Corn
Price action: December corn futures climbed 3 1/2 cents to $4.31, ending the day near mid-range. Prices gained 16 1/2 cents on the week.
5-day outlook: Corn production came in well below the average trade estimate, helping support corn prices to end the week. Traders anticipated little change in the corn balance sheet, projecting yield steady with a month ago at 183.8 bushels per acre. USDA cut their forecast yield by 0.7 bushels per acre to 183.1 bushels, just above our estimate of 182.9 bushels. That tightened the balance sheet to 1.938 billion bushels, in line with pre-report estimates. USDA made no changes to the demand side of the balance sheet despite cutting production. That exhibits more of a “wait and see” approach following the election. Exports have the greatest risk of volatility in the coming months as concerns over a trade war mount. The near-term momentum in corn futures certainly favors the bulls as December futures toppled the October high today. That momentum is likely to continue to carry corn futures higher over the coming week, though some profit-taking is possible as December futures have closed higher for six consecutive sessions.
30-day outlook: December corn futures have begun to work higher contra-seasonally thus far in November. Demand has remained solid, as noted by a daily export sale announced by USDA this morning of 200,480 MT for delivery to unknown destinations during 2024-25. Export shipments should work higher over the coming month seasonally, which could be exasperated by countries booking shipments ahead of the upcoming change in administration. Producers went into the new-crop marketing year with record amount of old-crop bushels in the bin. Demand is likely to play a key role in price action over the coming month, though some of that demand may not be noted outside of price ahead of the Quarterly Stocks Report in January.
90-day outlook: World corn production is seen as falling just modestly from the 2023-24 record. Still, the world balance sheet is tightening year-over-year as feed use continues to ramp up. Argentina and Brazil and both seen as producing large amounts of corn, taking a significant share of exports that used to go to the U.S. How the crops in South America fare over the coming quarter are going to garner a lot of attention, especially in Brazil as they begin planting their safrinha corn crop. The recent catch-up in soybean planting will enable most of the safrinha corn crop to get planted in the ideal window, which could drive production higher, but the rains still need to occur to maximize production. The return of La Nina is a concern just over the horizon which could bring dryness back to Brazil, which riddled the nations crops in the early 2020’s. Trump will begin his second term in January as well, how aggressive he is on trade and if he cracks down on Mexico will play a large role in corn demand in the first quarter of 2025. If Mexico retaliates via limiting imports of U.S. corn, corn prices would likely falter.
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: November soybeans rose 4 cents to $10.30 1/4 and gained 36 1/2 cents on the week. December soymeal fell $2.30 to $296.20 but rose 90 cents week-over-week. December soyoil rose 45 points to 48.77 cents and for the week, rose 247 points.
5-day outlook: The soy complex faced a volatile week but ultimately exposed resounding optimism as the week progressed. A midweek rebound in the wake of heavy overnight selling as election results poured in certainly proved noteworthy, especially in the face of a soaring U.S. dollar. Moreover, today’s production, supply and demand updates from USDA confirmed recent musings of a smaller soybean crop as the government cut the national yield 1.4 bu. per acre to 51.7 bu. per acre, while ending stocks declined 80 million bu. to 470 million bu. from October. Both missed analysts’ average pre-report estimates. However, a 41 million bu. cut to use offset a portion of the supply reduction. USDA trimmed estimated crush by 15 million bu., exports by 25 million bu. and residual use by 1 million bu. World ending stocks were also lower-than-expected at 131.74 MMT, down from 134.65 MMT last month and well below the pre-report estimate of 134.06 MMT.
Today’s rally included a test of the 100-day moving average for the first time in more than five-months, which spurred a corrective pullback, though nearby futures ultimately ended the session above the 40-day moving average, indicating next week will likely include sideways to higher price action. Look for the marketplace to continue to mull over today’s government data into next week and continue to closely monitor global end-user demand.
30-day outlook: South America will continue to be market-driver as soybean planting efforts gain speed in Argentina and producers ramp up plantings in Brazil. Despite unfavorable weather conditions for planting early on, Brazilian producers have gathered steam to notch the second fastest planting pace, amid improved soil moisture. In Argentina, soybean plantings were estimated to be 3.3% complete as of late last week. South American crop consultant Dr. Michael Cordonnier reported recent rainfall has been enough to sustain recently planted crops, but not enough to recharge soil moisture. Look for the marketplace to continue to monitor weather in South America as the planting and growing season progresses.
