Corn
Price action: March corn rose 4 cents to $4.91 1/2, closing near the session high.
Fundamental outlook: Corn futures were able to hold onto gains despite a negative tone across the ag complex, with solid gains in crude oil and delayed safrinha corn plantings propping up prices to begin the week. Meanwhile, USDA reported weekly export inspection data, which showed net corn inspections of 1.33 MMT (52.5 million bu.) during the week ended Feb. 6, up 81,174 MT from the previous week and near the upper end of the pre-report range of expectations from 1.0 MMT to 1.4 MMT. USDA also reported a daily sale to Mexico, totaling 365,000 MT and for delivery during 2024-25.
Persisting rains in Brazil continue to curtail safrinha corn planting efforts, with AgRural reporting planting stood at 20% complete as of last Thursday, well behind 38% on this date last year. While the pace is strong in Paraná and Mato Grosso do Sul, there continues to be significant delays in Mato Grosso and Goiás. World Weather Inc. reported earlier today that center-west and some southern areas of Brazil will see frequent shower and thunderstorm activity over the next two weeks, possibly inducing some periodic delays to harvest of first season crops and safrinha corn plantings.
Traders are looking toward Tuesday’s fresh supply and demand data from USDA, with analysts expecting a modest reduction in both U.S. and global ending stocks. The data will be released at 11 a.m. CT.
Technical outlook: March corn bulls were able to hold their ground, ending the session back above the 10-day moving average of $4.90 1/2 after also testing the 20-day, currently trading at $4.86 1/4. The two will continue to serve up support as bulls continue to look to breach the psychological $5.00 mark, though interim resistance will stand at $4.94 1/4 and at last week’s high of $4.98 1/2. Meanwhile, bears’ next target is to close below last week’s low of $4.72 1/2.
What to do: Get current with advised sales.
Hedgers: You should be 50% sold in the cash market on 2024-crop in the cash market. You should also have 10% of expected 2025-crop production sold for harvest delivery.
Cash-only marketers: You should be 50% sold in the cash market on 2024-crop. You should also have 10% of expected 2025-crop production sold for harvest delivery.
Soybeans
Price action: March soybean futures closed flat on the day at $10.49 1/2. March meal futures fell 90 cents to $300.50, near mid-range. March bean oil slid 25 points to 45.73 cents, near mid-range.
Fundamental outlook: Soybean futures struggled to garner much bullish momentum today despite the strength seen in the corn market. Corn continues to show relative strength over beans as abundant global supplies continue to weigh heavily on the soy complex. Brazilian exports are seen as ramping up in the coming weeks as their harvest progresses. That is expected to drag on U.S. exports, which continued to be strong through the month of January. Through January, accumulated export shipments totaled just over 71% of USDA’s export estimate. That is the most since 2020/21 and well above average. Continued impressive export inspections could entice USDA to eventually raise their estimate. Historically, the February WASDE (coming tomorrow) does not see a lot of change in the domestic balance sheet. Traders will keep a close eye on world production figures, particularly in South America. According to a Bloomberg poll, analysts expect USDA to lower their U.S. ending stocks estimate by 2.5 million bushels to 377.5 million bushels. Traders anticipate USDA to lower their Argentine production forecast by 1.4 MMT to 50.6 MMT, though expect Brazilian production relatively steady at 169.9 MMT, down slightly from 170 MMT in January.
Brazil’s soybean harvest for the 2024-25 season reached 15% of the planted area as of last Thursday, according to AgRural, up 6 percentage points from the previous week but down from last year’s pace of 23% for the same period. Harvest this week is expected to remain sluggish, particularly in southern Brazil and Mato Grosso. World Weather Inc. notes that some progress will be made, but persistent rainfall will keep harvest behind last year’s pace, though other areas will see more favorable conditions.
USDA reported soybean export inspections totaled 1.04 MMT (38.3 million bu.) during the week ended Feb. 6, down 98,078 MT from the previous week but near the upper end of the pre-report range of 500,000 MT to 1.25 MMT.
Technical outlook: March soybean futures traded in a relatively tight range today, especially during daytime trade. Bulls are looking to boost prices this week as the recent uptrend is stalling out. Initial resistance stems from the psychological $10.50 mark and is quickly backed by the 10-day moving average at $10.53 then $10.60 1/2. Support stems from the 20-day moving average at $10.45 1/2 then $10.33 on post-report selling.
