Corn
Price action: March corn rose 7 cents to $4.57 3/4 and closed nearer the session high.
Fundamental analysis: Corn futures began the first full week of the year on a positive note, extending to a fresh for-the-move high amid technical buying and support from a notable U.S. dollar decline. Looming concerns regarding weather in South America are also lending support, as central and portions of eastern Argentina will continue to trend drier over the next two weeks, increasing the need for greater rain late this month to prevent quick increases in crop stress and declines in yield potentials, according to World Weather Inc. Meanwhile, the remainder of Brazil and Argentina should see sufficient precip to support crop development, although portions of center west and center south Brazil may be too wet at times, which could slow soybean maturation and eventual harvesting, causing a new potential delay in safrinha corn planting.
USDA’s weekly Export Inspections Report showed a third straight decline in net corn inspections, most recently totaling 847,463 MT (33.4 million bu.) during the week ended Jan. 2. Inspections declined 60,102 MT from the previous week but were within the pre-report range of 750,000 MT to 1.0 MMT and are outpacing year-ago inspections by 25%.
Technical analysis: March corn continued to find support at the 200-day moving average, currently trading at $4.48 3/4, while resistance around $4.63 curbed a move higher. Initial support will now serve at the 10-day moving average of $4.52 3/4, which will be closely backed by the 200-, 20-, 40- and 100-day moving averages. Meanwhile, an extension higher will now face initial resistance at today’s high of $4.60 1/4, then at $4.63 3/4 and again at $4.67 3/4.
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 6 cents to $9.97 3/4 though settled nearer session lows. March meal futures fell $1.30 to $307.30 and settled near session lows. March bean oil rallied 40 points to 40.33 cents.
Fundamental analysis: Soybeans saw modest corrective strength from Friday’s steep losses today, supported by extensive weakness in the U.S. dollar index. The dollar turned lower after extending to a more than two year high last Thursday. Reports from the Washington Post that Trump was considering narrowing his tariff plan spurred dollar weakness overnight. This morning, Trump refuted those claims, stating the Washington Post article “incorrectly states that my tariff policy will be pared back.” That pared losses in the dollar index and brought soybeans off their early session highs.
Southern Brazil continues to become drier with rain falling from Mato Grosso and northern Mato Grosso do Sul to Minas Gerais and Espirito Santo over the weekend. Southern Brazil is expected to stay dry over the course of the next two weeks, leading to crop stress due to heat and lack of topsoil moisture, says World Weather Inc. Adequate subsoil moisture should prevent any serious hit to production, though.
USDA reported soybean export inspections of 1.29 MMT (47.2 million bu.) for the week ended Jan. 2, down 358,232 MT from the previous week but within the pre-report range of expectations from 800,000 MT to 1.4 MMT. Inspections continue to run ahead of the required pace needed to hit the current USDA export estimate. Historically, inspections tend to slow between now and the end of the marketing year as exporters tend to focus more on corn.
Technical analysis: March soybean futures showed robust strength overnight though faded as the session progressed. The 40-day moving average marks resistance at $9.98 3/4, which is quickly backed by the psychological $10.00 mark then $10.12. Bulls are seeking to hold support at the 10-day moving average at $9.94 1/4, which is backed by stout support at $9.89 1/2.
March meal futures started the session on a higher note but ended the day lower and on session lows. Bulls tried and failed to overcome 100-day moving average resistance at $311.0, which is backed by resistance at $314.9. Support comes in at $304.6 then the psychological $300.0 mark on continued selling pressure.
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 rose 11 1/4 cents to $5.40 1/2, nearer the daily high. March HRW wheat rose 14 1/4 cents to $5.53 1/4 and nearer the session high.
Fundamental analysis: The winter wheat futures markets today saw short covering after prices last week hit contract lows. The steep sell off in the U.S. dollar index and crude oil prices rising to a three-month high today were friendly outside-market influences that also prompted some speculator perceived bargain hunting. Concerns about wheat-production potential in Russia continue to be an underlying supportive element for wheat futures prices.
USDA this morning reported U.S. wheat export inspections of 412,342 MT for the week ended Jan. 2, up 73,241 MT from the previous week and above the pre-report range of expectations.
India’s wheat prices rose to a record high Monday on shrinking supplies amid solid demand from flour mills, industry officials told Reuters.
World Weather Inc. today said that in U.S. HRW country not much precipitation is expected in the next seven days. There will be some occasional light snow and very light rain. Temperatures will be generally near to below average and any subzero temperatures should occur mostly where there is protective snow cover. Meantime, in the northern Plains, a narrow strip of the region from interior northeastern Montana into north-central South Dakota has very thin snow cover or no snow cover and this part of the region could receive some winterkill this week due to exposure to significant cold temperatures. Some more snow will occur later this week, said World Weather.
Technical analysis: Winter wheat market bears have the solid 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 last week’s high of $5.54 3/4 and then at $5.69 1/4. First support is seen at the contract low of $5.27 1/2 and then at $5.20. 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 last week’s high of $5.63 1/4 and then at $5.77 1/4. First support is seen at $5.40 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 rallied 102 points to 68.68 cents, near the session high.
Fundamental analysis: A notable decline in the U.S. dollar invited short-covering, with additional support likely stemming from general strength across the ag complex. However, technical resistance at the 20-day moving average continued to curb a heftier move higher, especially ahead of USDA’s Annual Production Report, due out on Friday.
World Weather Inc. reports cotton areas in northern Argentina may dry down for a while, though subsoil moisture should support most crop needs for a while, but rain will be needed near mid-month from Santiago del Estero into Chao and northern Santa Fe. Meanwhile, planting has advanced well in growing areas of Brazil, though weather conditions should become wetter biased in the next couple of weeks, slowing additional fieldwork.
Technical analysis: March cotton futures held a close above the 10-day moving average, currently trading at 68.57 cents, though backing from the 20-day moving average of 68.93 cents limited stronger short-covering efforts. However, last Friday’s low of 67.63 cents served up initial support, with additional support at the Dec. 20 low of 68.21 cents helping curb stronger selling interest. Meanwhile, a move above the 20-day will see additional resistance at the 40-day moving average of 70.02 cents, then at the 100-day moving average of 71.66 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.