90-day outlook: Soybean exports will continue to be closely monitored as the marketing year progresses, especially as traders gauge the incoming administration’s trade policies. Global end-user demand for soybeans has been quite notable as of late, though uncertainty looms around economic conditions. Moreover, the direction of the U.S. dollar will also likely play a role in future export business, which could be impacted by the Fed’s battle against inflation.
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 1 cent to $5.72 1/2, near mid-range and on the week up 4 1/2 cents. December HRW wheat futures lost 4 3/4 cents to $5.64 1/4, for a technically bearish weekly low close today. For the week, December HRW lost 2 1/2 cents. December spring wheat fell 4 3/4 cents to $5.97 3/4, marking a 2-cent loss on the week.
5-day outlook: The winter wheat futures markets spent another week languishing and got little help from a rallying corn futures market that today hit a more-than-four-month high. A strong U.S. dollar index, which hit a four-month high this week, is a significantly bearish “outside-market” weight that is limiting buying interest in wheat futures markets. Today’s USDA supply and demand report contained no surprises for wheat and showed U.S. wheat carryover increased 3 million bu. from last month. USDA put the 2024-25 national average on-farm cash wheat price at $5.60, down 10 cents from last month’s report.
30-day outlook: With the major U.S. crops now in the bins, trader focus will lean toward weather conditions in major wheat-growing regions of the globe. World Weather Inc. today said recent rain and snow in hard red winter wheat areas and more expected Saturday will lead to much improved winter crop emergence and establishment. Recent rain and snow in Russia’s southern region, eastern Ukraine and western Kazakhstan was also welcome, though more is needed. South and western Australia will continue missing significant rain, but with most of the wheat and barley now filling and maturing the potential for changed production potential is low. Argentina’s central and southern wheat production areas received significant rain recently and more is expected. Southern Brazil weather is favorably mixed. Dry weather across Europe is good for routine farming activity, including the late planting of winter crops in the west, said World Weather.
90-day outlook: USDA Thursday reported U.S. wheat export sales of 374,700 MT during the week ended Oct. 31. That was down 9% from the previous week and down 20% from the four-week average. Exports were a marketing-year low of 236,900 MT. For the wheat futures markets to be able to sustain price uptrends in the coming months, U.S. wheat sales abroad will have to improve. Given that the U.S. dollar index is trending higher and making wheat even less price-competitive on the world markets, better U.S. wheat export sales the next few months is a difficult challenge.
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 7 points to 70.98 cents but rose 81 points on the week.
5-day outlook: Cotton futures ended the week in muted fashion amid mostly unsupportive outside markets and modest changes in USDA’s production, supply and demand update earlier today. USDA trimmed its cotton production estimate 10,000 bales from last month, leaving both yield and harvested area unchanged at 789 lbs. per acre and 8.635 million acres, respectively. On the supply side, total use was cut 200,000 bales amid a 200,000-bale cut to exports and 10,000 bale cut to unaccounted use to -50,000 bales. Meanwhile, global carryover was pegged at 75.75 million bales for 2024-25, down from 76.33 million bales in October and 74.59 million bales in 2023-24.
Today’s losses were limited, with strength in equities likely underpinning prices, though technical resistance should continue to limit earnest buying interest which will likely result in persisting consolidative trade.
30-day outlook: USDA reported cotton harvest was 63% complete as of Nov. 3. Though harvest is winding down, weather over the next couple of weeks will continue to prove important for growers to reap the last of their crops. World Weather Inc. reports additional rain in West Texas will increase some concern over fiber quality after significant rain fell this past weekend. Some parts of the Blacklands will also be impacted. However, drier weather is expected in both areas this weekend and next week which should improve fiber quality or at least end the declining conditions. Harvest in the Delta is winding down, but it too may have been hindered by recent rain and those coming this weekend. Torrential rain in parts of Georgia and South Carolina this week resulted in some significant flooding from south-central Georgia into western and central South Carolina, damaging some unharvested cotton. Slowly improving weather is expected, although additional showers are possible periodically, according to the forecaster.
90-day outlook: USDA’s additional cut to U.S. cotton exports continues to send a bleak message regarding demand for domestic supplies as the marketing year advances. Traders will continue to monitor the direction of the U.S. dollar, as well as trade policies of the incoming administration. Moreover, traders will continue to monitor the government’s production updates as the marketplace continues to determine the size of the crop and the extent of recent weather anomalies.
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.