Corn
Price action: March corn rallied 4 1/4 cents to $4.78 3/4 and marked a seven-month high close.
Fundamental analysis: Corn futures resumed recent strength following a modest pullback on Tuesday, with outside market support and a firm technical posture underpinning gains. Meanwhile, traders are also likely growing increasingly wary towards Brazil’s safrinha corn plantings, especially so in the wake of USDA’s production cuts on Friday. World Weather Inc. reports that while rain in center-west, northeast and center-south Brazil will maintain favorable soil moisture for most crops, there is some need for direr conditions to promote faster early soybean maturation and harvest progress to limit delays to second season safrinha corn plantings. Moreover, in Argentina rain events expected to occur tonight into Saturday and again Jan. 22-24 will be critical but will likely be too light to induce more than temporary relief. Stress to crops should increase soon after each rain event. The forecaster reports a close watch will be made on the latter advertised rain, which could fall in time to delay or prevent significant declines in yield potentials, but if it were to falter, stress to crops would likely soon be great enough to threaten yields.
Earlier today, the Energy Information Administration (EIA) reported weekly ethanol production averaged 1.095 million barrels (bpd) during the week ended Jan. 10, down 7,000 bpd (0.6%) from the previous week but still 41,000 bpd (3.9%) above the same week last year. Ethanol stocks rose 65,000 barrels to 25.008 million barrels. The EIA also reported on Tuesday that it projects fuel ethanol production to average 1.04 million bpd during the first and second quarters of 2025, an increase to 1.05 million bpd in the third quarter and 1.06 million bpd in the fourth quarter. Additionally, the EIA estimates fuel ethanol blending averaged 930,000 bpd in 2024, up from the December estimate of 920,000 bpd. Fuel ethanol blending is expected to remain unchanged at 930,000 bpd in both 2025 and 2026.
Technical analysis: March corn futures face resistance at Tuesday’s high of $4.79 3/4, though bulls remain poised to edge towards the next major target of $5.00. A break above initial resistance will find bulls facing interim resistance at $4.82 and $4.84, with $5.00 serving as strong psychological resistance. Meanwhile, the next downside target for bears is to secure a close below support at $4.55, though interim support lies at $4.72, then at $4.69 1/2, $4.65 3/4 and the 10-day moving average of $4.63 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
Advice: We advise soybean hedgers and cash-only marketers to sell another 10% of 2024-crop production in the cash market to get to 40% priced.
Price action: March soybeans fell 4 3/4 cents to $10.42 3/4, nearer the daily low. March soybean meal fell $3.80 to $302.00, near the session low. March soybean oil rose 5 points to 46.27 cents, near mid-range and hit a two-month high early on.
Fundamental analysis: Soybean futures saw a corrective price pullback and chart consolidation today after recent good gains, which is not bearish. However, soybean meal futures bulls cannot put together a daily winning streak, which is worrisome for the soy complex bulls. Soybean oil futures saw selling interest limited by the rally in the crude oil market that saw prices today hit a nine-month high.
Today’s NOPA crush report for December came in at 206.604 million bushels, up 13.419 million bushels from November, above market expectations and an all-time record. NOPA soybean oil stocks totaled 1,236 million pounds and were up 151.837 million pounds from last month’s figure. Stocks came in below market expectations, which is a testament to strong use and recently surging exports. Renewable diesel usage remains strong as implied use for December of 2,292 million pounds was slightly above November’s figure.
World Weather Inc. today said rain chances “are still looking good for Argentina, southern Brazil, Uruguay and Paraguay Friday into the weekend, although the resulting rainfall will not be enough to seriously relieve the nation’s crops from recent hot and dry conditions.” Only partial relief to recent drying is expected. “Much more rain will be needed to induce a more definitive break from the heat and dryness and to stop an inevitable decline in yield for at least some crops.” Rain in center-west, northeast and center-south Brazil will maintain favorable moisture for most crops, although there is some need for drier conditions to promote faster early soybean maturation and harvest progress, said World Weather.
Technical analysis: The soybean bulls have the overall near-term technical advantage. Prices are in an uptrend on the daily bar chart. The next near-term upside technical objective for the soybean bulls is closing March prices above solid resistance at $11.00. The next downside price objective for the bears is closing prices below solid technical support at $10.00. First resistance is seen at today’s high of $10.54 and then at this week’s high of $10.64. First support is seen at $10.40 and then at $10.30.
