Corn
Price action: March corn futures surged 9 3/4 cents to $4.84 1/4, closing near session highs. That marked a 14 1/4 cent gain on the week.
5-day outlook: Corn futures surged higher after consolidating for most of the week, ending the week at the highest level in seven months. Corn led strength across the grain and soy complex today. Futures rallying the trading day before Trump’s inauguration is a good sign that traders are not concerned about any hindrance to trade in the near future. March futures are overbought on the daily bar chart, which could spur some profit-taking in the next couple of sessions, but the overall near-term outlook remains fully bullish following today’s breakout from a bull flag on the daily bar chart. The next logical target for bulls is overcoming the psychological $5.00 mark, which stands as stiff resistance. Bulls are looking to hold prices above the prior high at $4.75 on any potential pull backs over the next week.
30-day outlook: Concerns regarding the South American corn crop are beginning to arise. The Rosario Grain Exchange cut their Argentine corn crop estimate to 48 MMT this week, a testament to recent dryness. While some precip is forecast over the coming week, La Nina conditions continue to loom over South America, limiting longer-term precipitation potential. That continues to loom over production efforts in Brazil as well. Brazil is harvesting their first crop right now, with safrinha plantings just around the corner. Persistent dryness in southern Brazil could lead to lower-than-expected production, which would be price supportive in the medium term.
90-day outlook: The recent rally in corn prices has many analysts rethinking 2025 corn acres. The Prospective Plantings Report is right around the corn with the USDA Outlook Forum preceding it. While inputs remain a challenge in penciling out 2025 balance sheets, an increase from 2024 acres seems certain, by how much exactly could lead to a surprise in the March report. Meanwhile, demand for old crop remains robust. That could continue to tighten the 2024-25 balance sheet and underpin prices, but one has to wonder when the rally will begin to have a negative effect on use as end users begin to ration demand. There have been no signs of that yet, but something that we will be paying attention to in the coming weeks.
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 soybeans rose 15 cents to $10.34 and gained 8 3/4 cents on the week. March soymeal closed up $2.80 to $297.20 but gave up $1.10 from a week ago. March soyoil rose 66 points to 45.69 cents but marked an 11-point weekly loss.
5-day outlook: Soybeans took back a portion of Thursday’s losses, with strength in corn spurring general support across the ag complex. However, technical support also curbed seller interest, as did persisting weather concerns in Argentina. Conversely, expectations of a large Brazilian crop and trade unknowns as the Trump administration re-enters the White House could spur some risk-off trade into next week. While China has been a recent purchaser of U.S. soybeans, it was noted earlier today that Chinese soy processors have turned to competitively priced Brazilian cargoes as opposed to U.S. supplies amid fears of additional tariffs after Jan. 20. Reuters reported today that Chinese processors have secured nearly all of their cargoes from Brazil for first quarter shipment.
Moreover, volatility could be intensified by next week’s shortened trade amid the observance of Martin Luther King, Jr. Day on Monday.
30-day outlook: Weather in South America will continue to carry a significant undertone as Brazilian harvest ramps up into February. World Weather Inc. reports all of Brazil’s grain and oilseed production areas will receive rain during the next two weeks, maintaining a good outlook for full- and late-season crops, though drier weather is needed where soybeans need to mature and be harvested swiftly in the next few weeks. Rain is expected to fall often enough to induce a slow harvest pace for early season soybeans. Meanwhile, rainfall in Argentina is expected to occur periodically with the middle two-thirds of the nation receiving showers and thunderstorms this weekend, followed by more rain in the central and north late next week through the following weekend. The forecaster highlighted a close watch on rain distribution throughout the country is warranted since the odds are relatively high that early Feb. weather will trend drier and warmer once again.
90-day outlook: The direction of the soybean market over the next several months will help U.S. producers finalize planting intentions for the 2025-26 crop. While most producers typically adhere to a strict crop rotation, the current corn-to-soybean ratio favors corn plantings, though waning working capital over recent months could influence stronger soybean acres across the U.S. as input prices remain quite firm. However, a broader trade riff could spur longer-term selling in soybeans, and likely result in dwindling export demand. Look for the marketplace to closely monitor trade relations in the coming months, with a specific focus on USDA’s Prospective Plantings and quarterly Grain Stocks Reports, due out March 31.
