Corn
Price action: May corn fell 1 1/4 cents to $4.93, a near one-month low-close.
Fundamental analysis: Corn futures inched lower, notching a fourth day of weakness as a general risk-off tone rang across the marketplace amid looming economic uncertainty and improving sentiments around Brazil’s safrinha corn production. Moreover, increasing ethanol stocks also weighed on prices at midweek, which were the second highest ever behind the week ended April 17, 2020.
President Trump’s tariff talks continue to supply an air of uncertainty, with traders largely unsure if the rhetoric will lead to negotiations toward improved trade relations or greater geopolitical tensions. Outside markets were mostly subdued today, though the U.S. dollar was slightly firmer, while crude oil sank, casting a shadow over commodities.
In Brazil, safrinha corn planting efforts have advanced, most notably across the Southeast and South, though planting delays remain pronounced in top producers, Mato Gross and Mato Grosso do Sul due to soybean harvest delays. These delays could leave an estimated 20-25% of the safrinha corn crop to be sown outside its optimal window and may subsequently have an adverse impact on yield, warranting attention.
This morning, the Energy Information Administration reported ethanol production averaged 1.081 million barrels per day (bod) during the week ended Feb. 21, down 3,000 bpd (0.3%) from the previous week but 6,000 bpd (0.6%) above the same week last year.
Early Thursday morning, USDA will detail weekly export sales, with traders expecting net sales to have ranged from 900,000 MT to 1.65 MMT during the week ended Feb. 20. Last week, net sales of 1.45 MMT were reported for the previous week.
Technical analysis: May corn faced pressure from the 20- and 10-day moving averages, currently trading at $5.03 1/2 and $5.04 3/4, while selling was hemmed by the 40-day moving average of $4.91 3/4. Bulls continue to own the near-term technical advantage, though their grasp is fading. The next upside price objective is to close May futures above resistance at the February high of $5.18 3/4, while bears look to secure a close below support at $4.70. Interim resistance stands at Tuesday’s high of $4.98 1/2, which is backed by psychological resistance at$5.00, while first support lies at this week’s low of $4.88 1/2 and then at the February low of $4.84.
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 soybeans fell 7 1/2 cents to $10.41 1/4, nearer the daily low and closed at a five-week-low close. May soybean meal fell 50 cents to $302.50 and near mid-range. May soybean oil fell 46 points to 45.59 cents, nearer the session low and hit a three-week low.
Fundamental analysis: The soybean and meal futures markets saw selling pressure today from chart-based speculators as the near-term technical postures for both markets have deteriorated recently. All three soy markets also saw buying interest limited as crude oil prices were lower and fell to a two-month low today.
World Weather Inc. today said that in South American soybean regions, Argentina crop weather “will trend too wet in the interior south and some central crop areas during the next 10 days, resulting in some flooding” and possible quality damage. Brazil’s weather will remain dry- biased for central and northern Minas Gerais into Bahia and some drying is also expected for a while in the interior southern parts of the nation. Most other areas will get some rain periodically.
Thursday’s morning’s release of key acreage numbers from the annual USDA Ag Outlook Forum are likely to impact the soy markets. Bean traders look for the Forum to project this year’s U.S. soybean plantings at 84.4 million acres, according to a Bloomberg survey.
Also, Thursday morning’s weekly USDA export sales report is expected to show U.S. soybean sales of 200,000 to 600,000 MT for the 2024-25 marketing year, and sales of zero to 50,000 MT for the 2025-26 marketing year.
Technical analysis: The soybean futures bears have the slight overall near-term technical advantage as prices are starting to trend down on the daily bar chart. The next near-term upside technical objective for the soybean bulls is closing May prices above solid resistance at $10.70. The next downside price objective for the bears is closing prices below solid technical support at $10.00. First resistance is seen at Tuesday’s high of $10.53 1/4 and then at this week’s high of $10.61. First support is seen at this week’s low of $10.37 1/4 and then at $10.30.
Soybean meal futures bears have the firm overall near-term technical advantage. Prices are trending down on the daily bar chart. The next upside price objective for the meal bulls is to produce a close in May futures above solid technical resistance at $315.00. The next downside price objective for the bears is closing prices below solid technical support at the contract low of $290.80. First resistance comes in at this week’s high of $305.50 and then at $308.40. First support is seen at $300.00 and then at this week’s low of $298.10.
Bean oil bulls have the overall near-term technical advantage. The next upside price objective for the bean oil bulls is closing May prices above solid technical resistance at the February high of 48.55 cents. Bean oil bears’ next downside technical price objective is closing prices below solid technical support at 44.50 cents. First resistance is seen at today’s high of 46.19 cents and then at Tuesday’s high of 46.96 cents. First support is seen at today’s low of 45.15 cents and then at 44.50 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: May SRW wheat fell 8 cents to $5.79 3/4, while May HRW futures dipped 6 1/4 cents to $5.98 1/2, each marking a three-and-a-half-week low close. May HRS futures fell 11 cents to $6.17 3/4.
Fundamental analysis: Wheat futures extended losses for the third straight session as a fading technical landscape and economic uncertainty continued to weigh on the ag complex. Traders largely ignored a report from SovEcon which reflected a 600,000 MT reduction to 42.2 MMT, due to a slow shipping pace. While seemingly a modest reduction, Russian wheat exports are expected to fall 10.2 MMT (19.5%) from last year and 2 MMT (4.5%) from the five-year average.
Moreover, some concern around the U.S. wheat crop has increased as unusually warm temperatures could reduce some winter hardness in southern states from Texas to the southeastern states by this time next week. World Weather Inc. reports the need for greater precip will rise in March, to support winter wheat as it begins to develop further. A pattern of occasional precip is expected to begin Sunday and continue into the second week, which will be timely and beneficial. The forecaster notes some cooling will occur next week, though the effects aren’t likely to be significant.
Technical analysis: May SRW wheat bears gained additional traction at midweek, with a close below the 100-day moving average for the first time since Feb. 3. Initial support will now serve at the 40-day moving average of $5.73 3/4, which is backed by additional support at $5.71 1/2 and $5.63 1/4. Meanwhile, initial resistance will now serve at the 100-day moving average, currently trading at $5.80 1/2, then at 20-, 10- and 200-day moving averages of $5.91 3/4, $5.98 1/4 and $6.08.
USDA will detail weekly export sales for the week ended Feb. 20 early Thursday morning. Analysts are expecting net sales ranged from 300,000 to 600,000 MT during the week. Last week, net sales of 532,674 MT were reported for the previous week.
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 fell 50 points to 66.87 cents, nearer the daily low and hit a three-week low.
Fundamental analysis: The cotton futures market continues to languish at lower price levels. A wobbly U.S. stock market and lower crude oil prices that today hit a two-month low are bearish outside-market elements for the cotton market.
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 the forecaster.
USDA’s annual Ag Outlook Forum begins Thursday and includes the release of U.S. planted acres numbers. The Forum is expected to show U.S. cotton plantings this year of 10.0 million acres, which compares to the latest USDA estimate of 11.2 million acres.
Cotton traders will also closely scrutinize Thursday morning’s weekly USDA export sales report. Seasonally U.S. cotton sales abroad should start to improve from recent levels.
Cotton traders are also awaiting Friday morning’s annual Mid-South Farm & Gin Show (February 28 and March) and comments from Joe Nicosia of Louis Dreyfus Company, providing his thoughts on the global market, prices and some of the supply chain factors impacting U.S. cotton farmers.
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 67.50 cents and then at this week’s high of 68.19 cents. First support is seen at today’s low of 66.80 cents and then at 66.25 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.