Soybean meal bears have the overall near-term technical advantage. The next upside price objective for the meal bulls is to produce a close in March futures above solid technical resistance at the January high of $321.60. The next downside price objective for the bears is closing prices below solid technical support at the contract low of $285.10. First resistance comes in at this week’s high of $309.50 and then at $312.50. First support is seen at this week’s low of $297.50 and then at the January low of $295.10.
Bean oil bulls have the overall near-term technical advantage. Prices are in an uptrend on the daily bar chart. The next upside price objective for the bean oil bulls is closing March prices above solid technical resistance at the November high of 49.38 cents. Bean oil bears’ next downside technical price objective is closing prices below solid technical support at 43.00 cents. First resistance is seen at today’s high of 47.10 cents and then at 48.00 cents. First support is seen at this week’s low of 45.09 cents and then at 44.00 cents.
What to do: Get current with advised sales.
Hedgers: NEW ADVICE -- Sell another 10% of 2024-crop production in the cash market to get to 40% priced.
Cash-only marketers: NEW ADVICE -- Sell another 10% of 2024-crop production to get to 40% priced.
Wheat
Price action: March SRW wheat rose 3/4 cent to $5.47, forging a mid-range close, while March HRW fell 3 1/4 cents to $5.57 1/2, closing nearer the session low.
Fundamental analysis: Winter wheat futures continued to face technical pressure into midweek despite support from a weaker U.S. dollar. Meanwhile, Black Sea supplies continue to prove competitive on the global export stage, paring European and U.S. exports. Earlier today, farm office FranceAgriMer kept its monthly forecast for 2024-25 SRW wheat exports outside of the European Union unchanged at the lowest this century, amid fading demand from Algeria and China. The agency also maintained its projection of French soft wheat exports to non-EU destinations at 3.5 MMT, down 66% from 2023-24 and the lowest volume marked since at least 1996-97.
This all comes despite lackluster weather conditions in the Black Sea, which could ultimately dampen supplies in the not-too-distant future. World Weather Inc. notes the majority of crops are not well established in the lower Danube River Basin, eastern Ukraine, Russia’s Southern Region or western Kazakhstan where dryness dominated the planting season. Most of these poorly established winter crop areas are unlikely to see threatening cold anytime soon, though recent precip does set the stage for improved conditions in early spring. More precip is still desired, especially from Ukraine into Kazakhstan, according to the forecaster.
Technical analysis: March SRW wheat continued to consolidate mostly between resistance at $5.51 1/2 and support at the 20- and 10-day moving averages, each trading around $5.40. Bears continue to firmly grasp the near-term technical advantage, however, and continue to look toward securing a close below support at $5.00, with additional support serving at $5.35 and again at the contract low of $5.26. Conversely, bulls’ next objective is to close prices above resistance at $5.69 1/4, though further resistance stands at $5.54 3/4 and again at $5.60 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 27 points to 67.77 cents and nearer the daily high.
Fundamental analysis: The cotton futures market saw some tepid short covering today and could not get much traction from a tame U.S. inflation report that rallied the U.S. stock market. December consumer price inflation (CPI) this morning showed inflation rising for the third consecutive month. CPI came in as expected at up 2.9%, annually, compared to the 2.7% rise in November. Core CPI rose 3.2%, annually, below expectations. U.S. stock indexes surged on the tame CPI data that included weaker- than-expected core inflation. Key outside markets were also friendly for cotton today, as the U.S. dollar index was weaker and crude oil prices were sharply up and hit a nine-month high. Yet, cotton futures could only muster slight price gains.
World Weather Inc. today said rain “will be needed during the heart of winter and early spring in the southwestern desert region, southern California, both south and west Texas and from northern Florida to eastern North Carolina to ensure favorable soil moisture for spring planting.” The U.S. Delta will be wettest for a while along with portions of the southeastern states. Meantime, cotton planting has advanced well in Bahia and a few other production areas in Goias, Minas Gerais and Mato Grosso do Sul, Brazil and weather conditions in each of these areas should be wet-biased in the next couple of weeks.
Cotton traders will closely examine Thursday morning’s weekly USDA export sales report, with bulls hoping for better U.S. cotton sales abroad.
Technical analysis: The cotton futures bears have the solid overall near-term technical advantage. Prices are in a three-month-old downtrend on the daily bar chart. The next upside price objective for the cotton bulls is to produce a close in March 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 65.00 cents. First resistance is seen at this week’s high of 67.98 cents and then at 68.80 cents. First support is seen at the contract low of 66.76 cents and then at 66.00 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.