Corn
Price action: March corn futures fell 3/4 cent to $4.48 1/4, near the session low after hitting a nine-week high early on.
Fundamental analysis: The corn futures market saw technical buying featured again early today, but mild profit-taking set in later in the day. After five daily price gains in a row, the market became short-term overbought, technically, and was due for a corrective pullback. Gains in corn were also limited by a firmer U.S. dollar index today, but higher crude oil prices somewhat offset the bearish impact of the higher USDX.
Corn also saw early buying interest following USDA bullish monthly supply and demand report on Tuesday that showed solidly higher ethanol and export estimates for the 2024-25 crop year, as well as tightening U.S. ending stocks.
U.S. ethanol production averaged 1.078 million barrels per day (bpd) during the week ended Dec. 6, up 5,000 bpd (0.5%) from the previous week and 4,000 bpd (0.4%) above the same week last year.Meantime, ethanol stocks dropped 355,000 barrels to 22.648 million barrels.
World Weather Inc. today said flood water in interior southern Brazil corn regions will slowly recede this week with the next round of precipitation expected Friday into Saturday. “The rain will be a setback for the needed drying trend, but more drying is expected next week.” Argentina will experience a good mix of rain and sunshine during the next ten days. “Argentina’s subsoil moisture is sufficient to carry established crops for a couple of weeks without rain as long as temperatures stay seasonable,” said the forecaster.
Thursday morning’s weekly USDA export sales report is expected to show U.S. corn sales of 1.1 million to 1.9 million MT in the 2024-25 marketing year, and sales of zero to 100,000 MT in the 2025-26 marketing year. That’s according to a Reuters survey of analysts.
Technical analysis: The corn futures bulls have the overall near-term technical advantage and have restarted a price uptrend on the daily bar chart. The next upside price objective for the bulls is to close March prices above solid chart resistance at the October high of $4.52 1/4. The next downside target for the bears is closing prices below chart support at $4.30. First resistance is seen at $4.52 1/4 and then at $4.60. First support is seen at $4.45 and then at $4.40.
What to do: Get current with advised sales.
Hedgers: You should be 30% sold in the cash market on 2024-crop.
Cash-only marketers: You should be 30% sold on 2024-crop.
Soybeans
Price action: January soybean futures settled 3/4 cent higher at $9.95 1/2 and near mid-range. January meal futures lost 90 cents to $291.10. January bean oil futures closed 28 points lower to 42.44 cents and near session lows.
Fundamental analysis: Soybeans led strength today following this morning’s open, closing at a three-week high. Yesterday’s USDA reports did little to spark buying interest in the soy complex, with USDA leaving everything aside from expected farm price unchanged. Still, the strength in the corn market alone has allowed for resurgent strength in soybeans, pushing nearby futures back above the psychological $10.00 mark for much of today’s session before selling increased into the close.
China got a head start on a looming trade war with the U.S. by showcasing a new range of tools it’s prepared to use if Donald Trump makes good on his threat to punish the world’s second-biggest economy with tariffs, Bloomberg reports. The potential of a looming trade war has spooked USDA analysts with their soybean export outlook, maintaining their prior export outlook despite strong sales over the past month. Traders seemingly hold the same outlook as futures continue to trade in a tight range, languishing near recent lows. There is reason for optimism as the Biden administration has in fact tightened trade regulations with China over the past four years with little negative impact on agricultural markets over that period.
USDA will release their weekly export sales report tomorrow morning. Analysts expect export sales between 1.5 and 2.2 MMT for the 2024-25 marketing year. For the week ended Nov. 28, sales totaled 2.213 MMT.
Technical analysis: January soybean futures traded on either side of unchanged today but ultimately did not go far. Prices remain in the middle of the recent choppy uptrend. Bulls are looking to close prices above significant $10.00 psychological resistance, which has capped buying efforts the past three sessions. That is reinforced by resistance at $10.09 3/4. Meanwhile, support comes in at $9.92, the 10-day moving average, with significant backing from uptrend support at $9.86.
