Corn
Price action: March corn rallied 11 3/4 cents to $4.97, marking an eight-month high close.
Fundamental analysis: Corn futures entered midweek with bullish force, eventually carving an eight-month high in late-morning trade. The move came despite no outside market support, as technical buying and shaky South American weather lent corn bulls the confidence to extend recent gains.
World Weather Inc. expects additional disruptions in fieldwork across Brazil will occur from Thursday to early next week, though some drying is expected late next week and into the following week. Conab reported the extensive rains have delayed the sowing of the second safrinha corn crop, which was estimated to be 1.4% as of Monday, well behind last year’s completion rate of 10.3% for the same period. Meanwhile, IMEA noted Mato Grosso, the biggest safrinha producing state had only 1.15% of the crop planted, 10.02 percentage points behind the five-year average and 10.08 points behind last year, marking the slowest rate based on the agency’s historical data. Moreover, there are some planted areas that are facing germination difficulties, with replanting in some areas already a possibility.
Traders got their weekly ethanol production update from the Energy Information Administration earlier today, which showed ethanol production averaged 1.015 million barrels per day (bpd) during the week ended Jan. 24, down 84,000 bpd (7.4%) but still up 24,000 bpd (3.4%) above the same week last year. Ethanol stocks declined 152,000 barrels to 25.772 million barrels.
Early Thursday morning, USDA will release its weekly export sales data, with analysts expecting net corn sales to have ranged from 850,000 Mt to 1.8 MMT during the week ended Jan. 23. Last week, net sales of 1.66 MMT were reported for the previous week.
Technical analysis: March corn ended the session above recent resistance of $4.89 1/4 and $4.93 1/2, with bulls intent on securing a close above $5.00. A move above the level would then face resistance at $5.10, with more significant resistance then standing at $5.50. Meanwhile, solid support lies at the 10-, 20-, 40-. 200- and 100-day moving averages, layered from $4.85 1/4 to $4.42 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
Price action: March soybeans rose 15 1/2 cents to $10.60 1/2, near the daily high. March soybean meal rose $8.20 to $309.80, near the session high. March soybean oil fell 16 points to 44.97 cents, near mid-range.
Fundamental analysis: The soybean and meal futures markets today were boosted by a rally in the corn futures market to an eight-month high, combined with growing concerns around South American weather conditions in soybean country. Technical buying was also featured in soybeans, while perceived bargain hunting was featured in soybean meal futures.
World Weather Inc. today said a drier weather outlook for Argentina and coming warm temperatures “will induce more bullishness than that of Tuesday.” More disruption to fieldwork is expected in Brazil from Thursday through early next week, with some welcome drying conditions late next week and into the following weekend. That returning dry bias will be important for soybean harvest potential, said World Weather.
Thursday morning’s weekly USDA export sales report is expected to show U.S. soybean sales of 450,000 to 1.7 million MT in the 2024-25 marketing year.
Technical analysis: The soybean bulls have the overall near-term technical advantage. Prices are in a five-week-old 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 $10.20. First resistance is seen at today’s high of $10.61 3/2 and then at the January high of $10.76 1/4. First support is seen at today’s low of $10.44 1/2 and then at last week’s low of $10.39.
Soybean meal bulls and bears are on a level overall near-term technical playing field amid recent choppy trading. 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 January low of $293.50. First resistance comes in at $313.00 and then at $319.00. First support is seen at $305.00 and then at $300.00.
Soybean oil bulls have the overall near-term technical advantage. However, a price uptrend on the daily bar chart has stalled out. The next upside price objective for the bean oil bulls is closing March prices above solid technical resistance at the January high of 47.10 cents. Bean oil bears’ next downside technical price objective is closing prices below solid technical support at 42.00 cents. First resistance is seen at this week’s high of 45.79 cents and then at 46.31 cents. First support is seen at today’s low of 44.70 cents and then at last week’s low of 44.08 cents.
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 surged 17 1/4 cents to $5.62 1/2, forging a seven-week high close, while March HRW wheat rallied 19 1/4 cents to $5.80 1/4, ending the session above the 100-day moving average. March HRS futures rose 16 cents to $6.13 3/4.
Fundamental analysis: Wheat futures extended Tuesday’s gains, with solid gains in corn spurring short-covering at midweek despite lacking outside market support. Meanwhile, earlier today, Russia’s Agriculture Minister Oksana Lut reported the country’s grain exports will fall by one-fifth from last season’s record to 57 MMT in 2024-25, after harvest was affected by subpar weather conditions, including early spring frosts, droughts and heavy rains in some areas. Moreover, an autumnal drought during winter crop sowing has affected the 2025 harvest. Nonetheless, Lut contended 82% of the winter grain crop was in good condition, well below the state’s weather agency estimate of a record 38% of the country’s winter crops were in poor condition due to drought. The variance between the two estimates were noted to be a result of differences in methodology and timing of data collection.
Early Thursday morning, USDA will release its weekly export sales data, with analysts expecting net sales to have ranged between 150,000 and 500,000 MT during the week ended Jan. 23. Last week, USDA reported net sales of 164,837 MT, which were down 68% from the previous week and 52% from the four-week average.
Technical analysis: March SRW wheat ended the session at the highest level since Dec. 11, ending the session above resistance at $5.51 1/4 and $5.57 1/2. Initial resistance will now serve at $5.66 1/4, which is backed by the 200-day moving average of $5.73 ¼, which will likely dampen buyer interest in the next couple of sessions. However, solid support lies at the 10-, 40- and 20-day moving averages, trading from $5.47 1/2 to $5.43 ¾, which have additional backing from support at $5.36 1/4 as well as the Jan. 10 low of $5.26.
March HRW wheat futures managed to close above the 100-day moving average of $5.75 1/2, with initial resistance now standing at the Jan. 22 high of $5.86, which is backed by psychological resistance at $6.00 as well as the 200-day moving average of $6.10 1/2. Initial support will now serve at the 100-day moving average, then at the 10-, 20- and 40-day moving averages, layered from $5.62 to $5.55 1/4.
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 fell 32 points to 66.66 cents and nearer the daily low.
Fundamental analysis: The cotton futures market bears are keeping a strong grip on price action. Rallies in the grain futures markets today could not entice any buying interest in cotton futures. This week’s rebound in the U.S. dollar index and the steep sell off in equities on Monday also have the cotton market bulls remaining very timid.
World Weather Inc. today said that in U.S. cotton country, rain will be needed during the second half of winter and early spring in the southwestern desert region, southern California and both south and west Texas “to ensure favorable soil moisture for spring planting.” A few areas in the southeastern U.S. are still drier than usual and need rain as well. The U.S. Delta will be wettest for a while along with portions of the interior southeast, said the forecaster.
Cotton traders are awaiting Thursday morning’s weekly export sales report. The past couple weeks have seen improved U.S. cotton export numbers and bulls are hoping lower prices will further stimulate foreign demand for the U.S. fiber in the coming weeks and months.
Technical analysis: The cotton futures bears have the solid overall near-term technical advantage. Prices are in a four-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 69.00 cents. The next downside price objective for the cotton bears is to close prices below solid technical support at 65.30 cents. First resistance is seen at today’s high of 67.16 cents and then at Tuesday’s high of 67.60 cents. First support is seen at the contract low of 66.60 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.