Corn
Price action: March corn rose 3 cents to $4.45, closing nearer the session high.
Fundamental analysis: Corn futures managed to achieve modest gains to begin the week despite general selling across the ag complex. Some support stemmed from a weaker U.S. dollar and notable weekly export inspections data from USDA in midmorning trade. For the week ended Dec. 12, weekly corn inspections totaled 1.13 MMT (44.5 million bu.), up 71,862 MT from the previous week and near the upper end of analysts’ pre-report range of 750,000 MT to 1.2 MMT.
Meanwhile, additional support is likely lingering amid forecasts of mostly dry conditions in southern Argentina and Uruguay, which will need to be closely monitored during the next couple of weeks, according to World Weather Inc. However, the forecaster notes the absence of hot temps will help conserve subsoil moisture for a while, though some crop stress is possible for recently planted and emerged crops. Planting progress is expected to advance well in the south while more frequent and significant rain in the north may keep field progress a little slow while ensuring long term soil moisture. In Brazil, grain production areas will stay favorably moist throughout the next two weeks, supporting aggressive crop development.
Technical analysis: March corn futures ended the session above resistance at $4.44 1/4, while initial support stood at the 10-day moving average of $4.40 1/2. Initial resistance will now serve at $4.46 1/4, then at $4.48 1/2 and again at the 200-day moving average of $4.51, which is backed by last week’s high of $4.51 1/4. Conversely, selling efforts will now face initial support at today’s failed resistance level, then at the 10-, 20-, 40- and 100-day moving averages, layered from $4.40 1/2 to $4.28 3/4.
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 sunk 6 1/4 cents to $9.82 and near session lows while deferred contracts saw steeper losses. January meal futures climbed 70 cents to $286.90, though settled near session lows. January bean oil futures sunk 89 points to 41.72 cents and near session lows.
Fundamental analysis: Soybean futures underwent selling pressure following this morning’s open. Selling efforts increased following the break of uptrend support, which had previously capped all of the downside since Nov. 21. That could lead to additional selling pressure as chart-based traders look to take advantage of the breakdown. Reports of just a few areas in Brazil being cause for concern likely weighed on prices as well. Rains fell across nearly all of Brazil’s crop areas last week. AgRural notes there are only a few isolated areas of concern. The firm estimates Brazil’s soybean crop at 171.5 MMT, which is near the upper end of estimates and above USDA at 169 MMT.
USDA reported soybean export inspections of 1.68 MMT (61.6 million bu.), down 60,339 MT from the previous week but within the pre-report range of expectations from 1.3 MMT to 2.2 MMT. Inspections the past couple of weeks have been historically average for the current USDA estimate. Accumulated inspections continue to run ahead of pace, but USDA has been slow to increase their export forecast based on concerns over trade policy in the latter half of the marketing year.
NOPA reported November crush at 193.185 million bushels, down 6.758 million bushels from October, but still a record for the month. It was bearish against expectations, below trade forecasts of 196.713 million bushels from Reuters. NOPA soybean oil stocks totaled 1,084 million pounds and were up 9.936 million pounds from last month’s revised figure. Stocks came below the average trade estimate of 1,123 million pounds in the Reuters survey.
Technical analysis: January soybeans underwent selling pressure as bears took hold of the near-term technical advantage. Initial support comes in at $9.77 3/4, which is backed by the contract low of $9.73 1/2. Bulls are seeking to reclaim uptrend support at $9.87 1/2, which is reinforced by resistance at $9.90, the 10-day moving average.
January meal futures closed modestly higher but nearer session lows today as sellers defended resistance at the 10-day moving average, currently at $289.30. Additional resistance lies at $288.0 on the way. Bulls are looking to hold support at the contract low of $285.50, else a trip to psychological support at $280.00 seems likely.
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 fell 2 1/4 cents to $5.50, nearer the daily low. March HRW wheat rose 2 1/4 cents to $5.59 1/4 and near mid-range.
Fundamental analysis: The winter wheat futures markets continue to chop in sideways trading patterns at lower price levels. The bulls are looking for a fresh fundamental spark to ignite a rally but continue to be disappointed. The recent strength in the U.S. dollar index has been a bearish element for wheat markets despite some modest price weakness seen today. This week’s FOMC meeting of the Federal Reserve is keeping the financial markets tentative to start the trading week, which is also likely spilling over into wheat traders standing on the sidelines.
USDA this morning reported disappointing U.S. wheat export inspections of 298,075 MT in the latest week, up 50,121 MT from the previous week but near the low end of pre-report expectations.
World Weather Inc. today said U.S. winter wheat crops will remain semi-dormant during the next two weeks, despite temperatures that are above to well above normal. Net drying is expected in the coming week with some precipitation next week. “Winter hardiness will be reduced because of unusually warm temperatures in this coming week,” said the forecaster. Meantime, in the northern Plains, snow in the first week of the outlook will help to expand and deepen the region’s snowpack. “This would be good for protection from potential extreme cold later in winter. However, well above average temperatures in the second week of the outlook will cause some melting which will lead to a need for more snow in early January,” said World Weather.
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 $5.59 1/4 and then at last week’s high of $5.69 1/4. First support is seen at $5.40 1/4 and then at $5.30.
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 $5.66 and then at last week’s high of $5.71 1/2. First support is seen at $5.50 and then at $5.40.
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 fell 21 points to 69.06 cents and near the session low. Prices closed at a four-week-low close.
Fundamental analysis: Cotton futures held a narrow range to start the week. The marketplace is generally subdued ahead of this week’s FOMC meeting of the Federal Reserve that begins Tuesday morning and ends Wednesday afternoon with a statement and then a press conference from Fed Chair Jerome Powell. The Fed is widely expected to cut interest rates by an additional 25 basis points. Traders will closely tune into Fed Chair Powell’s FOMC statement Wednesday afternoon for additional direction on future monetary policy.
World Weather Inc. reports late-season harvest across the U.S. is nearly done, although some areas will continue to see fieldwork for a while. Rain in the Delta will improve the moisture profile for planting next year, though portions of the southeastern U.S. will continue to see a drying bias for a while. Meanwhile, in other areas of the world, harvesting in northern India and Pakistan advanced well this year and should also be nearing completion. Southern India’s crops are in mostly good condition although recent rain and that which is forthcoming may threaten the quality of open boll cotton.
Technical analysis: March cotton futures continued to find support at 68.96 cents, while resistance at 69.83 cents, which is backed by the 10- and 20-day moving averages of 71.15 cents and 71.70 cents, limited buyer interest. Moreover, additional resistance at the 40- and 100-day moving averages will likely continue to favor bears, though further support at 68.64 cents, 68.09 cents and the Aug. 12 low of 67.90 cents should stifle notable selling.
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.