GENERAL COMMENTS:
March corn closed down 1 1/4 cents and May corn was unchanged, 0 cents. March soybeans closed down 18 cents and May soybeans were down 15 3/4 cents. March KC wheat closed down 3 cents, March Chicago wheat was down 4 3/4 cents, March Minneapolis wheat was down 3 1/4 cents.
The U.S. Dollar Index is down 0.40 at 107.56. The Dow Jones Industrial Average is up 256.0 points at 44,953.0. April gold is up $11.30 at $2,887.10, March silver is down $0.19 at $32.83 and March copper is up $0.0975. March crude oil is down $1.60 at $71.10, March ultra-low sulfur diesel is down $0.0467, March RBOB gasoline is down $0.0482 and March natural gas is up $0.098.
CORN:
Corn futures attempted a move higher early Wednesday, with the March contract trading to its highest level for the rally at $4.98 1/2, but ultimately prices were unable to sustain higher levels in the midst of pressure from a dropping soybean market. In domestic demand news, the Energy Information Administration announced Wednesday morning that last week’s ethanol production in the U.S. averaged 1,112,000 barrels per day (bpd), an impressive recovery from last week’s multi-month low of 1,015,000 bpd. Using the EIA’s weekly averages for January and assuming a standard corn feedstock usage rate of 94%, I figure total January corn used for ethanol at around 473 million bushels (mb). This figure would be steady with December corn grind and a 7% improvement in January 2024 if true. The bottom line is ethanol production continues at a great pace regardless of a challenging margin environment over the past 30-plus days. In corn technicals, despite finishing the session slightly lower, March corn futures managed to hold above support at $4.90 in a technical victory after briefly testing a move lower. This keeps $5.00 as the obvious near-term target for corn bulls. Medium-term support is seen at $4.81 1/2, the 20-day moving average for most active futures.
SOYBEANS:
Soybean futures led the grain complex lower Wednesday, most likely as a mix of Brazilian harvest pressure as well as technical pressure as soybeans continue to struggle at prices north of $10.70. Especially considering the next leg higher would put prices back above $11.00. With speculative traders now holding a small net-long position in soybeans for the first time since late 2023, traders are likely exercising caution with an uncertain trade outlook in terms of the U.S.’s relationship with China, as well as concern about overextending length ahead of South American production, which certainly still has the potential to be record-breaking. The market will watch condition ratings out of Argentina closely Thursday as they are set to be released by the Buenos Aires Grain Exchange at 12 p.m. CST. The past seven days have shown a return to the drier side of things throughout Argentina’s grain belt, after an approvement over the previous week. The next week looks to continue this trend for the most part, although some needy areas in the southeast of the major growing areas are slated to receive some relief. The following week shows increased chances of precipitation as of now. In central Brazil, drier weather over the past few days as well as windows of dryness over the next week have provided an opportunity for producers to catch up on soybean harvest which has been off to a very slow start. In soybean technicals, despite a sharp day lower on Wednesday, March soybean futures over the past two weeks have built a chart environment that now has several levels of support. Firstly, the market managed to hold soft support at $10.55 on Wednesday, but beyond that I view the low- to mid-$10.40s as a key short term pivot level for nearby soybean prices. Ultimately, fundamentals will dictate market direction but from a pure technical perspective I currently don’t view a down session like Wednesday as a huge panic point until that level of mid-term support is breached.
WHEAT:
Wheat markets acted for much of the morning hours of Wednesday’s session like they were going to be the trailblazer of the grain complex and firm regardless of outside pressure. Unfortunately, the negative influence from the soybean complex and corn market proved too much as all three wheat markets slipped lower by the close. The fundamental situation for wheat on the world scale remains intriguing with world offers, according to the International Grain Council, firming across the globe this week as the Russian export quota nears. In domestic winter wheat news, USDA field offices released updates on conditions Wednesday, consolidated in the state-by-state reports from NASS. Conditions were a mixed bag with Kansas showing a slight improvement of 3% in good-to-excellent conditions from January, while Nebraska and Colorado showed drops, although the latter remains in good condition overall. Nebraska, in particular, has shown steady declines in good-to-excellent conditions since fall. Montana far and away led the improvements in conditions with a 29% jump in good-to-excellent ratings since the last round of ratings during the first week of January. Washington did not post percentage ratings but did note good conditions overall. Meanwhile in the eastern soft red growing areas, Ohio reported stable conditions while Illinois showed a drop in good to excellent ratings of 4 points, although the crop still remains in overall good condition at 65% good to excellent. In wheat technicals, the Kansas City March contract found at least soft support on Wednesday at $5.90, which keeps $6.00 as the near-term price target for bulls in immediate reach. Longer-term support still sits in the mid $5.60s to $5.70 level.
