Corn
Price action: March corn futures rose 6 1/4 cents to $4.58 1/2, near the daily high and posted at a six-month-high close.
Fundamental analysis: Today’s technically bullish monthly and quarterly high close in March corn futures set the stage for follow-through chart-based buying in the near term. Today’s gains in corn were especially impressive given the U.S. dollar index today closed at yearly high close on this last trading day of 2024, and pushed to a new two-year high.
South American crop consultant Michael Cordonnier this week raised his Argentine corn crop forecast 1 MMT to 50 MMT and maintained his Brazilian corn crop estimate at 125 MMT. World Weather Inc. today said recent drying in western and southern Brazil corn regions “was good for fieldwork, although the topsoil is beginning to firm up and this process may continue for a while in some areas like Rio Grande do Sul, Paraguay and a part of western Santa Catarina and southwestern Parana.” Some crops in these drying areas may eventually experience a little moisture stress, though production potential will remain high, said the forecaster.
Technical analysis: The corn futures bulls have the overall near-term technical advantage and gained more power today amid a price uptrend in place on the daily bar chart. The next upside price objective for the bulls is to close March prices above solid chart resistance at $4.75. The next downside target for the bears is closing prices below chart support at $4.40. First resistance is seen at $4.60 and then at $4.65. First support is seen at today’s low of $4.52 and then at $4.50.
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
Advice: We advise soybean hedgers and cash-only marketers to sell another 10% of 2024-crop production to get to 30% sold in the cash market.
Price action: March soybeans rallied 18 3/4 cents to $10.10 1/2 but marked a yearly loss of $2.40 1/2. March soymeal rose $5.10 to $316.90 but is down $59.40 cents on the year. March soyoil rose 6 points to 40.36 cents but sunk 730 points from a year-ago.
Fundamental analysis: Soybeans caught a bid today, along with corn, edging above the 40-day moving average despite continued U.S. dollar strength, which extended to a more than 2-year high. Today’s price action was likely a result of year-end short-covering, though persisting dryness in Argentina and chances for periodic localized flooding in center west and center south crop areas of Brazil, could have exacerbated those efforts.
Meanwhile, Pro Farmer South American crop consultant Michael Cordonnier lowered his Argentine soybean crop estimate by 2 MMT, to 53 MMT, primarily due to lower acreage but also due to increasing concerns over forecasts for hotter, drier conditions. Cordonnier maintained his Brazilian soybean crop estimate at 171 MMT amid beneficial weather conditions throughout most of the country, which is allowing for favorable pod filling. Moreover, early harvest continues to advance throughout Mato Grosso and Parana in irrigated areas, where farmers are reporting good yields, though total harvest is less than 1% complete. Harvesting of dryland soybeans will begin in early January, with the peak of harvest expected during the first three weeks of February.
Technical analysis: March soybeans ended the session above the 40-day moving average, currently trading at $9.99 1/2, for the first time since early November, though additional resistance stands at the 100-day moving average of $10.19 1/2, which will likely curb an additional move higher as the contract is near-term overbought. However, initial support will now serve at the 40-day moving average, which is backed by the 20- and 10-day moving averages of $9.89 1/2 and $9.82 1/2, with the Dec. 19 low of $9.47 serving as additional support.
March soymeal futures rallied to the highest intraday level since mid-October. However, today’s high of $318.30 will serve as initial resistance, with backing from $320.90, $324.00 and the 200-day moving average of $328.10. Conversely, support will be layered from the 100-day moving average of $311.20 to the 10- and 20-day moving averages of $302.70 and $299.30.
What to do: Get current with advised sales.
Hedgers: NEW ADVICE – Sell another 10% of 2024-crop production to get to 30% sold in the cash market.
Cash-only marketers: NEW ADVICE – Sell another 10% of 2024-crop production to get to 30% sold.
Wheat
Price action: March SRW futures climbed 3 1/4 cents to $5.51 1/2 and closed nearer session highs. March HRW futures rallied 3 1/2 cents to $5.59 1/4. March HRS futures rose 2 cents to $5.95 3/4.
Fundamental analysis: Wheat futures saw choppy trade on either side of unchanged on the last trading day of the year. March SRW futures struggled to overcome technical resistance, leading to choppy sideways trade. Strength in the dollar index, which closed out the year at the highest level in two years, likely limited buyer interest in wheat futures today. Strength in corn did little to encourage wheat bulls today as the spread between corn and SRW futures continues to tighten to the tightest level in just over a year, which could spur strength in wheat as traders look for value buys to start the new year.
U.S. winter wheat is favorably established and mostly dormant. Some needed moisture has recently fallen in the Pacific Northwest, improving top-soil moisture, says World Weather Inc. Recent warmer than normal temperatures have reduced winter hardiness for many crops, leading to some vulnerability as temperatures get colder here in the next few weeks. Luckily, the coldest temps are expected where there is snow cover, the forecaster says.
Technical analysis: March SRW futures closed modestly higher and near downtrend resistance following a day of choppy trade. Bulls’ next objective is closing prices above downtrend resistance at $5.52 1/2, which is reinforced by resistance at the 40-day moving average at $5.58. Support comes in at the 20-day moving average at $5.48 3/4 then yesterday’s low of $5.44 1/2.
March HRW futures closed at the highest mark in about two weeks but stopped shy of 40-day moving average resistance at $5.61. Strength above that mark targets resistance at the Dec. 11 close of $5.67 1/4. Meanwhile, bulls are seeking to hold prices above support at $5.53 1/4, the 10-day moving average, which is reinforced by 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 fell 8 points to 68.40 cents and forged a yearly loss of 11.16 cents.
Fundamental analysis: Cotton futures edged lower in narrow trade to end the calendar year, as technical headwinds and pressure from a soaring U.S. dollar continue to plague the natural fiber. While persisting strength in crude oil futures likely lent some support, it was likely negated by weakness across equities.
Demand for U.S. cotton has certainly weighed on prices throughout the year, though an expansion of China’s services sector at the fastest pace in nine months, and third straight month of growth in the manufacturing sector, not only suggests the country’s economic stimulus may be working, but also gives hope for demand. The marketplace will continue to closely monitor economic conditions in China, though persisting gains in the dollar could continue to crimp demand into the new year.
Technical analysis: March cotton continued to be limited by the 10-day moving average of 68.54 cents, which is backed by the 20-day moving average of 69.36 cents. Meanwhile, though bears continue to firmly grasp the near-term technical advantage, initial support held at 68.08 cents, with backing from support at 67.67 cents and the Dec. 20 low of 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.