Corn
Price action: March corn futures plunged 8 3/4 cents to $4.50 3/4 and settled near session lows. That marked a 3 1/4 cent loss on the week.
5-day outlook: Corn futures traded sharply lower, erasing the gains made earlier this week. Some selling pressure was expected today as the market was technically overbought, but sharp selling pressure quickly reset momentum indicators. Traders next week will look forward to Friday’s reports, which will be a major catalyst. USDA will update their 2024 production estimate in the Crop Production Annual Summary, where we anticipate a modest reduction in 2024 production. USDA will release their monthly supply and demand reports alongside their quarterly Grain Stocks Report. Given that export and ethanol use is generally well known with both weekly and monthly reports for each, attention will be on residual use, which is historically more variable. If residual use comes in above expectations, that could further tighten USDA’s ending stocks forecast in the WASDE. Some positioning is likely ahead of Friday’s reports. Funds continue to maintain a net long position in corn but short covering efforts in wheat and/or soybeans could limit selling efforts in corn over the coming week.
30-day outlook: Brazil will continue to harvest first crop beans and focus in the market place will shift to Brazilian corn production after Friday’s reports. Abundant precipitation in center west through center south crop areas in Brazil is expected to slow soybean harvesting and in tandem safrinha plantings. Southern Brazil continues to see drying, which is expected to bring moisture stress to some crops in Rio Grande do Sul and some neighboring areas of Parana and Santa Catarina, says World Weather Inc. Delays due to excessive moisture or poor establishment to plantings could ignite some strength as traders are concerned over safrinha corn, which makes up the majority of Brazil’s production. While there is some buffer in the world soybean balance sheet, corn is much tighter and any cuts to production could draw additional export demand to the U.S.
90-day outlook: The marketplace will be focused on trade over the course of the coming quarter as Trump gets in the groove of his second term. We have reported that Trump has called his favorite word “tariff” which has people in the ag community looking back on the 2018 and 2019 trade wars. Trump has promised tariffs on Mexico and China, two of the largest importers of U.S. row crops. Key will be if any trade deals are made in the meantime to avoid a second trade war, which Trump said he is open to, and if he follows through on promised trade barriers. At this juncture, it does not appear the marketplace nor importers are overly concerned over a second trade war, considering total commitments are running at the highest clip since 2021/22 and a majority of that total has yet to be shipped. A lot of negativity seems to be already baked into the market, which could prove to be positive for prices in the long term.
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 fell 20 1/4 to $9.91 3/4 and marked a 2-cent weekly loss. March soymeal plunged $11.30 to $308.60 and down $1.90 on the week. March soyoil closed down 34 points at 39.93 cents and down 7 points week-over-week.
5-day outlook: Soybean futures faced heavy selling pressure to end the week as technical resistance curbed a move higher. However, support at the 20- and 10-day moving averages pared a heftier downside move. Next week marks the first full trading week of the new calendar year and will feature USDA’s Annual Production Report and Quarterly Grain Stocks, marking one of the most important days of the year. Today’s price movement certainly wasn’t unexpected amid near-term overbought conditions and traders’ predisposal to reducing risk ahead of the possibility of sizable market swings. However, USDA’s weekly export sales data, which marked a fresh marketing-year low, was the perfect catalyst to entice sellers. Look for next week to include sideways to lower trade, with the potential for fireworks next Friday following the release of the government’s data.
30-day outlook: South American weather will continue to be of note over the next month as harvest ramps up in key growing areas. While most of Brazil continues to experience mostly favorable weather conditions, with areas receiving significant rain in northeastern Brazil, which will reduce crop stress, areas in the southern region of the country will trend drier. This will induce some moisture stress for crops in Rio Grande do Sul into Paraguay and neighboring areas of Parana and Santa Catarina during the next ten days to two weeks. World Weather Inc. reports steady drying will also occur across much of Argentina during that period, though some rain will fall periodically in the far west, extreme north and in a few Buenos Aires locations. However, much of the resulting rainfall is not likely to be substantial except in some fringe areas of crop country. The forecaster states crop stress will become most significant during the next week through the following weekend and possibly into the week of January 12, if rainfall is lacking as advertised today.
