Crops Analysis | April 9, 2024
Price action: May corn futures closed down 4 1/4 cents at $4.31 1/4 and near the session low.
Fundamental analysis: Corn futures faced some technical selling pressure today amid charts that are still near-term bearish, overall. Weaker soybean and wheat prices today also limited buyer interest in corn.
USDA Monday afternoon reported 3% of the U.S. corn crop was planted as of last Sunday, up one percentage point from the previous week and one point ahead of the five-year average.
Pro Farmer’s South American crop consultant, Dr. Michael Cordonnier, cut his Argentina corn crop estimate by 2 MMT, to 53 MMT and left his Brazilian corn crop estimate unchanged at 112 MMT. Corn traders are awaiting Thursday morning’s latest USDA monthly supply and demand report that includes the agency’s updates on the size of the South American corn crops.
World Weather Inc. today said its forecast “still includes increasing rainfall later this week into next week for Safrinha corn areas of Brazil and a good mix of rain and sunshine is expected in Argentina.” The forecaster said U.S. planting progress may be slow over the balance of this month due to bouts of rain, moist field conditions and cooler-biased temperatures.
Technical analysis: The corn futures bears have the overall near-term technical advantage. The next upside price objective for the bulls is to close May prices above solid chart resistance at $4.50. The next downside target for the bears is closing prices below chart support at the contract low of $4.08 3/4. First resistance is seen at this week’s high of $4.37 1/2 and then at last week’s high of $4.42. First support is at last week’s low of $4.24 1/2 and then at $4.20.
What to do: Get current with advised sales.
Hedgers: You should be 50% sold in the cash market on 2023-crop.
Cash-only marketers: You should be 35% sold on 2023-crop production.
Price action: May soybeans fell 7 cents to $11.74 1/2, closing below the 40-day moving average, while May soymeal closed 40 cents lower at $335.60. May soyoil fell 38 points to 47.52 cents, marking the lowest close in nearly a month.
Fundamental analysis: Soybean futures edged lower on followthrough selling amid looming technical pressure, though, some light corrective buying in soymeal lent some support. Meanwhile, USDA reported the second flash soybean sale in less than a week, totaling 124,000 MT to unknown destinations for delivery during 2023-24, though it failed to generate sustained buying.
Selling in corn futures and increased Brazilian soybean export estimates from Anec likely paused buying, along with positioning ahead of USDA’s supply and demand update on Thursday. No changes in South American crop consultant Dr. Michael Cordonnier’s soybean production estimates likely aided in dampening sentiments during today’s session, as Cordonnier estimates Brazilian soybean production 145 MMT and Argentine production at 51 MMT. He noted a neutral bias going forward for both crops. Conab will update its official Brazilian crop estimate on Thursday morning.
Technical analysis: May soybeans ended the session below the 40-day moving average of $11.77 1/4 for the first time since April 2, though additional support at $11.72 1/4 limited a larger downside move. Additional support lies at $11.64 1/4, then at the Feb. 29 low of $11.28 1/2. Conversely, corrective buying efforts will face initial resistance at the 40-day moving average and a again at the 10- and 20-day moving averages of $11.84 1/2 and $11.91 1/2, which are backed by psychological resistance at $12.00.
May soymeal traded a fairly wide range but ended the session nearly unchanged as support at the 40- and 10-day moving averages of $335.10 and $334.60 limited selling, while the 20-day moving average of $336.40 curbed buying efforts into the close. Initial support will remain at the 40- and 10-day moving averages, with additional support serving at $332.80, $329.50 and $326.80. Initial resistance will continue to serve at the 20-day moving average, then at $338.80, $341.50 and $344.50.
What to do: Get current with advised sales.
Hedgers: You should be 65% sold in the cash market on 2023-crop. You should have 10% of expected 2024-crop production sold for harvest delivery next fall.
Cash-only marketers: You should be 60% sold on 2023-crop. You should have 10% of expected 2024-crop production sold for harvest delivery next fall.
