Corn
Price action: May corn rose 3 1/4 cents to $4.62, ending in a high-range close.
Fundamental analysis: Nearby corn futures posted modest gains despite general pressure across the ag complex, partially due to a firmer U.S. dollar, but also as trade uncertainties continue to limit earnest buying interest. Lending support was a 3% drop in ethanol stocks during the week ended March 14, despite a 4% production surge to 1.105 million barrels per day (bpd), which marked a six-week high. The drop in stocks was the largest weekly decline since October as implied ethanol usage jumped to a near all-time-high.
Traders will also get a look into export demand, with USDA’s weekly export sales release due out prior to Thursday’s open. Analysts are anticipating net sales to have ranged from 800,000 MT to 1.7 MMT during the week ended March 13. Last week, net sales of 967,348 MT were reported for the previous week.
Meanwhile, in South America, conditions have been dry in Argentina, which will benefit many areas but not in the northeast where dryness has already been prevailing for a while, stressing many crops. However, rain is expected this weekend into next week from west to east across the nation and into some of the dry areas of Rio Grande do Sul, Uruguay and Paraguay, bringing some relief from recent drying. In Brazil, center west and center south crop areas will continue to get a good mix of rain and sunshine, favoring crop development.
Technical analysis: May corn continued to find support at the must-hold 200-day moving average, currently trading at $4.54 3/4, while resistance stood at the 10-day moving average of $4.64 1/4. Bulls and bears continue to sit on an even playing field, with bulls looking to secure a close above last week’s high of $4.77 1/2, while bears’ next objective is to hold a close below the March low of $4.42 1/2. However, initial resistance will remain at the 10-day moving average, then at $4.70, while first support lies at $4.55 and then at $4.50.
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 4 1/2 cents to $10.08 1/4, nearer the daily low. May soybean meal lost $2.20 to $297.70, near the daily low and hit a three-week low. May soybean oil fell 18 points to 42.36 cents, near mid-range.
Fundamental analysis: The soybean complex futures saw some technical selling pressure today as the near-term chart postures are bearish. Meal is presently the weak sister in the soy complex, which is especially worrisome to the soybean bulls. A stronger U.S. dollar index today was also a bearish outside-market element for the soy complex. Firmer crude oil prices today did somewhat limit selling pressure, as did a bit less risk aversion in the general marketplace today, as the U.S. stock indexes posted corrective bounces.
S&P Global left its U.S. soybean plantings forecast unchanged at 83.3 million acres, down 3.8 million acres from last year.
World Weather Inc. today said that in South American soybean regions drier weather in Argentina into the weekend “will be good for many areas, but not in the northeast where dryness has already been prevailing for a while stressing many crops.” Rain is expected this weekend into next week from west to east across the nation and into some of the dry areas of Rio Grande do Sul, Uruguay and Paraguay, bringing some relief from recent drying. Meantime, Brazil’s center-west and center-south crop areas will continue to get a good mix of rain and sunshine favoring crop development.
Traders await Thursday morning’s weekly USDA export sales report that is expected to show U.S. soybean sales in the 2024-25 marketing year at 400,000 to 900,000 MT, and sales for 2025-26 at zero to 50,000 MT.
Technical analysis: The soybean bears have the overall near-term technical advantage as prices are in a six-week-old downtrend on the daily bar chart. The next near-term upside technical objective for the soybean bulls is closing May prices above solid resistance at $10.40. The next downside price objective for the bears is closing prices below solid technical support at the March low of $9.91. First resistance is seen at today’s high of $10.16 and then at this week’s high of $10.21 3/4. First support is seen at $10.00 and then at $9.91.
Bears have the solid overall near-term technical advantage. Prices are in a 2.5-month-old downtrend 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 the March high of $309.80. 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 today’s high of $301.90 and then at $305.00. First support is seen at $295.00 and then at $290.80.
Bean oil bears have the overall near-term technical advantage. Prices are trending down on the daily bar chart. The next upside price objective for the bean oil bulls is closing May prices above solid technical resistance at 44.00 cents. Bean oil bears’ next downside technical price objective is closing prices below solid technical support at the December low of 39.86 cents. First resistance is seen at this week’s high of 42.88 cents and then at 43.88 cents. First support is seen at today’s low of 42.11 cents and then at the March low of 41.08 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 futures closed 1 1/2 cents lower to $5.63 1/2, near mid-range. May HRW futures plunged 11 /2 cents to $5.94 3/4, nearer session lows.
