Corn
Price action: March corn rose 5 1/2 cents to $4.89 3/4, closing nearer the session high.
Fundamental analysis: A new for-the-move high was featured in corn futures today, which was quite notable amid lacking outside market support. Technical buying continues to prop up prices, with fundamental support stemming from lingering unknowns surrounding the South American crop. While subpar weather in Argentina has held a persisting undertone for some time, wet conditions in Brazil as producers intend to harvest, has bolstered concerns across the marketplace. Mainly due to the increasing likelihood of delayed safrinha corn plantings in Brazil, which is the major corn crop in South America.
World Weather Inc. maintains most areas of Brazil, outside of northeastern areas, will continue to see frequent rounds of showers and thunderstorms through the next two weeks, with enough rain to keep soil conditions favorable for crops, while slowing fieldwork. Drier weather will be needed to reduce harvest delays.
Meanwhile, corn demand continues to prove solid, with ethanol production during the week ended Jan. 17 averaged 1.099 million barrels per day (bpd), up 4,000 bpd from the previous week and 281,000 bpd (34.4%) above the same week last year. During this week last year, output was sharply reduced by extreme cold. Ethanol stocks rose 866,000 barrels to 25.874 million barrels.
Early Friday morning, USDA will release its weekly Export Sales Report, delayed a day due to Monday’s federal holiday. Analysts expect net corn sales ranged between 700,000 MT and 1.7 MMT during the week ended Jan. 16. Last week, net sales of 1.024 MMT were reported for the previous week.
Technical analysis: March corn futures edged to a fresh near-term high but failed to close above resistance at $4.90 1/4. However, solid support at $4.90 1/4 and the 10-day moving average of $4.77 3/4 continues to curb selling interest. Bulls remain steadfastly in control of the near-term technical advantage, with sights set on a close above $5.00, while bears look to edge below $4.55. Though additional support at $4.70 1/2 and the 20-day moving average of $4.66 1/4 will favor bull efforts.
What to do: Get current with advised sales.
Hedgers: You should be 50% sold in the cash market on 2024-crop in the cash market. You should also have 10% of expected 2025-crop production sold for harvest delivery.
Cash-only marketers: You should be 50% sold in the cash market on 2024-crop. You should also have 10% of expected 2025-crop production sold for harvest delivery.
Soybeans
Price action: March soybean futures climbed 9 1/2 cents to $10.65 1/2 and closed mid-range. March meal futures sank 50 cents to $315.30. March bean oil rallied 62 points to 45.04 cents.
Fundamental analysis: Soybean futures climbed to a fresh for-the-move high as strength in corn continues to pull soybeans higher. Bulls shook off reports that ADM declared force majeure in southern Louisiana as vessels struggled to navigate the snowy weather conditions. The shutdown of U.S. gulf terminals slows exports out of the biggest grain and soy port in the U.S., which handles about two-thirds of domestic crop exports. While slowing exports, the shut-down is not expected to last long. Traders are more focused on trade policy out of Washington, which has been encouraging as of late. Traders have been encouraged by the delayed implementation of tariffs and the potential for trade deals. President Trump has shown that he is more than willing to negotiate before ramping up tariffs, a sign the market has taken as price supportive.
Brazil rainfall continues to be sporadic and lighter than usual, allowing for better early maturation and harvest conditions as dryness allows some excessive wetness to dry, says World Weather Inc. Rainfall is expected to increase in southern parts of the nation this weekend, which will advance to the north during the late weekend and through much of next week, the forecaster says. Meanwhile, conditions in Argentina continue to deteriorate, as the poor rating increased seven points over the last week, according to Bolsa de Cereales.
USDA will release their weekly export sales report tomorrow morning, delayed a day due to Monday’s government holiday. A Reuters poll of analysts shows expectations of sales between 600,000 MT and 1.8 MMT. Sales last week totaled 569,142 MT.
Technical analysis: March soybean futures made a fresh for-the-move high but struggled to close above yesterday’s highs. Bulls continue to maintain the near-term technical advantage. Initial resistance stems from the 200-day moving average at $10.67 1/4, which has capped most of the gains the past three sessions. Strength above that mark targets $10.73 1/2, which is quickly backed by the psychological $10.75 mark. Support comes in at $10.56 then the psychological $10.50 mark on a reversal lower. Additional selling targets the 10-day moving average at $10.41 1/2.
