Corn
Price action: March corn rose a penny to $4.59 1/2, marking a high-range close.
Fundamental analysis: Corn futures extended to a fresh for-the-move high to begin the calendar year, though persisting gains in the U.S. dollar kept gains to a minimum across the ag complex. However, solid technical support continues to limit seller interest despite treading in near-term overbought territory. A persisting undertone of solid demand continues to give bulls confidence in the recent move to six-month highs. Traders will get an updated look into corn-for-ethanol use in USDA’s Grain Crushings Report, due out following today’s close. Analysts are expecting corn-for-ethanol use in November totaled 463.7 million bu., up 3.2 million bu. (0.7%) from October and 6.5 million (1.4%) above November 2023.
Meanwhile, weather in Brazil continues to prove mostly favorable for growing, though World Weather Inc. reports much of Argentina, Uruguay, southern Brazil and southern Paraguay were advertised to be mostly dry through the next two weeks, with any showers that may pop up likely failing to produce enough rain to counter evaporation. Rising temps will accelerate drying, making topsoil moisture very short by this time next week and subsoil moisture will steadily decline in the second week of the forecast.
The marketplace will get a peek into weekly export sales data for the week ended Dec. 26 early Friday morning, delayed a day from its typical release due to the observance of the New Year holiday midweek. Analysts are expecting net corn sales ranged from 800,000 MT to 1.4 MMT for the period. Last week, net sales of 1.71 MMT were reported for the previous week.
Technical analysis: March corn ended the session just shy of the session high, with initial support serving at $4.56 1/2, while resistance around $4.61 limited a move higher to begin the year. With bulls holding the near-term technical advantage, evidenced by a nine-week price uptrend on the daily barchart. The next price objective for the camp is to secure a close above resistance at $4.70, with interim resistance serving at $4.61 and $4.65. Meanwhile, for bears to regain technical momentum, a close below $4.40 will be required, though first support lies at $4.52 and again at $4.50.
What to do: Get current with advised sales.
Hedgers: You should be 30% sold in the cash market on 2024-crop.
Cash-only marketers: You should be 30% sold on 2024-crop.
Soybeans
Price action: March soybeans climbed 1 1/2 cents to $10.12 and closed nearer session highs. March meal futures rallied $3.00 to $319.90, nearer session highs. March bean oil fell 9 points to 40.27 cents.
Fundamental analysis: Soybeans opened lower on this morning’s cold open but found an early bottom and worked higher as the session went on. Strength in meal helped support soybean futures today as meal continues to show relative strength after posting a contract low in mid-December. Anticipation of record production out of Brazil continues to provide headwinds for soybean bulls. StoneX today released their Brazil customer survey which shows production expectations of 171.4 MMT, up from 166.2 MMT the previous month. While that is still below USDA and many private analysts, the month-over-month growth in their forecasts shows just how well the growing season has gone thus far in Brazil.
USDA will release their monthly Oilseed Crushings Report this afternoon. Analysts surveyed by Bloomberg expect USDA to report November soybean crush totaling 208.1 million bu., which would be down 7.7 million bu. (3.6%) from the all-time record in October but up 8 million bu. (4.0%) from last year.
USDA will release their weekly export sales report tomorrow morning, delayed a day due to Wednesday’s holiday. A Reuters poll of analysts shows expectations of sales between 500,000 MT and 1.2 MMT for the week ended Dec. 26. Last week, sales totaled 978,351 MT.
Technical analysis: March soybean futures closed modestly higher after opening lower this morning. Bulls maintain a slight near-term technical edge and are looking to overcome initial resistance at today’s high of $10.15 3/4 before tackling resistance at the psychological $10.25 mark. Support stems from today’s low of $10.03 1/2, which is quickly backed by the psychological $10.00 mark then the 40-day moving average at $9.99. Further selling finds staunch support at $9.88.
March meal futures forged a nearly three-month high today as futures continue to march higher. Overbought conditions could limit strength in the next few days. Additional strength seeks to overcome resistance at the 200-day moving average at $323.80, which is quickly backed by psychological $325.00 resistance. Support stems from $315.40, then the 100-day moving average at $311.40.
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 fell 5 3/4 cents to $5.45 3/4, nearer the daily low. March HRW wheat fell 7 1/2 cents to $5.51 3/4 and nearer the session low. March spring wheat futures fell 6 1/4 cents to $5.89 1/2.
Fundamental analysis: A surging U.S. dollar index that today pushed to a more-than-two-year high worked to pressure wheat futures today. Some technical selling was also featured as the near-term technical postures for winter wheat futures remain firmly bearish.
World Weather Inc. today said that in HRW wheat country, temperatures will be trending colder in the first week of the outlook as arctic air invades the region. Concerns of winterkill with this are low though, because threatening subzero temperatures should occur mostly where there is snow cover. Most of the snow will be occurring Saturday in eastern and northern production areas. Some warming will then occur in the second week of the outlook. In the northern Plains, southwestern production areas are in need of greater snow for protection from winterkill and should receive beneficial snow today through Saturday. Significant cold weather will impact the region through Tuesday causing livestock stress. Most crops should be protected from the cold weather. However, there may be a few pockets in a zone between the new snow that occurs in the southwest and the old snow in northeastern areas that is currently on the ground that are left without enough protection.
Friday morning’s weekly USDA export sales report (delayed by one day because of the New Year holiday Wednesday) is expected to show U.S. wheat sales of 200,000 to 500,000 MT in the 2024-25 marketing year, and sales of zero to 75,000 MT in the 2025-26 marketing year.
Technical analysis: Winter wheat market bears have the firm 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 this week’s high of $5.54 3/4 and then at $5.69 1/4. First support is seen at $5.40 and then at the contract low of $5.29 1/4. 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 this week’s high of $5.63 1/4 and then at $5.77 1/4. First support is seen at last week’s low of $5.41 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 climbed 17 points to 68.57 cents but closed nearer session lows.
Fundamental analysis: Cotton futures saw some short covering early in the session but closed well off session highs today. Strength in the U.S. dollar index, which surged to a more than two year high, weighed on cotton prices as the day went on, as did a weaker U.S. equity market. Cotton futures have performed well considering the sell-off in the stock market over the past week, a sign that a lot of the downside is likely already baked into the marketplace. Next key will be if prices can rally on bullish news, which could come as early as tomorrow morning, with USDA’s weekly export sales data coming a day late due to Wednesday’s holiday. Disappointing data out of China continues to weigh on cotton futures as well. Chinese stocks today boasted the worst start to a year since 2016 today as investors braced for economic uncertainties amid weaker-than-expected manufacturing data and an anticipated hike in tariffs.
Technical analysis: March cotton futures posted modest gains but closed nearer session lows in a disappointing day of trade. Bears continue to maintain the technical advantage. Bulls tried and failed to overcome 20-day moving average resistance at 69.22 cents, while additional resistance lies at 68.74 cents on the way. Bulls are looking to maintain prices above support at 68.25 cents, which is reinforced by the Dec. 20 contract low of 67.48 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.