Corn
Price action: March corn rose 6 1/4 cents to $4.90 1/4, closing near the session high.
Fundamental outlook: Corn futures managed to claw back a portion of Tuesday’s losses despite lacking outside market support and a fading soy complex. Today’s price action was seemingly a reflection of teetering global corn supply as uncertainties loom amid a sluggish safrinha planting pace in Mato Grosso, Brazil, while global soybean supply leans quite bearish as South American producers look to harvest a record crop. Meanwhile, export demand was displayed through a daily sale from USDA, which totaled 130,320 MT for delivery to unknown destinations during 2024-25. However, ethanol production has waned recently, with weekly production averaging 1.082 million barrels per day (bpd) during the week ended Feb. 7, down 30,000 bpd (2.7%) from the previous week and 1,000 bpd below the same week last year. That was the first time weekly production has been below year-ago since the week ended Nov. 29, 2024. Moreover, ethanol stocks dropped 72,000 barrels to 25.692 million barrels.
The marketplace will continue to focus on weather in South America as the optimal window for planting second safrinha corn is nearing its end. World Weather Inc. reports, though, that the weather will improve additionally over the next two weeks, further noting there is a good chance that the bulk of safrinha corn planting will be done by the end of this month. Regardless, late-season monsoonal rain will have to be routine to ensure the best development potential through mid-April.
USDA will release its Weekly Export Sales Report early Thursday morning, with analysts expecting net sales to have ranged from 800,000 MT to 1.7 MMT during the week ended Feb. 6. Last week, net sales of 1.48 MMT were reported for the previous week.
Technical outlook: March corn bulls managed to show their dominance through a close back above the 20- and 10-day moving averages of $4.87 1/2 and $4.89 3/4, which will once again serve as initial support. However, resistance will continue to serve at $4.92 3/4, which is backed by the Feb. 5 high of $4.98 1/2 and psychological resistance at $5.00. Conversely, an additional breach of the 10- and 20-day moving averages will face additional support at $4.79 1/4, $4.74 1/4 and the 40-day moving average of $4.70 3/4.
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 15 3/4 cents to $10.27 3/4, nearer the daily low and hit a near four-week low. March soybean meal fell $2.50 to $294.10, nearer the session low and hit a two-month low. March soybean oil fell 47 points to 45.66 cents and nearer the session low.
Fundamental analysis: Technical selling pressure and improving weather conditions in South American soybean-growing regions hit the soy futures markets today. Bulls got no traction from USDA reporting a daily U.S. soybean sale of 120,000 MT to unknown destinations for 2024-25, or from a drop in the U.S. dollar index. Solid losses in the crude oil market today were a bearish outside market for the soy complex futures.
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 in early season crops.” However, late season crops will benefit. Meantime, less rain and greater sunshine in center-south Brazil will be great for soybean harvesting. Mato Grosso, Brazil, however, will remain a little wet at times keeping field progress sluggish, said World Weather.
Thursday morning’s weekly USDA export sales report is expected to show U.S. soybean sales of 300,000 to 800,000 MT in the 2024-25 marketing year, and sales of zero to 50,000 MT in the 2025-26 marketing year.
Technical analysis: The soybean bulls have lost their overall near-term technical advantage. A six-week-old uptrend on the daily bar chart has been negated. The next near-term upside technical objective for the soybean bulls is closing March prices above solid resistance at the February high of $10.79 3/4. The next downside price objective for the bears is closing prices below solid technical support at $10.00. First resistance is seen at $10.40 and then at $10.50. First support is seen at today’s low of $10.24 1/2 and then at $10.18 1/2.
Soybean meal bears have the firm overall near-term technical advantage. The next upside price objective for the meal bulls is to produce a close in March futures above solid technical resistance at $310.00. The next downside price objective for the bears is closing prices below solid technical support at the contract low of $285.10. First resistance comes in at $300.00 and then at this week’s high of $302.90. First support is seen at today’s low of $293.40 and then at $290.00.
Bean oil bulls have the slight overall near-term technical advantage amid recent choppy trading. The next upside price objective for the bean oil bulls is closing March prices above solid technical resistance at the February high of 47.54 cents. Bean oil bears’ next downside technical price objective is closing prices below solid technical support at 42.00 cents. First resistance is seen at 46.00 cents and then at this week’s high of 46.60 cents. First support is seen at 45.00 cents and then at the February low of 44.64 cents.
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 2 3/4 cents to $5.74 1/4, while March HRW futures closed 1 1/4 cents lower at $5.91 1/2. Each closed near session lows.
Fundamental outlook: A rather muted tone occurred across wheat futures at midweek as bears were hesitant amid firm technical support, while short-covering was pared by consolidative efforts after last week’s reach to a three-month high. Meanwhile, Black Sea competition continues to be a factor, evidenced by a 5.8% increase in Ukraine’s grain exports from year-ago. More specifically, wheat exports included 11.34 MMT, up from 9.97 MMT last year. Meanwhile, France’s ag ministry lowered its forecast for 2024-25 French wheat exports outside the EU by 100,000 MT to 3.4 MMT, which would be down 67% from 2023-24 and the lowest level in the ministry’s record dating back to 1996-97. The ministry did raise its export forecast within the bloc by 100,000 MT to 6.24 MMT, down just 50,000 MT from 2023-24.
Early Thursday morning, USDA will release its Weekly Export Sales Report, with analysts expecting net wheat sales to have ranged from 200,000 to 600,000 MT. Last week, net sales of 438,867 MT were reported for the previous week, down 4% from the previous week but up 41% from the four-week average.
Technical outlook: March SRW wheat futures continued to face resistance at $5.84 3/4, which is backed by the Feb. 7 high of $5.92 1/2, and ultimately ended the session below the 10-day moving average of $5.74 3/4. An extension lower will now face initial support at the 100-day moving average of $5.71 1/4, which is backed by support at $5.68 and the 20-day moving average of $5.61 1/4. Bulls continue to grasp the near-term technical advantage, with the recent uptrend suggesting a market bottom is in place, though bulls will need to power through $6.00 in order to maintain the upper hand. Conversely, in order for bears to regain control, a breach of technical support at $5.40 will be required.
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 1 point to 67.41 cents and nearer the daily low.
Fundamental analysis: The cotton market saw a pause and some chart consolidation after making decent price gains this week. The key outside markets were neutral for the cotton market today as the U.S. dollar index was lower but so were crude oil prices. The U.S. stock indexes were also mixed today following a hotter-than-expected U.S. consumer price index report.
World Weather Inc. today said rain will be needed during the second half of winter and early spring in the U.S. southwestern desert region, southern California and both south and west Texas “to ensure favorable soil moisture for spring planting.” A few areas in the southeastern U.S. are still drier than usual and need rain as well. The U.S. Delta will be wettest for a while along with “portions” of the interior southeast. West Texas precipitation in the coming week “will be too light to have a lasting impact, although a little snow and rain may briefly fall,” said World Weather.
Friday morning’s weekly USDA export sales report will be closely scrutinized by cotton traders. Recent numbers have proven disappointing. Traders are also awaiting the weekend U.S. cotton acreage estimate that will come from the National Cotton Council convention.
Technical analysis: The cotton futures bears have the firm overall near-term technical advantage. Prices are still in a 4.5-month-old downtrend on the daily bar chart. The next upside price objective for the cotton bulls is to produce a close in March futures above technical resistance at 69.00 cents. The next downside price objective for the cotton bears is to close prices below solid technical support at the contract low of 65.01 cents. First resistance is seen at today’s high of 67.97 cents and then at 69.00 cents. First support is seen at 67.00 cents and then at 66.50 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.