Corn
Price action: March corn rose 5 1/4 cents to $4.53 3/4 to a six-month high close.
Fundamental analysis: Corn futures were supported by solid gains in the soy complex following the Christmas holiday, ultimately edging to a six-month high. An extension above the 200-day moving average gives additional confidence to buyers, along with a questionable forecast in Argentina over the next few days. World Weather Inc. reports much of Argentina, Uruguay, Rio Grande do Sul and southwestern Paraguay will get no rain through Tuesday of next week. The forecaster notes showers and thunderstorms will increase in the west and north during the middle to latter part of next week with some rain expected in Uruguay and Rio Grande do Sul, although precip in many other areas will be a little too sporadic and light to counter evaporation. As a result, net drying is likely for at least the next ten days in Buenos Aires, southern Santa Fe and portions of both western Rio Grande do Sul and southwestern Paraguay.
USDA will release weekly export sales data early Friday morning, delayed a day due to the Christmas holiday on Wednesday.
Technical analysis: March corn ended the session at a six-month high close, with initial support now serving at the 200-day moving average of $4.49 3/4, which is backed by support at $4.47 1/4 and the 10-day moving average of $4.45. Meanwhile, the next area of resistance will stand at $4.60. However, a push into near-term overbought territory could inspire some selling to end the week tomorrow, though additional support lies at the 20- and 40-day moving averages of $4.41 and $4.38.
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 surged 12 3/4 cents higher to $9.88 and closed near session highs. January meal futures surged $12.80 to $305.70 and closed on session highs. January bean oil futures sunk 37 points to 39.47 cents.
Fundamental Analysis: Soybean futures opened higher on this morning’s cold open and never looked back, closing at a more than one week high, having negated the recent technical breakdown. Soybeans were supported by corn hitting a fresh for-the-move high. Deferred contracts led soybeans higher today, a healthy sign of expected long-term demand in the marketplace. Volume was higher across the curve today than it was on Tuesday, a good sign for the market that today’s move higher can be sustained through the end of the week.
Much of Brazil received at least some rain Tuesday into Wednesday, including some of the driest areas in northeastern Minas Gerais. Frequent and sometimes heavy rain is expected in the next two weeks from Mato Grosso to western, central and southern Minas Gerais and northern Sao Paulo where fieldwork will be sluggish and some localized flooding could occur, says World Weather Inc.
Technical Analysis: January soybeans showed robust strength today as gains negated last week’s technical breakdown. Bears still hold a slight technical advantage. Resistance at the 40-day moving average at $9.91 limited gains today, while strength above that mark targets psychological $10.00 resistance. Tentative support lies at $9.77 3/4 on a reversal lower, while additional weakness finds support at $9.67.
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 6 1/4 cents to $5.41, while March HRW wheat rose 7 3/4 cents to $5.51 1/2, each closing near session highs. March HRS rose 4 1/2 to $5.94.
Fundamental Analysis: Wheat futures notched gains with support from weakness in the U.S. and evidence of global demand while global supply wanes. Earlier today, IKAR agricultural consultancy projects Russia will remain the world’s leader in wheat exports in 2024-25, but projects its share of global wheat trade will fall to 20% from 25% the previous year. IKAR projects Russia will export 41 MMT of wheat in the upcoming 2024-26 marketing year. Meanwhile, Algeria’s state grains buyer booked over a million tons of wheat in what is believed to be the biggest purchase made in one tender in at least the last seven years, according to Fastmarkets.
Early Friday morning, USDA will release its weekly export sales data, delayed a day due to this week’s Christmas holiday.
Technical Analysis: March SRW wheat futures continued to face resistance at the 10-day moving average of $5.42 3/4, which is backed by the 20-day of $5.48 1/2. However, initial support continued to serve at $5.31 1/2, which is backed by last week’s low of $5.29 1/4 as well as $5.23 1/2. A move above initial resistance will find bulls facing an additional battle at the 40-day moving average of $5.61 1/4, then at the 100-day moving average of $5.79 ½.
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 sunk 3 points to 68.75 cents and settled near mid-range.
Fundamental Analysis: Cotton futures faced modest pressure in light trade with U.S. dollar weakness lending some support, though stiff technical resistance and lacking fundamental news limited buyers and sellers. Weather in key growing regions around the world continues to prove mostly favorable, according to World Weather Inc., though there is a growing need for some rain in some western unirrigated production areas of eastern Australia, though the forecaster notes rain should resume in about a week. Meanwhile, rain in northern Argentina with periods of sunshine has supported planting, emergence and establishment. In Brazil, planting has advanced well in Bahia and a few of the minor production areas in Goias, Minas Gerais and Mato Grosso do Sul. However, there will be a need for greater rain in Bahia later this month.
Technical Analysis: March cotton futures continue to face profit-taking following Monday’s surge higher. Bears retain the technical advantage and are eyeing support at the Nov. 19 low of 68.40 cents before tackling the contract low of 67.48 cents. Meanwhile, resistance stands at 68.95 cents with additional strength looking to overcome the 20-day moving average at 69.53 cents, which capped gains earlier this week.
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.