Corn
Price action: May corn fell 9 1/2 cents to $4.60 3/4, closing below the 10- and 100-day moving averages.
Fundamental analysis: Corn futures erased recent gains as risk-off sentiments returned to the grain complex amid escalating trade tensions. Weighing on corn in particular were remarks from Canada’s energy minister Jonathan Wilkinson, which indicated Canada is considering imposing tariffs on U.S. ethanol as a part of a second tranche of trade penalties. Wilkinson noted, “everything is on the table” and specifically noted ethanol is “absolutely on the list of things” that could face tariffs. Traders will continue to closely monitor the situation as it advances.
Meanwhile, in South America weather is mostly favorable with most late season safrinha corn planted at this juncture. World Weather Inc. notes Rio Grande do Sul will dry out, while northern parts of center south and some of the northeast will see relief from dryness, though center west crop areas will see the most routine rainfall over the next two weeks.
Earlier today the Energy Information Administration reported weekly ethanol production averaged 1.062 million barrels per day (bpd) during the week ended March 7, down 31,000 bpd (2.8%) from the previous week but up 38,000 bpd (3.7%) from the same week last year. Ethanol stocks rose 87,000 barrels to 27.376 million barrels.
Thursday morning, USDA will release its Weekly Export Sales Report, with analysts expecting net sales to have ranged from 725,000 MT to 1.4 MMT during the week ended March 6. Last week, net sales of 909,050 MT were reported for the previous week.
Technical analysis: May corn ended the session below the 10- and 100-day moving averages, each trading around $4.65 with the 200-day moving average of $4.55 1/2 now serving as initial support. Bears continue to show their dominance and will continue to look towards holding a close below support at $4.50, while bulls will need to edge back above this week’s high of $4.77 1/2. However, initial resistance will now serve at today’s failed support levels, then at $4.70 and $4.72.
What to do: Get current with advised sales.
Hedgers: You should be 70% sold in the cash market on 2024-crop. You should have 20% of expected 2025-crop production forward sold for harvest delivery.
Cash-only marketers: You should be 70% sold on 2024-crop. You should have 20% of expected 2025-crop production forward sold for harvest delivery.
Soybeans
Price action: May soybeans fell 10 3/4 cents to $10.00 1/2, nearer the daily low and closed at 2.5-month low close. May soybean meal lost $1.60 to $300.20 and nearer the daily low. May soybean oil fell 25 points to 41.68 cents, nearer the session low and hit a nine-week low.
Fundamental analysis: The soybean complex futures saw more speculative selling pressure today, much of which was weak long liquidation, amid still-elevated risk aversion in the general marketplace amid worries about a global trade war sparking a world economic recession. Solidly lower corn futures prices also spilled over into selling pressure in the soy markets. Key outside markets were neutral today, as a firmer U.S. dollar index was a negative for soybeans, while higher crude oil prices were a positive element.
Also bearish for soybeans, the expiration of the $1-per-gallon blenders tax credit on Dec. 31, 2024, has led to the shutdown of multiple biodiesel plants in Iowa. Industry leaders face uncertainty as the Treasury Department has yet to finalize rules for the replacement 45Z Clean Fuel Production Tax Credit. Industry groups are urging Congress to reinstate the expired 40A Biodiesel Tax Credit.
World Weather Inc. today said that in South American soybean regions, drier weather in Argentina this week “will be good for many areas that have received a little too much rain recently. Northeastern crop areas, however, are too dry and will remain that way for at least another ten days.” Meantime, Brazil’s weather is mostly good. Relief from dryness is expected in northern parts of center-south and some of the northeast while center-west crop areas get the most routine rainfall over the next two weeks.
Thursday morning’s weekly USDA export sales report is expected to show U.S. soybean sales of 275,000 to 700,000 MT in the 2024-25 marketing year, and sales of zero to 100,000 MT during the 2025-26 marketing year.
Technical analysis: The soybean, meal and bean oil bears have the firm overall near-term technical advantage. May soybean prices are in a five-week-old downtrend on the daily bar chart. The next near-term upside technical objective for the soybean bulls is closing May prices above solid resistance at $10.40. The next downside price objective for the bears is closing prices below solid technical support at the contract low of $9.55 1/2. First resistance is seen at today’s high of $10.14 and then at $10.25. First support is seen at the March low of $9.91 and then at $9.75.
Soybean meal prices are in a nine-week-old downtrend on the daily bar chart. The next upside price objective for the meal bulls is to produce a close in May futures above solid technical resistance at $310.00. The next downside price objective for the bears is closing prices below solid technical support at the contract low of $290.80. First resistance comes in at today’s high of $303.50 and then at last week’s high of $307.60. First support is seen at today’s low of $298.60 and then at $295.00.
