Corn
Price action: March corn futures fell 7 1/2 cents to $4.84, near the session low.
Fundamental analysis: The corn futures market today saw profit-taking from the speculators after recent gains. Losses in soybean and soybean meal futures today also helped to pressure corn.
USDA in its monthly supply and demand report this morning left its U.S. corn ending stocks forecast unchanged at 1.540 billion bushels. That leaned a bit bearish, as analysts had expected a 14-million-bu. decline. The agency made no changes to the supply or demand side of the 2024-25 balance sheet. USDA raised its 2024-25 average cash corn price projection by 10 cents, to $4.35.
Also weighing on corn futures today, China’s ag ministry made no changes to its supply and demand tables for 2024-25 this month and continues to forecast its 2024-25 corn imports at 9 MMT, down sharply from 23.41 MMT in 2023-24.
World Weather Inc. today said central and northeastern Argentina, Uruguay, southwestern Paraguay and southern Brazil “will all receive significant rain in the coming 10 days, bolstering soil moisture after a period of stress in recent weeks. Some of the precipitation falls a little late for saving yields and production. However, late-season crops will benefit.” Meantime, less rain and greater sunshine in center-south Brazil will be good for first-season corn harvesting as well as Safrinha crop planting. Mato Grosso, Brazil, however, will remain a little wet at times keeping field progress sluggish, said the forecaster. Pro Farmer South American crop consultant Michael Cordonnier left his Brazilian corn production forecast at 123 MMT but holds a neutral-to-lower bias given safrinha planting delays in Mato Grosso. He also left his Argentine corn estimate unchanged at 47 MMT.
Technical analysis: The corn futures bulls have the overall near-term technical advantage. However, a 2.5-month-old price uptrend on the daily bar chart has stalled out. The next upside price objective for the bulls is to close March prices above solid chart resistance at $5.00. The next downside target for the bears is closing prices below chart support at the February low of $4.72 1/2. First resistance is seen at $4.90 and then at $4.95. First support is seen at this week’s low of $4.82 1/4 and then at $4.78.
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 soybeans fell 6 cents to $10.43 1/2, while March soymeal fell $3.90 to $296.60, each closing near the session low. March soyoil rose 40 points to 46.13 cents.
Fundamental outlook: USDA’s late-morning supply and demand update pulled soybeans from earlier highs, which included minimal changes from January. While there were no changes to domestic soybean ending stocks, where analysts were expecting a 6 million-bushel cut, global ending stocks of 124.34 MMT did land well below the average pre-report estimate, though the figure was still above year-ago.
Meanwhile, improving conditions in South America prompted crop consultant Dr. Michael Cordonnier to raise his Brazilian soybean estimate by 1 MMT, to 171 MMT, due to “surprising harvest progress in central Brazil last week and the anticipation of another good harvest week this week.” With somewhat drier weather in the forecast, he is less concerned about harvest delays and crop quality. Cordonnier left his Argentine forecast unchanged at 49 MMT, though he did indicate a neutral to lower bias going forward.
As the Brazilian harvest ramps up, demand for U.S. soybeans is likely to wane as importing countries look to secure fresh supplies, though some logistical concerns loom, with Brazil’s Port of Santos preparing for a significant increase in cargo flow due to an expected record harvest. Truck traffic at the port is expected to spike from the usual 3,000 trucks per day to 15,000 during the peak export months of March to June. This comes as top importer, China, expects reduced soybean imports of 94.6 MMT during 2024-25, down from 104.75 MMT in 2023-24.
Technical outlook: March soybeans ended the session below support at $10.44 1/4, after an earlier test of the 20- and 10-day moving averages of $10.50 3/4 and $10.54, which will continue to serve as initial resistance. Conversely, initial support will now serve at $10.39, with further support lying at $10.35 and again at the nearly converged 100- and 40-day moving averages, currently trading at $10.23 1/2 and $10.22 1/4. Bulls efforts to breach $11.00 are fading, while bears continue to look towards securing a close below $10.31 3/4.
March soymeal continues to face technical pressure from the 40-, 10-, 20- and 100-day moving averages, layered from $303.80 to $307.40, which forced a close below support at $298.90 and $297.20. Initial support will now serve at $295.30 and then at $290.00 followed by the Dec. 19 low of $285.10.
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 futures settled 2 1/2 cents lower to $5.77. March HRW futures dropped 4 cents to $5.92 3/4, nearer session lows. March HRS futures fell 7 cents to $6.18 1/4.
Fundamental outlook: Winter wheat futures showed relative strength this morning but losses in the corn market weighed heavily on prices after today’s USDA reports. USDA made minimal changes to their balance sheets in today’s reports, as expected. They raised food use by four million bushels, tightening their ending stocks forecast by the same amount to 794 million bushels, a little below expectations of 799 million bushels. The world balance sheet continues to grow tighter, as noted by USDA lowering 2024-25 carryout by 1.3 MMT to $257.6 MMT, which would be down 9.9 MMT below last year. Meanwhile, USDA lowered expected Chinese imports by 2.5 MMT to 8 MMT for 2024-25. China had a fruitful growing season last year, leading to an abundance of supplies. Reduced Chinese demand on the world market could weigh on U.S. exports, which are still seen as surging 143 million bushels from a year ago despite recent poor sales and shipments.
Colder air is expected across the central and southwestern U.S. Plains and Midwest over the coming week but the upcoming snowstorm is expected to insulate winter crops, says World Weather Inc. Snowfall should help protect the crop as winter hardiness has been reduced due to recent warmer than average temperatures and provide much needed precip across the region.
Technical outlook: Winter wheat futures have closed lower for three consecutive sessions, though bulls retain a slight advantage. Additional selling pressure in March SRW futures finds support at the 10-day moving average at $5.72, which is reinforced by $5.66 1/2. Resistance stands at $5.84 1/4 then last Friday’s for-the-move high of $5.92 1/2 on a reversal higher. March HRW futures struggled to shake outside market weakness today as well as prices closed lower for the third consecutive session. Support comes in at $5.90 1/4 then $5.86 3/4 on continued selling, while bulls are eyeing resistance at $5.99 then $6.07 1/2 on a bounce.
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 86 points to 67.40 cents, ending the session above the 20-day moving average.
Fundamental outlook: Cotton futures were able to extend Monday’s gains despite mostly bearish supply and demand data in USDA’s monthly update. Meanwhile, solid outside support likely spurred some additional short-covering, though a slow safrinha cotton planting pace in Brazil continues to be an additional supporting factor.
USDA raised its cotton carryover forecast by 100,000 bales, to 4.9 million bales, where analysts expected a 10,000-bale decline. No changes were made on the supply side of the balance sheet, though on the demand side, domestic use was cut 100,000 bales to 1.7 million bales. Global ending stocks also landed above pre-report expectations at 78.41 million bales.
World Weather Inc. reports Brazil cotton areas have seen less frequent and intense rain recently, which may continue for a while, although totally dry weather is not likely in Mato Grosso where more delays in fieldwork are possible periodically.
Technical outlook: March cotton notched another day of short-covering strength, which included a futile run at the 40-day moving average of 67.65 cents, which will now serve as initial resistance, as well as a close above the 20-day moving average of 66.86 cents for the first time since early December. The 10-day moving average of 66.35 cents will back the 20-day moving average as initial support, while bears continue to look toward a close below the Feb. 3 low of 65.01 cents, while bulls continue to look toward 70.00 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.