Is Wheat Gearing Up for a Bigger Move?

Weekly Export Sales Estimates

Corn

Technicals 

Higher lows were marked earlier in the week which was followed up by higher highs in yesterday’s trade.  Phycological resistance remains intact from 499-502 1/4, above that and we could make a run at the more significant resistance pocket from 508 1/4-510.  The RSI is right on the edge of “overbought” with a reading of 69.35 this morning, but we’ve seen that as high as 74.50 in recent weeks.  With the way the Funds have been moving some of these agricultural markets it’s tough to fight the trend which continues to be up and to the right. A break and close below the lows from earlier in the week 477 3/4-479 3/4 would be what we would view as the inflection point to turn the tide.  

Technical Levels of Importance

• Resistance: 494 1/2**, 499-502 1/4**, 508 1/3-510****
• Pivot: 487-488
• Support:477 3/4-479 3/4***, 469 1/4-471 1/2***

Fundamental Notes

• (Reuters) – With global corn supplies set for decade lows later this year, Brazil’s corn harvest cannot afford a mishap.Brazilian corn stocks are particularly tight heading into 2024-25, and planting of the second corn crop, which accounts for almost 80% of the country’s corn production, is off to a slow start.Brazil’s second corn output is predicted to rise modestly this year versus last, though if that fails, it could spell opportunity for the United States.Second corn in top growing state Mato Grosso was just 1% planted as of last Friday, the date’s slowest pace since 2011 but nearly identical to 2021. Both of those years plus 2016, another slow year, coincided with some of the state’s poorest corn yields.Untimely rains have delayed Mato Grosso’s soybean harvest, which also delays corn planting. This shifts the corn yield formation window to potentially overlap with the onset of dry season.Farmers in Mato Grosso, on average, plant about 11% of their corn crop this week, so planting efforts should be at least 12% complete by Friday to maintain a somewhat comfortable pace. The last week has been favorably drier, though rains could resume over the next several days.

Seasonal Tendencies Update

(Updated on 1.27.25)

Below is a look at historical price averages for March corn futures on a 5, 10, 15, 20, and 30 year time frames (Past performance is not necessarily indicative of future results).  

Commitment of Traders Update

• Managed money has amassed a considerable net-long position, which now totals 311,678 contracts between futures and options.

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