Corn
Price action: December corn fell 6 1/4 cents to $4.37 1/4, marking the lowest close since Dec. 5.
Fundamental analysis: Corn futures fell victim to plunging soybean futures, largely driven by continued selling in soyoil futures. Congress’s Continuing Resolution (CR) made waves today, which included a one-year extension of the 2018 Farm Bill, which included $31 billion in financial and disaster aid for farmers and ranchers, as well as text for year-round E15. Some market speculation suggested a year-round E15 impact could result in a shift in demand from biodiesel to ethanol, though those notions are likely premature, with today’s selloff largely driven by risk-off positioning and favorable growing conditions in Brazil.
Demand continues to prove quite solid, with Colombia showing up today to purchase 135,000 MT in a flash sale reported for delivery during 2024-25 by USDA. This marked the first sale to Colombia since the end of August. Meanwhile, ethanol production during the week ended Dec. 13 averaged 1.103 million barrels per day (bpd), up 25,000 (2.3%) from the previous week and 32,000 bpd (3.0%) above the same week last year. Ethanol stocks declined 12,000 barrels to 22.636 million barrels.
USDA will detail weekly export data early Thursday morning, with analysts expecting net sales to have ranged from 800,000 MT to 1.6 MMT during the week ended Dec. 12, according to a Reuters poll. Last week, net sales of 946,863 MT were reported for the previous week.
Technical analysis: March corn futures ended the session below support at the 10- and 20-day moving averages, currently trading at $4.42 1/2 and $4.37 1/2, increasing bears’ technical posture, though initial support will now serve at the 40-day moving average of $4.35 3/4 and is backed by the 100-day moving average of $4.29 1/4. Conversely, initial resistance will now stand at today’s failed support levels, then at $4.46 1/2 and the 200-day moving average of $4.50 1/2, which is backed by Dec. 11 high of $4.51 1/4.
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 soybeans fell 25 cents to $9.51 3/4, near the daily low and hit a contract low. January soybean meal lost $7.70 to $279.50, near the session low and hit a contract low. January soybean oil fell 107 points to 39.55 cents, near the session low and hit a three-month low.
Fundamental analysis: Today’s washout-type downside price moves in the soybean complex futures have the bulls hoping near-term market bottoms might be close at hand. Soybeans, meal and soybean oil futures markets are all now short-term oversold, technically, and due for at least corrective bounces soon.
Global vegetable oil markets are sliding on expectations of a coming record Brazilian soybean crop and U.S. plans to allow E15 sales year-round, which has raised some worries over demand for soyoil. Bulls got no help from USDA today reporting a daily U.S. soymeal sale of 120,000 MT to Colombia for the 2024-25 marketing year.
World Weather Inc. today said net drying in southern and east-central Argentina soybean 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 oilseed production areas will stay favorably moist throughout the next two weeks, supporting aggressive crop development, said World Weather.
Thursday morning’s weekly USDA export sales report is expected to show U.S. soybean sales of 825,000 to 2 million MT for the 2024-25 marketing year, and sales of zero to 100,000 MT for the 2025-26 marketing year.
Technical analysis: The soybean complex bears have the solid overall near-term technical advantage and gained more power today. The next near-term upside technical objective for the soybean bulls is closing January prices above solid resistance at $10.00. The next downside price objective for the bears is closing prices below solid technical support at this year’s low of $9.36 1/4, basis nearby futures. First resistance is seen at $9.65 and then at today’s high of $9.77 1/2. First support is seen at today’s contract low of $9.52 and then at $9.36 1/4.
For soybean meal, the next upside price objective for the meal bulls is to produce a close in January futures above solid technical resistance at $293.90. The next downside price objective for the bears is closing prices below solid technical support at $265.00. First resistance comes in at $285.00 and then at today’s high of $287.50. First support is seen at the contract low of $279.90 and then at $275.00.
In soybean oil, the next upside price objective for the bulls is closing January prices above solid technical resistance at 43.50 cents. Bean oil bears’ next downside technical price objective is closing prices below solid technical support at the August low of 37.83 cents. First resistance is seen at 40.00 cents and then at today’s high of 40.64 cents. First support is seen at today’s low of 39.36 cents and then at 39.00 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 wheat futures fell 3 3/4 cents to $5.41 1/4, a contract low close, while March HRW wheat fell 3 3/4 cents to $5.48 3/4, ending nearer the session low. March HRS futures fell 3 cents to $5.92.
Fundamental analysis: Wheat futures extended lower for the fifth straight session, giving up gains scored in overnight trade. General weakness across the ag complex invited risk-off trade, along with continued strength in the U.S. dollar which is crimping the global competitiveness of U.S. commodities. The marketplace continues to seemingly ignore looming global supply issues as Russia’s winter crop faces the worst conditions in decades. World Weather Inc. reports crops are poorly established in the lower Danube River Basin, eastern Ukraine, Russia’s Southern Region and western Kazakhstan, with these areas unlikely to see threatening cold anytime soon. Meanwhile, in other areas of the world, Argentina’s wheat region has seen a good mix of weather for late season crops in the south, with net drying over the next two weeks helping to promote grain fill, crop maturation and harvest. The U.S. crop is favorably established, and mostly dormant or semi-dormant, though unusually warm weather next week will reduce winter hardiness for many winter crops.
USDA will release its weekly Export Sales Report early Thursday morning, with analysts expecting net wheat sales to have ranged from 825,000 MT to 2.0 MMT during the week ended Dec. 12. Last week, net sales of 1.17 MMT were reported for the previous week.
Technical analysis: March SRW wheat futures continued to face technical headwinds at the 10- and 20-day moving averages, each trading around $5.55, while support at $5.40 3/4 ultimately held into the close despite a reach to fresh contract low of $5.40. An extension below these areas will find additional support serving at $5.36 1/2, then at $5.30 3/4. Initial resistance will continue to serve at $5.50 3/4 and the 10- and 20-day moving averages, with further resistance standing at $5.60 3/4 and the 40-day moving average of $5.68.
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 61 points to 68.08 cents, near the session low and closed at a contract low close.
Fundamental analysis: The cotton futures market saw more chart-based selling pressure today amid eroding near-term technicals. Solid losses in corn and soybean futures markets today also spilled over into selling pressure in cotton. The recent rally in the U.S. dollar index is also a negative outside-market element for the cotton market.
This afternoon saw the Federal Reserve’s FOMC cut its main interest rate by 0.25%, as expected. Lower U.S. interest rates, a booming U.S. stock market and good consumer confidence are all factors the cotton market bulls hope will stop the price slide in cotton futures soon.
World Weather Inc. today said late-season cotton harvest across the U.S. is nearly done, although some areas will continue to see fieldwork for a while. Recent rain in the Delta and more in the forecast will improve the moisture profile for 2025. Portions of the southeastern U.S., however, will continue to see a drying bias for a while.
Thursday morning’s weekly USDA export sales report will be closely scrutinized by cotton traders. Recent sales and shipments data has been disappointing.
Technical analysis: The cotton futures bears have the solid overall near-term technical advantage and have gained more power this week. The next upside price objective for the cotton bulls is to produce a close in March futures above technical resistance at 71.00 cents. The next downside price objective for the cotton bears is to close prices below solid technical support at the contract low of 67.90 cents. First resistance is seen at today’s high of 68.90 cents at Tuesday’s high of 69.19 cents. First support is seen at today’s low of 68.16 cents and then at 67.90 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.