Corn
Price action: March corn fell 4 cents to $4.54, ending near the session low.
Fundamental analysis: Corn futures favored the downside in narrow trade, with technical support allowing for consolidation around the recent high. Some profit-taking in crude oil in the wake of a solid rally, combined with continued strength in the U.S. dollar, certainly cast a shadow across the ag complex at midweek. Meanwhile, positioning ahead of Friday’s Annual Production and Quarterly Stocks reports will likely maintain a quiet tone up until USDA’s release of the data.
Some concern has been raised around a wetter bias in northern Brazil, which will limit fieldwork and induce some possible flooding over the course of the next couple weeks, possibly delaying harvest and thus safrinha corn plantings. World Weather Inc. noted earlier this week that the potential for significant delays are still little low, despite the wetter bias. In the meantime, a drier bias is also expected to continue in central and portions of eastern Argentina, southeastern Paraguay, southern and western Rio Grande do Sul and Uruguay.
Earlier today, the Energy Information Administration showed weekly ethanol production averaged 1.102 million barrels per day (bpd) during the week ended Jan. 3, down 9,0000 bpd (0.8%) from the previous week but up 40,000 bpd (3.8%) from the same week last year. Ethanol stocks rose 509,000 barrels to 24.148 million barrels.
Technical analysis: March corn futures ended the session near the daily low and below the 10-day moving average of $4.54 1/2. Initial support will now serve at $4.51, which is backed by the 20- and 200-day moving averages $4.49 1/2 and $4.48 1/2. Meanwhile, initial resistance continued to serve at $4.60, which is backed by Monday’s high of $4.60 1/4. Bulls continue to hold the near-term technical advantage and continue to have sights set on $4.70. Meanwhile, bears continue to work towards a close below support at $4.40.
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 2 3/4 cents to $9.94 1/2, nearer the daily low. March soybean meal fell $2.70 to $300.80, near mid-range after hitting a two-week low early on. March soybean oil rose 34 points to 41.59 cents, nearer the daily high and hit a three-week high.
Fundamental analysis: The soybean futures market continues to languish at lower price levels. Solid gains in the U.S. dollar index which is back near last week’s two-year high limited buying interest in the soy complex today. Spreaders have been featured recently buying soybean oil and selling soybean meal. Bulls got little help from USDA reporting a daily U.S. soybean sale of 120,000 MT to unknown destinations for 2024-25.
World Weather Inc. today said that in South American soybean regions central and portions of Eastern Argentina, southwestern Paraguay, southern and western Rio Grande do Sul and Uruguay will see less-than-usual precipitation over the next 10 days and temperatures will 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. 17-21 as scattered showers and thunderstorms evolve. The remainder of Brazil and Argentina should see sufficient precipitation to support crop development, said the forecaster.
Soybean traders are awaiting Friday’s USDA annual production and quarterly grain stocks reports. A survey of analysts shows they expect a slightly lower U.S. soybean production number from last month’s report. Soybean ending stocks are seen up around 200 million bushels from the same time last year.
Technical analysis: The soybean, meal and bean oil bears all have the overall near-term technical advantage. The next near-term upside technical objective for the soybean bulls is closing March prices above solid resistance at $10.55. The next downside price objective for the bears is closing prices below solid technical support at the contract low of $9.47. First resistance is seen at this week’s high of $10.09 3/4 and then at the January high of $10.15 3/4. First support is seen at this week’s low of $9.85 1/2 and then at $9.75. The next upside price objective for the meal bulls is to produce a close in March futures above solid technical resistance at the January high of $321.60. The next downside price objective for the bears is closing prices below solid technical support at the contract low of $285.10. First resistance comes in at Tuesday’s high of $307.30 and then at $310.00. First support is seen at today’s low of $298.30 and then at $295.00. The next upside price objective for the bean oil bulls is closing March prices above solid technical resistance at 43.50 cents. Bean oil bears’ next downside technical price objective is closing prices below solid technical support at the contract low of 37.83 cents. First resistance is seen at today’s high of 41.31 cents and then at 42.00 cents. First support is seen at 40.00 cents and then at this week’s low of 39.75 cents.
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 fell 6 1/4 cents to $5.36 1/4, while HRW futures fell 5 1/2 cents to $5.50 1/4. Each marking low-range closes.
Fundamental analysis: Technical pressure and U.S. dollar strength continue to curb buyer interest in wheat futures, though consolidation ahead of USDA’s first look at 2025 wheat acres and quarterly stocks on Friday will likely maintain a subdued tone across the marketplace.
World Weather Inc. maintains a winter storm in the southeastern U.S. Thursday into Saturday will produce snow from northern Texas to Michigan, Ohio and the middle Atlantic Coast states, with 1-3 inches north of the Ohio River with 2-8 inches and local totals to 10 inches from southern Oklahoma and far northern Texas to parts of Tennessee, Kentucky and the southern Appalachian Mountains. The snow cover will help protect winter wheat crops across the area. Meanwhile, two waves of snow will also impact the drier areas of southwestern Canada’s Prairies and northwestern U.S. Plains from southern Alberta and southwestern Saskatchewan into the western Dakotas, Wyoming and Nebraska during the coming week, with the moisture from the melting snow beneficial for easing drought conditions early in the spring.
Technical analysis: March SRW wheat continued to face resistance at the 10- and 20-day moving averages of $5.40 3/4 and $5.44 1/2, while support continued to serve around $5.31 1/2. Bears continue to firmly grasp the near-term technical advantage. SRW bulls’ next upside price objective is closing March prices above resistance at $5.69 1/4, while bears continue to work towards breaching support at $5.00. First resistance is seen at last Friday’s high of $5.47 and then at last week’s high of $5.54 3/4. Meanwhile, first support lies at the contract low of $5.27 1/2 and then at $5.20.
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 28 points to 68.23 cents and nearer the daily low.
Fundamental analysis: The cotton futures market today saw modest selling pressure amid bearish technicals and a strong U.S. dollar index that today saw solid gains to push prices back near last week’s two-year high. Lower crude oil prices today were also a bearish outside-market element for cotton futures.
World Weather Inc. today said crop harvesting in northern India and Pakistan should be complete. Southern India’s weather will be good for maturing crops and their harvest, although some showers will pop up periodically. Eastern Australia cotton areas will see some periodic thunderstorms during the next two weeks. There is some risk of hail damage. Otherwise the precipitation will be welcome and good for long term dryland crop development. Northern Argentina cotton areas may dry down for a while but subsoil moisture should support most crop needs. Rain will be needed near mid-month. Planting has advanced well in Brazil cotton regions and weather conditions should be wet-biased in the next couple of weeks, slowing additional fieldwork.
Cotton traders are awaiting Friday’s USDA annual production report, which is expected to show the agency decreasing the size of the U.S. cotton crop by 100,000 bales and show slightly lower ending stocks from last month’s report.
Technical analysis: The cotton futures bears have the solid overall near-term technical advantage. The next upside price objective for the cotton bulls is to produce a close in March futures above technical resistance at 71.00 cents. The next downside price objective for the cotton bears is to close prices below solid technical support at the contract low of 67.48 cents. First resistance is seen at today’s high of 68.64 cents and then at this week’s high of 69.15 cents. First support is seen at 68.00 cents and then at 67.48 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.