Corn
Price action: December corn fell 1 3/4 cents to $4.52 1/4, after carving the highest intraday level since June 25.
Fundamental analysis: Corn futures notched a fresh for-the-move high in early trade, which spurred some corrective pressure as the session progressed. However, solid technical support continued to curb sellers, though fading weekly export inspections, reported at midsession, failed to lend much support. USDA reported weekly inspections of 878,380 MT (34.6 million bu.) for the week ended Dec. 26, down 267,805 MT from the previous week and near the low-end of the pre-report range between 700,000 MT and 1.2 MMT.
Meanwhile, the marketplace is increasingly focusing on South American weather amid drying in central and portions of Eastern Argentina, southwestern Paraguay, southern and western Rio Grande do Sul and Uruguay. The areas are expected to see less than usual precip over the next ten days to two weeks, leading to firming soil and development of crop stress, according to World Weather Inc. Meanwhile, the remainder of Brazil and Argentina should see sufficient precip to support crop development, although portions of center west and center south Brazil may be too wet at times.
Technical analysis: March corn futures ended the session well off the daily high, though support at the 200-day moving average of $4.49 1/2, with backing from the 10-day, currently trading at $4.46 3/4, helped limit downside momentum. Though bulls continue to firmly hold the near-term technical advantage, with additional support serving at the 20-, 40- and 100-day moving averages of $4.43 1/4, $4.39 1/2 and $4.31 1/4. However, a move higher will be limited by resistance at $4.55 1/4, $4.56 1/2 and today’s high of $4.58 1/2.
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: March soybean futures climbed 2 cents to $9.91 3/4 though settled nearer session lows. March meal futures rose $1.30 to $311.80. March bean oil futures closed 30 points higher to 40.30 cents.
Fundamental analysis: After opening higher overnight and trending higher in the overnight session, soybeans closed around unchanged. Intraday weakness was led by corn futures, which reversed off a more than six-month high this morning. Some profit-taking was expected given over-bought conditions in corn, but soybeans inability to maintain strength was a little disappointing for bulls. Export demand remains quite strong for beans, with inspections totaling 1.57 MMT (57.7 million bu.) for the week ended Dec. 26. That was down 204,469 MT from the previous week but within pre-report estimates ranging from 800,000 MT to 1.75 MMT and impressive considering that included the holiday. Accumulated export inspections continue to run above the historical pace needed to hit the current USDA export estimate.
Recent drying in western and southern Brazil has been good for fieldwork, although the topsoil is beginning to firm and may continue to firm for a while, according to World Weather Inc. Drying conditions may lead to some crop stress but production potentials still remain high.
This morning, USDA reported daily soyoil sales of 23,000 MT to India for 2024-25, continuing to point to renewed export demand for bean oil.
Technical analysis: March soybeans extended higher overnight though failed to hold onto most gains as the session went on. Prices have trended largely sideways for the past two months. Bulls tried and failed to overcome psychological $10.00 resistance today, which is reinforced by resistance ranging from $10.08 to $10.09. Support stems from the 20-day moving average at $9.89, which is firmly backed by support at $9.83.
March meal futures closed modestly higher today after trading solidly higher earlier in the session. Bulls maintain a slight technical advantage after strong short-covering efforts over the past week and a half. Support stems from the 100-day moving average at $310.8, which is reinforced by $306.6. Bulls are eyeing resistance at $314.9 before tackling additional resistance at $317.7.
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 1 3/4 cents to $5.48 1/4 and near mid-range. March HRW wheat gained 1 1/4 cents to $5.55 3/4 and nearer the session low. March spring wheat futures fell 2 cents to $5.93 1/4 .
Fundamental analysis: The wheat futures markets saw buying interest limited by a firmer U.S. dollar index to start the trading week. The USDX is hovering near a two-year high at present. The recent rally in the corn futures market has limited the downside in wheat futures, although corn prices did back down today after hitting a six-month high in early dealings. Look for quieter, pre-holiday trading Tuesday, as Wednesday is the New Year holiday.
USDA this morning reported U.S. wheat export inspections of 337,685 MT, down 68,238 MT but within the pre-report range of expectations.
World Weather Inc. today said that in U.S. HRW country, a large arctic air mass is likely to move into the region next Sunday through Jan. 11. “This will raise the need for protective snow cover, especially in central and northeastern production areas where the coldest conditions are likely to occur. A storm system is expected at the leading edge of the arctic air Saturday into Sunday with some snow and a close monitoring of the forecast will be warranted for the distribution of snow cover this produces.” Meantime, in the northern Plains, southwestern production areas are in need of snow cover to protect crops from winterkill. Snow will likely mostly fill in this area before threateningly cold temperatures arrive. “However, a close monitoring of the distribution of snow will be warranted,” said World Weather.
Technical analysis: Winter wheat market bears have the firm overall near-term technical advantage. Prices are in 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 today’s high of $5.54 3/4 and then at $5.69 1/4. First support is seen at $5.40 and then at the contract low of $5.29 1/4.
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 today’s high of $5.63 1/4 and then at $5.77 1/4. 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 fell 41 points to 68.48 cents, marking a low-range close.
Fundamental analysis: Cotton futures edged lower to begin the week, with weakness in equities and a firmer U.S. dollar offsetting support from strength in crude oil. However, the marketplace is generally subdued ahead of the New Year holiday. Meanwhile, technical resistance continues to curb buyer interest, which is fundamentally coupled with tepid demand for U.S. supplies as top purchaser China continues to face economic headwinds. It was reported earlier today the Chinese government urged local officials to provide more financial relief or step up one-time allowances to people in need ahead of major holidays over the next month as the country’s economic difficulties are set to extend into 2025.
While the U.S. harvest is mostly completed, World Weather Inc. notes rain will be needed during the heart of winter and early spring for the southwestern desert region, both South and West Texas and from northern Florida to eastern North Carolina to ensure favorable soil moisture for spring planting.
Technical analysis: March cotton futures held a limited range to begin the shortened trading week, with resistance serving at Friday’s high of 69.86 cents, which is backed by the 10- and 20-day moving averages of 70.21 cents and 71.61 cents. Conversely, today’s downside was limited by last week’s low of 67.48 cents, which is backed by support at 67.00 cents. However, with additional resistance serving at the 40-, and 100-day moving averages of 73.36 cents and 77.31 cents, the path of least resistance continues to firmly favor bears.
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.