90-day outlook: Earlier today, USDA released its weekly Export Sales Report for the week ended Dec. 26, which proved rather dismal, though the data included a holiday week. This will also be the case next in next week’s data. By comparison, year-ago export sales were also at a marketing-year low for the same week in 2023, with a seasonal decline imminent as a robust Brazilian harvest has already begun and is expected to peak by the second week of February. An advancing U.S. dollar could also compound global demand for soybeans and other commodities, along with the possibility of heightened trade tensions. A risk-off tone across the marketplace is certainly possible in the soy complex over the longer-term, though next week’s USDA reports, along with any hiccups in South America could quickly alter that trajectory.
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 futures fell 16 1/2 cents to $4.29 1/4, nearer the daily low and set a contract low. For the week, March SRW dropped 17 1/4 cents. March HRW wheat lost 12 3/4 cents to $5.39, nearer the daily low and closed at a contract low close. On the week, March HRW fell 15 1/2 cents. March spring wheat futures fell 11 3/4 cents to $5.77 3/4 and marked a weekly loss of 17 1/2 cents.
5-day outlook: Friday’s hefty sell-off in the winter wheat futures markets that included technically bearish weekly low closes set the stage for follow-through, chart-based selling pressure from the speculators early next week. Wheat traders will look to the corn market for price direction in the coming week, but with corn prices solidly down today, corn may not provide much positive leadership for the wheat market bulls. Next Friday sees USDA’s Annual Production quarterly Grain Stocks Reports, marking one of the most important report days of the year.
30-day outlook: Wheat traders in the coming weeks will continue to monitor weather patterns in major global wheat regions. World Weather Inc. today said U.S. wheat is favorably established and mostly dormant or semi-dormant. Some needed moisture has fallen recently in the Pacific Northwest in recent weeks to improve topsoil moisture and more is expected. Cooling has returned to the Great Plains and Midwest which should restore better winter hardiness. Bitter cold is expected during mid-week next week and that might raise some concern, though snow should precede the cold and temperatures are not expected to be very threatening, said the forecaster. Meantime, much of central and northern Europe and the western CIS are cool enough for most winter crops to be dormant or semi-dormant. The majority of crops are well established. Poorly established crops in the lower Danube River Basin, eastern Ukraine, Russia’s Southern Region and western Kazakhstan are unlikely to see threatening cold anytime soon. Australia’s late-season wheat harvest in the south is advancing sufficiently in a favorable weather pattern and no change is likely. Argentina’s dry weather in the south expected in the next couple of weeks will continue to be good for maturing wheat along with its harvest.
90-day outlook: USDA today reported weekly U.S. wheat export sales of 140,600 MT for 2024-25 — a marketing-year low, down 77% from the previous week and down 68% from the four-week average. Sales were below expectations. The surging U.S. dollar index that hit a more-than-two-year high this week may be starting to further crimp global demand for U.S. wheat. Unfortunately for the wheat market bulls, price trends in the currency markets tend to be stronger and longer-lasting than price trends in other markets—suggesting the greenback could remain at lofty levels for much of 2025.
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 91 points to 67.66 cents and was down 123 points on the week.
5-day outlook: Cotton futures edged lower as technical resistance continued to limit buyer interest despite outside market support. Notable selling across the grain and soy complexes likely limited buyer interest in the natural fiber, along with tepid weekly export sales data, reported earlier this morning. Meanwhile, with next week comes USDA’s Annual Production Report, with early week trading including a sideways- to lower bias, with a large move possible at the end of the week. USDA will release the report at 11:00 a.m. CT Friday.
30-day outlook: Weather in key growing regions outside of the U.S. will become an increasing focus as harvest has been completed and late season fieldwork is winding down. However, rain will be needed in the heart of winter and early spring in the southwestern desert region, both South and West Texas and from northern Florida to eastern North Caroline to ensure favorable soil moisture for spring planting. Meanwhile, World Weather Inc. reports planting has advanced well in Bahia and a few of the minor production areas in Goias, Minas Gerais and Mato Grosso do Sul, Brazil recently, and weather conditions in each of these areas should become wetter biased in the next couple of weeks, slowing additional fieldwork.
90-day outlook: Demand for U.S. cotton will continue to be the longer-term trade focus. A soaring U.S. dollar and plentiful global supplies combined with a tepid Chinese economy have certainly weighed on exports. The marketplace will continue to focus on global trade relations as the Trump administration reenters the White House as well as monetary policy as the Fed continues to battle inflation.
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.