Corn
Price action: March corn rose 3 1/4 cents to $4.93 1/2, a one-week high close.
Fundamental analysis: Corn futures eked out gains as the session progressed as decided strength transpired across the ag complex amid support from a fading U.S. dollar. Support also stemmed from solid weekly corn sales, which totaled 1.65 MMT during the week ended Feb. 6. Net sales rose 12% from the previous week and 20% from the four-week average, landing near the upper end of the pre-report range of 800,000 MT to 1.7 MMT.
Earlier today the Rosario Grain Exchange cut its Argentine corn production forecast by 2 MMT to 46 MMT due to heat and moisture stress, however, Conab raised its Brazilian crop estimate to 122.01 MMT, up almost 2.46 MMT from January.
World Weather Inc. notes less rain and greater sunshine in center-south Brazil will be great for first season harvest and safrinha crop planting, though Mato Grosso will remain a little wet at times. Meanwhile, central and northeastern Argentina, Uruguay, southwestern Paraguay and southern Brazil will all receive significant rain in the coming five to six days, bolstering soil moisture after a period of stress in recent weeks. The forecaster notes, however, that the precip falls a little late for saving yields and production in early season crops.
Technical analysis: March corn continues to hold above the 10- and 20-day moving averages, currently trading at $4.90 and $4.88 1/4, but consolidated between resistance and support at $4.94 1/2 and $4.83 3/4. Bulls continue to hold the near-term technical advantage and look to hold a close above $5.00, while bears are focused on edging below the Feb. 3 low of $4.72 1/2.
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 closed 2 1/4 cents higher to $10.30, nearer session highs March meal futures fell $1.40 to $292.70, nearer session lows. March bean oil rallied 59 points to 46.25 cents.
Fundamental analysis: Soybean futures saw action on either side of unchanged before closing modestly higher on the day. Corn continues to lead strength but soybeans have struggled to follow suit as woes over abundant South American supplies continue to weigh heavily on prices, negating recent cuts to SA production forecasts from several forecasters. Conab trimmed its Brazilian soybean supply forecast to 166.01 MMT for 2024-25, citing “irreversible crop losses” in southern Brazil due to drought. Meanwhile, regular rounds of showers and thunderstorms are expected over the next couple of weeks from western Brazil and Paraguay, though most of the rain is not expected to be frequent enough to delay harvest, says World Weather Inc. The Rosario Grain Exchange forecasts the country’s soybean production at 47.5 MMT, around 5 MMT less than if weather conditions were favorable, and warned crop potential could decline more depending on rains over the next 10 days.
Anticipation of South American supplies are weighing on demand for U.S. origin supplies. USDA reported soybean export sales of 185,500 MT for the week ended Feb. 6, down 52% from the previous week and 74% from the four-week average. Net sales were well below analysts’ pre-report expectations ranging from 300,000 to 800,000 MT. Sales for soybeans have slowed faster than usual in the past few weeks, with today’s sales rather disappointing. Shipments on the other hand remain quite strong.
Technical analysis: March soybean futures saw modest strength today after facing two days of sustained selling pressure. Bulls have a slight technical advantage on the daily bar chart. Support stems from $10.23 1/2, a break below that mark opens up a test of support at $10.16 then $10.09 3/4. Bulls are looking to challenge resistance at $10.33 1/4, the 40-day moving average, while strength above that mark targets resistance at $10.44 then the psychological $10.50 mark.
March meal futures closed lower for the seventh consecutive session as bears retain the technical advantage. Prices did close above the prior resistance zone at $292.00, which marks initial support. Weakness below that mark targets support at $287.00. Bulls are looking to overcome resistance at $294.40 before tackling resistance at the psychological $300.00 mark.
What to do: Get current with advised sales. Our next sales target is $11.00 in nearby futures.
Hedgers: You should be 55% sold in the cash market on 2024-crop. You should also have 10% of expected 2025-crop production sold for harvest delivery.
Cash-only marketers: You should be 55% sold on 2024-crop. You should also have 10% of expected 2025-crop production sold for harvest delivery.
Wheat
Price action: March SRW wheat rose 3 1/2 cents to $5.77 3/4 and near mid-range. March HRW wheat rose 6 3/4 cents to $5.98 1/4, nearer the daily high. March spring wheat futures climbed 2 cents to $6.16 3/4.
Fundamental analysis: The wheat futures markets today saw buying support from technical traders as the near-term charts lean friendly. A lower U.S. dollar index was a bullish outside-market element for wheat today.
World Weather Inc. today said that in U.S. HRW country “no crop damage should have occurred from bitter cold temperatures this morning in the central or southwestern Plains because of adequate snow cover in most areas that were near and below zero.” A generally cold weather pattern will continue through the next eight to 10 days before the arctic air mass leaves. Some of the most significant cold air is expected next Tuesday through Feb. 20. “Snow cover is likely to be enough to protect crops where temperatures are threateningly cold.” In the northern Plains, portions of South Dakota “were snow-free today when the bitter cold settled into the region and there is potential for some winterkill to have occurred in a few of the snow-free production areas, although assessing the damage will not be possible until spring.” Temperatures will be significantly cold through Feb. 20 before a warming trend begins, said World Weather.
Also friendly for the wheat markets today, USDA this morning reported U.S. wheat export sales of 569,600 MT for the week ended Feb. 6, up 30% from the previous week and up 45% from the four-week average. Net sales were near the upper end of pre-report expectations.
Technical analysis: Winter wheat market bulls have the slight overall near-term technical advantage. Prices are in uptrends on the daily bar charts. Recent price action suggests near-term market bottoms are in place. SRW 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 $5.50. First resistance is seen at this week’s high of $5.88 and then at last week’s high of $5.92 1/2. First support is seen at today’s low of $5.71 1/2 and then at $5.60.
March HRW prices today scored a bullish “outside day” up and bulls’ next upside price objective is closing March prices above solid chart resistance at the October 2024 high of $6.38 1/4. The bears’ next downside objective is closing prices below solid technical support at $5.70. First resistance is seen at this week’s high of $6.06 1/2 and then at the February high of $6.14 3/4. First support is seen at today’s low of $5.87 3/4 and then at $5.78.
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 closed 64 points lower to 66.83 cents and settled near session lows.
Fundamental analysis: Cotton futures saw resurgent selling pressure today despite markedly improving export demand. Cotton futures fell despite weakness in the U.S. dollar index, which was down over 500 points today as it saw persistent weakness throughout the session. Cotton futures were poised for a technical breakout after rallying for three consecutive sessions, marking today’s sell off as rather disappointing. Volume fell off from highs seen earlier this week as well, indicating that the Goldman roll is coming to an end. That could bring fundamentals back to the focus though, especially considering NCC will release their acreage estimate over the weekend. Positioning is likely to drive trade tomorrow ahead of the report.
USDA reported cotton export sales of 248,700 bales, which was up 28% from the previous week but down 14% from the four-week average. While sales came in below those seen in mid-January, export shipments climbed to the highest mark since April of last year. The demand for physical cotton increasing was a good sign in this morning’s report, but more sales are needed to garner traders attention.
Technical analysis: Cotton futures continue to trend lower on the daily bar chart as bears maintain the technical advantage. Bulls managed to hold initial support at 66.77 cents, the 10-day moving average, which was quickly reinforced by support at 66.50 cents then 65.63 cents. Resistance at 67.69 cents, the 40-day moving average, capped this week’s rally, while strength above that mark targets resistance at 68.44 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.