Corn
Price action: March corn fell 6 3/4 cents to $4.90 1/4, marking a low-range close.
Fundamental analysis: Corn futures faced corrective pressure, in tandem with the soy complex despite mostly supportive outside markets. Prospects of improving weather conditions in South America eased some production concerns, overshadowing stable weekly export sales data, reported earlier this morning by the USDA.
World Weather Inc. notes dry weather will return to Brazil next week, which should be well timed and help promote soybean drying to advance harvest and safrinha corn planting. The forecaster did note, however, that totally dry weather is not expected, though the frequency and intensity will be greatly reduced. Meanwhile, Argentina will see “some” periodic shower activity that will offer pockets of infrequent relief, though some of the lost production in soybeans will be easily countered by the huge Brazilian crop.
Earlier today, USDA reported weekly corn sales of 1.36 MMT for the week ended Jan. 23, which were down 18% from the previous week but up 39% from the four-week average. Net sales were within the pre-report range of expectations between 850,000 MT and 1.8 MMT.
Technical analysis: March corn futures held an inside range, with bulls pausing after Wednesday’s reach to an eight-month high. However, they maintain their objective to close above $5.00, with additional resistance serving at $5.10 and $5.50. Meanwhile, bears continue to look to hold a close below $4.70, with support serving at the 10-day moving average of $4.86 1/2 and again at $4.80 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 soybean futures fell 16 1/2 cents to $10.44 and closed nearer session lows. March meal futures plunged $5.10 to $304.70. March bean oil closed a tick higher at 44.98 cents.
Fundamental analysis: Soybean futures led weakness today as March futures are back to trading near this week’s lows. Soybean futures have quickly gotten to an inflection point, with tomorrow’s price action likely determining if recent weakness is going to persist. Weakness in corn did little to support soybean futures today either, as nearby corn futures gave up about half of yesterday’s impressive gain. Traders are likely looking toward Friday’s implementation of tariffs on Mexico and Canada, which is likely weighing on traders minds, knowing that more are likely to come.
Satellite imagery and surface weather reports suggest rain and interruptions to fieldwork continue in much of the region for Mato Grosso to Goias to portions of Minas Gerais and Sao Paulo, says World Weather Inc. Rain is forecast over the next week, further increasing concerns over soybean quality declines and delays to harvest.
USDA reported soybean export sales of 438,800 MT for the week ended Jan. 23, down 71% from the previous week and 33% from the four-week average. Net sales were shy of the pre-report range of 450,000 MT to 1.7 MMT. Meanwhile, soymeal sales totaled the most since Nov. 21. Soymeal prices have been under heavy selling pressure as stocks have been on the rise amidst strong crushings. Increased export use for meal is likely to shore up meal stocks, continuing to provide incentive for crushers to operate at capacity.
Technical analysis: March soybean futures underwent persistent selling pressure throughout today’s session. Bulls retain the technical advantage on the daily bar chart. Continued selling pressure looks to break prices below uptrend support at $10.40, weakness below that mark would be concerning for bulls. Additional support lies at $10.35 1/2. Tentative resistance stands at $10.46 3/4, the 10-day moving average, which is backed by the psychological $10.50 mark, then yesterday’s high of $10.61 3/4.
March meal futures saw heavy selling pressure today as well as volatility persists across the meal complex. Losses stopped shy of 40-day moving average support at $304.30. Additional support lies at the psychological $300.00 mark, with weakness below that mark targeting support at this week’s low of $298.60. Resistance stands at $307.80, then the 100-day moving average at $309.10.
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 rose 4 cents to $5.66 1/2, nearer the daily high and hit a nine-week high. March HRW wheat firmed 8 cents to $5.88 1/4, nearer the daily high and hit a 10-week high. March spring wheat futures climbed 6 1/2 cents to $6.20 1/4.
Fundamental analysis: The winter wheat futures markets bulls gained momentum today by pushing prices above recent chart resistance levels to suggest market bottoms are in place. Wheat futures gains were especially impressive today given the selling pressure seen in corn and soybean futures. A weaker U.S. dollar index today was mildly supportive for wheat markets. Spreaders today were likely unwinding long corn/short wheat spreads. A weaker U.S. dollar and global supply concerns are also helping spur short-covering.
USDA this morning reported U.S. wheat export sales of 456,100 MT for the week ended Jan. 23, up notably from the previous week and 96% above the four-week average. Net sales were near the upper end of the pre-report expectations.
World Weather Inc. today said U.S. hard red winter wheat areas “will remain dry-biased for the next 10 days, especially in the west. Missed precipitation at this time of year is not a problem since crops were well established in the autumn. Concern about winterkill will remain until spring arrives.” Meantime, India is forecast to see above-average temperatures in February, with key winter crop-growing states likely to see maximum temperatures up to 5 degrees Celsius above average. Higher temperatures during the grain formation stage could reduce wheat yields for the fourth straight year, reports said.
Technical analysis: Winter wheat futures market bears still have the overall near-term technical advantage. However, today’s price action suggests near-term market bottoms are in place. SRW bulls’ next upside price objective is closing March prices above solid chart resistance at $6.00. The bears’ next downside objective is closing prices below solid technical support at the contract low of $5.26. First resistance is seen at $5.75 and then at $5.85. First support is seen at today’s low of $5.59 and then at $5.50.
HRW bulls’ next upside price objective is closing March prices above solid chart resistance at $6.00. The bears’ next downside objective is closing prices below solid technical support at this week’s low of $5.49 1/4. First resistance is seen at $6.00 and then at $6.15. First support is seen at today’s low of $5.76 and then at $5.60.
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 sunk 39 points before settling at 66.27 cents, nearer the daily low.
Fundamental analysis: March cotton futures forged a fresh contract low today as prices closed lower for the fourth consecutive session. The path of least resistance remains lower as bulls have not been encouraged by the recent increase in export sales. After disappointing sales for much of December and early January, sales have picked up the past couple of weeks. For the week ended Jan. 23, cotton sales totaled 287,200 bales. That was down 19% from the previous week but was still up 21% from the four-week average. Sales have increased in tandem with weakness in the U.S. dollar index. The dollar index peaked on Jan. 13 and has persistently weakened since. That makes U.S. supplies more competitive on the world market. The only real way for the cotton balance sheet to dramatically improve is for an increase in exports. A weaker dollar and potential trade deals open the door for a shift in demand.
Technical analysis: March cotton futures continue to undergo persistent selling pressure as bears retain the technical advantage. The contract low of 66.01 cents marks support while additional selling targets support at 65.30 cents. Bulls’ initial objective is closing prices above resistance at 66.60 cents, while strength above that mark targets 10-day moving average resistance at 67.10 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.