Corn
Advice: We advise corn hedgers and cash-only marketers to sell another 20% of 2024-crop production to get to 50% sold in the cash market. We also advise selling an initial 10% of expected 2025-crop production for harvest delivery.
Price action: March corn rallied 6 cents to $4.76 1/2, marking the highest close since June 18.
Fundamental analysis: Corn futures extended to a new for-the-move high, extending last week’s strength in the wake of bullish government data. Meanwhile, a rally in crude to a six-month high certainly didn’t hinder today’s strength, nor did solid weekly export inspection data, released in midmorning trade. Crude rose amid a new round of U.S. sanctions on Russia’s oil industry last Friday, that could curb global oil supplies.
USDA reported weekly corn inspections during the week ended Jan. 9 rose 563,792 MT from the previous week to 1.44 MMT, notably exceeding the pre-report range of 500,000 MT to 1.0 MMT. Corn inspections are running around 27% ahead of year-ago.
AgRural reported corn harvest in Brazil was 1.3% complete as of last Thursday, though soybean harvest, currently 0.3% complete, will ultimately determine the fate of second corn safrinha plantings. World Weather Inc. reports rain in center west, northeast, and center south Brazil will maintain favorable moisture for most crops, although there may be some need for drier conditions to promote early soybean maturation and harvest.
Technical analysis: March corn futures continue to show resounding strength, edging to a fresh for-the-move high to begin the week, though resistance at $4.76 3/4 curbed stronger buying efforts, while initial support served at $4.66 1/4 throughout the session. With bulls firmly grasping the near-term technical advantage, bulls’ next price objective to secure a close above $5.00, while bears are now looking towards holding a close below support at $4.55. However, interim resistance will stand at $4.76 3/4, which is backed by today’s high, then at $4.83, $4.93 1/2, with $5.00 serving as solid psychological resistance. Conversely, support is layered from $4.66 1/4 to 10-, 20-, 200-, 40- and 10-day moving averages, trading from $4.59 1/2 to $4.35 1/4.
What to do: Get current with advised sales.
Hedgers: NEW ADVICE -- Sell another 20% of 2024-crop production to get to 50% sold in the cash market. Also sell an initial 10% of expected 2025-crop production for harvest delivery.
Cash-only marketers: NEW ADVICE -- Sell another 20% of 2024-crop production to get to 50% sold. Also sell an initial 10% of expected 2025-crop production for harvest delivery.
Soybeans
Price action: March soybeans closed on session highs, up 27 3/4 cents to $10.53. March meal surged $9.50 to $307.80, on session highs. March bean oil climbed 41 points to 45.99 cents.
Fundamental analysis: Soybeans surged higher for the second consecutive session, building off fundamental strength as reported in Friday’s USDA reports. While the balance sheet is still seen as expanding from a year ago, the situation is significantly tighter than it was considered to be a month ago. It is also worth noting that USDA did not make any meaningful cut to demand, like they did in corn. The lack of change in the soybean balance sheet is a testament to how strong use has been so far this crop year. Export data through the first four months of the crop year have been strong, with inspections today showing more of the same. USDA reported soybean export inspections of 1.35 MMT (49.6 million bu.) during the week ended Jan. 2, up 54,742 MT from the previous week and within the pre-report range of expectations from 1.075 MMT to 1.7 MMT. Strong demand so far this crop year likely means that the current ending stocks forecast of 380 million bushels is fairly conservative, meaning it could be as abundant as it will be. USDA is likely awaiting to see how trade progresses over the next couple of months before raising their forecast.
While shifts in the U.S. balance sheet have been more favorable, looming record South American production remains a headwind for soy prices. Over the weekend, beneficial rain fell on much of Brazil from northern Rio Grande do Sul to Parana, as well as parts of Mato Grosso do Sul. Much of the rain was not heavy enough to induce a lasting increase in soil moisture though, says World Weather Inc. Little rain is expected in portions of southern Brazil over the next few days while hot temperatures are expected. The forecaster notes showers are expected to increase towards the end of the week.
