Corn
Price action: March corn futures plunged 8 1/4 cents to $4.82, marking a 4 1/2 cent loss on the week.
5-day outlook: Corn futures saw heavy selling pressure overnight before rebounding during the day-time session, though still closed solidly lower on the day. Bulls were encouraged to see prices hold above Monday’s lows. Price action over the coming week will be key. March futures have seen largely methodical buying since posting the August low and especially since the Oct. 15 low. March futures have generally seen a period of strength followed by a period of consolidation before pushing higher. Only a few times have the surges higher been negated by intense selling pressure immediately succeeding the rally, like what happened this week. That marks price action early next week as key, as strength is likely to breed strength with a test of this week’s high of $4.97 1/2, though additional weakness would be a concerning sign.
30-day outlook: Reports circulated that the White House is postponing the implementation of 25% tariffs on China to March 1, though just a few hours later, other members of the White House were refuting that tariffs would be postponed and that the February 1 (tomorrow) headline still holds. That interaction in and of itself outlines a lot of the risk in the medium term. Uncertainty regarding trade policy is likely to continue. That uncertainty makes it difficult for prices to continue to climb as the supportive fundamental outlook is largely dependent on exports. Corn exports typically shine in the latter portion of the marketing year and any hindrance to outflows could have dire consequences to the balance sheet. One can already see that playing out in the marketplace this week. One positive outcome to look for is signed trade deals put into place, such as the Phase 1 trade deal with China.
90-day outlook: While recent weather conditions have modestly cleared up in Brazil, there is still significant risk for the country’s safrinha corn crop. Considering second crop corn makes up about three quarters of production and plantings are running at multi-year lows, there is concern that a significant portion of the crop will be planted late and at risk for maturing past the window for seasonal rainfall. Brazilian corn is expected to take a significant portion of U.S. export demand in the summer and fall. If production comes in below expectations, it could drive additional buyers to the U.S. market as the world balance sheet becomes even tighter.
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 fell 2 cents to $10.42, finishing the week down 13 3/4 cents, while March soymeal fell $3.60 to $301.10, marking a $3.80 weekly loss. March soyoil rallied 113 points to 46.11 cents and rose 89 points on the week.
5-day outlook: Soybeans rebounded somewhat remarkably, with support from the 20-day moving average and rallying soyoil lifting futures from the overnight low. Evening trade featured risk-off selling stemming from President Trump’s reiteration that his administration will impose tariffs on China, though corrective strength transpired throughout the day session. A firmer U.S. dollar, extended selling in corn futures and resistance at the 10-day moving averaged curbed bullish enthusiasm. Meanwhile, uncertainly over Trump’s application of tariffs on imports from Canada and Mexico, which were initially slated to begin on Feb. 1, could induce notable volatility next week, with soybeans likely to sympathize with any subsequent moves in the corn market.
30-day outlook: The South American soybean crop is expected to be a big one, though recent weather conditions have raised doubt over production in Argentina and quality in some areas of Brazil due to consistent rains. The Argentine crop has encountered stress amid hot, dry conditions, with World Weather Inc. reporting potential yield losses are on the rise despite a few pockets of significant rain. However, next week’s trend toward rain in the south during midweek will be extremely important and could slow or briefly stall the declining crop trend, though follow up rain will still be needed. In Brazil, the crop is expected to be quite sizeable, although persisting rains have slowed maturation and harvest. However, improving conditions are expected next week. Look for the marketplace to closely monitor weather down south as harvest progresses through February.
90-day outlook: USDA’s Prospective Planting Report, due out March 31, will be the next notable government update. Currently, the corn- to soybean ratio favors 2024-25 corn plantings, though in addition to mother nature, a rocky ag economy could dictate some producers’ planting intentions, as input prices remain mostly stable. However, escalating trade tensions over the next several months could certainly play a part in soybean plantings across the country. Look for traders to continue to closely monitor rhetoric with China as well as domestic and global demand as the marketing-year progresses.
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 7 cents lower to $5.59 1/2, though still gained 15 1/2 cents on the week. March HRW futures fell 9 cents to $5.79 1/4, but still rose 19 3/4 cents on the week. March HRS futures closed down 4 3/4 cents to $6.15 1/2, but marked a 20 1/4-cent weekly gain.
5-day outlook: Wheat futures saw heavy selling to end the week but still posted a solid weekly gain. Heavy selling was featured in overnight trade, in tandem with corn and soybeans, as concerns over tomorrow’s deadline for tariffs on Mexico and Canada looms. Mexico is a top purchaser of U.S. wheat, marking any retaliatory trade barriers a potential hindrance for exports. Still, wheat futures posted impressive gains this week and continue to maintain an uptrend from the early January contract low. Additional strength seems to be on the table, but some additional profit-taking is possible given that prices are still in the upper end of the recent range. Traders will keep a close eye on any potential retaliation from Mexico on the trade front, a key catalyst that is difficult to predict.
30-day outlook: Nearby SRW futures tend to follow corn futures in the month of February, closing in line with corn during 18 out of the last 20 years. Given the potential for significant market catalysts, such as trade announcements, that seems like it will be the case again this year, with policy affecting all U.S. ag products similarly. There are some concerns regarding winter hardiness as temperatures across the U.S. Plains are forecast to be warmer than average in the coming weeks. That could have a moderate impact on how crops exit dormancy in the spring. U.S. winter wheat went into dormancy at the highest rating since 2018 but individual state reports since then have suggested the crop has deteriorated since then, which could draw modest strength to the market once the crop’s quality is better known.
90-day outlook: Despite a tightening world balance sheet, U.S. exports have been slow to pick up additional demand. Shrinking Russian exports are likely to stir up some additional demand in the latter half of the marketing year, which has already happened somewhat in the past couple of weeks. How the U.S. winter crop comes out of dormancy is likely to play a significant role in price action this spring, as is the spring acreage planting estimate coming in the March USDA Prospective Plantings Report.
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 slipped 39 points to 65.88 cents, marking a 171-point weekly loss.
5-day outlook: Cotton futures have failed to catch a break over the past year, amid waning export demand and comfortable global supplies, though strength in the U.S. dollar since mid-September has certainly compounded bearishness towards the natural fiber.
The dollar caught a bid as the marketplace has incrementally factored in potential tariffs, which would result in, at best, a stable inflationary environment. This would ultimately mean higher-for-longer interest rates, which ultimately reduces disposable income for durable goods, many of which are produced with cotton. Moreover, recent selling in crude oil futures has also eased buyer interest, as it is used to make polyester; a distinguished cotton competitor. Look for the cotton market to continue to take direction from outside markets over the near-term, though fresh lows carved today imply an extension lower is likely.
30-day outlook: Second crop safrinha cotton plantings in Brazil have recently become a more common topic as late rains have stifled harvest efforts in some production areas. World Weather Inc. reports cotton plantings in Mato Grosso, Brazil are well behind the norm, with only 33.5% of the crop planted as of Jan. 26, down from 75.2% last year. However, the states of Goais and Bahia were each slightly ahead of last year, leaving Mato Grosso the most behind in planting. The forecaster indicated that will not improve until the next drier period, which is expected late next week into the week of Feb. 10.
90-day outlook: Cotton acres for the 2025-26 crop year will be a focus, especially given current prices, which are virtually telling producers to plant other crops. The National Cotton Council will hold its Annual Meeting from Feb. 14 – 16, and will provide initial planting estimates, with USDA then releasing its Prospective Planting Report on March 31. The current environment suggests acres will be down, which could spur short-covering into the spring, though export demand will continue to lead the direction of the natural fiber, especially if the dollar remains stable amid lingering 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.