Fundamental analysis: Price action across wheat futures was a bit of a mixed bag today as SRW futures showed relative strength, contrary to the trend seen earlier this week, as HRW futures led the way higher. Blizzard conditions evolved overnight in western Kansas, northeastern Colorado and Nebraska with sustained high winds, says World Weather Inc. While the snowfall improved moisture totals, high winds kept snow blowing, providing no tangible benefit to winter crops. Little precip is expected until the end of the month in HRW areas, keeping the area dry and subject to crop stress. World Weather Inc. notes that freeze-damaged crops in the Plains may not be able to recover. This is known across the marketplace, helping fuel the recent advance in HRW and today’s setback is little more than corrective in nature. Followthrough selling tomorrow becomes more concerning.
We have reported on the tightening world balance sheet periodically over the past several months. While stocks-to-use among the world’s top exporters remain tight, that has done little to support a sustained rally in wheat futures. Exports are slowing out of both Russia and the European Union. USDA is likely too high on export estimates for both regions. That is going to add to the world balance sheet and could eventually actually lead to increasing stocks from last year. This indicates more of a demand concern, as importing countries are not importing as much wheat as they have been the past couple of years. How exports end the marketing year over the next couple months will be key.
USDA will release its weekly export sales report tomorrow morning. Analysts expect sales between 300,000 and 700,000 MT of wheat for the week ended March 13. Last week, sales totaled an impressive 783,416 MT.
Technical analysis: May SRW futures traded on either side of unchanged today, caught between technical support and resistance. Losses were limited by the 10-day moving average at $5.62, which coincides with uptrend support stemming from the early March low. Additional selling has bears targeting psychological support at $5.50. Bulls are looking to overcome resistance at $5.65 1/4, the 20-day moving average, before tackling yesterday’s high of $5.74 3/4.
May HRW futures saw sharp selling pressure today, though bulls continue to maintain a slight overall technical advantage. Bulls are seeking to keep prices above today’s low of $5.91 3/4 in order to maintain the recent uptrend. Additional selling targets the 40-day moving average at $5.87. Resistance comes in at the psychological $6.00 mark on a reversal back higher. That is reinforced by yesterday’s for-the-move high close of $6.06 1/4.
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 12 points to 66.35 cents and nearer the daily high.
Fundamental analysis: The cotton futures market today saw some mild price pressure from technical selling and a rally in the U.S. dollar index. Firmer crude oil prices and a bit less risk aversion in the general marketplace today did limit the downside for cotton.
This afternoon’s Federal Reserve FOMC meeting saw no change in U.S. interest rates. The FOMC statement said the economic outlook is uncertain and that the inflation outlook has up-ticked just a bit. However, the marketplace took the report as not being too hawkish and the U.S. stock market held and even extended its daily gains a bit following the FOMC statement.
World Weather Inc. today said rain is needed in the southwestern U.S. desert region, southern California and both South and West Texas “to provide more favorable soil moisture for spring planting.” The Blacklands are also expected to dry out in the coming five days. There is potential for crop areas from the Blacklands into South Texas to get some rain March 25-27. Excessive wind in West Texas recently induced some soil erosion, though cotton planting does not usually begin before May 1.
Thursday morning’s weekly USDA export sales report will be closely scrutinized by cotton traders. Weekly shipments of the U.S. fiber have improved recently, but better export sales numbers are needed on a consistent basis for prices to sustain a significant uptrend in the coming weeks.
Technical analysis: The cotton futures bears have the firm overall near-term technical advantage. Prices are in a downtrend on the daily bar chart. The next upside price objective for the cotton bulls is to produce a close in May futures above technical resistance at the February high of 69.25 cents. The next downside price objective for the cotton bears is to close prices below solid technical support at the contract low of 60.00 cents. First resistance is seen at Tuesday’s high of 67.08 cents and then at this week’s high of 67.80 cents. First support is seen at today’s low of 65.96 cents and then at last week’s low of 65.42 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.