Technical analysis: March soybean futures closed at a three-month high as report driven strength continues to drive prices higher. Bulls retain the technical advantage after the past two days of gains. Resistance stands at $10.55 then $10.66 on continued strength. Tentative strength lies at $10.50 while bulls are ultimately seeking to hold prices above support at $10.43 1/2, which is backed by $10.28 support.
March meal futures rebounded strongly today, giving bulls a slight technical advantage. Continued strength targets the 100-day moving average at $310.1, which is reinforced by the Jan. 2 closing high of $321.6. Support comes in at the 10-day moving average at $304.4 then the psychological $300.0 mark.
What to do: Get current with advised sales.
Hedgers: You should be 30% sold in the cash market on 2024-crop production.
Cash-only marketers: You should be 30% sold on 2024-crop production.
Wheat
Price action: March SRW wheat rose 14 1/4 cents to $5.45, near the daily high. March HRW wheat gained 9 1/4 cents to $5.61 and near the daily high. March spring wheat futures rose 9 1/4 cents to $5.93 1/2.
Fundamental analysis: The winter wheat futures markets saw short-covering and bargain-hunting buying interest today, amid solid gains in corn and soybean futures the past two trading sessions. In the key outside markets today, a bearish stronger U.S. dollar index that hit a two-plus year high was offset by the bullish solid gains in crude oil prices to a six-month high today.
USDA today reported U.S. wheat export inspections of 288,895 MT during the week ended Jan. 2, down 123,447 MT from the previous week and near the low end of the pre-report trade expectations.
World Weather Inc. today said that in U.S. HRW country, a large arctic air mass is expected to move into the region in this upcoming weekend. “This will raise the need for greater snow cover, especially after the expected melting later this week. A snow event remains possible late Friday through Saturday and it will need to provide enough snow to protect crops from threatening cold, especially in central and northern production areas.” Meantime, in the northern Plains, World Weather said periods of arctic air will occur in the next two weeks. The cold, dry air will limit snowfall in the region but most areas are snow-covered.
Technical analysis: Winter wheat market bears have the solid overall near-term technical advantage. Prices are in three-month-old downtrends on the daily bar charts. SRW bulls’ next upside price objective is closing March prices above solid chart resistance at the December high of $5.69 1/4. The bears’ next downside objective is closing prices below solid technical support at $5.00. First resistance is seen at $5.54 3/4 and then at $5.69 1/4. First support is seen at the contract low of $5.26 and then at $5.15. HRW bulls’ next upside price objective is closing March prices above solid chart resistance at the December high of $5.71 1/2. The bears’ next downside objective is closing prices below solid technical support at the contract low of $5.35. First resistance is seen at $5.63 1/4 and then at $5.77 1/4. First support is seen at last week’s low of $5.43 3/4 and then at $5.35.
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 63 points to 67.64 cents, closing nearer the session high.
Fundamental analysis: Cotton futures posted modest corrective gains following Friday’s heavy selling, with a rally in the ag complex lending support. Meanwhile, followthrough gains in crude oil futures likely negated some pressure from persisting U.S. dollar strength, though today’s move could be chalked up to short-covering from a contract low. However, barring a catalyst, technical resistance will continue to curb heftier efforts.
Moreover, Friday’s strong jobs reports has weighed on equities combined with a reported wider-than-expected trade balance in China, which may encourage the incoming Trump administration to push harder for fresh tariffs on Chinese exports to the U.S.
Meanwhile, the marketplace will likely remain somewhat subdued into Wednesday’s Consumer Price Index (CPI) Report for December.
In South America, planting has advanced well in Bahia and a few other production areas of Brazil, though weather conditions in each of these areas should be wet biased in the next couple of weeks, slowing additional fieldwork, according to World Weather Inc. Early planting has begun in Mato Grosso, but the soybean harvest must occur first before aggressive cotton planting can occur.
Technical analysis: March cotton spent the session trading within Friday’s lower trading range, with support serving at the previous session low of 66.76 cents, while resistance stood at the 10- and 20-day moving averages, currently trading at 68.28 cents and 68.55 cents. Bears continue to firmly grasp the near-term technical advantage, though extended selling will face additional support at 66.37 cents, then at 65.74 cents and again at 64.00 cents. Meanwhile, extended short-covering will face additional resistance at 69.34 cents, which is backed by the 40-day moving average of 69.49 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.