Corn
Price action: May corn rose 4 1/2 cents to $4.65 1/4, closing nearer the session high.
Fundamental analysis: Corn futures held onto gains into the close amid general short-covering across the ag complex despite lacking outside market support. Solid weekly export sales helped carry overnight gains, with USDA reporting net corn sales of 967,300 MT for the week ended March 6. This marked a 6% increase from the previous week, though net sales were down 19% from the four-week average. Meanwhile, exports during the week reached a marketing-year high of 1.86 MMT, up nearly 50% from the previous week. Japan, Mexico and Spain were the top destinations.
Earlier today, Conab released updated Brazilian crop projections, which included a 750,000 MT increase in its corn crop forecast to 122.76 MMT, despite a 540,000 MT cut to projected safrinha crop production. Moreover, the Rosario Grain Exchange also updated its crop estimates, which featured a 1.5 MMT reduction in corn production to 44.5 MMT. To compare, USDA’s current estimates stand at 126 MMT for Brazil and a 50 MMT Argentine crop.
World Weather Inc. notes Argentina will face drier conditions this week, which will be good for many areas that have received too much rain recently, while northeastern areas will remain too dry for at least another ten days. In Brazil, the forecaster indicates the weather is mostly good, with relief from dryness expected in northern parts of center south and some of the northeast while center west crop areas get the most routine rainfall over the next two weeks.
Technical analysis: May corn held an inside range, ending the session back above the 10-day moving average of $4.63 1/2 and right at the 100-day, currently trading at $4.65 1/4, with bulls and bears on an overall level playing field at this juncture. Bulls’ next objective is to secure a close above this week’s high of $4.77 1/2, while bears look to breach support at $4.50. First resistance stands at $4.70, then $4.72, while first support will now serve at the 10-day moving average and again at the 200-day moving average of $4.55 1/2.
What to do: Get current with advised sales.
Hedgers: You should be 70% sold in the cash market on 2024-crop. You should have 20% of expected 2025-crop production forward sold for harvest delivery.
Cash-only marketers: You should be 70% sold on 2024-crop. You should have 20% of expected 2025-crop production forward sold for harvest delivery.
Soybeans
Price action: May soybean futures climbed 10 1/4 cents to $10.10 3/4 but closed near mid-range. May meal futures rallied $6.9 to $307.1. May bean oil slid 40 points to 41.28 cents.
Fundamental analysis: Soybean futures posted impressive gains today on corrective buying following yesterday’s move near this year’s lows. Newswires today carried a flurry of mixed news regarding South American production prospects. The Rosario Grain Exchange cut their Argentine crop forecast by 1 MMT to 46.5 MMT which remains well below USDA’s estimate of 49.00 MMT. Conab raised its Brazilian production forecast by 1.36 MMT to 167.37 MMT and their export estimate by 300,000 MT to 105.74 MT. This time of year, Conab’s soy production estimate is generally too low, so it is no surprise they remain well below USDA’s production estimate of 169 MMT.
The weakness seen in late February and early March was met with a flurry buying from importers, noted in today’s export sales report from USDA. For the week ended March 6, export sales were 751,700 MT. That was the largest weekly tally since the week ended Jan. 16 and more than doubled last week’s total. The fact that China led purchases was a good sign for bulls, as expectations were for China to switch purchases to Brazil given the ongoing harvest.
Technical analysis: May soybean futures posted corrective gains today though bears retain the technical advantage as bulls failed to overcome initial resistance at $10.17, the 10-day moving average. The 10-day has limited all gains on a closing basis since Feb. 20 and stands as bulls first target. Strength above that mark looks to challenge the psychological $10.25 mark. Support comes in at $10.00 then yesterday’s low of $9.94.
May meal futures posted impressive gains today, though still closed well off session highs. Bulls retain a slight technical advantage as prices are in a modest uptrend on the daily bar chart. Resistance stands at $309.6, the 100-day moving average, then $314.8. Bulls are looking to hold support at $305.1, the 40-day moving average, then support at the psychological $300.0 mark on a reversal lower.
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: May SRW wheat rose 8 1/2 cents to $5.62 1/2, near mid-range and hit a two-week high. May HRW wheat gained 14 1/2 cents to $5.87 1/2, nearer the daily high and hit a two-week high.
Fundamental analysis: The winter wheat futures markets posted good rebounds from Wednesday’s selling pressure, to keep hopes alive that prices in early March put in near-term bottoms. Gains in wheat futures were especially impressive today given the firmer U.S. dollar index and elevated risk aversion in the general marketplace, evidenced by another sell off in the U.S. stock market.
Also friendly for wheat futures prices, the IKAR consultancy has lowered its 2024-25 Russian wheat export forecast another 1.5 MMT, to 41 MMT.
USDA this morning reported U.S. wheat export sales of 783,400 MT for the week ended March 6, which were up notably from the previous week and up 83% from the four-week average. Net sales were well above the pre-report range of expectations.
World Weather Inc. today said wheat in the U.S. is going to be greening in the south. “Cooler temperatures in the central Plains and Midwest periodically over the next two weeks will help prevent much crop development in those areas. A boost in soil moisture and precipitation is needed in crop areas suffering from freeze damage earlier this year, but precipitation in the central Plains will be limited for a while.” High wind speeds and low humidity Thursday into Saturday in the central Plains will reduce soil moisture, raising the need for rain even higher, said World Weather.
Technical analysis: SRW wheat market bears still have the overall near-term technical advantage. However, this week’s price strength begins to suggest a near-term market bottom is in place. SRW bulls’ next upside price objective is closing May 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 $5.30. First resistance is seen at today’s high of $5.66 3/4 and then at $5.75. First support is seen at $5.50 and then at this week’s low of $5.46 1/2.
The HRW bulls and bears are on a level overall near-term technical playing field but the bulls have momentum. Bulls’ next upside price objective is closing May 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 today’s high of $5.91 1/4 and then at $6.00. First support is seen at today’s low of $5.75 1/4 and then at this week’s low of $5.65 1/2.
What to Do: Get current with advised sales.
Hedgers: You should be 85% sold in the cash market on 2024-crop. You should have 20% forward sold for harvest delivery in 2025.
Cash-only marketers: You should be 85% sold on 2024-crop. You should have 20% forward sold for harvest delivery in 2025.
Cotton
Price action: May cotton futures fell 45 points to 66.53 cents, marking a low range close.
Fundamental analysis: Cotton futures gave up a portion of Tuesday’s gain as traders took advantage of the highest prices in a couple weeks. May futures are near the upper end of the recent range, encouraging technical traders and funds to add to short positions. Today’s selling pressure came despite improved export sales. USDA reported cotton export sales of 276,400 bales for the week ended March 6. That was the most since the week ended Feb. 13 and was up 10% from the previous week and 8% from the four-week average. Not only have sales picked up recently, but export shipments have been climbing in recent weeks as well. Export shipments for the week ended Mar. 6 topped the five-year average for the first time in nearly two months. Heavy selling pressure in the equity market and persistent weakness in crude oil futures continue to sag on cotton prices.
Technical analysis: May cotton futures saw modest selling pressure after challenging 40-day moving average resistance early in the session. Bears continue to hold the technical advantage, though a modest uptrend persists on the daily bar chart. Stiff resistance stands at 67.26 cents, closing prices above which remains bulls’ next objective, as the 40-day has limited nearly all gains since late October. Support stands at 66.42 cents then 65.42 cents on continued selling pressure.
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.