March meal futures closed lower for the third-consecutive session as prices trade violently sideways on the daily bar chart. Bulls are looking to hold support at the psychological $300.0 mark, which historically acts as a floor. Weakness below that mark finds support at $295.30. Resistance stands at $304.40 then the 100-day moving average at $308.60.
What to do: Get current with advised sales. Our next sales target is $11.00 in nearby futures.
Hedgers: You should be 55% sold in the cash market on 2024-crop. You should also have 10% of expected 2025-crop production sold for harvest delivery.
Cash-only marketers: You should be 55% sold on 2024-crop. You should also have 10% of expected 2025-crop production sold for harvest delivery.
Wheat
Price action: March SRW wheat fell 3 1/4 cents to $5.79 1/2, nearer the daily low. March HRW wheat lost 7 1/2 cents to $5.96 3/4, nearer the daily low. March spring wheat futures settled 2 1/2 cents lower to $6.25 1/4.
Fundamental analysis: The winter wheat futures markets today saw corrective price pullbacks from recent gains that pushed prices to multi-week highs last Friday. A firmer U.S. dollar index today was a mild negative for wheat prices. Higher corn futures prices today somewhat limited the downside in wheat futures markets.
USDA this morning reported U.S. wheat export inspections totaled 536,217 MT during the week ended Feb. 6, up 283,080 MT from last week’s number and above analysts’ pre-report range of expectations.
World Weather Inc. today said “no new threatening weather is expected in U.S. crop areas during the next 10 days. Cold weather will return to the U.S. central Plains and a part of the Midwest this week, although temperatures should not be cold enough to induce any harm due to expected snow cover. Damage may have occurred from extreme cold and limited snow cover in mid-January, although there is no way to assess the damage until spring.” Meantime, winter crops in most of Europe and the western CIS are dormant or semi-dormant. Snow fell this past week in parts of the region from eastern Ukraine to a part of Russia’s southern region and temperatures will trend colder in that region later this week into next week with more snow falling first. Northeastern Europe will also trend colder later this week and snow cover will be limited leaving a few crops vulnerable to the bitter cold, although damage is not very likely, said World Weather.
Traders are awaiting Tuesday’s monthly USDA supply and demand report (WASDE), which is not expected to show much change from a month ago. For ending stocks, the average trade estimate came in just 1 million bushels higher, according to a Reuters survey, bringing ending stocks to 799 million bushels. Traders will also pay close attention to any changes the agency makes to foreign wheat production.
Technical analysis: Winter wheat market bulls have the slight overall near-term technical advantage. Recent price action suggests near-term market bottoms are in place. SRW bulls’ next upside price objective is closing March prices above solid chart resistance at $6.00. The bears’ next downside objective is closing prices below solid technical support at $5.50. First resistance is seen at today’s high of $5.86 and then at last week’s high of $5.92 1/2. First support is seen at $5.70 and then at $5.60.
HRW bulls’ next upside price objective is closing March prices above solid chart resistance at the October 2024 high of $6.38 1/4. The bears’ next downside objective is closing prices below solid technical support at $5.70. First resistance is seen at today’s high of $6.06 1/2 and then at last week’s high of $6.14 3/4. First support is seen at $5.90 and then at $5.78.
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 91 points to 66.54 cents, closing near the session high.
Fundamental analysis: Modest short covering bolstered by crude oil strength was featured in the cotton market to begin the week, though technical resistance and a firmer U.S. dollar kept gains minimal. Meanwhile, weather in South America continues to lend some support, as World Weather Inc. Reports cotton development in Northern Argentina should be slowing amid hot temperatures and no rain, which will prevail early this week before rain finally evolves. In Brazil, cotton areas have seen less frequent and intense rains recently, which may continue, although totally dry weather is not likely in Mato Grosso, where more delays in fieldwork are possible.
With tomorrow comes USDA February supply and demand update, due out at 11 a.m. CT. Analysts are expecting modest reductions in U.S. and global ending stocks.
Technical analysis: March cotton continues to be limited by technical resistance at the 10-day moving average of 67.42 cents, as bears continue to firmly grasp the near-term technical advantage. Bears will continue to look to breach last week’s low of $65.01, with additional support serving at 64.89 cents and 64.22 cents. Bulls will need to capture a close above 70.00 cents to regain technical control.
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.