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 futures closed 1 1/4 cents higher to $5.38 3/4 and settled near mid-range. That marked an 8 1/2 cent gain on the week. March HRW futures rose 1/4 cent to $5.48 1/2 though lost 3 1/4 cents on the week. March HRS futures rose 2 cents to $5.83 1/2 but fell 3/4 cent on the week.
5-day outlook: Wheat futures saw modest spillover strength from the corn and soybean markets today but continue to be a laggard. Wheat futures continue to trade nearer contract lows with bears retaining the technical advantage. While some corrective strength is possible over the coming week, unless March futures overcome stiff resistance at $5.50, the path of least resistance remains lower. Wheat futures trended lower in the latter portion of the week despite weakness in the U.S. dollar. Given the dollar is likely to continue to trend higher as long-term interest rates continue to work higher, wheat futures are unlikely to garner much bullish support from the greenback. Bulls are looking to hold prices above the contract low of $5.26, maintaining that low would be the first step in building some much needed bullish momentum.
30-day outlook: The world wheat balance sheet has found some relief as the 2024-25 ending stocks forecast has ticked up in recent months, though stocks are still expected to fall substantially from a year ago. Traders have seemingly ignored the tightening world balance sheet and Russia’s promise to severely limit exports in the latter half of the marketing year, clinging to increased production out of Australia. While increased Australian production is expected to pull from U.S. demand, that does not change the fact that the world balance sheet is tight and eventually importers will need to seek out other buyers, which is likely to prop up exports in the latter half of the marketing year and into 2025-26.
90-day outlook: The spread between SRW wheat and corn futures continues to tighten. That likely led to increased residual demand as noted in last week’s USDA reports, which showed second quarter feed use coming in at the highest mark since 2022-23 and the second most since 2019-20. That either implies improved feed demand, which would be a significant switch from the past several years, or it implies the 2024-25 crop was smaller than anticipated. Both would be bullish developments for wheat futures that the market has ignored over the past week. Wheat prices are doing little to buy spring planted acres or encourage spring applications for winter crops, which could limit production potential in 2025, but more will be known on that score as the quarter progresses. At this juncture, it seems traders are pricing in the worst case scenario for wheat, which could lead to corrective strength in the coming months.
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 87 points to 67.60, marking a weekly gain of 59 points.
5-day outlook: The downtrend in cotton futures has been quite pronounced in recent months, with strong technical resistance, ample global supplies, a robust U.S. dollar and lackluster export demand casting a shadow over the natural fiber. While today’s strength was largely corrective in the wake of Thursday’s fresh contract low, the downside remains the path of least resistance for the natural fiber. However, with support serving at this week’s low, which is backed by support at 66.00 cents, sideways consolidation between support and the 10- and 20-day moving averages, currently trading at 67.81 cents and 68.15 cents is likely. However, next week’s shortened trade due to the observance of the Martin Luther King, Jr. holiday could ignite some larger volatility, and especially so, as it coincides with the inauguration of President Trump.
30-day outlook: Weather conditions in South America will continue to be at the forefront of the cotton market over the coming month as planting efforts continue in Brazil, with wet conditions slowing soybean harvest, thus slowing safrinha cotton plantings. Planting progress in most states continues to lag year-ago, which will likely persist as all production areas will remain plenty wet throughout the next two weeks. In Argentina, some rains are expected in northern areas of the country over the coming week, with a much better chance of rain during the last week of this month. World Weather Inc. reports conditions should be mostly favorable.
90-day outlook: U.S. cotton sales abroad rose quite notably in USDA’s most recent weekly Export Sales Report, which outlined sales during the week ended Jan. 9. Net sales during the week totaled 316,200 RB and were up noticeably from the week prior, marking the largest weekly volume since the week ended Nov. 21. Even so, the marketplace seemed rather unimpressed, as net upland sales continue to lag year-ago by nearly 14%. However, exports were also strong for the week, notching a marketing-year high of 224,800 RB. Traders are likely apprehensive about broadening trade tiffs, which could likely continue to crimp interest in U.S. supplies.
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.