The agricultural markets for corn, soybeans, and wheat are experiencing dynamic shifts influenced by weather patterns, export data, and geopolitical factors. Corn prices are on the rise due to increased export demands and logistical improvements in Brazil. Soybean markets show mixed results, with prices slightly higher, influenced by weather relief in Argentina but tempered by export commitments. Wheat prices have surged, driven by speculative trading and concerns over winterkill due to cooler temperatures in key production areas.
Ag Market Insights is dedicated to bringing you timely information to help you consistently get the most money for your crops. Our team painstakingly goes through mountains of information and data and distills insights into a format that you can consume in a few minutes.
In this edition:
Harvest Headlines: Events impacting crop prices.
Technical Analysis: Price projections for corn based on our technical analysis.
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Market Overview
Harvest Headlines
Corn Market Events:
New Crop Corn Sale to Mexico: The USDA confirmed private sales of 330,000 metric tons of U.S. corn to Mexico for the 2025/26 marketing year. This sale supports a positive outlook for corn prices due to sustained demand.
Brazilian Logistics Improvement: The resolution of logistical bottlenecks at the Rondonópolis transshipment facility has normalized operations, which should aid in maintaining or boosting corn prices by ensuring smoother transport to export markets.
Export Expectations: The Bloomberg survey anticipates corn export sales for the week ending January 30 to range from 850k to 1,500k tons, with an average of 1,130k tons. Strong export numbers generally correlate with higher corn prices.
Ukrainian Corn Exports: Ukraine is set to export 2.15 million tons of corn in February, following a significant export in January, potentially impacting global corn supply and price dynamics.
Mexican GMO Corn Policy: Mexico reversed its ban on GMO corn for human consumption, which could affect corn trade patterns and potentially influence corn price levels in international markets.
Cargill's Biofuels Acquisition: Cargill's acquisition of SJC Bioenergia in Brazil to expand into biofuels could increase industrial demand for corn, possibly uplifting corn prices due to diversified usage.
Soybeans Market Events:
Weather Relief in Argentina: Heavy rains in dry regions of Argentina are expected to stabilize soybean crop ratings, potentially supporting soybean prices by alleviating supply concerns.
Export Sales Below Expectations: Soybean exports were reported at 14 million bushels, on the lower end of expectations, which might put downward pressure on prices unless demand picks up.
Brazilian Harvest Delays: Delays in Brazil's soybean harvest could impact the planting schedule for the second corn crop, leading to potential adjustments in soybean market strategies and prices.
Chinese WTO Complaint: China's intention to file a WTO complaint against U.S. actions introduces trade uncertainty, which could affect soybean prices given China's significant market influence.
Drought Expansion in U.S.: U.S. soybean acres under drought conditions expanded by 2% this week, potentially threatening yield and supporting higher soybean prices if the situation persists.
Soybean Meal Demand: Strong sales of soybean meal, above expectations at 531k tons, indicate robust demand for soy products, which could indirectly support soybean prices through increased processing needs.
Wheat Market Events:
Price Surge Across Classes: Wheat prices across SRW, HRW, and HRS classes rose significantly, with Chicago and KC wheat up by 5.13-5.16 and MGEX wheat by 5.10. This surge might be driven by speculative short covering, suggesting a bullish market sentiment.
Export Sales in Line with Expectations: Wheat export sales were 18 million bushels, aligning with market expectations. This steady export performance supports current price levels but does not suggest immediate upward pressure.
Drought Impact on U.S. Wheat Acres: The percentage of U.S. winter wheat acres under drought conditions slightly decreased, yet the situation remains critical in certain regions, potentially affecting future wheat supplies and prices.
Weather Risks in Key Wheat Regions: Cooler temperatures expected in the Black Sea region and U.S. Southern Plains increase the risk of winterkill, which could tighten supply and elevate wheat prices if the cold persists without sufficient snow cover.
Global Tenders and Sales: Various international tenders for wheat, including from Japan, South Korea, and Jordan, reflect ongoing global demand, which could continue to support or even drive wheat prices higher in the near term.
Soybean Technical Analysis - February 6th, 2025
The price of soybeans on February 6th, 2025, closed at $10.59, up 3 and 1/2 cents from the previous day. In this report, I'll provide a technical analysis of the current price of soybeans, using the main technical indicators to predict what the price will do in the short and long term.
