Corn
Price action: March corn futures closed steady at $4.28, settling well off overnight highs.
5-day outlook: Corn futures struggled to maintain overnight strength and ended the day nearer session lows, capping a disappointing few days of trade. Reports of Trump’s plan to increase tariffs on Mexico weighed heavily on corn prices the past couple of days, with retaliation likely harming this marketing year’s corn exports, which have been pacing remarkably well. Choppy trade is likely to persist until there is more clarity on trade policy and seeing what is actually done come Trump’s inauguration on January 20. Next week, USDA will release monthly corn-for-ethanol use for the month of October, which is likely to show a record for the month. Corn for ethanol use so far this year has been what is likely a record, a healthy sign for the balance sheet as the market looks to offload bushels. The downside seems limited over the coming week but recent technical selling pressure has been discouraging.
30-day outlook: Traders will keep a close eye on export sales over the coming month to see if sales remain quite strong with the change in the White House coming at hand. Commitments continue to run at the highest mark since 2021-22 despite a lackluster start to the marketing year. Use, particularly exports, will need to continue to run hot in order to help mitigate the expansion of the balance sheet due to this year’s impressive yield. While we anticipate total supplies to come down, the effects of any change to 2024-25 production won’t be known until January at the earliest, at least officially.
90-day outlook: South American weather will play a key role in the world balance sheet over the coming quarter. The return of La Nina and unpredictable weather could eventually support U.S. corn prices, but La Nina has been slow to develop despite shifting out of El Nino in the spring. Ocean temperatures have remained ENSO neutral despite continuous calls for La Nina, with World Weather Inc. noting in a special report that neutral conditions are quite possible for the next couple of months. Low corn prices also pressure producers to find alternative, more profitable crops, with reports this week indicating Brazilian producers are likely to substantially increase cotton plantings.. Any change to the planted acreage in Brazil could send additional demand to the U.S. market, further providing a floor under prices, but given abundant supplies under current assumptions, corn prices are likely to face persistent selling on any sustained rally.
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 5 1/4 cents to $9.88 3/4, nearer the session high, while January soymeal closed up $4.00 at $295.40 and above the 20-day moving average for the first time since Oct. 3. January soyoil plunged 179 points to 40.92 cents, marking the lowest close since Sept. 18.
5-day outlook: Soybean futures managed to extend Tuesday’s gains. Corrective pressure in the U.S. dollar aided in today’s strength, combined with solid gains in meal futures following sideways consolidation. A daily sale of 132,000 MT to China during 2024-25 also lent an early boost. However, returned selling in soyoil futures curbed buying interest across the complex in low-volume trade. Next week soybeans will likely continue to follow meal futures, with additional direction stemming from the dollar, which has backed off the more than two-year high carved last week.
30-day outlook: Weather in South America continues to lean favorable for planting and establishment, so much so, crop consultant Dr. Michael Cordonnier raised his Brazilian 2024-25 soybean crop estimate another 2 MMT to 168.0 MMT. World Weather Inc. reported earlier today the two-week outlook remains favorable for crop development across much of Brazil and Paraguay as regular rounds of showers and thunderstorms will bring enough rain to maintain or improve soil moisture while fieldwork is slowed at times. Northeastern Brazil will need greater rain soon, but recent rain has left the region with enough moisture over the next two weeks. Meanwhile, the driest areas of Paraguay will benefit from rain beginning today. Cordonnier left his Argentine crop estimate unchanged at 57.0 MMT. He notes rainfall has been adequate for planting efforts to advance, but not enough to fully recharge the soil moisture.
90-day outlook: U.S. exports and trade relations will be the focus as the Trump administration returns to the White House. Recent comments from the President-elect have indicated a 10% tariff on all Chinese goods and 25% on all products from both Mexico and Canada. The proposed tariffs would include several economic consequences, including retaliation risks from affected countries, which could further disrupt trade with the U.S., and slowdown in economic growth. Such moves could heighten inflation, keeping interest rates robust and thus reducing consumer spending.
