Corn
Price action: March corn futures rose 1/4 cent to $4.58, nearer the daily high.
Fundamental analysis: The corn futures market today saw some chart consolidation. The bulls remain resilient. A rebound in the U.S. dollar index today, after solid losses Monday, limited buying interest in corn futures.
USDA today reported a daily U.S. corn sale of 110,000 MT to Colombia for 2024-25. Also, the Commerce Department today reported U.S. corn exports for November came in well above expectations, at 185.2 million bushels. That’s an additional 15 million bushels versus the normal difference above monthly inspections.
South American crop consultant Dr. Michael Cordonnier kept his Brazilian and Argentine corn crop estimates at 125 MMT and 50 MMT, respectively. He holds a neutral bias toward the Brazilian crop and a neutral to lower bias for Argentina’s corn crop amid significant dryness across much of the country. World Weather Inc. today said central and portions of eastern Argentina, southwestern Paraguay, southern and western Rio Grande do Sul and Uruguay corn regions will see less-than-usual precipitation over the next 10 days. Temperatures will also trend hotter this weekend into next week. “Crop stress is expected to evolve and become a little more significant as each day moves along.” Some partial relief is expected Jan. 18-22 as scattered showers and thunderstorms evolve. The remainder of Brazil and Argentina should see sufficient precipitation to support crop development, said the forecaster.
Corn traders are awaiting Friday’s USDA annual production report and quarterly grain stocks report, making Friday one of the most important data days of the year for the grain markets.
Technical analysis: The corn futures bulls have the overall near-term technical advantage. A five-week-old price uptrend is in place on the daily bar chart. The next upside price objective for the bulls is to close March prices above solid chart resistance at $4.75. The next downside target for the bears is closing prices below chart support at $4.40. First resistance is seen at this week’s high of $4.60 1/4 and then at $4.65. First support is seen at this week’s low of $4.51 1/2 and then at $4.50.
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 1/2 cent to $9.97 1/4, ending just shy of the intraday high. March meal futures slid $3.80 to $303.50, marking a mid-range close after edging to a two-week low early on. March soyoil rallied 92 points to 41.25 cents, notching a close above the 20-day moving average for the first time since Dec. 13.
Fundamental analysis: Soybeans edged modestly lower with pressure stemming from extended selling in soymeal futures, though a solid rise in soyoil, outside recent sideways consolidation, assisted in a close well off the intraday low. However, technical resistance continued to keep extended short-covering efforts at bay, especially ahead of Friday’s Annual Production and quarterly Grain Stocks Reports.
Also undergirding soybeans are lingering weather concerns in central and portions of eastern Argentina, southwestern Paraguay, southern and western Rio Grande do Sul and Uruguay, which will continue to see less-than-usual precip over the next ten days, combined with increasing temps this weekend into next week. World Weather Inc. notes crop stress is expected to evolve and should become a little more significant each day. However, partial relief is expected Jan. 18-22 as scattered showers and thunderstorms evolve. Meanwhile, the remainder of Brazil and Argentina should see sufficient precip to support crop development, though portions of center west and center south Brazil may be too wet at times. South American crop consultant Dr. Michael Cordonnier maintained both his Brazilian and Argentine soybean estimates unchanged at 171 MMT and 53 MMT, respectively. Going forward, Cordonnier indicated a neutral to higher bias towards the Brazilian soy crop and a neutral to lower bias regarding the Argentine crop.
Technical analysis: March soybean futures ended right at the 40-day moving average, currently trading around $9.97 1/4, while support at the 10- and 20-day moving averages of $9.94 1/2 and $9.90 1/4 served up support throughout the session. An extension higher will face additional resistance around $10.00, which is backed by this week’s high of $10.09 3/4 and last week’s high of $10.15 3/4, though bulls will need a close above the November high of $10.55 to regain the technical advantage. Meanwhile, bears look to hold a close below the December low of $9.47, with first support lying at $9.85 1/2, then at $9.75.
December meal futures gapped lower overnight and faced resistance at the 10-day moving average of $323.00 throughout the session, while support at $317.50 curbed sellers. Bears will work to secure a close below the 20- and 40-day moving averages of $315.70 and $312.00 and ultimately the Dec. 19 low of $301.40, while bulls will look towards breaching the 200-day moving average of $332.50 and last week’s high of $334.10.
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 futures climbed 2 cents to $5.42 1/2 and closed nearer session highs. March HRW futures rallied 2 1/2 cents to $5.55 3/4, near mid-range. March HRS futures rose 2 1/2 cents to $5.94 3/4.
Fundamental analysis: Wheat futures saw modest strength after a disappointing overnight session, though prices continue to trend lower on the daily bar chart. While both corn and beans struggled to trade to the upside, both closed well off overnight lows, which supported wheat prices in the latter half of today’s session. Positioning is likely to drive trade ahead of Friday’s USDA reports, which will give a key look into 2025 winter wheat acres. The reports will also give a look into second quarter demand in the quarterly Grain Stocks report and any potential changes to the 2024/25 balance sheet, likely driven by any change in demand. Feed use is notoriously difficult to get a grasp on in wheat, so even a small surprise could end up driving trade.
State-level winter wheat crop condition ratings signaled general deterioration in the HRW crop during December, led by top producer Kansas and Nebraska. On the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop declined 9.0 points from the end of November to 330.3. Precipitation over HRW acres will be limited over the coming week, with any precipitation that does fall will likely be snow. Additional snow cover will be beneficial for crops ahead of an expected surge of arctic air after Jan. 16.
Technical analysis: March SRW futures posted modest gains, though bears continue to retain the technical advantage. Bulls overcame resistance at $5.42 1/4, the 10-day moving average, and are looking to challenge resistance at $5.51 1/2. That is quickly backed by the 40-day moving average at $5.54 3/4. Support stems from $5.42 1/4 with little backing until $5.33 on continued downside. Bears are ultimately eyeing the contract low of $5.27 1/2.
March HRW futures continue to maintain a modest downtrend on the daily bar chart. Bulls are looking to challenge downtrend resistance at $5.59, which sees little backing until the Dec. 11 high of $5.71 1/2. Support stems from the 10-day moving average at $5.51 3/4, which is backed by support at $5.41 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 17 points to 68.51 cents, closing near the session low.
Fundamental analysis: March cotton futures made a run at the 20-day moving average though short-covering efforts were thwarted by returned strength in the U.S. dollar and a push into overbought territory. Meanwhile, cotton traders will likely remain rather subdued ahead of USDA’s Annual Production Report and the Bureau of Labor Statistics’ Employment Situation Report, each due out Friday. Analysts are forecasting non-farm payroll will increase by 160,000, which compares to an increase of 227,000 in the November jobs report. The data could help stabilize equities and help clarify the Federal Reserve’s interest rate plans.
World Weather Inc. notes cotton 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 Chaco and northern Santa Fe. Meanwhile, the forecaster maintains a wetter bias in areas of Brazil during the next couple of weeks will slow fieldwork.
Technical analysis: March cotton futures continue to face technical headwinds as the 20-day moving average has curbed buying since early December. Meanwhile, support around 68.40 cents has consistently proven as solid near-term support, with backing from support at 68.04 cents and the Dec. 20 low of 67.48 cents. A move into near-term overbought territory will likely compound difficulties around a move higher, especially with additional resistance serving at the 40-day moving average of 69.90 cents. Conversely, support around 67.40 cents has proven a formidable level for bears to breach.
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.