Corn
Price action: May corn fell 1 1/4 cents to $4.50, marking a mid-range close.
Fundamental analysis: Corn faced another day of selling, with pressure stemming from wheat, while gains across the soy complex failed to muster up much spillover support. USDA’s weekly export sales data for the week ended March 20 showed a 31% decline in corn sales from the previous week at 1.04 MMT, though it was unchanged from the four-week average. Net sales were within the expected pre-report range of 600,000 MT and 1.6 MMT.
Weather in the Midwest is set to become fairly active over the next two weeks, with three rounds of nearly widespread precipitation expected during the period. The moisture will help replenish soils ahead of planting, also slowing early-season fieldwork. The forecaster notes eastern North Dakota and northeastern South Dakota and central Minnesota should be driest through the next ten days and the region will be left in need of significant precip to improve conditions for planting and establishment of crops later in the spring.
Technical analysis: May corn ended the session off the daily low, though continued to face resistance at the 200-day moving average of $4.56 3/4, while support served at $4.47 1/2. Bears have the upper hand and will look to hold a close below the March low of $4.42 1/2, while bulls need to close above $4.77 1/2, though interim resistance stands at the 200-, 10-, 20- and 100-day moving averages, layered from $4.54 to $4.67 1/2.
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 closed 15 3/4 cents higher to $10.16 3/4 and closed near session highs. May soymeal climbed 90 cents to $294.5 and settled near mid-range. May bean oil surged 163 points to 44.27 cents, near session highs.
Fundamental analysis: Soybeans surged above key technical resistance in a surprising rally ahead of Monday’s reports. Soybean oil led strength, closing at the highest mark in a month. That indicates spreaders were active across the soy complex today, helping fuel gains. Some shoring up of positions also led to short covering as traders position themselves ahead of Monday’s key reports, which will outline soy stocks at the beginning of March and farmers intentions for soy plantings this year. Our survey showed soybean acres falling to 85.0 million acres, above most analysts’ forecasts. That can be attributed to the relatively lower cost of planting beans, an influx of acres coming out of cotton country in the south and acres being planted from PP acres in the northern Plains.
USDA reported soybean export sales of 338,500 MT for the week ended March 20, down 4% from the previous week and 28% from the four-week average. Exports totaled 922,100 MT. China purchased a small lot of beans but continues to accept the bulk of soybean shipments. China still has about 950,000 MT of sales on the book for this marketing year. Last year, from now until the end of the marketing year, China purchased about 1 MMT of soybeans. Given the current amount of bushels already shipped and the current amount of sales on the book, the current USDA export estimate at 1.825 billion bushels remains very attainable.
Technical analysis: May soybeans showed impressive strength today, closing above the 10-day moving average for the first time in over a month. That area marks initial support at $10.10, while additional selling seeks to overcome psychological $10.00 support. The 20-day moving average, currently at $10.16, limited gains today and is backed by psychological resistance at $10.25.
May meal futures posted modest gains today as bears retain the technical advantage. Prices remain in the bottom end of the recent range. Bulls are seeking to hold support at $293.70, which is reinforced by support at the March 4 low of $291.30, then $290.80.
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 3 1/4 cents to $5.32, near mid-range and hit a contract low early on. May HRW wheat rose 1 1/4 cents to $5.66 1/4, near mid-range and hit a three-week low. May spring wheat futures rose 3 1/4 cents to $5.88 1/2.
Fundamental analysis: The wheat futures market bulls continued very timid amid a “risk-off” trading environment today, mostly due to heightened trade tensions between the U.S. and other major economies that could dent foreign demand for U.S. wheat. A lower U.S. dollar index and slightly higher crude oil prices today may have somewhat limited the downside in wheat futures.
USDA this morning reported weekly U.S. wheat export sales of 100,300 MT, which were down notably from the previous week and down 65% from the four-week average. Exports totaled 428,700 MT.
World Weather Inc. today said that in U.S. HRW country, “wildly swinging temperatures across the Great Plains will continue over the coming week, with hot weather today and Friday and then freezing conditions during the early part of next week. These conditions are indicative of drought and will continue stressing some crops. Soil moisture depletion will be accelerated by the hot and dry conditions in the next two days. Extreme highs in the 80s and lower 90s in March is never a good omen especially when it is quite dry.” Precipitation will remain very light and mostly insignificant in most of the wheat region through the next 10 days. Northern parts of the region are most favored for rain in the second week of the outlook, said World Weather.
Technical analysis: SRW wheat market bears have the solid overall near-term technical advantage. Prices are trending down on the daily bar chart. SRW bulls’ next upside price objective is closing May prices above solid chart resistance at the March high of $5.75 1/4. The bears’ next downside objective is closing prices below solid technical support at $5.00. First resistance is seen at today’s high of $5.37 1/4 and then at Wednesday’s high of $5.45 3/4. First support is seen at today’s contract low of $5.26 1/2 and then at $5.15.
The HRW bears have the firm overall near-term technical advantage. Bulls’ next upside price objective is closing May prices above solid chart resistance at $6.00. The bears’ next downside objective is closing prices below solid technical support at the contract low of $5.41 1/2. First resistance is seen at Wednesday’s high of $5.72 3/4 and then at $5.85. First support is seen at today’s low of $5.60 and then at $5.50.
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 futures surged 139 points to 67.07 cents, marking the highest close since March 14.
Fundamental analysis: Cotton futures posted another day of modest gains as prices find equilibrium ahead of Monday’s key USDA reports. Futures posted gains despite another week of disappointing export sales. USDA reported net sales totaling 104,300 MT for the week ended March 20, down 18% from a week ago and 51% from the four-week average. China cancelled some shipments for the week as well, a concerning omen for the market. Meanwhile, export shipments continue to be impressive. Shipments totaled 405,300 bales for the week, near marketing year highs. Historically, shipments peak this time of year before trending lower into the end of the marketing year. At this point, abundant stocks seem given as total exports for the year are abysmal, but traders are looking to Monday’s report to provide the next catalyst for cotton prices. A sharp drop in acres seems guaranteed, but the extent of the drop remains to be seen. Even with sharply lower acres, without any increase in exports, likely fueled by trade agreements, the balance sheet is likely to remain unfriendly for bulls.
Technical analysis: May cotton futures showed impressive strength today as shorts covered a portion of their positions ahead of Monday’s reports. Prices closed right at downward trendline resistance at 67.00 cents, followthrough buying above that mark would signal a technical breakout, targeting resistance at 67.37 cents, then 67.80 cents. Bulls are seeking to hold support at 66.00 cents on a reversal lower, which is backed by support at 65.14 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.