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: March SRW wheat futures fell 9 1/2 cents to $5.48 1/2 and near the daily low. March HRW wheat futures fell 14 1/4 cents to $5.44 1/2, near the daily low and closed at a contract low close. March spring wheat tumbled 10 1/4 cents to $5.91 1/4.
5-day outlook: This week has seen technical selling pressure from the speculators featured as winter wheat futures remain in near-term price downtrends. Worrisome for the wheat market bulls heading into trading next week is the fact the significant drop in the U.S. dollar index this week, to begin to suggest the index has put in a market top, has done virtually nothing to support the wheat futures markets. This week’s USDA export sales report is out on Friday morning, due to the Thanksgiving holiday Thursday. U.S. wheat sales abroad need to see the pace pick up in the coming weeks to support any price uptrends developing in the wheat markets.
30-day outlook: Weather patterns in global wheat-growing regions will continue to be closely monitored by traders in the coming weeks. World Weather Inc. today said U.S. hard red winter wheat areas “have benefited from recent weeks of rain, with good root and tiller systems expected in many production areas.” Meantime, much of central and northern Europe and the western CIS are now cool enough for most winter crops to be dormant or semi-dormant. The majority are well established except in the lower Danube River Basin, eastern Ukraine, Russia’s Southern Region or western Kazakhstan. Most of these poorly established winter crop areas will not be seeing any threatening cold for a while and soil moisture is expected to increase for crop improvement in the spring. Australia’s wheat harvest should be advancing relatively well. Argentina’s wheat region continues to get a good mix of rain and sunshine for its late season crop in the south. Yield potential did improve in the region when rain began falling a few weeks ago, said the forecaster.
90-day outlook: The recent escalation in the Russia-Ukraine war has not supported wheat futures much at present, despite heightened concerns about production and exports coming from that region. Russia’s defense ministry has announced preparations for retaliatory actions after Ukraine used U.S.-supplied ATACMS missiles to strike air defense units in Russia’s Kursk region. If this situation deteriorates further in the coming months, wheat futures markets are likely to see better buying interest. More than a few market watchers are wondering if incoming President Trump will broker a ceasefire between Russia and Ukraine, given Trump’s better relationship with Russia President Putin.
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 closed 7 points higher at 71.75 cents, ending near mid-range.
5-day outlook: Cotton futures held a tight range to end the week, with a plummeting U.S. dollar not supportive enough for traders to tackle resistance at the 100-day moving average. However, it certainly didn’t hurt, with selling limited by the 20-day moving average. Persisting U.S. dollar pressure into next week could certainly provide cotton futures with adequate momentum to breach looming technical resistance, though recent strength has pushed the natural fiber into near-term overbought territory, which could deter buying efforts. Look for cotton to consolidate sideways over the near term as traders continue to assess the economic landscape.
30-day outlook: USDA reported cotton harvest had advanced to 84% complete as of Nov. 24, with weather continuing to prove important as producers work towards wrapping up their harvest efforts. World Weather Inc. maintains late season harvest conditions across the U.S. will be relatively good, although recent rain in southern California may have disrupted some fieldwork. A few more showers are expected in the southeastern U.S., where some brief interruptions to fieldwork are expected. Rain in southern Texas early next week will be ideal in raising topsoil moisture for use in the spring. Moreover, USDA’s production, supply and demand data, due out on Dec. 9 will provide greater insight into the size of the crop.
90-day outlook: U.S. cotton exports will continue to serve as the longer-term focus. A recent uptick in export sales could likely be attributed to front-loading ahead of the incoming administration’s proposed tariffs on China, Mexico and Canada, which are virtually certain to yield retaliation, if realized. Economic risks certainly loom, with rising inflation, a robust U.S. dollar and higher interest rates stifling trade and consumer spending.
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.