Corn
Price action: March corn rose 1 1/2 cents to $4.47 3/4, marking the highest close since Dec. 11.
Fundamental Analysis: Corn futures spent the session hovering around unchanged, with short-covering gains in the wheat complex negating pressure from the soy complex and strength in the U.S. dollar. Moreover, technical resistance at the 200-day moving average continues to curb buying interest, despite persisting demand. Earlier today, USDA reported a daily sale of 132,000 MT to unknown destinations during 2024-25 as well as export inspections totaling 1.12 MMT for the week ended Dec. 19, which were down 18,907 MT from the previous week.
In a win for U.S. corn growers, a USMCA panel ruled against Mexico’s GM corn ban, stating Mexico violated its commitments under the U.S.-Mexico-Canada Agreement (USMCA) by issuing a decree banning genetically modified (GM) corn imports in early 2023. The ruling carries substantial economic implications, given that Mexico will work closely with the U.S. Trade Representative and incoming Trump administration to ensure the decision is enforced. If Mexico doesn’t follow the USMCA panel decision, the U.S. will be allowed to suspend trade benefits with Mexico equivalent to the damage caused by Mexico’s GM corn measures. Mexico responded by saying it would adhere to the ruling, which obliges it to eliminate restrictions on imports of U.S. GM corn. Mexican President Claudia Sheinbaum announced she will seek to prohibit the planting of GM corn in the country through a reform to the Constitution in 2025. Mexico’s Ag Minister Julio Berdegué will aim to increase non-GM white corn production, to eliminate the need to import corn.
Technical Analysis: March corn continued to face resistance at the 200-day moving average of $4.50 1/4 while the 10-day moving average of $4.44 1/2 served up support throughout the session. Bulls will need to grasp a close above the 200-day, which is backed by the Dec. 11 high of $4.51 1/4 in order to gain further momentum, while bears will look to secure a close below $4.25 1/2, though support at the 10-day and $4.39 1/2 will curb sellers.
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 a nickel to $9.69 1/2 and closed nearer session lows. January meal futures fell $5.0 to $289.50, near session lows. January bean oil futures saw relative strength, climbing 75 points to 40.23 cents.
Fundamental Analysis: Weakness in soymeal futures undercut soybean futures today. January soybeans challenged and failed to overcome key technical resistance, rendering last week’s buying efforts as corrective in nature. Volume the next couple of days is expected to remain fairly light, as today’s volume across the curve was the lowest since Black Friday.
Export demand continues to prove impressive for U.S. beans. This morning, USDA reported daily sales of 132,000 MT of soybeans to China during 2024-25. USDA also reported weekly export inspections of 1.75 MMT (64.2 million bu.), up 51,102 MT from the previous week. Inspections increased from the previous week despite inspections falling seasonally. Accumulated inspections continue to run well ahead of the historical pace needed to hit the current USDA export forecast.
La Nina like conditions are expected to dominate South America over the next few weeks. That will result in below normal precip in eastern Argentina and far southern Brazil. Meanwhile, it will lead to abundant to excessive rain from Mato Grosso to Minas Gerais and Sao Paulo, says World Weather Inc. While conditions may impact yield potential, the anomalies are unlikely to persist long enough to have a lasting impact.
Technical Analysis: January soybeans saw selling pressure after challenging 10-day moving average resistance overnight as bears continue to maintain the near-term technical advantage. Resistance persists at $9.75 3/4, which is reinforced by $9.83 3/4 then $9.91. Support comes in at $9.63 1/2 then the psychological $9.50 mark on continued selling pressure.
January soymeal futures underwent heavy selling pressure today. Friday’s rally gave bulls confidence of a near-term reversal, but continued selling pressure today give the technical advantage to the bears. Support stems from the 10-day moving average at $288.3 then the Dec. 6 low of $285.6. Bulls are looking to overcome resistance at $291.4 then the 40-day moving average at $294.7, which capped the recent rally.
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 7 1/2 cents to $5.40 1/2, nearer the daily high. March HRW wheat rose 6 1/4 cents to $5.51 and nearer the session high. March spring wheat futures climbed 5 1/4 cents to $5.95 1/2.
Fundamental analysis: The winter wheat futures markets today saw some short covering after hitting contract lows last week. A stronger U.S. dollar index did limit the upside in wheat futures. Wheat traders will continue to watch the corn futures market closely. If that market can break out to new for-the-move highs just above present prices and see a solid rally, wheat is likely to also see buying support.
USDA this morning reported weekly U.S. export inspections of 403,719 MT (14.8 million bu.), up 102,830 MT from the previous week.
World Weather Inc. today said that in U.S. HRW wheat country not much rain will impact key wheat production areas through Wednesday. Rain is more likely Thursday and Friday in central and eastern parts of the region “which may improve topsoil moisture for a little while.” Some shower activity is likely to get into western production areas of the region, too, though not likely enough to have much impact on soil moisture. Unusual warmth will continue into Dec. 31 before a colder weather pattern arrives. The need for snow cover will rise in early January to protect crops in case temperatures become cold enough to cause damage. Meantime, in the northern Plains, little to no snow is expected in the next seven days and temperatures will be warm enough to melt some of the existing snow cover. This will leave a large portion of the region exposed, especially the southwestern half of the region. There will be a high need of greater snow in the second week of the outlook to protect crops due to expected arctic air, said World Weather.
Technical analysis: Winter wheat market bears have the solid overall near-term technical advantage. Prices are in nearly three-month-old downtrends on the daily bar charts. SRW bulls’ next upside price objective is closing March prices above solid chart resistance at the December high of $5.69 1/4. The bears’ next downside objective is closing prices below solid technical support at $5.00. First resistance is seen at $5.50 and then at $5.60. First support is seen at the contract low of $5.29 1/4 and then at $5.25.
HRW bulls’ next upside price objective is closing March prices above solid chart resistance at the December high of $5.71 1/2. The bears’ next downside objective is closing prices below solid technical support at the contract low of $5.35. First resistance is seen at $5.61 1/2 and then at $5.70. First support is seen at last week’s low of $5.41 and then at $5.35.
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 rallied 136 points to 69.42 cents, nearer the session high.
Fundamental Analysis: Cotton futures rebounded to begin the shortened week, amid corrective buying as risk-on sentiments returned to the marketplace as traders were relieved the U.S. Congress averted a federal government shutdown. The move was rather profound given minimal outside market support as the U.S. dollar posted gains, though technical resistance curbed corrective strength from last week’s low.
With the U.S. harvest mostly complete, other key growing regions are becoming of increased importance. World Weather Inc. reports Southern India’s crops may endure some periodic rain that may slow crop maturation and harvesting, though no significant change in fiber quality is expected. Meanwhile, eastern Australia crop conditions are still mostly good, although there is a growing need for rain in some western unirrigated production areas. Rain should resume in about a week to ten days. In South America, rain in northern Argentina will be well balanced with periods of sunshine supporting additional planting, emergence and establishment. Early season crop development should advance well.
Technical Analysis: March cotton futures extended from Friday’s low, though resistance at the 10- and 20-day moving averages, currently trading at 70.70 cents and 71.65 cents slowed momentum. Meanwhile, initial support served at 67.62 cents then at Friday’s low of 67.48 cents and again at 66.89 cents. Meanwhile, an extension above initial resistance will face additional resistance at the 40-day moving average of 73.78 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.