Price action: May SRW futures closed 8 cents lower at $5.57 3/4. May HRW futures dropped 8 cents as well to $5.77 1/4, though settled off session lows. May HRS futures showed relative strength, rising a penny to $6.51 1/4.
Fundamental analysis: Wheat futures traded solidly lower throughout the session but was able to rebound from overnight weakness a bit, as prices continue to chop higher on a longer-term basis. Weakness in the corn market did little to support wheat prices today, which saw sustained selling pressure as outside markets favored more of a risk-off tone. Volume has picked up in the calendar spreads the last few days as traders actively roll their positions out of nearby May futures.
Unusually warm to hot temperatures along with strong wind speeds and dry weather are forecast to impact the central United States and a part of the southern Canadian Prairies from Friday to Monday, World Weather Inc. says. Extreme highs in the 70s and 80s are expected in areas of the Plains and western Corn Belt, which could lead to some stress to winter crops, the forecaster notes.
In yesterday’s crop progress report, USDA rated 56% of the winter wheat crop as “good” to “excellent,” unchanged from the previous week. When USDA’s weekly crop condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop slid 0.1 point to 345.3, while the SRW crop improved 2.3 points to 373.8. Click here for details.
Technical analysis: May SRW futures saw heavy selling for the second consecutive session. Bulls continue to maintain a modest uptrend on the daily bar chart. Initial resistance now stands at the 40-day moving average, currently at $5.62 3/4. Further buying targets resistance at $5.70 1/4, then uptrend line resistance at $5.72 1/4. Bears are seeking to close prices below 20-day moving average support, which currently stands at $5.55 1/2. Further selling targets uptrend line support at $5.50, which has capped nearly all losses since the March 11 low.
May HRW futures led wheat futures lower today. Prices continue to trend lower on the daily bar chart. Bulls are ultimately seeking to close prices above downtrend line resistance at $5.84, which has capped nearly all gains since early December. Further buying targets resistance at $5.98 3/4, which is quickly reinforced by the psychological $6.00 mark. Meanwhile, support comes in at today’s low at $5.71. Below which, bears are seeking to close prices below $5.63 1/4 support.
What to do: Get current with advised sales.
Hedgers: You should be 80% priced in the cash market on 2023-crop. You should be 20% forward priced for harvest delivery on expected 2024-crop production.
Cash-only marketers: You should be 80% priced on 2023-crop. You should be 20% forward priced for harvest delivery on expected 2024-crop production.
Cotton
Price action: May cotton slid 61 cents to 86.04 cents and marked the lowest close since Jan. 29.
Fundamental analysis: Nearby cotton futures favored the downside in relatively narrow trade following Monday’s attempt to move above the 100-day moving average. Technical pressure continues to plague the natural fiber, though sideways price action suggests a larger move could occur in the near-term. Notable selling across equities and crude oil pressured prices during today’s session along with positioning ahead of USDA’s supply and demand update, due out Thursday.
USDA reported U.S. cotton plantings were 5% complete, which were one percentage point behind the five-year average. World Weather Inc. reports the U.S. Delta may get too wet for a while, further delaying the start of planting, while West Texas may get some moisture briefly this week. Meanwhile, the southeast and far western cotton areas will be seeing a good mix of weather.
Technical analysis: May cotton continued to face resistance at the 100-day moving average of 87.08 cents, though initial support at 85.77 cents limited curbed selling. However, continued pressure will face additional support at 84.88 cents, then at 83.65 cents. Conversely, initial resistance will continue to serve at the 100-day moving average, then at 87.89 cents and the 10-, 20- and 40-day moving averages of 89.42 cents, 91.38 cents and 93.29 cents.
What to do: Get current with advised sales.
Hedgers: You should be 90% sold in the cash market on 2023-crop. You should also have 25% of expected 2024-crop production forward sold for harvest delivery.
Cash-only marketers: You should be 90% sold on 2023-crop. You should also have 25% of expected 2024-crop production forward sold for harvest delivery.
