Corn
Price action: March corn rose 2 3/4 cents to $4.56 3/4, marking a high-range close.
Fundamental analysis: Corn futures managed to turn decidedly higher in midmorning trade, in tandem with soybean futures in today’s abbreviated session. A firmer U.S. dollar was likely negated by strength in crude oil, while improving chances of rain in Argentina were seemingly overshadowed by likely positioning ahead of USDA’s Annual Production and quarterly Grain Stocks Reports, due out Friday at 11 a.m. CT. Look for subdued trade ahead of their release. In addition, USDA will also release its weekly export sales data, delayed a day, with analysts expecting net sales to have ranged from 700,000 MT to 1.4 MMT during the week ended Jan. 2.
World Weather Inc. reports models overnight were promoting scattered showers and thunderstorms across Argentina at the end of next week. Some of the rain is expected to reach Uruguay, far southern Brazil and Paraguay as well.
Technical analysis: March corn ended the session back above the 10-day moving average of $4.55 1/2 after holding an inside range throughout the session. With bulls continuing to hold firm to the near-term technical advantage, they will continue to eye resistance at $4.70 as their next target, though interim resistance stands at $4.57 1/2, again at last week’s high of $4.60 1/4 and again at $4.61 1/2 and $4.63 1/2. Conversely, bears will continue to focus on securing a close below $4.40, with interim support lying at the 10-day moving average, then at $4.51 3/4 and again at the 20- and 200-day moving averages of $4.49 3/4 and $4.48 1/2.
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 soybean futures climbed 2 1/4 cents to $9.96 3/4 and settled nearer session highs. March meal futures fell to $1.70 to $299.10.. March bean oil futures surged 79 points to 42.76 cents.
Fundamental analysis: Soybeans favored the downside in overnight trade though buying interest picked up early this morning and persisted throughout today’s shortened session, helping prices close near session highs. Volume was light today as a lot of outside markets saw closures or abbreviated sessions due to the National Day of Mourning to commemorate the late former president Jimmy Carter.
Positioning likely drove trade today ahead of tomorrow’s USDA reports. According to a Reuters poll, analysts expect USDA to cut production by 8 million bushels due to a drop in yield. Quarterly stocks as of Dec. 1 are expected to total 3.231 billion bushels, which would be well above year ago at 3.001 billion. U.S. ending stocks are seen as falling to 457 million bushels in the supply and demand report, which would be down from 470 million in December. Impressive crush and exports amid a cut to production likely has traders anticipating tighter stocks.
Analysts expect a modest cut to the Argentine production estimate and an increase to the Brazilian production estimate. Weather in Brazil continues to bode well for production as beneficial rain fell from portions of north-central Rio Grande do Sul to eastern and parts of the remainder of southern Parana Wednesday while rain continued in most areas from Mato Grosso to Minas Gerais and Espirito Santo, says World Weather Inc.
Technical analysis: March soybean futures continue to trade in a tight range ahead of Friday’s reports. Bears retain a slight technical advantage though recent strength has called that advantage into question. Bulls are looking to tackle 40-day moving average resistance at $9.98 1/2, which is reinforced by resistance at last week’s high of $10.15 3/4. Tentative support comes in at $9.94, the 20-day moving average, which is backed by $9.85 3/4 then $9.80.
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 4 cents to $5.34, nearer the daily low. March HRW wheat fell 2 1/4 cents to $5.50 1/4 and near mid-range. March spring wheat futures fell 1 1/2 cents to $5.83 1/2.
Fundamental analysis: The winter wheat futures markets saw mild technical selling pressure today. A strong U.S. dollar index that is near last week’s two-year high is also an anchor on wheat futures prices at present.
World Weather Inc. today said cold weather in U.S. wheat areas has not had any negative impact due to snow cover and that will likely continue to be the case through the next 10 days.
Weekly USDA U.S. export sales are delayed until Friday morning due to the federal holiday for President Jimmy Carter today. A survey by Reuters expects U.S. wheat sales of 150,000 to 500,000 MT in the 2024-25 marketing year, and sales of zero to 50,000 MT in the 2025-26 marketing year.
Grain futures trading may become more active near midday Friday in the wake of the release of the USDA annual production and quarterly grain stocks reports.
Technical analysis: Winter wheat market bears have the solid overall near-term technical advantage. 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. 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.
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 rallied 31 points to 68.50 cents.
Fundamental analysis: Cotton futures saw modest strength today as positioning continues to drive trade ahead of Friday’s reports. Prices have been largely sideways over the past couple of weeks as traders await a catalyst. Historically, the January reports yield little change in production. A Bloomberg poll shows expectations of 14.16 million bales, which would be down from 14.26 million in December. Ending stocks are forecast to fall to 4.28 million bales from 4.4 million bales in December. Analysts are expecting exports to increase despite the cut to production. Export sales overall have been lackluster, which has kept sellers active in futures, which makes analysts’ expectations a little surprising. This week’s export sales report was pushed to Friday given government office closures today due to the National Day of Mourning after the passing of president Carter.
Technical analysis: March cotton futures continue to pivot near the 10-day moving average at 68.51 cents as bears retain the technical advantage. Bulls are looking to challenge the 20-day moving average at 68.88 cents, which is backed by downtrend line resistance at 69.07 cents. Support comes in at today’s low of 67.86 cents then the contract low of 67.48 cents on continued selling pressure.
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.