Historical Price Data
Over the past year, soybean prices have experienced significant volatility, reaching a 52-week high of 1235-2 and a 52-week low of 947-0. The overall trend has been downwards, with prices declining from the highs reached in early 2024. However, there have been periods of upward momentum, with prices rallying from the lows reached in late 2024. This suggests a potential for a trend reversal or at least a period of consolidation in the soybean market.
Moving Averages
Moving averages are a trend-following indicator that smooths out price action by averaging a set of past prices. They can be used to identify the direction of a trend and potential support and resistance levels. The most common moving averages are the 50-day, 100-day, and 200-day moving averages. The 50-day moving average is often considered a significant support level.
The 50-day moving average for soybeans is currently at $10.09, the 100-day moving average is at $10.22, and the 200-day moving average is at $10.72. The 20-day moving average is $10.47 1/4, and the year-to-date moving average is $10.33. The fact that the 50-day and 100-day moving averages are below the 200-day moving average suggests that the price of soybeans is in a downtrend in the long term. However, the price of soybeans is currently above the 50-day and 100-day moving averages, which suggests that the price may be in an uptrend in the short term.
Adding to this observation, soybean futures saw action on either side of unchanged before settling modestly higher. This price action, combined with the moving average readings, paints a mixed picture for the short-term trend, with potential for both upward and downward movements.
Relative Strength Index (RSI)
The Relative Strength Index (RSI) is a momentum oscillator that measures the magnitude of recent price changes to evaluate overbought or oversold conditions in the price of a stock or other asset. The RSI is displayed as a number between 0 and 100. Traditionally, an asset is considered overbought when the RSI is above 70 and oversold when it is below 30. It's important to note that the RSI works best when a failure swing occurs between the RSI and market prices.
The current RSI for soybeans is 54.00%. This suggests that the price of soybeans is neither overbought nor oversold. The RSI has been trending higher in recent days, which suggests that the price of soybeans may continue to rise in the short term. However, it's crucial to watch for a potential failure swing, where the price fails to confirm the RSI movement, which could signal a reversal.
Moving Average Convergence Divergence (MACD)
The Moving Average Convergence Divergence (MACD) is a trend-following momentum indicator that shows the relationship between two moving averages of prices. The MACD is calculated by subtracting the 26-period Exponential Moving Average (EMA) from the 12-period EMA. The speed of crossovers in the MACD is also considered a signal of whether a market is overbought or oversold.
The MACD for soybeans is currently at 0-4. This suggests that the price of soybeans is in a neutral trend. The MACD has been trending higher in recent days, which suggests that the price of soybeans may continue to rise in the short term. However, it's important to note that the MACD and RSI can sometimes provide contradictory signals. Therefore, it's crucial to consider both indicators in conjunction with other technical and fundamental factors.
Furthermore, when fading a move at support, it's important to look for strong momentum in the MACD histogram, indicated by increasingly larger bars. This can help confirm the strength of the potential reversal.
Bollinger Bands
Bollinger Bands are a type of statistical chart characterizing the prices and volatility over time of a financial instrument or commodity, using a formulaic method developed by John Bollinger. They consist of three lines: a simple moving average (typically 20 periods) of the soybeans prices, with upper and lower bands set two standard deviations above and below the middle band. Trading breakouts with Bollinger Bands can be very effective due to the risk/reward opportunity they present.
The current price of soybeans is trading near the middle band of the Bollinger Bands. The bands have been widening in recent days, which suggests that the volatility of the price of soybeans is increasing. This could be a sign that a breakout is imminent.
Support and Resistance Levels
Support and resistance levels are price levels where an asset's price tends to stall or reverse. Support is a price level where an asset's price is likely to find buying pressure, preventing the price from falling further. Resistance is a price level where an asset's price is likely to find selling pressure, preventing the price from rising further.
There are two primary methods used to identify support and resistance levels: major Gann squares, which are horizontal lines on a chart where the market has historically reversed, and Fibonacci retracements, which are based on the mathematical relationships between numbers in the Fibonacci sequence.
