Corn
Price action: May corn fell 6 1/2 cents to $4.51 1/4, closing below the 200-day moving average.
Fundamental analysis: Corn futures extended lower in tandem with wheat futures as a firmer U.S. dollar hovered over commodities, though strengthening crude oil futures helped to limit losses. The marketplace continues to consolidate sideways to lower as looming trade woes have the marketplace leaning heavily toward risk aversion, especially as USDA’s release of its Prospective Plantings and Quarterly Grain Stocks reports draw nearer.
The marketplace has generally shaken off growing concerns in Brazil despite lingering dryness in Minas Gerais into central and eastern Bahia. World Weather Inc. does note, however, that regular rounds of showers will occur through the next two weeks in a large part of Brazil and Paraguay, which should provide enough moisture to maintain or improve conditions for safrinha crops outside of the aforementioned areas. Meanwhile, Argentina is expected to see a wet weather pattern through Monday, allowing for additional improvements in crop and soil conditions in drier areas of the north.
Earlier today, the Energy Information Administration reported weekly ethanol production averaged 1.053 million barrels per day (bpd) during the week ended March21, down 52,000 bpd (4.7%) from the previous week and 1,000 bpd below the same week last year. Ethanol stocks rose 775,000 barrels to 27.35 million barrels.
Technical analysis: May corn futures ended the session below support at the 200-day moving average of $4.54 1/4 as bears look to take out the early March low of $4.42 1/2. Conversely, initial resistance will now stand at the 200-day moving average, which is backed by the 10-, 20- and 100-day moving averages, trading at $4.61, $4.63 and $4.67 1/2, with bulls desperately needing a close back above the March high of $4.77 1/2 to regain the upper hand.
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 3/4 cent to $10.01, nearer the daily low. May soybean meal lost $1.50 to $293.60, near the daily low and hit a three-week low. May soybean oil rose 34 points to 42.64 cents, near mid-range and hit a two-week high.
Fundamental analysis: The soybean and bean oil markets saw mild to moderate short-covering gains early on today, but soybean bulls faded down the stretch. Meal prices continue to languish not far above the recent lows. Higher crude oil prices today were a positive outside-market factor, but that was mostly offset by a higher U.S. dollar index at mid-week. Solid losses in the already wobbly U.S. stock indexes today led to a risk-off atmosphere in the general marketplace that also limited buying interest in the soy markets.
World Weather Inc. today said rain will fall in most of Brazil and Argentina outside of Bahia and northern Minas Gerais at one time or another during the next 10 days to two weeks. “The moisture alternating with periods of sunshine should be good for most crops, although a few areas may become a little too wet slowing crop maturation and harvest progress,” said the forecaster.
Trading in the grain futures markets is likely to be more subdued to end the week, as the all-important USDA planting intentions and quarterly grain stocks reports are out near midday next Monday.
Technical analysis: The soybean bears have the overall near-term technical advantage as prices are in a seven-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 March low of $9.91. First resistance is seen at this week’s high of $10.11 1/2 and then at $10.21 3/4. First support is seen at today’s low of $9.97 1/2 and then at $9.91.
Soybean meal bears have the solid overall near-term technical advantage. Prices are in a nearly three-month-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 the March high of $309.80. 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 Tuesday’s high of $298.10 and then at $300.00. First support is seen at today’s low of $293.80 and then at $290.80.
Bean oil bears have the overall near-term technical advantage. Prices are 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 March low of 41.08 cents. First resistance is seen at today’s high of 43.11 cents and then at 43.60 cents. First support is seen at today’s low of 42.15 cents and then at this week’s low of 41.50 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 closed 8 cents lower at $5.35 1/4, marking a three-week low close, while May HRW futures fell 4 1/4 cents to $5.65; a two-and-a-half week low close.
Fundamental analysis: SRW wheat futures extended losses for a third straight session as technical headwinds and a firmer U.S. dollar continued to limit any buyer interest. Moreover, traders are quite hesitant to take a position of risk amid ongoing tariff threats, especially ahead of USDA’s Prospective Planting Report and Quarterly Grain Stocks reports.
The marketplace has seemingly shaken off concerns in HRW wheat country, which continue to prove hot and dry. World Weather Inc. notes west-central and southwestern production areas are unlikely to get much precip for a while and temperatures will bounce around greatly. As for other key growing regions, the forecaster notes the precip is expected to increase in the Black Sea region, which will prove favorable for winter crops and some prospective spring planting. However, while the moisture advertised for southern Russia, Ukraine and western Kazakhstan and Turkey will be welcome, it will be light, leaving the need for follow-up rainfall.
Technical analysis: May SRW wheat futures bears showed their dominance again today, forging a close below support at $5.39 1/2 and $5.36, with sights set on holding a close below the March 4 low of $5.30. Initial resistance will now serve at today’s failed support levels, which are backed by the 20-, 10-, 100- and 40-day moving averages, layered from $5.54 1/4 to $5.73. Meanwhile, a move below the March low will find bears targeting $5.20, then $5.00.
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 54 points to 65.68 cents and nearer the daily high.
Fundamental analysis: The cotton futures market saw some short covering today but gains were limited by a risk-off day in the general marketplace, as seen by sharp losses in the U.S. stock indexes. A firmer U.S. dollar index (negative) and higher crude oil prices (positive) today were offsetting outside-market elements for cotton.
World Weather Inc. today said rain is expected in south Texas, the Texas Coastal Bend and Blacklands. “The precipitation will help induce better long-term crop development potential.” Much of west Texas will be dry. Some flooding may occur near the middle Texas coast. California and the southwestern desert region will remain drier than usual. The U.S. Delta will be wet biased for a while and at the same time the far southeastern cotton areas from Georgia to Virginia may experience some net drying, said World Weather.
Thursday’s weekly USDA export sales report will be closely monitored by cotton traders, with the bulls hoping for much better U.S. cotton sales abroad than seen in last week’s export sales data.
Monday’s planting intentions report is the next big data point for cotton market traders. Most market watchers look for a U.S. cotton planted acreage figure of close to 10 million.
Technical analysis: The cotton futures bears have the firm overall near-term technical advantage. Prices are in a 5.5-month-old 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 March high of 67.80 cents. The next downside price objective for the cotton bears is to close prices below solid technical support at the contract low of 62.54 cents. First resistance is seen at 66.00 cents and then at 66.85 cents. First support is seen at this week’s low of 64.83 cents and then at 64.00 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.