Corn
Price action: May corn futures settled 8 cents lower to $4.97.
Fundamental analysis: Corn futures underwent heavy selling pressure to start the week as May futures closed at the lowest mark in three weeks. Relatively dry conditions last week allowed Brazilian producers to get a significant amount of fieldwork done. While that was known, just how much work got done was rather unexpected. AgRural reported safrinha corn plantings at 64% completed, down from 73% last year at this time but well above last week at 36% completed. Wet weather is expected over the coming week in Brazil from Mato Grosso into northern Mato Grosso do Sul and western Goias. The rain will be welcome for areas that already have second crop corn planted, but will slow the harvest of first-crop beans and planting of second crop corn where progress still needs to be made.
USDA reported corn export inspections of 1.135 MMT (44.7 million bu.) for the week ended Feb. 20, down 488,651 MT from the previous week. While that was below average, accumulated inspections continue to run well ahead of the historical pace needed to hit the current USDA export forecast.
Technical analysis: May corn futures continue to see sustained selling pressure. Bears ability to close prices below the 20-day moving average is a bad sign for bulls, as that mark had capped most of the downside since December. Bulls are seeking to hold support at $4.90 3/4, the 40-day moving average, on continued selling, while additional weakness eyes $4.85 support. Resistance stands at $5.01 3/4, the 20-day moving average, then $5.05 on a bounce.
What to do: Get current with advised sales.
Hedgers: You should be 70% sold in the cash market on 2024-crop. You should have 20% of expected 2025-crop production forward sold for harvest delivery.
Cash-only marketers: You should be 70% sold on 2024-crop. You should have 20% of expected 2025-crop production forward sold for harvest delivery.
Soybeans
Price action: May soybean futures fell 10 1/2 cents to $10.47 1/2 and closed nearer session lows. May meal futures sunk $3.00 to $300.90 and on session lows. May bean oil futures closed 104 points lower to 46.30 cents.
Fundamental analysis: Soybeans fell today in a continuation of Friday’s selling pressure. While today’s selling negated the recent modest uptrend stemming from the early February low, followthrough selling is necessary before calling an interim market top. News that AgRural cut its Brazilian production forecast did little to support soybean prices today. AgRural reduced its Brazilian soybean production forecast by 2.8 MMT, to 168.2 MMT, led by cuts to the crop in Rio Grande do Sul. The firm said soybean harvest reached 39% as of last Thursday, nearly caught up to last year’s 40% on this date. With additional rain forecast over the coming week, some concerns are arising about soybean quality, says World Weather Inc.
USDA reported soybean export inspections of 858,679 MT (31.6 million bu.) for the week ended Feb. 20, up 132,179 MT from the previous week. Accumulated export inspections are running right about on par with what is needed historically to hit the current USDA export forecast, though recent disappointing sales has some analysts questioning whether or not exports will get there.
Technical analysis: May soybean futures closed lower for the second straight session. Neither bull nor bear has much of a technical edge at this point. Support comes in at today’s low of $10.45 3/4 then the Feb. 13 low at $10.41 1/4. Bulls are seeking to close prices back above psychological $10.50 resistance, which is reinforced by resistance at $10.55 3/4.
May meal futures continue to consolidate near recent lows as bears retain the technical advantage. Support stems from the psychological $300.00 mark, which is backed by support at $296.40 then $290.80. Resistance stands at $304.50, the 10-day moving average, which has capped gains in each of the past six sessions.
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: May SRW wheat fell 10 1/2 cents to $5.93 1/2 and nearer the daily low. May HRW wheat lost 12 1/4 cents to $6.09 1/2, nearer the daily low. May spring wheat futures closed 10 1/4 cents lower to $6.35 3/4.
Fundamental analysis: The wheat futures markets today fell victim to profit taking from the shorter-term futures traders after recent gains. Solid losses in the corn futures market also spilled over into wheat.