Bean oil prices are also trending down on the daily bar chart. The next upside price objective for the bean oil bulls is closing May prices above solid technical resistance at 44.00 cents. Bean oil bears’ next downside technical price objective is closing prices below solid technical support at the December low of 39.86 cents. First resistance is seen at today’s high of 42.14 cents and then at 43.00 cents. First support is seen at today’s low of 41.22 cents and then at 41.00 cents.
What to do: Get current with advised sales. Our next sales target is $11.00 in nearby futures.
Hedgers: You should be 55% sold in the cash market on 2024-crop. You should also have 10% of expected 2025-crop production sold for harvest delivery.
Cash-only marketers: You should be 55% sold on 2024-crop. You should also have 10% of expected 2025-crop production sold for harvest delivery.
Wheat
Price action: May SRW wheat fell 2 3/4 cents to $5.54, while May HRW wheat rose a penny to $5.73, each forging high-range closes. May HRS futures fell 2 3/4 cents to $5.94 1/2.
Fundamental analysis: SRW wheat futures faced modest pressure despite notable pressure in corn futures and the soy complex along with a firmer U.S. dollar. Moreover, as the session progressed, HRW wheat futures were able to notch gains, which helped limit selling interest.
Earlier today, Statistics Canada reported Canadian farmers intend to plant 27.5 million acres of wheat this year, up 702,000 (2.6%) from last year. Spring wheat area is expected to drive the increase, rising 2.5% to 19.4 million acres. The total wheat acreage figure was well above pre-report estimates.
In the U.S., World Weather Inc. notes wheat in the southern U.S. is going to be greening, while cooler temps in the central Plains and Midwest periodically over the next two weeks will help prevent much crop development in those areas. A boost in soil moisture and precip is needed in crop areas suffering from freeze damage earlier this year, but precip in the central Plains will be limited for a while.
Early Thursday morning, USDA will release its weekly export sales data, with analysts expecting net wheat sales to have ranged from 275,000 to 650,000 MT during the week ended March 6. Last week, net sales of 338,703 MT were reported for the previous week.
Technical analysis: May SRW wheat continued to find support at the 10-day moving average of $5.71 1/2, though looming resistance at the 100-, 40-day and 20-day moving averages, currently layered from $5.73 1/4 and $5.75 1/2 kept buying to a minimum. Initial resistance will continue to serve at $5.61 1/4, then at $5.65 3/4, then at $5.68 3/4, while initial support will remain at the 10-day moving average, then at $5.50 3/4, $5.46 1/4 and the March low of $5.30.
May HRW futures notched slight gains to end the session, though spent the session trading mostly between the 10-day moving average of $5.67 3/4 and the 100-day moving average of $5.79 1/2. A move below the 10-day will face additional support at $5.65 3/4, then $5.60 1/2 and the March low of $5.41 1/2. Conversely, a break of the 100-day will find additional resistance at $5.82 1/4, $5.85 1/2, and again at the 40-, 20- and 200-day moving averages, currently trading at $5.89 1/4, $5.92 1/4 and $6.01 1/4.
What to Do: Get current with advised sales.
Hedgers: You should be 85% sold in the cash market on 2024-crop. You should have 20% forward sold for harvest delivery in 2025.
Cash-only marketers: You should be 85% sold on 2024-crop. You should have 20% forward sold for harvest delivery in 2025.
Cotton
Price action: May cotton rose 98 points to 66.98 cents and near the daily high.
Fundamental analysis: The cotton futures market today saw more short covering. A tame U.S. consumer price index report today that saw inflation come in slightly lower than expectations was a friendly element for the cotton market, as were higher crude oil prices. However, gains in cotton were somewhat limited by a firmer U.S. dollar index today.
World Weather Inc. today said rain is needed in the southwestern U.S. desert region, southern California and both south and west Texas “to ensure favorable soil moisture for spring planting.” Additional rain is needed in the southeastern states, despite some moisture this week. The U.S. Delta will be wettest for a while along with portions of the interior southeast. West Texas precipitation will remain insignificant through the next two weeks. South Texas will be equally dry and quite warm threatening dryland planting which is normally under way at this time of year, said the forecaster.
Cotton traders will closely examine Thursday morning’s weekly USDA export sales report. U.S. cotton sales abroad have been lackluster recently and bulls are hoping the lower price levels the past few months will garner better global demand for the U.S. fiber.
Technical analysis: The cotton futures bears have the firm overall near-term technical advantage. Prices are in a downtrend on the daily bar chart. The next upside price objective for the cotton bulls is to produce a close in May futures above technical resistance at the February high of 69.25 cents. The next downside price objective for the cotton bears is to close prices below solid technical support at the contract low of 60.00 cents. First resistance is seen at this week’s high of 67.07 cents and then at 68.00 cents. First support is seen at today’s low of 65.95 cents and then at this week’s low of 65.42 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.