March meal futures struggled to build of the strength seen in soybeans. Bears retain a slight technical advantage, though prices are in the upper end of the recent range. Resistance stands at $315.80 with additional strength targeting the Jan. 2 close of $319.90. Bulls are looking to hold support at $314.90, then the 100-day moving average at $309.60 on continued selling pressure.
What to do: Get current with advised sales.
Hedgers: You should be 40% priced in the cash market on 2024-crop production.
Cash-only marketers: You should be 40% priced on 2024-crop production.
Wheat
Price action: March SRW wheat closed unchanged at $5.54, near mid-range. March HRW wheat lost 4 cents to $5.70 3/4 and nearer the daily low.
Fundamental analysis: The winter wheat futures markets today saw some routine chart consolidation after good early-week gains. A weaker U.S. dollar index today did limit selling interest in wheat markets, as did solid rallies in the corn and soybean futures markets. However, weaker crude oil prices today were a modestly negative outside-market element for the grains.
World Weather Inc. today said that in U.S. HRW wheat country, “no big or threatening” weather events are likely in the next 10 days. A new arctic air mass could then arrive in the region within the Feb. 2 – 6 timeframe. “Confidence in the significance of this arctic air is a little low, but some snow is expected with it and there may be a need for new snow cover to protect crops from the associated cold temperatures.” In the Northern Plains, “conditions will be uneventful in the next seven to 10 days,” said the forecaster.
Friday morning’s weekly USDA export sales report (delayed one day due to the federal holiday Monday) is expected to show U.S. wheat export sale of 200,000 to 600,000 MT in the 2024-25 marketing year, and sales of zero to 50,000 MT in the 2025-26 marketing year.
Technical analysis: Winter wheat market bears still have the overall near-term technical advantage. However, three-month-old downtrends on the daily bar charts have been negated. SRW bulls’ next upside price objective is closing March prices above solid chart resistance at the December high of $5.69 1/4. The bears’ next downside objective is closing prices below solid technical support at the contract low of $5.26. First resistance is seen at this week’s high of $5.66 3/4 and then at $5.69 1/4. First support is seen at this week’s low of $5.42 and then at $5.26.
HRW bulls’ next upside price objective is closing March prices above solid chart resistance at $6.00. The bears’ next downside objective is closing prices below solid technical support at the contract low of $5.35. First resistance is seen at this week’s high of $5.86 and then at $6.00. First support is seen at $5.60 and then at $5.50.
What to Do: Get current with advised sales.
Hedgers: You should be 70% sold in the cash market for 2024 crop. You should have 20% forward sold for harvest delivery in 2025.
Cash-only marketers: You should be 70% sold for the 2024 crop. You should also be 20% sold for harvest delivery for expected 2025-crop.
Cotton
Price action: March cotton futures rallied 33 points to 67.47 cents and closed nearer session highs.
Fundamental analysis: Cotton futures saw modest strength today, though remain within the recent range. Recent weakness in the U.S. dollar index has done little to support cotton futures. The dollar is down over 2000 points from last week’s high and continued to struggle moving to the upside today despite higher long-term interest rates. That is a key break in the relationship between bond yields and the dollar, which could point to an extended downturn in the dollar. Cotton and the dollar have maintained an inverse relationship over the past four months to a startling degree. That is, as the dollar has surged higher, cotton futures have trended lower. The recent break in the dollar index could drum up additional export demand as U.S. supplies become more competitively priced on the world market.
Technical analysis: March cotton futures saw modest strength though bears continue to maintain the near-term technical advantage. Bulls are looking to challenge downtrend resistance at 68.15 cents, with a daily close above that mark signaling a technical breakout. Additional resistance lies on the way at 67.58 cents, the 10-day moving average. Additional selling targets support at 67.14 cents, though bears are ultimately looking to break prices below the contract low of 66.60 cents.
What to do: Get current with advised sales and hedges.
Hedgers: You should be 35% sold in the cash market on 2024-crop.
Cash-only marketers: You should be 35% sold on 2024-crop.