Corn
Price action: March corn closed up 6 3/4 cents at $4.88 3/4, ending near the session high after carving a three-week low overnight.
Fundamental analysis: After gapping lower in the overnight open as the marketplace reeled from President Trump’s plan of fresh tariffs against Canada, Mexico and China, corrective buying was featured through most of the day session amid news some tariffs would be delayed a month. The situation will remain fluid as negotiations continue, with earlier mentions of possible tariffs on the European Union as well, citing a large trade deficit with the bloc.
Meanwhile, safrinha corn plantings continue to face delays due to frequent and significant rainfall from Mato Grosso into Sao Paulo and Parana early this week, though rainfall intensity and coverage are expected to lighten across central Brazil next week. World Weather Inc. reports farmers will continue to struggle to aggressively harvest soybeans over the next two weeks, which will increase concern over safrinha plantings. In central and northern Argentina, temps will be above normal for the next seven to ten days, which will coincide with no rain and quickly drying and crop stress.
This morning, USDA reported weekly Export Inspections of 1.25 MMT (49.3 million bu.) for the week ended Jan. 30, up 1,281 MT from the previous week and within pre-report expectations from 1.0 MMT to 1.4 MMT. Corn inspections are running ahead of year-ago inspections by 33% and well ahead of the seasonal pace needed to achieve USDA’s target.
Technical analysis: March corn futures managed to end the session back above the 10-day moving average of $4.87 1/2 after dipping to a three-week low in overnight trade. The move was solid proof of bulls’ continued grasp on the near-term technical advantage. The camp will continue to work to secure a close above $5.00, with interim resistance serving at $4.93, $4.97. Conversely, bears’ next objective is to manage a close below support at $4.60, though interim support is layered at the 20-day moving average of $4.78, then at $4.74, $4.68 1/2 and the 40-day moving average of $4.62 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 surged 16 1/4 cents to $10.58 1/4, over a quarter off overnight lows. March soymeal rose $2.60 to $303.70, nearer session highs. March bean oil rose 40 points to 46.51 cents.
Fundamental analysis: After opening lower overnight, soybeans rebounded and saw persistent strength throughout today’s session and closed nearer session highs. Attention across the marketplace today was focused on tariff announcements. After implementing an additional 10% tariff on Chinese goods over the weekend, traders were encouraged to see that China was willing to talk with President Trump and negotiate, with rumblings that China would revisit Phase 1 purchase agreements outlined in Trump’s first term. Today’s price action made it obvious that the market is back to headline driven trading with developments swinging price and sentiment at a rapid pace. The key will be to pay attention to longer term trends and to try to ignore the day to day, or even hour to hour, swings.
Soybeans shook off reports that Brazilian agribusiness consultant Celeres raised their production forecast to 174 MMT from 170.8 MMT previously. That is one of the higher private forecasts and is surprising given how wet it has been. Rain is expected to continue from Mato Grosso to Goias, southern Minas Gerais, Sao Paulo and Parana this week on a consistent basis, further delaying harvest and leading to additional crop quality declines, says World Weather Inc.
USDA reported soybean export inspections of 1.01 MMT (37.2 million bu.) for the week ended Jan. 30, up 275,264 MT from the previous week and near the upper end of the pre-report range of expectations from 400,000 MT to 1.25 MMT. Inspections have fallen faster than historically normal, though are still running ahead of the historical pace needed to hit the USDA export estimate.
Technical analysis: March soybean futures opened solidly lower overnight but rebounded and closed on session highs. Bulls retain the near-term technical advantage, though prices continue to consolidate in a bull flag on the daily bar chart. Resistance stands at $10.58 1/2, with additional strength targeting the 200-day moving average at $10.65 3/4. Support stands at the psychological $10.50 mark, while additional selling eyes support at $10.38, then today’s low of $10.31 3/4.
