Corn
Price action: May corn rose 1/4 cent to $4.64 1/2, notching a high-range close.
Fundamental analysis: Corn futures were able to rebound from the early morning low as the session progressed, though technical resistance at the 20-day moving average and a firmer U.S. dollar continued to limit a move higher. Moreover, risk-off sentiments continue to hamstring the ag complex as traders remain reluctant to extend out of the recent pattern of sideways consolidation.
Around midmorning, USDA released its weekly Export Inspections Report, which showed net inspections of 1.46 MMT (57.6 million bu.) for the week ended March 20, down 229,205 MT from the previous week but within the pre-report range of expectations from 1.0 MMT to 1.7 MMT. While down fairly notably on the week, net inspections continue to run well ahead of year-ago despite lacking purchases from China.
In South America, rains are widely expected across most of Brazil and Argentina outside of Bahia and northern Minas Gerais at one time or another during the next ten days. The moisture alternating with periods of sunshine should be good for most crops, although a few areas may become a little too wet, according to World Weather Inc. Meanwhile, AgRural lowered its Brazilian soybean crop estimate earlier today, and lowered their corn production forecast by 600,000 MT to 121.8 MMT, citing concerns relative to irregular rainfall in areas of the country.
Technical analysis: May corn continued to face resistance at the 20-day moving average, currently trading at $4.67, while support served at the 10-day moving average of $4.63 1/2. Bulls and bears continue hold an even playing field, with bulls looking to edge above resistance at $4.77 1/2, while bears look to secure a close below the March low of $4.42 1/2. Bulls will continue to face initial resistance at the 20-day moving average, then at $4.73 1/2, while bears will continue to face initial support at the 10-day moving average, then at the 200-day, currently trading at $4.54 1/2, which is backed by support at $4.51 3/4.
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 sunk 2 1/2 cents to $10.07 1/4 and closed near mid-range. May meal futures closed $2.70 lower to $297.60. May bean oil climbed 14 points to 42.15 cents.
Fundamental analysis: After favoring the downside in overnight trade, soybeans chipped away at losses and closed nearly steady on the day as muted volatility persists. The long-term ramifications of the ongoing trade wars are still yet to be known, but the market is anticipating a hit to export demand which has kept traders favoring the short side of the market. Considering the majority of 2024-25 soybean exports have already shipped, a significant hit to this year’s demand is not likely, but traders are quickly shifting their focus to new-crop. Given next week’s acreage report from USDA, the demand side of the balance sheet is less of a concern than the supply side. A big focus on acres is likely to keep a significant shift in price action this week as positioning drives a lot of trade.
AgRural cut its Brazilian soybean production forecast by 2.3 MMT to 165.9 MMT, as hot and dry conditions “continued to wreak havoc” on the crop since mid-February in far southern Brazil. The cut was driven by Rio Grande do Sul, the only state in Brazil that will harvest a smaller crop than last year. There were also slight reductions in Paraná and Mato Grosso do Sul, in addition to small cuts in Bahia and Piauí, which have been facing drier weather since February. AgRural noted strong yields in other states, particularly Mato Grosso, partially offset those reductions. Given the lack of rainfall, soybean harvest advanced to 77% as of last Thursday, the fastest pace for the date since 2010-11.
USDA reported soybean export inspections of 822,214 MT (30.2 million bu.) for the week ended March 20, up 164,378 MT from the previous week and near the upper end of pre-report expectations from 300,000 to 900,000 MT. Inspections slow this time of year but have slowed less than usual. Accumulated inspections are running above the historical pace needed to hit the current USDA export estimate.
Technical analysis: May soybean futures closed a couple cents lower as prices struggle to break below last week’s support zone. Bears retain the technical advantage, though price action has been sideways and choppy recently. Support stems from $10.05 and is quickly backed by the psychological $10.00 mark then the March 12 low at $9.94. Bulls are looking to overcome 10-day moving average resistance at $10.12 1/4 before tackling last week’s high of $10.21 3/4.
