug '26 Beans | 1226 | +21 1/2 |
Nov '26 Beans | 1226 1/4 | +23 1/4 |
Sept '26 Chi Wheat | 674 | -8 3/4 |
Sept '26 KC Wheat | 723 3/4 | -8 1/2 |
Dec '26 Cotton | 78.92 | +.29 |
Aug '26 Crude Oil | 82.86 | +1.08 |
US Dollar Index | 100.77 | +.18 |
Dow Jones | 52,081 | -294 |
Outside markets listed may not represent the actual close based on the timing in which this letter was sent.
Daily Glance commodity market
Our markets gapped higher last night on a hot/dry forecast and escalating Iran war action.
As the day session progressed, corn and beans both added to gains, maintaining their gaps, while Chicago wheat reversed to finish lower.
The hot/dry forecasts continued throughout the day session updates, but at the end leaned to slightly more rain for the Midwest, arguably causing a slight pullback from session highs into the close.
Expectations for a 2-3% downtick in crop conditions added to the bullish enthusiasm--see below for the afternoon update.
All markets are having difficulty interpreting the constant stream of war developments resulting in a mixed stock market performance and a very choppy, two-sided trade in crude oil. Crude ended the day near session highs, which contributed to corn and bean gains.
Much talk about the escalating war between Russia and Ukraine as well, with Black Sea transit routes and ports continuing to suffer damage, making today's pullback in wheat a little surprising.
Key Points/Developments:
Technicals: The technical picture for both corn and beans continues to strengthen with Dec corn stabbing into a seven week high and closing only slightly off that peak. As said in Friday's letter the 471 level was the next hurdle we were watching, and having closed above that today, the next target is the low 480s, then 490 and the spring high near 500, while support underneath now sits at 468-470, the gap created on last night's open, then 457 and 447.
Nov beans managed to clear the one year high near 1214, with next resistance at today's high near 1232, then1250.
Weather: TStorm downgraded their rating for both corn and soybeans to Slightly Unfavorable in Sunday's update. Their yield model as of last Wednesday remains near 185, two bushels above the USDA's 183, and given their downgrade, our guess is they will back off their corn yield somewhat in Wednesday's update, but are very likely to stay above the USDA. :Here is their closing comment from about 1 pm today:
There are no changes to the T-storm Weather Outlook with some t-storms ahead, but unlikely enough to break drying. Heat is also ahead for western crops, but less-so eastern crops.
A strong cool front triggers t-storms in the Corn Belt into tomorrow and turns a wide area seasonable to cool for several days. Some additional t-storms follow Wed.-Thu. in / near NE-MO as the cool front stalls and turns into a warm front. Hot upper-level high pressure then re-emerges and likely affects the western halves of corn and soybeans for at least 7 days (mid-90s / mid-70s) starting Fri.-Sun., while 80s-90s / 60s-70s are more common with eastward extent next week. Some t-storms can never be ruled out in the summer, but either low humidities from cool fronts east or a lack of energy from the upper-level high are probable to limit rainfall.
Markets/Trading Implications
As said Friday, "...if December corn can clear 471 decisively we would treat that as a real technical trigger, not just another poke at resistance", and that's exactly what happened today. Funds appear to be continuing to add length here, somewhat more aggressively as upward momentum appears to be building. .
Beans continue to impress, closing at a long term high despite weaker soybean oil, also attracting increased fund buying. Optimism continues regarding China's intentions with respect to the trade agreement claims made by the US, and the bullish tilt to weather forecasts probably increases the odds of their willingness to do so. More solid flash sales today to both China and Unknown.
It is interesting to note that based on the USDA's July S&D, the stocks to usage ratio for soybeans is much tighter than for corn (6.9% vs 11.0%), yet the bean/corn ratio is sitting very close to the long term average of 2.5:1. Add to this the fact that the most uncertainty exists regarding soybean weather than corn weather as of this date, and one can make a good argument that beans are underpriced here, at least in relation to corn. But of course continued weather concerns and evidence of more Chinese buying is likely needed to bring on additional gains.
We continue to hold off on any new sales for either old or new crop, but we are approaching some very attractive levels that we are likely to capitalize on soon.
Other Notes
|
Static Notes
The Commitment of Traders report released today, covering positions through Tuesday, July 14, showed funds adding to their bullish bets across the board. Corn's net long jumped to 43k contracts, up about 31k on the week, soybeans' net long grew to 73k, up a more modest 4k, and wheat saw the biggest shift, funds trimming their net short from 62k down to 37k, a 25k swing.
What stands out to us is the price action underneath those numbers, corn and beans were actually lower over the reporting week itself, corn down 4 cents and beans down 7, yet funds were net buyers into that weakness, while wheat was the opposite, already up 26 cents over the same stretch as the short covering accelerated. All three then kept climbing into the back half of the week, corn up 7 more, beans up 12, and wheat another 38, which tells us the buying likely did not stop at Tuesday's cutoff.
Have a nice evening!
Clayton and Taylor
The following table is a "bird's eye" view of our recommended sales levels. Please note that these are meant to be very general guidelines and do not apply to all readers due to the critical differences and unique situations that may exist. Among other possible differences, those current with the following coverage levels might be perfectly comfortable with the expectation of buying some of these sales back at lower levels, whereas others might have no interest in doing so. commodity market
commodity market
Crop Year | 2025/26 | 2026/27 | 2027/28 |
Corn | 80% | 40% | 0% |
Soybeans | 85% | 40% | 0% |
Wheat | 100% | 30% | 0% |
RISK DISCLAIMER:Trading in futures products entails significant risks of loss which must be understood prior to trading and may not be appropriate for all investors. Please contact your account representative for more information on these risks. Past performance of actual trades or strategies cited herein is not necessarily indicative of future performance.
Comments