Corn
Price action: May corn rallied 9 cents to $4.83, a six-week high close.
Fundamental analysis: Corn futures edged higher for the fifth straight session and secured a fresh for-the-move high. Support stemmed from a plummeting U.S. dollar, while resumed selling in crude oil was largely disregarded. Though, USDA’s hefty 100 million bu. export increase (2.55 billion bu.) for 2024-25, in its April World Agricultural Supply and Demand Estimates production, bolstered buying interest. While use was ultimately lowered 25 million bu. for feed & residual (to 5.75 million), it still resulted in a net 75 million bu. decline in projected ending stocks to 1.465 billion bu.
This came after the Rosario Grain Exchange raised its Argentine corn production forecast by 4 MMT to 48.5 MMT, while Conab raised its Brazilian corn crop forecast to 124.74 MMT, up from its previous estimate of 122.76 MMT. Of the total, Conab expects 97.89 MMT from Brazil’s safrinha crop, which is up from previous forecasts of 95.51 MMT.
Earlier today, USDA also released its weekly Export Sales Report, which showed net corn sales of 785,600 MT for the week ended April 3. Net sales were down 33% from the previous week and four-week average and landed near the low-end of the pre-report range of 700,000 MT to 1.3 MMT.
Technical analysis: May corn bulls were able to score a close above the March high of $4.77 1/2, at a six-week high close. Bulls will now focus on a breach of the psychological $5.00 level, with initial resistance now serving at the Feb. 27 high of $4.96 1/4.
Meanwhile, bears will continue to edge back below the March 28 low of $4.42, though solid support lies at the 40-, 100-, 10-, 20- and 200-day moving averages, layered from $4.72 1/2 to $4.53 1/4.
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 surged 16 1/4 cents to $10.29 and closed on session highs. May meal firmed $3.40 to $297.90. May bean oil inched 13 points higher to 46.32 cents.
Fundamental analysis: Soybean futures saw impressive gains today, piggybacking yesterday’s gains as prices pushed to near the April highs. Soybeans shook off higher tariffs from China that are likely to limit soybean imports. While that is not likely to have a large impact on 2024-25 exports, it could have a large effect on new-crop exports. Today’s USDA reports showed little change from a month ago. USDA lowered ending stocks 5 million bushels to 375 million bushels. That included a 5 million bushel increase to imports and a 10 million bushel increase in crush use. Exports were left unchanged, which was a big question given the changes in tariff policy over the past month.
USDA reported soybean export sales of 172,300 MT for the week ended April 3, down 58% from the previous week and 63% from the four-week average. Net sales fell short of pre-report expectations from 200,000 to 700,000 MT. Export sales have really slowed in the last couple of weeks. The pace analysis points makes USDA’s export estimate rather reasonable.
Conab raised its Brazilian soybean crop estimate to 167.87 MMT, up from its previous forecast of 167.37 MMT. Conab has been steadily increasing their soybean production estimate but it still remains below USDA, who kept their production estimate steady at 169 MMT.
Technical analysis: May soybeans continue to march higher, negating bears’ recent technical advantage. Bulls and bears are on an overall level playing field. Open interest continues to fall on a daily basis as prices rally, indicating short-covering is driving a lot of recent strength. Bulls are seeking to overcome the 100-day moving average at $10.29, which is reinforced by resistance at $10.34 3/4. Support comes in at the psychological $10.25 mark then the 40-day moving average at $10.18 3/4 on a reversal lower. Persistent selling finds support at $10.11 1/2.
May meal closed higher for the fourth consecutive session as bulls are poised to challenge key 40-day moving average resistance at $297.9. Strength above that mark seeks to overcome resistance at $300.0. Meanwhile, a reversal back lover finds support at $294.3 then the 10-day moving average at $292.5.
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 4 1/4 cents to $5.38 and nearer the daily low after hitting a three-week high early on. May HRW wheat lost 10 cents to $5.58, nearer the daily low and scored a bearish outside day down. May spring wheat futures skid 6 3/4 cents to $6.02.
Fundamental analysis: Risk aversion in the general marketplace amid another big sell off in the U.S. stock market today pressed the wheat futures markets lower. Today’s monthly USDA supply and demand report also leaned a bit bearish as U.S. wheat ending stocks were a bit higher than the trade expected. Losses in wheat were somewhat limited by a sharp drop in the U.S. dollar index to a 6.5-month low. The positive element of a weaker USDX today was somewhat offset by sharply lower crude oil prices.
CME Group, parent of the Chicago Board of Trade, declared a force majeure for wheat-shipping terminals on the Ohio River due to flooding. Flooding made grain loading impossible at delivery points for CBOT wheat futures on the river.
As of April 8, the Drought Monitor showed 58% of the U.S. was covered by abnormal dryness/drought, down eight percentage points from the previous week. World Weather Inc. today said that in U.S. HRW wheat country conditions “will continue to be unusually dry in the next seven days, with occasional periods of strong wind. Unusual warmth will occur most often and this will lead to more crop stress and a limit of both root development and new tillering.” Greater rainfall is still expected in the second week of the outlook. “The significance of this rain is in question. However, any rain will be beneficial and this should at least promote some improvement over the conditions of the first week’s outlook. It is important to note that the region does typically get wetter at this time of year and the rain will need to keep up with generally warming temperatures in order for conditions to become more favorable,” said World Weather.
USDA reported U.S. wheat export sales of 107,300 MT for the week ended April 3, which were down 68% from the previous week and down 56% from the four-week average. Net sales were within the range of expectations.
Technical analysis: SRW and HRW bears have the overall near-term technical advantage. SRW bulls’ next upside price objective is closing May prices above solid chart resistance at $5.60. The bears’ next downside objective is closing prices below solid technical support at $5.00. First resistance is seen at today’s high of $5.47 1/2 and then at $5.50. First support is seen at today’s low of $5.34 1/2 and then at this week’s low of $5.25 3/4. HRW 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 $5.41 1/2. First resistance is seen at today’s high of $5.77 1/4 and then at $5.90. First support is seen at $5.50 and then at $5.41 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 slid 16 points to 66.47 cents and settled nearer session lows.
Fundamental analysis: Cotton futures continue to see volatile trade, pushing to the highest mark in a week today before reversing and closing modestly lower on the session. Today’s USDA reports didn’t yield a lot of changes on the domestic or world balance sheets. USDA expectedly lowered their U.S. export forecast by 100,000 bales to 10.9 million bales, which puts their ending stocks forecast at 5 million bales. That is the highest level since 2019-20 and reflects disappointing export demand which drove prospective plantings to the lowest mark in a decade. Volatility continues in outside markets as stocks were down heavily today, giving up a portion of yesterday’s gain. The U.S. dollar index pushed to six-month lows as well amid heavy volatility in the treasury markets. Persistent heavy volatility in highly traded markets, such as treasuries and equities, continues to spew liquidation trade in other markets.
USDA reported export sales totaling 117,800 MT for the week ended April 3. That is down 14% from the previous week and 27% from the four-week average. Export shipments continue to prove strong but the lack of sales is disappointing. Increases in sales came primarily from Vietnam.
Technical analysis: May cotton futures found stiff resistance at the 40-day moving average today, which stands as initial resistance at 66.57 cents. Strength above that mark challenges today’s high of 67.62 cents, then the 100-day moving average at 68.35 cents. Bulls are looking to hold support at the 20-day moving average at 66.17 cents, which capped the downside today. Selling below that mark quickly finds support at 66.00 cents then the psychological 65.00 cent mark.
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.