Corn
Price action: March corn futures fell 1/4 cent to $4.31 1/4, nearer the session low.
Fundamental analysis: The corn futures market today saw some mild technical selling pressure featured. However, firmer soybean and wheat futures prices limited the downside in corn, as did a lower U.S. dollar index today. Higher crude oil prices today were also a friendly outside-market element for corn that limited selling pressure.
Reuters, citing three sources, reported today that Biden administration officials will not finalize highly anticipated guidelines on new clean fuel production tax credits aimed at the airline and biofuel industries before they leave Jan. 20. This casts doubt on the future of a key piece of the Biden administration’s climate agenda. This uncertainty on the biofuels front also limited buying interest in corn futures.
Pro Farmer’s South American crop consultant, Dr. Michael Cordonnier, left his Brazilian and Argentine corn crop estimates at 125 MMT and 48 MMT, respectively. World Weather Inc. today said South America corn region weather “has been and will likely continue to be mostly good over the next two weeks.” Southern Brazil will become too wet for a while and Argentina will dry out, but neither issue is expected to fester into a viable crop concern, said the forecaster.
Technical analysis: The corn futures bulls and bears are on a level overall near-term technical playing field. However, the market has been “coiling” at lower price levels since August, which is a bullish chart clue. The next upside price objective for the bulls is to close March prices above solid chart resistance at the November high of $4.47 3/4. The next downside target for the bears is closing prices below chart support at the October low of $4.14. First resistance is seen at today’s high of $4.36 and then at $4.40. First support is seen at this week’s low of $4.29 3/4 and then at last week’s low of $4.25 1/2.
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.
Soybeans
Price action: January soybeans rose 6 1/2 cents to $9.91 3/4, while January soymeal rose $2.50 to $290.40, each forging near mid-range closes. January soyoil rallied 72 points to 42.12 cents.
Fundamental analysis: Soybeans notched modest short-covering gains, led by soyoil futures, which were bolstered by overnight strength in Malaysian palm oil and solid gains in crude oil. Supply concerns emerged as peninsular Malaysia was hit by floods that officials fear could be the worst in a decade, which could affect palm oil production.
Meanwhile, in South America, the planting and growing season continues to progress quite favorably. Crop consultant Dr. Michael Cordonnier raised his Brazilian crop estimate by an additional 2 MMT to 170 MMT, noting the only concern for dryness in the country was in western Parana, southern Mato Grosso do Sul, western Santa Catarina and parts of Rio Grande do Sul. However, the forecast this week is calling for widespread rain across Brazil, with heavy amounts in southern Brazil, which could eliminate lingering dry conditions. Soybean planting efforts had reached 91% as of last Thursday, according to AgRural, which is the highest percentage planted at the end of November since 2018. Cordonnier left his Argentine soybean estimate unchanged at 57 MMT, noting recent rainfall has improved soil moisture in most of the country. Planting efforts advanced to 44.4% as of late last week.
Technical analysis: January soybeans were plagued by resistance at the 20- and 40-day moving averages, currently trading at $9.98 1/2 and $10.05 1/2, while the 10-day moving average of $9.87 1/2 served up support. Bears continue to grasp the near-term technical advantage, with sights set on securing a close below the August low of $9.73 3/4, though interim support lies at $9.84 3/4. Conversely, a move above initial resistance will find bulls facing additional resistance at the 100-day moving average of $10.21 3/4, with aspirations of closing above the September high of $10.87 1/2.
January meal futures continued to face resistance at the 10- and 20-day moving averages of $291.50 and $293.60, which are backed by resistance at $296.20, $298.60 and the 40-day moving average of $302.00. Initial support will continue to serve at this week’s low of $287.10, then at the Nov. 15 low of $287.00 and again at $285.40, $283.00 and $ 278.80.
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 futures settled 1/4 cent higher to $5.47 1/2 but settled nearer session lows. March HRW futures climbed 1 1/4 cent to $5.41 3/4. March HRS futures rose 2 1/4 cents to $5.90.
Fundamental analysis: Wheat futures struggled to maintain strong overnight gains as prices fell back near recent lows in afternoon trading. Technical selling pressure continues to dominate the wheat market as the path of least resistance remains lower. Geopolitical concerns have once again returned to the forefront of traders’ minds. South Korean president Yoon Suk Yeol declared martial law in a move to thwart opposition threats to the nation’s constitution, while the nation’s parliament quickly voted unanimously to reject that declaration. South Korea is a large purchaser of U.S. origin wheat.
Much of the winter wheat planted in the northern hemisphere is on the brink of dormancy, if it is not already there. Crops in central and northern Europe and the western CIS (Ukraine, Russia, Belarus) are well established, but some crops in eastern Ukraine, southern Russia and western Kazakhstan are poorly established, says World Weather Inc. Frigid, harmful temps are not expected in the near-term and soil moisture is expected to increase for improvement in the spring, but the crops are currently vulnerable.
Technical analysis: March SRW futures continue to languish near recent lows as bears retain the technical advantage. Bulls tried and failed to overcome 10-day moving average resistance at $5.55 1/2 today, while additional resistance lies on the way at $5.50. Support comes in at $5.43, the contract low of $5.42, then $5.33.
March HRW futures struggled to maintain strength today as well, as the 10-day moving average limited gains at $5.51 3/4. Continued weakness finds support at the contract low at $5.35 then the psychological $5.25 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 fell 22 points to 71.27 cents, ending the session above the 20-day moving average.
Fundamental analysis: Cotton futures ended modestly lower, despite U.S. dollar weakness and solid gains in crude oil futures as sliding equities and lingering technical resistance curbed buyer interest. The marketplace is likely to remain somewhat subdued ahead of updated economic forecasts from the Organization for Economic Co-operation and Development (OECD) on Wednesday, Thursday’s OPEC meeting and the Labor Department’s Employment data, due out on Friday. Earlier today, the Labor Department reported job openings rose 5% to 7.7 million, up from 7.4 million in September in its October Job Openings and Labor Turnover Report (JOLTS), suggesting jobs could pick up in the coming months.
Key cotton growing areas around the globe look to be faring well, with favorably advancing crop maturation in northern India and Pakistan and good conditions in Southern India. World Weather Inc. reports recent rain and that which is coming in the next week to ten days in Australia’s eastern dryland crop region of New South Wales and Queensland will improve planting, emergence and establishment. Production potential has improved with the rains, which should continue. Rains in northern Argentina periodically through the coming two weeks will be good for planting, however, Formosa may be dry and warm for a while, according to the forecaster.
Technical analysis: March cotton spent the session trading within Monday’s range, limited by the 20-day moving average of 71.18 cents as well as the 100- and 40-day moving averages, currently trading at 72.06 cents and 72.33 cents. Conversely, initial support continues to serve at the 10-day moving average of 70.65 cents, and is backed by support at 69.63 cents, 68.88 cents and the Nov. 19 low of 68.40 cents. A move above initial resistance will face a further technical battle at 72.99 cents and 73.92 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.