Corn
Price action: March corn futures slid 4 3/4 cents to $4.43 1/2 and settled nearer session lows.
Fundamental analysis: Corn futures led weakness today after yesterday’s failed break above $4.50 led to significant followthrough selling efforts today. Little has changed on the fundamental front for corn, but traders were discouraged by export sales coming in below expectations for the week ended Dec. 5. USDA reported sales totaling 946,900 MT, which was down 45% from the previous week and 32% from the four-week average. Sales came below expectations ranging from 1.1 MMT to 1.9 MMT. The period included Black Friday and the extended holiday weekend, which may have weighed on sales as U.S. originators could have been out of the office.
Argentina will see a mix of rain and sunshine over the next two weeks; there will be some heat but soil moisture is great enough to favorably support crop development in much of the country, says World Weather Inc. USDA opted to leave their Argentine corn crop peg unchanged at 51 MMT, while Dr. Michael Cordonnier is a little more pessimistic at 48 MMT. Meanwhile, Conab lowered the Brazilian corn crop forecast 180,000 MT to 119.63 MMT but maintained its 2024-25 export projection at 34 MMT.
Technical analysis: March corn futures saw continued selling pressure following yesterday’s two-month high. Bulls hold a slight technical advantage and are looking to close prices above the psychological $4.50 mark, with resistance at $4.47 3/4 on the way. Support at $4.44 1/4 limited selling efforts today, while continued selling finds support at the 10-day moving average at $4.40 1/2.
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 soybeans rose 1/4 cent to $9.95 3/4 and nearer the daily high. January soybean meal fell $1.60 to $289.50 and near mid-range. January soybean oil rose 23 points to 42.67 cents and nearer the session high.
Fundamental analysis: The soybean complex futures saw buying interest limited today by a sell off in corn and wheat futures markets. A firmer U.S. dollar index that hit a more-than-two-week high today was also a bearish outside market for the soy complex.
Bulls got very little help today from USDA reporting a daily U.S. soybean sale of 334,000 MT to unknown destinations for 2024-25. And the agency reported disappointing U.S. weekly soybean sales of 1.174 MMT, down 49% from the previous week and 42% below the four-week average. Sales were the lowest since the second week of August, before the official start of the marketing year, and below trade expectations.
World Weather Inc. today said flood water in interior southern Brazil soybean regions “is receding with the next round of precipitation expected Friday into Saturday. The rain will be a set back to 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, although pockets of dryness are expected in the south and the situation will need to be closely monitored. “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.
Technical analysis: The soybean bears have the overall near-term technical advantage. However, there are strong chart support levels that lie just below current prices. The next near-term upside technical objective for the soybean bulls is closing January prices above solid resistance at the November high of $10.44. The next downside price objective for the bears is closing prices below solid technical support at the contract low of $9.73 1/2. First resistance is seen at this week’s high of $10.03 1/2 and then at $10.12 3/4. First support is seen at this week’s low of $9.85 3/4 and then at $9.73 1/2.
Soybean meal bears have the firm near-term technical advantage. The next upside price objective for the meal bulls is to produce a close in January futures above solid technical resistance at the November high of $304.50. The next downside price objective for the bears is closing prices below solid technical support at $275.00. First resistance comes in at today’s high of $292.00 and then at this week’s high of $293.90. First support is seen at the contract low of $285.60 and then at $280.00.
Soybean oil bears also have the overall near-term technical advantage. A bear flag pattern has formed on the daily bar chart. The next upside price objective for the bean oil bulls is closing January prices above solid technical resistance at 45.00 cents. Bean oil bears’ next downside technical price objective is closing prices below solid technical support at the November low of 40.64 cents. First resistance is seen at last week’s high of 43.50 cents and then at 44.00 cents. First support is seen at today’s low of 41.88 cents and then at 41.00 cents.
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 futures fell 4 3/4 cents to $5.58 1/2 and settled nearer the session low. March HRW futures sank 4 1/2 cents to $5.62 3/4 and nearer the session low.
Fundamental analysis: Weakness in corn futures bled into the wheat markets today as corn prices fell for the first time since last Friday. Selling pressure in wheat was limited though prices did settle near key support, which will make tomorrow’s session key in determining the near-term trend. Traders continue to shake off a tight world balance sheet, which has done little to spur gains in price or even much of an uptick in export sales. While total commitments are running at the highest clip since 2020-21, sales for the week ended Dec. 5 were rather disappointing, as USDA reported weekly wheat sales of 290,200 MT, down 23% from the previous week and 31% from the four-week average. Sales were at the lower end of expectations ranging from 275,000 to 600,000 MT.
The Rosario Grain Exchange raised its 2024-25 Argentine wheat production forecast by 500,000 MT to 19.3 MMT after recent favorable weather. Argentina’s wheat region continues to get a good mix of rain and sunshine for its late season crop in the south. Yield potential has improved in the region, says World Weather Inc. Conditions should dry in the next couple of weeks, allowing for improved harvest conditions.
Technical analysis: March SRW saw steady selling pressure during the session. Bears maintain a slight advantage on the daily bar chart. Support at the 10-day moving average at $5.57 3/4 limited most of the downside today. Additional support lies at the psychological $5.50 mark. Bulls are looking to reclaim the 20-day moving average at $5.61 1/4, while additional resistance lies at yesterday’s high of $5.69 1/4.
December HRW futures have shown relative strength over the past week, though bears maintain a slight technical advantage. The 20-day moving average limited losses today and will remain support at $5.60. Additional selling finds support at the psychological $5.50 mark. Resistance stands at the 40-day moving average at $5.68 1/2, which is quickly backed by yesterday’s high of $5.71 1/2
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 slipped 6 points to 70.09 cents/pound Thursday after a day of trading mostly at slightly higher levels.
Fundamental analysis: The cotton market marked time again Thursday, with prices holding up surprisingly well despite another weak result on the weekly USDA Export Sales report. Net sales for the 2024-25 crop year reached just 153,00 running bales, which represented a 10% weekly reduction and a 37% shortfall when compared to the four-week average. Shipments were similar at just 137,400 bales.
And yet, futures posted a relatively steady close in the wake of Tuesday’s USDA boost to projected 2024-25 carryout and this morning’s sluggish export news. In fact, when today’s action is viewed in light of activity in the outside markets, particularly concurrent slippage in the equity indexes and crude oil, as well as renewed U.S. dollar strength, the firm showing seems rather impressive. Bulls may simply be anticipating renewed U.S. and global economic strength with the Fed cutting interest rates and Donald Trump being set to retake the U.S. Presidency on Jan. 20.
Technical analysis: Bears still seem to hold the short-term technical advantage in March cotton futures despite Wednesday’s strong advance. Bulls can reasonably argue the market is moving in their direction after bears proved unable to force a close below the psychologically important 70.00-cent level. Look for additional support at yesterday’s low of 69.05, with a drop below that point having bears targeting the November low at 68.40, then the Aug. 16 low of 67.90. The contract’s 20- and 10-day moving averages indicate resistance at 70.57 and 70.70, respectively. A close below the latter point would open the door to a test of the Nov. 29 high at 72.15.
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.