May meal futures closed solidly lower and near recent lows as bulls failed to overcome 10-day moving average resistance at $300.2 early in the session. Above that mark, bulls are targeting resistance at $303.7. Support comes in at last week’s low of $296.2, which is reinforced by the March 4 for-the-move low close at $293.5.
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 fell 10 cents to $5.48 1/4, nearer the session low and hit a two-week low. May HRW wheat dropped 10 3/4 cents to $5.78, nearer the daily low. May spring wheat futures sunk 12 3/4 cents to $5.92 1/4.
Fundamental analysis: The wheat futures market bulls were hamstrung today due in part to reports the Trump administration said it will put trade sanctions on any country that buys Venezuelan oil. Venezuela is a U.S. wheat importer. Meantime, Russia and the U.S. are discussing a potential revival of the Black Sea Grain Initiative, a 2022 agreement to ensure safe merchant shipping and grain exports during the Russia-Ukraine war. A firmer U.S. dollar index today was also a bearish daily outside-market element for wheat markets. A “risk-on” trading day today that saw strong rallies in the U.S. stock indexes did little to support buying interest in the grain markets.
USDA today reported U.S. wheat export inspections of 484,701 MT for the week ended March 20, down 10,452 MT from the previous week but above the pre-report expectations.
World Weather Inc. today said concern about some U.S. hard red winter wheat areas being too dry continues, despite some recent precipitation in interior western Kansas and Nebraska. “Concern also remains for Russia’s southern wheat and barley crop as well as that of eastern Ukraine, Kazakhstan and parts of Turkey. Some of these areas will get a little rain during the next two weeks, but a general soaking may be hard to come by.” Winter wheat crops in much of Europe are greening up and spring planting is under way in a part of the Iberian Peninsula. Rain in southeastern Europe may become heavy enough to induce some flooding and that may delay spring planting and threaten a few winter crops produced in low-lying areas, said World Weather. State weekly crop progress reports for wheat, out this afternoon, will be closely scrutinized by traders.
Technical analysis: SRW wheat market bears have the overall near-term technical advantage. SRW bulls’ next upside price objective is closing May prices above solid chart resistance at $5.80. 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 $5.63 and then at $5.70. First support is seen at today’s low of $5.45 1/4 and then at $5.37 3/4.
The HRW bulls and bears are on a level overall near-term technical playing field. Bulls’ next upside price objective is closing May prices above solid chart resistance at the March high of $6.17. The bears’ next downside objective is closing prices below solid technical support at the contract low of $5.41 1/2. First resistance is seen at today’s high of $5.95 1/4 and then at $6.00. First support is seen at today’s low of $5.75 and then at $5.65.
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 rose 15 points to 65.42 cents, closing nearer the session high.
Fundamental analysis: Cotton futures mildly favored the upside to begin the week as stronger equities helped offset pressure from a firmer U.S. dollar. However, looming resistance and a mostly risk-off tone across the grain and soy complex kept cotton buyers at bay. The marketplace continues to hold general concern around President Trump’s trade policies, which could result in an increase in inflation, as confirmed by the Federal Reserve last week in its post FOMC-meeting comments. Traders will continue to closely monitor any escalation in recent trade tensions.
World Weather Inc. notes rain is expected later this week and into the weekend in West and South Texas, the Texas Coastal Bend and Blacklands. The precip will help induce better long-term development potential. However, much of the rain in West Texas will be quite light, leaving the need for much more. California and the southwestern desert region will remain drier than usual, while the Delta will be wettest for a while as far southeastern cotton areas from Georgia to Virginia may experience some net drying.
Technical analysis: May cotton forged a high range close after extending to a more than two-week low in overnight trade. However, the 20-, 10- and 40-day moving averages, trading at 65.96 cents, 66.35 cents and 66.87 cents continued to curb buyer interest, though support at 64.87 cents continued to limit a move lower. Bulls will need to edge above the 20-, 10- and 40-day moving averages to gain an improved technical posture, while bears will continue to look to breach the March 4 low of 62.54 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.