Corn
Price action: March corn futures settled a tick higher to $4.54 and nearer session highs. That marked a 7 3/4 cent gain on the week.
5-day outlook: Corn futures forged a fresh for-the-move high today in an impressive show of strength. Prices were supported by corn sales coming in above expectations. For the week ended Dec. 19, corn sales totaled 1.711 MMT for 2024-25, which was up 46% from the previous week and 39% from the four-week average. Increases came primarily for Mexico and Colombia. Sales came above expectations ranging from 1.0 to 1.6 MMT. Corn sales continue to be impressive which bodes well for the balance sheet, especially considering inspections continue at a rapid clip. Today’s strength continues to bode well for the technical outlook for corn bulls. Even so, with prices scoring a new high and prices nearing the upper end of the recent upward trend, some profit-taking is possible over the next week, especially considering it will be another holiday shortened week of trade.
30-day outlook: The upcoming quarterly Grain Stocks Report and Annual Production Summary from USDA will be the main focus of the marketplace over the coming month. USDA is likely to adjust 2024 production and we are anticipating a slight production cut from the November forecast. Eyes will be on first quarter feed use in the stocks report. While ethanol and export demand is well known as there are weekly reports for each, feed use is much more ambiguous, with just a few insights a year available. Generally, when corn prices are relatively low, feed use tends to increase and given feedlots have opted to hold onto cattle longer, driving weights higher, we feel that could be especially true this year. Higher than expected feed use and a cut to production could drive prices higher over the coming month.
90-day outlook: Early crop soybeans are beginning to be harvested in Brazil. South American production is driving trade in the soy market and the attention is turning to corn as producers will begin planting safrinha corn soon. Recent long-term forecasts have a more La Niña-like tendency which generally increases the odds of drought in southern parts of Brazil, including Mato Grosso do Sul, while increasing rainfall in the northern parts of the nation. Drought in southern portions could limit corn production, but a close eye will be kept on soybean harvest progress in the northern parts of Brazil as any delay to safrinha plantings could drive planting past the ideal window. Trader attention is likely to turn to South American crop prospects in the coming quarter with any cuts to production likely being price supportive.
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 8 cents to $9.80 but gained 5 1/2 cents on the week. January soymeal closed down $4.80 to $300.90 but marked a $6.40 weekly gain. January soyoil rose 5 points to 39.52 cents and gained 4 points on the week.
5-day outlook: Soybeans edged correctively lower following two days of gains, led by strength in soymeal futures. Meanwhile, the recent rally in corn futures has certainly lent soybeans a hand, though a push into near-term overbought territory and technical resistance at the 40-day moving average could limit buying into next week. Moreover, the midweek New Year holiday is likely to continue to curb volume, though a large move in soymeal will likely determine the direction of soybean futures into the new calendar year, with likely positioning ahead of USDA’s Annual Crop Production and quarterly Grain Stocks Report, due out Jan. 10.
30-day outlook: USDA’s final production and quarterly grain stocks estimates on Jan. 10 will be the major focus and price driver over the next month, in addition to weather in South America as the growing season progresses and the glut of harvest nears. Conditions in Brazil remain rather favorable, though Argentina has faced a period of infrequent rainfall. World Weather Inc. reports the country will dry down significantly and some areas may see rising levels of stress in January. However, soil moisture in place and some at least some rain should prevent serious crop stress in most areas during the next two weeks.
90-day outlook: U.S. soybean exports will continue to be a long-term trade focus, with special attention on the U.S. dollar, which has trended higher of late, along with the size of South America’s crop and global trade relations. Soybean sales have been quite robust, though USDA reported net sales were a marketing-year low at 978,400 MT for the week ended Dec. 19, which could be the beginning of a decline in sales into the new year. However, harvest progress in Brazil will certainly determine the pace of U.S. sales. Earlier this week, South American crop consultant Dr. Michael Cordonnier reported the one thing that could derail the country’s soybean crop would be persistent heavy rains during harvest.
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 rose 5 1/2 cents to $5.46 1/2, near the daily high and for the week up 13 1/2 cents. March HRW futures rose 3 cents to $5.54 1/2, near the session high and on the week up 9 3/4 cents.
5-day outlook: Today’s technically bullish weekly high closes in winter wheat futures set the table for follow-through buying interest from the speculators early next week. Good gains in the corn futures market this week that saw March corn hit a six-month high is good news for the wheat market bulls heading into the new year.
30-day outlook: Traders continue to monitor weather conditions in major global wheat-growing regions. World Weather Inc. today said U.S. wheat “is favorably established and mostly dormant or semi-dormant.” Some needed moisture has fallen recently in the Pacific Northwest in recent weeks to improve topsoil moisture and more is expected. Unusually warm weather over the next several days will reduce winter hardiness for many winter crops in the United States. Cooling is expected in January. Much of central and northern Europe and the western CIS are cool enough for most winter crops to be dormant or semi-dormant. Australia’s late-season wheat harvest in the south is advancing sufficiently in a favorable weather pattern and no change is likely. Argentina’s dry weather in the south will be great for filling and maturing wheat along with its harvest, said World Weather.
90-day outlook: USDA this morning reported weekly U.S. wheat export sales of 612,400 MT, up 34% from the previous week and 64% from the four-week average. Net sales topped the pre-report range of expectations. U.S. exports totaled 376,200 MT for the week. While this week’s numbers were good news for the wheat market bulls, those kinds of numbers need to be sustained in the coming months. That chore will be tougher to execute with the U.S. dollar index not far below the recent two-year high.
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 rose 14 points to 68.89 cents but marked an 83-point weekly gain.
5-day outlook: Cotton futures held an inside range to end the week in low-volume trade. However, some outside market support pushed the natural fiber back above the 10-day moving average. Next week will likely see sideways trade as technical headwinds loom and the midweek New Year holiday will likely keep volume to a minimum.
30-day outlook: USDA’s Annual Production Report, due out on Jan. 10, will be the main market event over the next month, though traders will continue to eye global weather conditions in key growing areas. World Weather Inc. notes crop harvesting in northern India and Pakistan advanced well this year and should be nearing completion, though crops in southern India may endure some periodic rain that may slow crop maturation and harvesting, but no significant change in fiber quality is expected. Meanwhile, conditions in eastern Australia are still mostly good, although there is a growing need for some rain in western unirrigated production areas. Some rain should resume next week. Overall conditions for planting and growing in South America continue to lean mostly favorable.
90-day outlook: U.S. cotton sales will continue to be of note as the marketing-year progresses. Earlier today, USDA reported net upland cotton sales of 279,100 RB for the week ended Dec. 19, which were up 43% from the previous week and 33% from the four-week average. Top purchasers for the week included Turkey, Vietnam and Pakistan. Meanwhile, exports totaled 140,500 RB for the week, up 9% from the previous week and 2%from the four-week average. Top destinations were China, Pakistan and Vietnam.
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.