Corn
Price action: December corn futures climbed 5 cents to $4.24 and closed near session highs, though still dropped 7 cents on the week.
5-day outlook: December corn futures rebounded today, posing the sole daily gain of this week. While prices dwindled on the week, December futures maintained key uptrend support that has limited all of the downside since mid-October. Bulls’ defense of that level keeps the near-term uptrend alive. Bulls are targeting a daily close above the early October high of $4.34 1/4 to further cement their hold of the market. Given continued robust use and anticipated further reduction to supplies as a reduction to the USDA production forecast seems likely, continued downside seems unlikely at this juncture, which is further reinforced by bullish technicals, likely leading prices higher over the coming week.
30-day outlook: Traders will keep a close eye on the demand side of the balance sheet over the course of the coming month. Some market watchers are concerned over the return of former President Trump to the White House given his trade views. Trump has vowed to escalate trade tensions with Mexico, the top importer of U.S. corn, if U.S. companies continue to move production efforts to the nation. Exports are the most variable use category on the balance sheet at this stage, though total commitments (accumulated sales plus accumulated exports) are the highest since 2021-22, which were elevated due to Phase 1 purchases from China.
USDA reported corn export sales of 1.32 MMT during the week ended Nov. 7, down 53% from the previous week and 52% from the four-week average. Net sales were near the lower end of analysts’ pre-report range of expectations from 1.25 MMT to 2.6MMT. Exports totaled 698,600 MT for the week. While sales slowed this week, they were still above the five-year average for this time of year.
90-day outlook: Recent rain in Brazil has negated much of the moisture concerns for first crops, allowing soy plantings to accelerate allowing for a better opportunity to get safrinha corn planted within the ideal window. More attention has been drawn to Argentina, which has become more dry and is expected to see more sunshine than rain in the next couple of weeks, says World Weather Inc. Concerns regarding insect pressure following last year’s infestation of corn leafhoppers led Argentine producers to lower corn plantings, leading crop consultant Michael Cordonnier to have his Argentina corn production estimate at 48.0 MMT, well below USDA at 51.0 MMT. The coming quarter will also give greater insight into safrinha plantings in Brazil. A large South American crop is likely to draw some demand from the U.S. export market, but the world balance sheet tightening by over 10 MMT should keep the downside relatively limited in corn futures, especially considering U.S. production is likely to be cut in January.
What to do: Get current with advised sales.
Hedgers: You should be 20% sold in the cash market on 2024-crop.
Cash-only marketers: You should be 20% sold on 2024-crop.
Soybeans
Price action: January soybeans rose 11 cents to $9.98 1/2 but fell 31 3/4 cents on the week. December soymeal rose $2.60 to $289.60 but notched a $6.60 weekly loss. December soyoil rose 91 points to 45.35 cents but lost 342 points on the week.
5-day outlook: Soybeans took back a portion of Thursday’s losses, with easing pressure across soyoil futures curbing this week’s selloff. Meanwhile, as expected, the National Oilseed Processors Association (NOPA) reported U.S. soybean crush among its members surged to an all-time monthly high in October to 199.959 million bushels, surpassing the previous record of 196.406 million bushels set earlier this year in March. The crush rose 12.8% from the 177.320 million bushels crushed in September and up 5.4% from the October 2023 crush of 189.774 million bushels. Moreover, soyoil stocks among NOPA members as of Oct. 31 rose slightly to 1.069 billion pounds, up from 1.066 billion at the end of September, which was the tightest end-of-month supply since November 2014.
Soybeans will likely continue to trade mostly sideways into next week, though a soyoil or meal will certainly set the tone for the complex in the near-term.
30-day outlook: Planting efforts in South America have advanced quite rapidly as of late following a shaky start to the season. AgRural reported Brazilian producers has planted 67% of the estimated soybean area as of late last week, advancing six points ahead of year-ago. It was noted that planting in the two largest production states, Mato Grosso and Paraná, was in the final stretch. In Argentina, soybean plantings were estimated to 7.9% complete, with core production areas approximately 10% planted. As the planting and growing season continues to progress in both areas, weather will continue to be a focus. Crop consultant Dr. Michael Cordonnier notes conditions in Brazil are mostly favorable and generally good but stated dryness in southern Brazil needs to be monitored, while conditions in Argentina continue to be hit or miss. Cordonnier reports there has been enough rainfall for planting and emergence, but not enough to recharge the soil moisture which remains below what it should be for this time of year.
