Grain markets faced downward pressure across the board, with soybeans, corn, and wheat all closing lower. Soybeans were weighed down by strong South American production and weak export demand, while corn prices dipped despite solid ethanol production and export sales. Wheat prices fell as traders monitored global trade tensions and weather conditions in key growing regions.
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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 Highlights
Tariff Concerns: Corn prices were pressured by the potential imposition of tariffs on Mexico and Canada, which could impact export demand. President Trump announced a delay in implementing tariffs until April 2, but the threat continues to weigh on the market.
Ethanol Production: Ethanol production remained strong, with 318 million gallons produced last week, up 1% year-over-year. This supports corn demand, as 108 million bushels were used in ethanol production, above the pace needed to meet USDA forecasts.
Export Sales: Analysts expect USDA export sales to range between 35-65 million bushels for corn, reflecting steady demand despite global trade uncertainties.
Acreage Estimates: A Reuters poll suggests U.S. corn acreage could expand by 3 million acres in 2025 to 93.6 million acres, with production potentially reaching 15.4 billion bushels.
South American Weather: Dry conditions in Brazil’s Center-West and Southeast regions are causing stress for late-maturing soybeans and first-crop corn, but wetter conditions in Mato Grosso are slowing harvest and second-crop corn planting.
Soybean Market Highlights
South American Production: Soybean prices were pressured by strong production prospects in Argentina and Brazil, with harvest progress in Brazil continuing to move forward. Some private firms have trimmed production estimates due to weather issues, but overall supply remains robust.
Export Demand: Weak export demand for U.S. soybeans, driven by large South American supplies and ongoing trade tensions with China, continues to weigh on prices. Analysts expect USDA export sales to range between 8-22 million bushels.
Acreage Estimates: A Reuters poll predicts U.S. soybean acreage could fall by 2.7 million acres in 2025 to 84.4 million acres, with production and ending stocks expected to remain steady compared to 2024.
Weather Impact: Dry conditions in Brazil’s Center-West and Southeast regions are stressing late-maturing soybeans, while wetter conditions in Mato Grosso are slowing harvest progress.
Soy Complex Weakness: Soymeal and soyoil prices also declined, with May soyoil hitting a new monthly low before recovering slightly. Spot board crush margins remained steady at $1.15½ per bushel.
Wheat Market Highlights
Tariff Impact: Wheat prices were sensitive to potential tariffs on Mexico, a top buyer of U.S. wheat. The delay in tariff implementation provided some relief, but uncertainty remains.
Global Trade Tensions: Traders are monitoring talks to end Russia’s war in Ukraine, which could impact global wheat trade. Russia’s export cap and the strength of the U.S. dollar are also key factors influencing demand.
Export Sales: Analysts expect USDA export sales to range between 300,000-700,000 metric tons for wheat, with Algeria purchasing 5.5 million bushels of milling wheat in a recent tender.
Weather Concerns: Dry conditions in the southwestern U.S. Plains and Europe are raising concerns about hard red winter wheat conditions. Ukraine’s wheat production remains unchanged at 20.3 million tons, but cold risks persist.
Acreage Estimates: Analysts expect U.S. wheat acreage to reach 46.7 million acres in 2025, with production potentially totaling 1.922 billion bushels, assuming an average yield of 50.3 bushels per acre.
Corn Technical Analysis
While short-term bearish signals (e.g., -17.6 point 5-Day drop, oversold Stochastic) suggest caution, the medium- to long-term outlook is strongly bullish, driven by a +34.1 MACD, significant Moving Average gains (+33.6 to +54.6), and stable volatility (18.95%). Farmers should balance short-term risk management with optimism for medium- and long-term gains to maximize returns.
Short-Term (5-20 Days):
Declining 5-Day (-17.6 points) and 20-Day (-5.4 points) Moving Averages, combined with oversold Stochastic (Raw at 0.00%) and Percent R (100.00%), suggest selling pressure or profit-taking. The low ATR (4.4-4.6) indicates any correction will likely be moderate.Medium-Term (50-100 Days):
Strong gains in the 50-Day (+33.6 points) and 100-Day (+54.6 points) Moving Averages, overbought Stochastic readings (68.60%-84.91%), and a sharply positive MACD (+34.1) signal a robust bullish trend. Stable Historic Volatility (18.95%) supports sustained increases.Long-Term (200-Day and Year-to-Date):
The 200-Day Moving Average (+10.6 points) and Year-to-Date (+19.6 points) confirm a steady upward trajectory, though at a slower pace than the medium term, suggesting long-term bullishness.
Predictions
Short-Term (Next 1-4 Weeks):
A correction or consolidation is likely, with prices possibly testing support at the 20-Day Moving Average (486.6) or 50-Day Moving Average (470.6). The oversold signals and declining short-term averages suggest a bearish bias, but low ATR limits downside risk.Medium-Term (1-3 Months):
After any short-term dip, prices are expected to resume upward movement, potentially reaching or exceeding the Year-to-Date level of 478.6, with a target near 500 points if momentum persists, driven by strong Moving Averages, MACD, and Stochastic indicators.Long-Term (6-12 Months):
Prices should trend higher, supported by the 200-Day Moving Average (+10.6) and Year-to-Date gains (+19.6), with stable volatility suggesting gradual increases.
Recommendations for Farmers
Short-Term Strategy (Next 1-4 Weeks)
Action: Avoid selling immediately if possible, as prices may dip further, offering better hedging or buying opportunities. If concerned about declines, use futures to lock in prices near 483.5-486.6.
Monitoring: Watch support at 470.6 (50-Day MA) and resistance at 486.6 (20-Day MA). A drop below 470.6 may signal a deeper correction.
2. Medium-Term Strategy (1-3 Months)
Action: Target sales or hedges at higher levels (478.6-500 points), leveraging the bullish MACD (+34.1) and Moving Average gains. Use options or futures to manage downside risk while capturing upside potential.
Diversification: Employ forward contracts as Stochastic readings (68.60%-84.91%) approach overbought levels.
3. Long-Term Strategy (6-12 Months)
Action: Maintain a bullish stance, using storage or long-term marketing agreements to benefit from gradual price rises. Monitor fundamentals (e.g., weather, demand) alongside technicals to adjust plans.
Extended Commentary
Corn prices remained relatively stable, aided by strong ethanol production of 318 million gallons last week, representing a 1% year-over-year increase. Despite this, the market faced headwinds from potential tariffs on Mexico and Canada, which raised concerns about export demand. While acreage estimates indicate that corn planting in the United States will increase in 2025, weather conditions in Brazil's Center-West and Southeast regions continue to be a source of uncertainty for South American supply. Global trade tensions and US dollar fluctuations will continue to be important factors influencing price movement in the coming weeks.
Soybean prices remained under pressure due to abundant South American supplies, with Brazil and Argentina's strong production keeping export demand for US soybeans low. While some private firms have slightly reduced their Brazilian crop estimates due to the dry conditions, the overall supply outlook remains strong. Export sales expectations remain low, with analysts estimating sales of 8-22 million bushels. Meanwhile, soybean meal and oil prices fell, indicating concerns about global demand and ongoing trade tensions with China.
Wheat markets fell modestly as traders responded to uncertainty over global trade policies and weather patterns. The delay in tariff implementation for Mexico provided some relief, but ongoing negotiations will be closely monitored. Weather conditions in the southwestern United States Plains and Europe are causing concern about winter wheat conditions, while Russia's grain export cap has added new variables to the global supply outlook. As the market navigates these supply and demand factors, future acreage estimates and geopolitical developments will have a significant impact on price trends.
