Corn
Price action: March corn futures rallied 1 3/4 cents to $4.41 3/4 and settled on session highs.
Fundamental Analysis: Corn futures traded on either side of unchanged today before rallying into the close and settling on session highs. Technical headwinds and weakness in the soybean market weighed on corn futures midday. Bulls and bears alike will look for a catalyst in tomorrow’s updated USDA world supply and demand reports. Demand will be the focus of tomorrow’s reports as USDA will not update the 2024 production estimate until the annual summary in January. A Reuters’ poll of analysts shows expectations of a 32-million-bushel drop in ending stocks from the November report to 1.906 billion bushels. Increases in export sales and robust use for ethanol likely led analysts to trim their ending stocks forecast. Unlike soybeans, analysts expect little change to the South American production estimates for corn.
USDA reported corn export inspections of 1.050 MMT (41.3 million bu.) during the week ended Dec. 5, up 100,878 MT from the previous week and in the upper end of the pre-report range of expectations from 700,000 MT to 1.1 MMT. Corn inspections continue to run well ahead of the historical pace needed to hit the current USDA export forecast.
Technical Analysis: March corn futures closed higher for the third consecutive session and at a nearly one-month high close, though the overall trend remains sideways. Bulls are looking to overcome resistance at $4.44 1/4 before tackling the November high of $4.47 3/4. Support comes in at $4.40 then the 100-day moving average at $4.36 1/4 on a reversal lower.
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 soybean futures fell 3 3/4 cents to $9.90 and nearer session lows. January meal futures saw relative strength and closed $2.20 higher to $289.60. January bean oil futures sunk 17 points to 42.80 cents, though settled nearer session highs.
Fundamental Analysis: Soybeans traded on either side of unchanged today, favoring the upside early in the session, but fading lower as the session went on. Technical headwinds limited bulls’ momentum today. Soybean futures continue to trade in a relatively tight range, awaiting a catalyst to break out of the range. Tomorrow’s updated world supply and demand reports could prove to be that catalyst, though analysts do not expect much of a change at all to 2024-25 ending stocks, with the average estimate just a million bushels below the November report at 469 million bushels. On the other hand, analysts expect USDA to increase their production estimate for Brazil, though there is some variation in how much they expect the estimate to increase. Estimates range from 166.2 MMT to 171.0 MMT in the Reuters’ poll, with an average estimate of 169.3 MMT, up 300,000 MT from USDA’s November estimate.
The Brazilian soybean crop has benefited from ample rainfall as of late. Heavy rain developed in interior southern Brazil as expected during the weekend, with more rainfall expected the first half of this week. World Weather Inc. says some flooding resulted, though the extent of any damage to crops is uncertain. Favorable conditions are expected across the rest of Brazil.
USDA reported soybean export inspections of 1.622 MMT (59.6 million bu.) during the week ended Dec. 5, down 487,468 MT from the previous week but within the pre-report range of expectations from 1.3 MMT to 2.2 MMT. Inspections were below the five-year average for the first time since the week ended Sept. 26.
Technical Analysis: January soybean futures looked poised for a bullish breakout early in the session, though technical headwinds increased selling pressure as the session went on. Bulls are looking to build momentum by overcoming 20-day moving average resistance at $9.93 before tackling stiff resistance at the psychological $10.00 mark, which coincides with the 40-day moving average. Continued selling pressure finds support at $9.84 1/2, while heavy selling finds support at the contract low of $9.73 1/2.
January meal futures saw relative strength today, though bears continue to maintain the technical advantage as prices languish near contract lows. The 10-day moving average at $290.70 limited gains today and will remain resistance, while additional strength seeks to overcome resistance at $293.10. Support stems from $287.40, which is quickly backed by the contract low at $285.60.
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 1/2 cents to $5.58 3/4 and near mid-range. March HRW wheat rose 5 cents to $5.58 3/4 and nearer the daily high.
Fundamental analysis: The wheat futures markets saw some tepid short covering to start the trading week. The recent weakening of the U.S. dollar index has also been supportive for the wheat market bulls. Higher crude oil prices today were another friendly outside-market force that limited selling in wheat markets.
World Weather Inc. today said U.S. hard red winter wheat areas benefited from recent weeks of rain with good root and tiller systems suspected in many production areas. Cooler temperatures have pushed most U.S. crops into dormancy or semi-dormancy, said the forecaster. Meantime, Argentina’s wheat regions continue to get a good mix of rain and sunshine for its late-season crop in the south. Yield potential did improve in the region when rain began falling a few weeks ago. Rainfall should become less frequent and less significant which should bode well for improved harvest conditions, said World Weather.
USDA reported disappointing U.S. wheat export inspections of 226,513 MT for the week ended Dec. 5, down 72,037 MT from the previous week and below the pre-report range of expectations.
Tuesday’s USDA supply and demand report will be the highlight of the week in the grain futures markets. No significant changes are expected to the supply and demand balance sheets for the wheat markets.
Technical analysis: Winter wheat market bears have the solid overall near-term technical advantage. However, nine-week-old price downtrends on the daily bar charts may be stalling out. SRW bulls’ next upside price objective is closing March prices above solid chart resistance at $5.77 1/2. The bears’ next downside objective is closing prices below solid technical support at $5.25. First resistance is seen at today’s high of $5.64 3/4 and then at $5.70. First support is seen at $5.50 and then at the contract low of $5.40 1/4.
HRW bulls’ next upside price objective is closing March prices above solid chart resistance at $5.77 1/4. The bears’ next downside objective is closing prices below solid technical support at $5.25. First resistance is seen at today’s high of $5.62 1/4 and then at $5.70. First support is seen at $5.50 and then at the contract low of $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 16 points to 69.95 cents, nearer the session low and hit a two-week low.
Fundamental analysis: The cotton futures market continues to see buyer interest limited by the overall bearish technical posture for the fiber. A weaker U.S. stock market to start the trading week was also a negative for cotton today. However, selling interest was limited by higher crude oil prices and the recent decline in the U.S. dollar index.
World Weather Inc. today said late-season harvest conditions across the U.S. will be mostly good in the near term. Some rain is expected in the southeastern states this week.
Tuesday’s December USDA supply and demand report is expected to show U.S. cotton production and U.S. exports down just slightly from the November report.
Technical analysis: The cotton futures bears have the overall near-term technical advantage. However, stiff support levels lie below present prices. The next upside price objective for the cotton bulls is to produce a close in March futures above technical resistance at 73.00 cents. The next downside price objective for the cotton bears is to close prices below solid technical support at the contract low of 67.90 cents. First resistance is seen at today’s high of 70.75 cents at 72.00 cents. First support is seen at today’s low of 69.75 cents and then at 69.00 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.