January meal futures struggled to garner much bullish momentum today despite strength in soybeans. Bears still maintain the technical advantage but prices have been trending sideways for the better part of a month. Initial resistance stands at $292.80, the 20-day moving average, while strength above that mark targets resistance at $296.00. Support stems from $288.00 then the contract low of $285.60.
What to do: Get current with advised sales.
Hedgers: You should be 20% sold in the cash market on 2024-crop.
Cash-only marketers: You should be 20% sold on 2024-crop.
Wheat
Price action: March SRW wheat rose 1 1/2 cents to $5.63 1/4, nearer the daily low and hit a two-week high early on. March HRW wheat rose 1 1/2 cents to $5.67 1/4 and near mid-range. Prices hit a nearly three-week high early on today. March spring wheat futures closed steady at $6.06 1/2.
Fundamental analysis: The winter wheat futures markets today saw more mild short covering and also some buying support from the recently surging corn futures market. Higher crude oil prices were a bullish outside market for wheat, but the firmer U.S. dollar index today did limit buying interest in wheat.
Wheat futures saw light follow-through strength after Tuesday’s friendly USDA monthly supply and demand report that showed a favorable world balance sheet, with USDA cutting 2024-25 U.S. ending stocks more than expected.
World Weather Inc. today said U.S. wheat is “favorably established and mostly dormant or semi-dormant. There is some concern for crops in unirrigated fields in the Pacific Northwest where soil moisture has not been abundant this autumn. No serious problem with drought is suspected and winter crops should hold on through the winter without much risk,” said the forecaster.
Thursday’s weekly USDA export sales report is expected to show U.S. wheat sales of 275,000 to 600,000 MT in the 2024-25 marketing year, and sales of zero to 50,000 MT in the 2025-26 marketing year, according to a Reuters survey.
Technical analysis: Winter wheat market bears have the overall near-term technical advantage. However, nine-week-old price downtrends on the daily bar charts have stalled out. SRW bulls’ next upside price objective is closing March prices above solid chart resistance at $5.77 1/2. The bears’ next downside objective is closing prices below solid technical support at the contract low of $5.40 1/4. First resistance is seen at today’s high of $5.69 1/4 and then at $5.77 1/2. First support is seen at $5.60 and then at this week’s low of $5.53 3/4.
HRW bulls’ next upside price objective is closing March prices above solid chart resistance at $5.77 1/4. The bears’ next downside objective is closing prices below solid technical support at the contract low of $5.35. First resistance is seen at today’s high of $5.71 1/2 and then at $5.77 1/4. First support is seen at $5.60 and then at this week’s low of $5.51.
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 rebounded strongly Wednesday, surging 67 cents to 70.15 cents/pound at the close.
Fundamental analysis: The cotton outlook seems less than promising, especially with export demand prospects remaining weak and USDA having boosted its production estimate in Tuesday’s Supply & Demand and Crop Production reports. The market has also been disappointed by the slow development of demand out of the India/Pakistan region in the wake of talk of increased cotton needs this fall. Traders are likely concerned about a potential “Trump trade war” with China, which could further slow exports to that country. Weak crude oil prices also suggest general commodity weakness, as well as stronger price competition from manmade fibers derived from petroleum. Improved economic prospects under a second Trump administration are likely encouraging bulls somewhat, but a stronger dollar in such circumstances at least partially offsets such ideas. Nevertheless, today’s strong rebound after a failed bearish test of support near the 69.00-cent level suggests fresh support has entered the market.
Technical analysis: Bears still hold the short-term technical advantage in March cotton futures, but today’s strong rebound reestablished initial support at the psychologically important 70.00-cent level. Look for added support at today’s low of 69.05 cents/pound. That’s backed by the Nov. 15 low of 68.83, then the Nov. 19 low of 68.40. A drop below that point would have bears targeting the psychological 65.00-cent level. Today’s high marked initial resistance at 70.39. That’s backed by the contract’s 20-, 10- and 40-day moving averages near 70.61, 70.85 and 71.72, respectively.
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.