Based on the technical indicators, here are some key levels of support and resistance for soybeans:
Major Resistance:
52-Week High: 1235-2
38.2% retracement from the contract high: $10.95
200-day moving average: $10.72
Minor Resistance:
Pivot Point 3rd Level Resistance: 1114-3
Pivot Point 2nd Level Resistance: 1095-7
Pivot Point 1st Resistance Point: 1085-3
3-10 Day Moving Average Crossover Stalls: 1083-2
Pivot Point: 1066-7
Major Support:
52-Week Low: 947-0
Minor Support:
61.8% Retracement from the 52 Week Low: 1125-1
50% Retracement From 52 Week High/Low: 1091-1
38.2% Retracement From 52 Week Low: 1057-1
Pivot Point 1st Support Point: 1056-3
Pivot Point 2nd Support Point: 1037-7
Pivot Point 3rd Support Point: 1027-3
Volatility
The Soybean CVOL Index, which measures 30-day implied volatility, is currently at 21.6865. This index can be used to assess risk in the soybean market. The recent widening of the Bollinger Bands also suggests increasing volatility, which could lead to larger price swings in the near future.
Divergence
Divergence occurs when the price of an asset moves in the opposite direction of a technical indicator. This can signal a potential trend reversal. For example, if the price of soybeans makes a new high while the RSI makes a lower high, this is considered a bearish divergence and could indicate that the upward momentum is weakening. Conversely, if the price makes a new low while the RSI makes a higher low, this is a bullish divergence and could signal a potential upward reversal.
Fundamental Factors
While this report focuses on technical analysis, it's important to acknowledge the influence of fundamental factors on soybean prices. Some key fundamental factors to consider include:
Weather conditions in South America: Shower activity in central Brazil could diminish, potentially leading to increased fieldwork. However, excessively hot and dry conditions in Argentina could cause permanent reductions in yield. These contrasting weather patterns could create uncertainty in the soybean market.
Lunar New Year in China: The observance of the Lunar New Year in China could impact soybean futures, as trading activity may be reduced during this period.
Prediction
Based on the technical analysis, the price of soybeans presents a mixed outlook. The short-term indicators suggest a potential for upward movement, while the long-term indicators point towards a downtrend. This conflict could lead to a period of consolidation or a potential trend reversal.
In the short term, the price of soybeans could rise to the resistance level at $10.67. If the price breaks through this level, it could continue to rise to the next resistance level at $10.83. However, looming technical resistance and a corrective pullback in soymeal futures could contribute to weakness in soybean futures.
On the other hand, the overall technical rating for soybean futures is a strong buy, according to one source. This suggests a potential for continued upward momentum.
In the long term, the price of soybeans is expected to fall. The 200-day moving average at $10.72 is a key level of resistance. If the price falls below this level, it could continue to fall to the next support level at $10.57. Moreover, the RSI is currently at a level that has historically coincided with a major top in the soybean market. This raises concerns about the long-term sustainability of the current upward momentum.
Adding to the uncertainty, there is speculation that soybean prices may even fall into single-digit territory. This highlights the potential for significant downside risk in the long term.
Conclusion
The technical analysis of soybeans suggests a mixed outlook, with conflicting signals between the short-term and long-term indicators. The price could rise in the short term, driven by the upward momentum in the RSI and MACD, but the long-term trend remains downward, with the 200-day moving average serving as a key resistance level.
Traders should closely monitor the key support and resistance levels identified in this report, including the 52-week high and low, the 38.2% retracement from the contract high, and the 200-day moving average. These levels could provide crucial entry and exit points for trades.
Furthermore, it's essential to consider the fundamental factors that could influence soybean prices, such as weather conditions in South America and the Lunar New Year in China. These factors could contribute to increased volatility and potentially trigger a breakout from the current trading range.
Extended Commentary
Corn prices are gaining momentum, supported by strong export demand and improving logistics in Brazil. The USDA’s confirmation of a 330,000-metric-ton corn sale to Mexico highlights sustained demand, while the resolution of transportation bottlenecks in Brazil enhances supply flow. However, Ukrainian exports, projected at 2.15 million tons for February, may counterbalance these bullish factors. Additionally, Mexico's reversal of its GMO corn ban introduces a new variable that could reshape trade dynamics in the long term.
Soybean markets remain volatile as Argentina’s rains stabilize crop ratings, yet weak U.S. export sales and Brazilian harvest delays contribute to uncertainty. Expanding U.S. drought conditions and strong soybean meal demand provide support, but China’s WTO complaint against U.S. trade actions adds geopolitical risk. Meanwhile, wheat prices surge on speculative trading, export sales in line with expectations, and weather risks in key production regions. Cooler temperatures in the Black Sea and U.S. Southern Plains heighten winterkill concerns, while steady global demand sustains market strength.
Short-term price action reflects mixed technical signals. Corn and wheat maintain bullish momentum on strong fundamentals, while soybeans face resistance amid shifting supply and demand factors. Market participants will closely watch export sales data and weather developments for further price direction.
