Corn
Price action: In a holiday-shortened session, March corn futures rose 3/4 cent to $4.48 1/2 and settled near mid-range.
Fundamental analysis: Some mild speculator buying interest today continued to support the rebound from a two-week low posted last Friday. Slight gains were still impressive today given this week’s rally in the U.S. dollar index.
World Weather Inc. today said that in South American corn regions, eastern Argentina, southwestern Paraguay, southern and western Rio Grande do Sul and Uruguay will see less-than-usual precipitation over the next 10 days to two weeks, “leading to firming soil and the possible development of crop stress.” Brazil should see abundant precipitation except from Bahia into eastern Piaui where some dryness will prevail, said World Weather. Pro Farmer crop consultant Michael Cordonnier left his Brazilian corn estimate unchanged at 125 MMT, noting a neutral bias going forward. He also left his Argentine corn-production estimate unchanged at 49 MMT, with a neutral-to-lower bias.
Technical analysis: The corn futures bulls have the overall near-term technical advantage amid a price uptrend in place on the daily bar chart. However, there are stiff chart resistance levels just above the market. 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 $4.50 and then at $4.52 1/4. First support is seen at $4.40 and then at last week’s low of $4.35 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 soybeans rose 5 3/4 cents to $9.75 1/4, closing near the session high, while January meal gained $3.40, closing at $292.90, ending just above the 40-day moving average. January soyoil slid 39 points to 39.84 cents.
Fundamental Analysis: Soybean futures took back Monday’s losses with modest gains in soymeal propping up the complex in low volume trade ahead of the Christmas holiday. In a weekly update, South American crop consultant Dr. Michael Cordonnier noted early soybean harvesting has begun in eastern Mato Grosso and western Parana, where yields are reported to be quite good, with most producers in the country optimistic toward soybean production. Cordonnier raised his Brazilian soybean crop estimate by 1 MMT to 171 MMT due to weather that continues to be beneficial for the crop, and more moisture in the forecast. He noted many soybeans in Brazil are filling pods under good moisture conditions and noted a neutral to higher bias toward the crop going forward. Cordonnier stated one thing that could derail the crop would be persistent heavy rains during harvest.
For the Argentine soybean crop, he left his estimate unchanged at 55 MMT, with a neutral to lower bias going forward. Cordonnier reported if the hotter and dryer forecast verifies, moisture stress could start to develop as the crop’s water demand increases. “The subsoil moisture was not recharged in most areas, so the crops are going to be highly dependent on timely rainfall.”
Technical Analysis: January soybeans continued to find initial support at $9.65 1/4, though technical headwinds continue to loom, with resistance serving at the 10-day moving average of $9.77 1/4, which is backed by the 20- and 40-day moving averages of $9.83 1/4 and $9.99 1/2, with psychological resistance then standing at $10.00. However, additional support lies at $9.61 and $9.54, which are backed by last week’s low of $9.45 1/4.
January meal futures were limited by the 40-day moving average of $292.70, but ultimately held a close above the level amid support from the 20- and 10-day moving averages, currently trading around $289.50 and $288.10, respectively. An extension higher, will face additional resistance at $295.90, then at Monday’s high of $298.90, which is backed by psychological resistance at $300.00. Conversely, a move below initial support will face additional support at $286.20, $282.80 and at last week’s low of $278.50.
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 wheat fell 5 3/4 cents to $5.34 3/4, while March HRW slid 7 1/4 cents to $5.43 3/4. March Spring wheat fell a nickel to $5.90 3/4. Each closed near session lows.
Fundamental Analysis: Wheat futures underwent persistent selling pressure in light trade, though traded within Monday’s range. The path of least resistance remains lower for wheat futures despite the fundamentally supportive global balance sheet, which looks to tighten further before any potential reprieve. Reports that Russia is seeking to secure access to the Chinese market for their winter wheat likely weighed on U.S. prices somewhat today. Historically, China only purchases spring wheat from Russia, which accounts for just 10% of the nation’s production. China has been a somewhat active purchaser of U.S. wheat, so Russia securing additional market share would likely draw from U.S. demand.
Technical Analysis: March SRW futures continue to trend lower on the daily bar chart as bears retain the technical advantage. Continued selling pressure finds tentative support at $5.33, but a test of the contract low at $5.29 1/4 seems likely. The 10-day moving average at $5.42 3/4 proved tough as initial resistance, while strength above that mark has bulls eyeing the psychological $5.50 mark.
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 closed 64 points lower at 68.78 cents.
Fundamental Analysis: Cotton futures gave up a portion of Monday’s impressive gain in light holiday trade. The continued robust strength in the U.S. dollar index, which continues to trade near recent highs, is providing headwinds for cotton bulls. Bulls are likely disappointed by weaker-than-normal export sales as well, which have run below average for most of the marketing year and are likely to be light in holiday- shortened weeks ahead, which will be closely followed by Chinese New Year festivities in late January, which historically drag on import purchases.
Technical Analysis: March cotton futures continue to trend lower on the daily bar chart as bears retain the technical advantage. Bulls’ first objective is overcoming 20-day moving average resistance at 69.63 cents, which is reinforced by the psychological 70.00 cent mark. Continued selling pressure finds support at the psychological 68.00 cent mark then the contract low at 67.48 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.