Corn
Price action: May corn futures fell 1 3/4 cents to $4.70 1/4 and near the daily low.
Fundamental analysis: The corn futures market early on today saw follow-through technical buying interest from the speculators, but faded into the close on keener risk aversion in the general marketplace following new U.S. trade tariff moves against Canada today. A deteriorating U.S. dollar index that today hit a four-month low limited the downside in corn.
There were no surprises in today’s USDA monthly supply and demand report. The agency kept its U.S. corn ending stocks forecast unchanged for a second straight month. It made no changes to any of the supply/demand balance sheet categories. USDA maintained its average cash corn price projection for 2024-25 at $4.35. The agency also made no changes to its Brazil or Argentina corn-production estimates.
World Weather Inc. today said that in South American corn regions, drier weather in Argentina this week “will be good for many areas that have received a little too much rain recently. Northeastern crop areas, however, are too dry and will remain that way for at least another 10 days. A band of rain across central parts of the nation today and Wednesday will maintain wet fields in that region.” Meantime, Brazil’s weather is mostly good for crops and fieldwork. South American crop consultant Dr. Michael Cordonnier maintained his corn crop forecasts for Brazil and Argentina at 123 MMT and 46 MMT, respectively. He did note, near-term rains must continue, or he will start lowering his Brazilian corn crop outlook.
Technical analysis: The corn futures bull and bears are on a level overall near-term technical playing field as a bullish V-Bottom reversal pattern has formed on the daily bar chart to negate a price downtrend. The next upside price objective for the bulls is to close May prices above solid chart resistance at $5.00. The next downside target for the bears is closing prices below chart support at the March low of $4.42 1/2. First resistance is seen at today’s high of $4.77 1/2 and then at $4.80. First support is seen at this week’s low of $4.66 1/2 and then at $4.60.
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 2 3/4 cents to $10.11 1/4, while May soymeal fell 50 cents to $301.80. May soyoil fell 33 points to 41.93 cents. Each ended near session lows.
Fundamental analysis: Soybeans held onto gains into USDA’s March Supply & Demand Report, which featured minimal changes from February. Meanwhile, an extension lower in the U.S. dollar was positive for commodities. However, escalating trade tensions kept buying to a minimum as President Trump doubled tariffs on steel and aluminum imports from Canada to 50%.
Analysts were expecting slight reductions in ending stocks from the February estimate, though USDA left the figure unchanged for the second straight month at 380 million bu. While there were no changes on the supply side of the balance sheet, USDA lowered projected seed use by 3 million bu., which was entirely offset by a 3 million bu. increase to residual use. Moreover, global carryover for 2024-25 was reported at 121.41 MMT, down from 124.34 MMT in February but up from 112.55 MMT a year ago.
South American crop consultant Dr. Michael Cordonnier maintained his Brazilian and Argentine soybean forecasts at 170 MMT and 48 MMT, respectively, and noted a neutral bias going forward. Cordonnier stated weather has improved significantly over the last several weeks, stabilizing crops, while previous drought fears have given way to concerns of too much rain in isolated areas of Buenos Aires. He indicated the weather concern in Brazil is now on dryness in south-central and southern Brazilian states of Parana, southern Mato Grosso do Sul, Sao Paulo, Minas Gerais, Santa Catarina and Rio Grande do Sul.
Technical analysis: May soybean gains were hemmed by the 10-day moving average of $10.20 1/2, while support served at Monday’s low of $10.09 3/4, which is backed by support at $10.06 1/2. With bears holding the near-term technical advantage, the camp is poised to edge below psychological support at $10.00, with the March low of $9.91 ultimately in their sights. Conversely, bulls will continue to look to secure a close above resistance at $10.65.
May soymeal ended the day right at the 20-day moving average, currently trading at $301.80, while resistance stood at $303.90 throughout the session. Initial support will now serve at the 10-day moving average of $300.70, which is backed by psychological support at $300.00, though bears will continue to edge below the March low of $291.30. Meanwhile, initial resistance will now stand at the 20-day moving average, with bulls needing to edge back above the 100- and 40-day moving averages, currently trading at $306.80 and $307.50 in order to gain technical traction.
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 futures fell 5 3/4 cents to $5.66 3/4 and closed near session lows. May HRW futures skid 7 1/2 cents to $5.72, closing on session lows. May HRS fell 8 cents to $5.96 1/2.
Fundamental analysis: Wheat futures favored the downside most of today’s session, with USDA reports providing little catalyst. While USDA opted to leave the corn and soybean balance sheets unchanged, they did make a few changes to the wheat balance sheet. USDA raised imports by 10 million bushels to 140 million and cut exports by 15 million bushels to 835 million. That led to an increase of 25 million bushels to ending stocks to 819 million. While the changes initially seem bearish, markets did not react that way. The increase in imports is surprising given difficult trade negotiations with Canada over the past month. Considering most of the wheat that the U.S. imports come from Canada, one would expect a decrease in imports, not an increase. Census bureau data indicates imports remained quite strong early in the year, an indication of robust domestic demand. USDA has made very little change to domestic use categories in the past couple of months. Low prices could be spurring additional demand not yet accounted for, underpinning wheat prices.
Technical analysis: May SRW futures gave up a significant portion of Monday’s gain today as bears retain the technical advantage. Bears are looking to overcome support at $5.50 before tackling support at $5.44 1/2. Initial resistance stands at $5.60, which is backed by Monday’s high of $5.66. May HRW futures saw similar action today. Bears are eyeing support at $5.70 3/4, which capped losses today, before tackling firm support at $5.56 1/4. Resistance comes in at $5.75 then the 20-day moving average at $5.83 on a bounce.
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 was unchanged at 66.00 cents, forging a mid-range close.
Fundamental analysis: Cotton futures held an inside range and mostly between the 20- and 10-day moving averages, with outside markets lending support as the U.S. dollar resumed its recent decline. However, lingering trade uncertainties continued to pressure equities, casting doubt across the marketplace.
USDA released its March supply and demand estimates earlier today, which included minimal changes from February. There were no changes to either side of the balance sheet, though global ending stocks were reported at 78.33 million bales, down from 78.41 million in February, but up from 73.71 million bales a year ago.
Meanwhile, with tomorrow comes the Bureau of Labor Statistics’ Consumer Price Index (CPI) Reading for February, which is seen coming in at up 2.9% year-over-year, compared to a rise of 3.0% in the January Report. Moreover, the Producer Price Index (PPI) will be released on Thursday and is expected to be up 0.3% month-over-month compared to a 0.4% rise in the January report.
Technical analysis: May cotton consolidated mostly between the 10- and 20-day moving averages of 67.88 cents and 67.91 cents, with bulls looking to edge above 68.30 cents and ultimately 70.00 cents, while bears continue to look towards breaching the March 4 low of 62.54 cents. Initial resistance will continue to serve at the 20-day moving average, and again at the 40-day moving average of 67.37 cents, then at 67.68 cents. Meanwhile support is layered at the 10-day moving average, then at 64.78 cents and 63.94 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.