Corn
Price action: March corn futures fell 1 1/2 cents to $4.43 1/2, near mid-range.
Fundamental analysis: The corn futures market saw some more mild profit-taking pressure from the speculators today, following recent gains of the past few weeks. Losses in the soybean and wheat futures markets today also spilled over into selling pressure in corn.
The bulls got no traction today from a USDA reported daily U.S. corn sale of 170,400 MT to Mexico for the 2024-25 marketing year.
Pro Farmer South American crop consultant Michael Cordonnier has raised his Argentine corn crop estimate by 1 MMT, to 49 MMT, due to expectations of more plantings. He has a neutral bias going forward, but added weather in Argentina is starting to look problematic. He left his Brazilian corn crop estimate unchanged at 125 MMT.
World Weather Inc. today said net drying in southern and east-central Argentina corn regions “will need to be closely monitored during the next couple of weeks, although the absence of hot temperatures will help conserve subsoil moisture for a while.” Some crop stress is possible especially for recently planted and emerged crops. Planting progress will advance well in the south while more frequent and significant rain in the north may keep field progress a little slow while ensuring good long term soil moisture. Brazil’s grain production areas will stay favorably moist throughout the next two weeks, supporting aggressive crop development, said World Weather.
Technical analysis: The corn futures bulls still have the overall near-term technical advantage amid a price uptrend in place 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 today’s high of $4.46 3/4 and then at $4.50. First support is seen at $4.40 and then at $4.35.
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 fell 5 1/4 cents to $9.76 3/4, marking the lowest close since Aug. 16, while January soymeal rose 30 cents to $287.20 after marking a contract low in early trade. January soyoil fell 110 points to 40.62 cents, the lowest close since Sept. 18.
Fundamental analysis: January soybeans extended to a fresh contract low around midmorning as heavy selling in soyoil, by way of crude oil weakness, continued to pressure the complex. Additional daily sales to Spain and unknown destinations, which totaled 187,000 MT and 132,000 MT, respectively, failed to spur any buyer interest. Neither did news of a soybean shortage in southern areas of China, stemming from its government’s efforts to limit agricultural imports, which has led to longer-than-usual wait times at customs, according to Bloomberg, who cited traders with knowledge on the matter.
Meanwhile, weather continues to prove beneficial for crop development in Brazil, though conditions in Argentina are beginning to look more “problematic” according to South American crop consultant Dr. Michael Cordonnier. As such, he maintained his Brazilian soybean estimate of 170 MMT but lowered his Argentine soybean estimate by 2 MMT, to 55.0 MMT. In Argentina, Cordonnier also noted it appears farmers are not going to switch as many hectares of late-planted corn to soybeans as anticipated. Going forward, he indicated a neutral to higher bias toward the Brazilian crop and neutral to lower bias for Argentina.
Technical analysis: January soybeans continued to break down technically, forging a fresh contract low at $9.70 1/2 as the 20- and 10-day moving averages, each trading around $9.89, continued to serve up resistance, with bears ultimately holding a close below initial support at $9.77 1/2. Initial support will now lie at $9.73, then at $9.65. Conversely, additional resistance stands at the 40-day moving average of $9.95 1/2, then at $10.00 and again at the 100-day moving average of $10.13 1/2.
January soymeal extended to a fresh contract low, pressured by resistance from the 10- and 20-day moving averages, each trading around $290.00. However, a close was held above initial support at $284.90, and will now be backed by today’s low of $284.20 as well as $283.00 and $279.80. An extension above initial resistance will find an additional upside battle at $293.20, then at the 40-day moving average of $295.50.
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 a nickel to $5.45 and settled nearer session lows. March HRW futures sunk 6 3/4 cents to $5.52 1/2. March HRS futures fell a nickel to $5.95.
Fundamental analysis: Winter wheat futures continue to trend lower, closing in on contract lows, despite growing attention to tightening global supplies. A portion of the weakness seen in U.S. prices can be attributed to recent strength in the U.S. dollar, which continues to consolidate near recent highs, making U.S. origin crops relatively more expensive. Chatter surrounding the world balance sheet circulated following a cut to Russian production by Sovecon, who reduced their estimate by 3 MMT to 78.7 MMT, citing the worst crop conditions in decades. Russia is the number one exporter of wheat in the world market and is generally the lowest priced wheat on the market. Russia is already looking to ration exports in the latter half of the marketing year and traders are speculating that the cut to global supplies has not yet been priced in. Meanwhile, winter wheat conditions in Ukraine have been largely favorable as the country has received more precip than neighboring Russia.
Argentinian wheat production is expected to make up for a portion of the drop in the Russian crop. Conditions in Argentina have been largely favorable, with a healthy mix of rain and sunshine. The coming weeks are expected to be a little dry, which should support grain filling and crop maturation for late planted crops, says World Weather Inc.
Technical analysis: March SRW futures closed lower for the fourth consecutive session as bears continue to maintain the near-term technical advantage. Support at $5.43 limited losses today, which is reinforced by the contract low of $5.40 1/4. Resistance stands at the psychological $5.50 then the 10-day moving average at $5.53 3/4. March HRW futures have seen relative strength to SRW futures recently, though bears maintain the technical advantage there as well. Tentative support lies at $5.50, while additional selling finds support at $5.45. Resistance comes in at $5.57 1/4 then the 40-day moving average at $5.66 3/4.
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 37 points to 68.69 cents, marking the lowest close since Aug. 14.
Fundamental analysis: Cotton futures faced selling for a third straight session, with pressure stemming from crude oil weakness and a downtrodden tone in equities. The general marketplace largely seeped a risk-off tone as today marked the beginning of the Federal Reserve’s Open Market Committee (FOMC) Meeting, while a fading Chinese economy also hovered over the marketplace. Traders are preparing for the Fed’s rate announcement tomorrow, with most anticipating a 25 basis-point rate cut. Nonetheless, investors will closely monitor the FOMC’s quarterly summary of economic projections which will provide forecasts for GDP growth, unemployment, inflation and the fed funds rate for 2025 and beyond.
With U.S. harvest all but finished, weather in other key cotton growing regions around the world will become an increasing focus. World Weather Inc. reports recent rain in Australia’s eastern dryland crop region of New South Wales and Queensland has improved development potential though heat and dryness will reverse this trend, raising the need for more in January. Meanwhile, rain in Argentina periodically through the coming two weeks will be good for cotton emergence and establishment, however some areas may get rain a little too often, slowing fieldwork. Some planting has begun in Brazil and a few of the minor production areas in Goias and Mato Grosso do Sul. Weather conditions in each of these areas should be mostly good for early development, though there will be a need for greater rain in western Bahia later this month.
Technical analysis: March cotton futures ended the session below support at 68.75 cents, pressured by resistance at 69.64 cents, which is backed by the 10- and 20- day moving averages, currently trading at 69.92 cents and 70.49 cents, respectively. Initial support will now serve at 68.44 cents, then at the Aug. 16 low of 67.90 cents and again at 67.86 cents. Meanwhile, a move above the 10- and 20-day moving averages will face additional resistance at the 40- and 100-day moving averages of 71.32 cents and 71.82 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.