USDA this morning reported U.S. wheat export inspections of 375,546 MT for the week ended Feb. 20, up 125,416 MT from the previous week.
World Weather Inc. today reports that in U.S. HRW country, “unusual warmth will dominate the next seven days of the outlook. All snow in the region has melted away except for localized pockets in Kansas and Nebraska. This will help allow soil temperatures to start warming up at a greater rate, leading to a loss in winter crop hardiness.” No greening is expected for a while, although Texas and Oklahoma crop areas will need to be closely monitored since they will be warmest for the longest period of time, said the forecaster. Some cooling is expected next week, although temperatures should remain warmer than usual. In the Northern Plains, temperatures in the next seven days will also be unusually warm and a majority of the snow that is currently on the ground will likely melt. Flooding is unlikely to be a problem since there is not a significant amount of snow on the ground, said World Weather.
This week’s Ag Outlook Forum is expected to show the confab forecasting this year’s U.S. wheat acreage at 46.7 million acres versus 46.1 million in the latest USDA forecast. U.S. wheat production this year is seen at 1.936 billion bushels versus 1.971 billion in the latest USDA report. U.S. ending wheat stocks are estimated at 829 million bushels versus 794 million in the latest USDA report. The Forum estimates came from a Bloomberg survey of analysts.
Technical analysis: Winter wheat market bulls still have the overall near-term technical advantage but need to show fresh power soon to keep alive uptrends on the daily bar charts. SRW bulls’ next upside price objective is closing May prices above solid chart resistance the February high of $6.21 3/4. The bears’ next downside objective is closing prices below solid technical support at $5.60. First resistance is seen at today’s high of $6.04 and then at $6.15. First support is seen at today’s low of $5.89 1/4 and then at last week’s low of $5.85.
The HRW bulls next upside price objective is closing March prices above solid chart resistance at the October 2024 high of $6.47 3/4. The bears’ next downside objective is closing prices below solid technical support at $5.80. First resistance is seen at today’s high of $6.22 1/2 and then at $6.30. First support is seen at today’s low of $6.05 1/4 and then at $6.00.
What to Do: Get current with advised sales.
Hedgers: You should be 85% sold in the cash market on 2024-crop. You should have 20% forward sold for harvest delivery in 2025.
Cash-only marketers: You should be 85% sold on 2024-crop. You should have 20% forward sold for harvest delivery in 2025.
Cotton
Price action: May cotton rose 54 points to 67.88 cents and near mid-range.
Fundamental analysis: The cotton futures market saw some tepid short covering today and also some mild support as the U.S. stock indexes stabilized after Friday’s sharp losses. A mildly weaker U.S. dollar index and firmer crude oil prices today were also somewhat supportive for cotton futures. Today was first-notice day for March cotton futures. Deliveries were light at 15 issued and 15 stopped.
World Weather Inc. today said rain will be needed during the balance of winter and early spring in the 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 will remain insignificant into the first half of March. “South Texas needs warmer temperatures and abundant precipitation to induce the best planting environment for March,” said World Weather.
This week’s Ag Outlook Forum is expected to show the confab forecasting U.S. cotton acreage at 10 million acres compared to USDA’s latest forecast of 11.2 million acres. U.S. cotton production is seen at 13.63 million bales compared to 14.41 million bales in the latest forecast from USDA. U.S. cotton ending stocks are pegged at 4.72 million bales versus 4.90 in the latest USDA estimate. The Forum estimates came from a Bloomberg survey of analysts.
Technical analysis: The cotton futures bears have the firm overall near-term technical advantage. However, a 4.5-month-old downtrend on the daily bar chart has stalled out. The next upside price objective for the cotton bulls is to produce a close in May futures above technical resistance at 70.00 cents. The next downside price objective for the cotton bears is to close prices below solid technical support at the contract low of 66.25 cents. First resistance is seen at today’s high of 68.19 cents and then at the February high of 69.25 cents. First support is seen at last week’s low of 67.02 cents and then at 66.74 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.