Palm oil, soybeans, wheat and cotton: four supply signals for the week ahead
Pro Farmer weekly outlook: lower Malaysian palm oil output could lift demand for soybean oil and crushing, while corn, wheat and cotton trade around their own supply signals.
CBOT corn
CBOT corn finally broke out of its trading range, driven mainly by the fundamental jolt from the August WASDE report. Although the production estimate was raised slightly, the report was seen as bullish because it lowered ending stocks. Before futures rose, US corn prices were nearly level with offers for Brazil's second crop. Higher prices may now curb export demand in the short term. EIA data showed ethanol production at 1.117 million barrels a day in the week ended August 7. Biofuel demand remains supported as oil prices continue to fluctuate. Ethanol prices in Iowa were 19 cents a gallon higher than a year earlier, an increase of 11%.
CBOT soybeans
CBOT soybeans tested their 40-day moving average this week but ultimately failed to break through the key resistance level, despite supportive fundamental news. The US Department of Agriculture raised its 2026/27 ending-stocks estimate in the WASDE report, but only slightly, leaving the overall effect on the soybean market broadly neutral. Outstanding soybean export sales for the coming crop year stand at 10.13 million tonnes, well above the 4.71 million tonnes recorded at the same point last year. The USDA also cut the share of the soybean crop rated good or excellent by one percentage point this week, to 62%. Meanwhile, Malaysian palm oil output—a source of supply that competes with soybean oil—is being cut as the effects of El Niño draw global attention. Lower palm oil production could further increase demand for soybean crushing.
CBOT wheat
CBOT wheat's advance moderated after Wednesday, but the move was sufficient to break through the key 10-day and 40-day moving averages, which should now provide technical support. The USDA also lowered its production estimate for the European Union, a major wheat producer, by 1.8 million tonnes.
ICE cotton
The USDA's August production estimate was slightly below the previous month's figure, as a sharp reduction in yield offset an increase in planted area. Traders had expected a larger cut in production, and the December ICE cotton contract fell, although market support remains firm.