March corn closed up 6 1/4 cents and May corn was up 6 cents. March soybeans closed down 15 3/4 cents and May soybeans were down 14 1/2 cents. March KC wheat closed down 1 1/4 cents, March Chicago wheat was down 2 3/4 cents, March Minneapolis wheat was down 4 1/4 cents.
The U.S. Dollar Index is down 0.03 at 107.94. The Dow Jones Industrial Average is down 247.0 points at 44,461.0. April gold is down $13.40 at $2,919.20, March silver is up $0.35 at $32.68 and March copper is up $0.0945. March crude oil is down $1.94 at $71.38, March ultra-low sulfur diesel is down $0.0633, March RBOB gasoline is down $0.0594 and March natural gas is up $0.053.
CORN:
March corn futures traded as low as $4.81 1/2 early Wednesday before finding buying interest to send prices upwards for at least a partial recovery of Tuesday’s losses. Fresh fundamental news is scarce outside of Tuesday’s USDA figures which as a reminder featured changes solely to world supply and demand, as the USDA left the U.S. balance sheet unchanged this time around. The initial kneejerk reaction to this appears to have run its course at least for the moment Wednesday, as traders are focusing on corn fundamentals that for the most part remain moderately supportive. In Wednesday news, the Energy Information Administration released ethanol production for last week, totaling 1,082,000 barrels per day (bpd), 30,000 bpd below the prior week’s production but still slightly above the prior four week’s average. Ethanol margins have shown slight improvement since mid-January as well, with Monday’s USDA weekly coproducts report pegging a bushel of corn crushed for ethanol to be worth $6.01 to an Iowa ethanol plant accounting for ethanol, DDGs, and corn oil produced. Of course there are overhead costs not considered in this report. Factoring in a standard cost per bushel, I calculated an average margin of 55 cents per bushels for the seven areas covered by the USDA report. A notable metric to watch moving forward is the new-crop soybean-to-corn price ratio which has dropped this week to 2.21, the lowest ratio for new-crop futures since late May 2023. It isn’t a perfect relationship, but this heavily implies a shift towards more corn acres is likely in 2025, which will be important to be mindful of as we head into U.S. planting season in just a few short months. In corn technicals, support near and above $4.80 continues to catch prices when sellers attempt a move to the downside. For now, March corn futures are again dancing around $4.90 which has become steady resistance to prices, with the medium-term objective for bulls still to secure a close above $4.97, which at this point bulls may be running out of fundamental ammunition to achieve this at least in the immediate future, but as always time will tell.
SOYBEANS:
Soybean futures began Wednesday with only short losses but price action became more and more bearish and the session wore on. Unfortunately for soybean bulls, regardless of the bullish directional changes in world soybean supplies in Tuesday’s USDA release, the overall supply of soybeans still remains historically large even with 7.5 million metric tons (mmt) in stock reductions over the past two months. To add to weakness is a South American forecast over the next two weeks that calls for rainfall anywhere from 2 to 6 inches across most of Argentina’s grain belt. Meanwhile the forecast in Brazil continues to show pockets of dry periods which should aid in fieldwork efforts for producers there. The Buenos Aires Grain Exchange will release its weekly crop conditions update on Thursday, while Brazilian agency CONAB will also release its monthly crop report on Thursday as well which will both give the market a more localized look into South American conditions. In soybean technicals, March soybean prices were quick to fall below near- to medium-term trendline support in the low $10.40s, before finding at least soft support in the mid $10.20s. For now, the next immediate target for bearish traders is to test the 50-day moving average (now at $10.16 1/2), which will be an important level to hold to keep the almost two-month-old price rally alive.
WHEAT:
Wheat markets found themselves stuck between slightly firmer corn prices and sharply lower soybean prices. Overall, the market has digested fairly static estimates from the USDA Tuesday quickly and moved back to focusing on world wheat values that continue to climb week over week. Tuesday’s estimates did little to alter the overall outlook of the wheat market for the balance of the old crop season, as trader attention will likely begin to shift over the next month or two to new-crop outlook for this year’s winter crops as well as plantings for spring crops. The next 30 days or so will also be important for finishing out the old crop export program for U.S. wheat, which still has sales to find and make if it is to reach the USDA goal of 850 million bushels (mb) for the marketing year. In wheat technicals, March Kansas City futures have found support for now near $5.90, which keeps $6.00s within the markets reach. The next round of support is the 20-day moving average in the upper $5.70s.