Meal futures continue to see volatile trade though neither bull nor bear holds the near-term technical edge. March soymeal continued to be solidly supported when under the $300.0 level. Weakness below that mark has bears targeting support at $293.5. Resistance at $304.1, the 40-day moving average, limited gains today. Above that mark, bulls are targeting resistance at $308.9.
What to do: Get current with advised sales.
Hedgers: You should be 40% priced in the cash market on 2024-crop production.
Cash-only marketers: You should be 40% priced on 2024-crop production.
Wheat
Price action: March SRW wheat rose 7 1/4 cents to $5.66 3/4, nearer the daily high and hit a nine-week high. March HRW wheat rose 6 1/2 cents to $5.85 3/4, nearer the daily high. March spring wheat futures inched up a penny to $6.16 1/2.
Fundamental analysis: The wheat futures markets rallied today after seeing overnight selling pressure on worries that new U.S. trade tariffs against Mexico, Canada and China, set to take effect Tuesday, would find U.S. ag products being targeted with retaliation from those countries. However, news at mid-morning that Mexico got a one-month extension to the tariff implementation so the countries could negotiate more gave grain traders some hope that the matter could be resolved without new tariffs being implemented. This situation remains very fluid and the risk aversion still in the general marketplace, if it continues, would likely limit the upside for the wheat markets.
Gains in wheat were impressive today given the solid rally in the U.S. dollar index. However, the USDX did back well down from its daily high on the Mexico tariff delay news.
World Weather Inc. today said that in U.S. HRW country, more dry weather is expected in the next seven days. Temperatures will be slowly trending colder as an arctic air mass settles in. The cold air is expected to overtake the entire region in the second week of the outlook, raising the need for protective snow cover. A storm system Feb. 10 – 12 is most likely to provide needed snow. However, confidence in the coverage and significance of snow from this system is a little low, said the forecaster. Meantime, in the northern Plains, arctic air with well below average temperatures will dominate the weather pattern through the next two weeks. New snow is filling into areas that were missing snow before, so, the risk of winterkill occurring with this cold air mass is mostly non-existent, said World Weather.
USDA this morning reported U.S. wheat export inspections of 252,637 MT for the week ended Jan. 30, down 231,907 MT from the previous week and within the pre-report range of expectations.
Technical analysis: Winter wheat market bears still have the overall near-term technical advantage. However, 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 the contract low of $5.26. First resistance is seen at today’s high of $5.73 3/4 and then at $5.80. First support is seen at $5.60 and then at today’s low of $5.50 1/2.
HRW 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 this week’s low of $5.49 1/4. First resistance is seen at today’s high of $5.90 3/4 and then at $6.00. First support is seen at $5.80 and then at today’s low of $5.71 3/4.
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 16 points to 66.04 cents, ending nearer the session high.
Fundamental analysis: Cotton futures extended to a fresh low, edging to the lowest level since Oct. 2020. The natural fiber faded amid continued pressure from a rocketing U.S. dollar and tumbling equities as the Trump administration indicated a new round of tariffs would affect Canada, Mexico, China and most recently the European Union. However, prices did manage to rebound from the daily low following reports that some of the planned tariffs would be delayed a month. The current environment will certainly keep traders on their heels as the situation progresses.
Brazil’s safrinha cotton crop continues to face delays, with planting in Mato Grosso still well behind normal, with only 33.5% of the crop planted as of Jan. 26, down from 75.2% last year. Mato Grosso is the most behind in planting and that is not expected to improve until the next drier period, which is expected late next week into the week of Feb. 10.
Technical analysis: March cotton futures edged to a new contract low overnight, though ended well off the daily low by the close. Bears continue to hold the near-term technical advantage and will face initial resistance at 66.34 cents, then at the 10-, 20- and 40-day moving averages of 66.90 cents, 67.36 cents and 68.20 cents. Conversely, support will remain at 67.36 cents, 65.24 cents then at today’s low of 65.01 cents and again at 64.78 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.