Corn
Price action: March corn fell 4 1/4 cents to $4.74 1/2, closing nearer the session low.
Fundamental analysis: Corn futures spent the session modestly lower in corrective trade, in step with soybean and crude oil futures. However, evidence of export demand was certainly supportive as USDA reported a daily sale of 135,000 MT to Taiwan during 2024-25 as well as weekly corn sales of 1.024 MMT for the week ended Jan. 9. Net weekly sales were up notably from the previous week and topped analysts’ pre-report range of 500,000 MT to 1.0 MMT, while exports for the week reached a marketing-year high of 1.484 MMT.
Also lending some support was a cut to 2024-25 global corn production by the International Grains Council (IGC) and a cut to Argentine corn production by the Rosario Grain Exchange. The IGC trimmed its global corn production forecast by 6 MMT to 1.219 billion tons, which is 12 MMT below year-ago. Meanwhile the Rosario Grain Exchange cut its Argentine forecast to 48 MMT from a previous range of 50 MMT to 51 MMT due to drought impacts.
However, World Weather Inc reports today’s forecast for Argentina is wetter overall for Jan. 23-30 and if rain Jan. 23-25 and showers and thunderstorms Jan. 26-30 occur as advertised, much of the country will see an improving trend for crop development and soil moisture during the last week of the month. In Brazil, most of the country outside of northeastern areas, will see frequent rounds of rain through the next two weeks, which will limit harvesting efforts and delay second crop safrinha corn plantings.
Technical analysis: March corn futures continued to face resistance at this week’s high of $4.79 3/4, ending the session below initial support at $4.75 1/4. Bulls continue to hold the near-term technical advantage, with bulls looking to secure a close above resistance at $5.00, though interim resistance is layered at this week’s high and again at $4.85. Conversely, bears continue to seek to forge a close below support at $4.55, with initial support serving at $4.73 1/2 and again at this week’s low of $4.69 1/4.
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 plunged 23 3/4 cents to $10.19, on session lows. March meal futures closed $7.60 lower to $294.40, near session lows. March bean oil futures sunk 124 points to 45.03 cents.
Fundamental analysis: Soybean futures underwent heavy selling pressure, extending recent losses from Tuesday’s for-the-move high. While nearby futures have pulled well off recent highs, bears struggled to break prices below 10-day moving average support, indicating selling efforts can be chalked up to profit-taking at this juncture. That being said, additional selling pressure becomes more concerning for bulls.
Reports of production woes in South America did little to spur strength in the soy market today. The Rosario Grain Exchange said soybean production would be below its forecast range of 53 MMT to 53.5 MMT, without providing a new estimate, noting hot and dry conditions ruled out “the high productivity scenarios that were considered until recently.” Analysts have also recently begun to cut production forecasts for Brazil as dry weather in southern Brazil and overcast conditions in central Brazil have weighed on production potential.
Soybean traders were likely disappointed in export sales this morning. While export sales surged above last week’s disappointing figure but still managed to come in below the four-week average. USDA reported soybean sales of 569,100 MT for the week ended Jan. 9. Net sales were within the pre-report range of expectations from 300,000 MT to 800,000 MT, while exports for the week totaled 1.477 MMT. Unlike corn and wheat, soybean sales failed to top expectations, which were well below a week ago.
USDA reported daily soybean sales of 132,000 MT to China for 2024-25.
Technical analysis: March soybean futures underwent heavy selling pressure today, though bulls continue to maintain the near-term technical advantage. Bulls are seeking to hold prices above key support at $10.20, while follow-through selling targets support at the 40-day moving average at $10.07. Resurgent strength eyes resistance at $10.25 1/2, the 100-day moving average, which is quickly backed by last Friday’s high of $10.33 1/2, then $10.42 3/4.
March meal futures saw aggressive selling today, breaking below the prior January low. Prices are in a downtrend on the daily bar chart. Support comes in at $291.5 then the contract low of $285.1. Bulls are looking to challenge initial resistance at $298.3 before challenging the psychological $300.0 mark, which is backed by the 10-day moving average at $302.5.
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 fell 9 1/2 cents to $5.37 1/2, near the daily low. March HRW wheat lost 9 1/4 cents to $5.48 1/4 and near the daily low.
Fundamental analysis: Technical selling pressure from the speculators was featured in the winter wheat futures markets today. Losses in the corn and soybean futures markets also spilled over into wheat futures. Losses in wheat were somewhat limited today by a weaker U.S. dollar index and better weekly export sales. USDA reported U.S. wheat export sales of 513,400 MT for the week ended Jan. 9, up notably from the previous week and 55% higher than the four-week average. Net sales topped the pre-report range of expectations.
World Weather Inc. today said limited snow cover is expected in Nebraska and western Kansas this weekend when bitter cold arrives. “That may leave some crops vulnerable to a little damage. Most wheat plants have been adequately hardened by recent cold and they may be able to manage the cold without a tremendous negative impact. With that said, no assessments of damage will occur prior to the start of spring growth.” Temperatures will slip the positive and negative single digits which are near the damage threshold without snow on the ground. Most of the Midwest will still have sufficient snow to protect winter crops, said World Weather.
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 $5.60 and then at this week’s high of $5.68 1/2. 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 futures closed 104 points lower to 66.73 cents, near session lows.
Fundamental analysis: Cotton futures continue to undergo persistent selling pressure, marking a fresh contract low today. Impressive export sales did little to encourage buyers today. Bulls are likely awaiting additional reports of increased export sales rather than just a one-off event. USDA reported export sales of 319,100 bales, more than double a week ago and up 70% from the four-week average. Turkey led purchases of cotton, with Vietnam and Pakistan not far behind.
It is likely going to take a significant shift in the balance sheet to spur strength in the cotton market. The balance sheet continues to weigh on prices and it would take a significant reduction in 2025 acres to entice the market to turn around, barring any significant shift in demand, which would have to come from exports. While the U.S. dollar has turned around from recent highs, a stronger dollar index makes U.S. supplies less competitive on the world market.
Technical analysis: March cotton futures saw persistent selling pressure today as bears continue to maintain full control of the technical advantage. Tentative support comes in at 66.50, though bears are ultimately looking to break prices below 66.00 cents. Over the past six months, losses have been limited under 66.00 cents, with prices bouncing off that level several times. Resistance comes in at 67.00 cents then the 10-day moving average at 67.74 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.