90-day outlook: Uncertainty lingers around the changing political landscape in the U.S., not only around trade but also inflation as the incoming administration begins implementing its policies. The implications of an additional trade war have been widely perceived as negative for U.S. export business, especially amid persisting global economic woes. U.S. soybean exports have been quite strong recently, though the surge in the U.S. dollar immediately following the election has garnered additional concern of the competitiveness of U.S. products on the global marketplace, as evidenced by this week’s selloff. Look for the marketplace to closely monitor movements in the dollar and trade relations closely into the new year.
What to do: Get current with advised sales.
Hedgers: You should be 20% sold in the cash market on 2024-crop.
Cash-only marketers: You should be 20% sold on 2024-crop.
Wheat
Price action: December SRW wheat futures rose 6 1/4 cents to $5.36 1/2 and near the session high. For the week, December SRW fell 36 cents. December HRW wheat gained 7 cents to $5.40, nearer the daily high and on the week down 24 1/4 cents. December spring wheat rose 5 3/4 cents to $5.72 1/4 , but fell 25 1/2 cents on the week.
5-day outlook: The winter wheat futures markets saw short covering to end the week, after SRW and HRW hit 2.5-month lows Thursday. Look for more chart-based selling pressure early next week as technicals remain firmly bearish. Wheat traders will also continue to look to the corn and soybean markets, and especially corn, for daily price direction. With corn futures prices being in a near-term uptrend at present and wheat futures markets trending down, that price divergence is not likely to last much longer.
30-day outlook: Weather in U.S. wheat country leans price-bearish. World Weather Inc. today said additional rain in U.S. hard red winter wheat areas Sunday into Monday “will maintain moisture abundance for long-term crop development. A dry and warm scenario would be best following the precipitation event.” Meanwhile, eastern Ukraine may receive some needed rain late next week with a part of Russia’s southern region also getting some rain in the following weekend. “The moisture will be welcome and of use to crops in the spring, but there is not much chance for serious crop improvements in the next few weeks.” South and western Australia will continue missing significant rain through the weekend, but the potential for changed production potential is minimal. Argentina’s central and southern wheat production areas received significant rain recently and crops should be reproducing and filling in a better environment. The lower Danube River Basin and Greece are among the driest wheat areas in Europe and some precipitation is expected, said World Weather.
On the positive side, the month of December is historically a price-bullish month for the grain markets and that general price strength can last into the early-spring months.
90-day outlook: USDA today reported U.S. wheat export sales of 380,100 MT during the week ended Nov. 7, up 1% from the previous week but down 17% from the four-week average. While sales were within the range of trade expectations, they are disappointing to wheat market bulls. The U.S. dollar index this week hit a six-month high, which is helping to keep buying interest in wheat futures squelched. Trends in the currency markets tend to be stronger and longer lasting than price trends in other markets, which suggests the greenback could continue to appreciate for some time to come, which could continue to limit the upside in U.S. wheat futures in the coming months.
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: December cotton fell 152 points to 66.80 cents and lost 418 points on the week.
5-day outlook: Cotton futures ended the week on a sour note, edging to a three-month low in intraday trade as selling in crude oil futures and looming economic uncertainty in top importer, China, curbed buyer interest. Moreover, the astounding rally in the U.S. dollar immediately following the presidential election has certainly proven to be a limiting factor for commodities across the board, though floundering demand for cotton this year has seemingly intensified the already gloomy outlook for the natural fiber. Today’s price action suggests selling will likely persist into next week as technical resistance hovers and fundamentals favor the bears. However, some corrective buying could transpire, though efforts will likely be limited.
30-day outlook: USDA reported cotton harvest was 71% complete as of Sunday, advancing eight percentage points on the week. Weather will continue to prove important to round out the rest of cotton harvest in the U.S. World Weather Inc. reports another wave of rain will arrive in West Texas Sunday into Monday, which will bolster soil moisture, but degrade some of the cotton fiber that has not yet been harvested. Frost and freeze conditions may follow the event during mid- to late week next week. The forecaster reports some rain is expected in the Blacklands as well. Harvesting in the Delta is winding down, while it is continuing in California and Arizona, where conditions will remain favorable for a while longer. Recent drying in Georgia, northern Florida and South Carolina has improved late-season field working conditions.
90-day outlook: As the marketplace continues to grasp the size of the U.S. crop, following a mix of unseasonable weather patterns throughout the growing season, changes to domestic production are certainly a possibility. However, poor export demand is likely to offset any support from any potential production cuts. Moreover, persisting inflation and a continued rally in the dollar could dampen longer-term buyer interest as the marketing year progresses.
What to do: Get current with advised sales and hedges.
Hedgers: You have 15% of 2024-crop production hedged in December futures at 69.84 cents. You should be 35% sold in the cash market on 2024-crop.
Cash-only marketers: You should be 35% sold on 2024-crop.