Agricultural markets faced a challenging week as corn, soybean, and wheat prices all trended lower amid mixed global weather forecasts and shifting supply-demand dynamics. Corn and wheat saw significant declines, pressured by weakening spreads and lackluster export figures, while soybeans held up slightly better despite harvest progress in Brazil and drought concerns in the U.S. High temperatures threatening India’s wheat crop and favorable conditions boosting Brazil’s soybean and corn output added complexity to the global outlook.
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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 Prices: Key Events
Price Declines and Weakening Spreads
Corn prices dropped 6 to 13 cents, with May-25 futures hitting a monthly low after breaking through the 50-day moving average at $4.84½. Spreads weakened significantly, with the March/May spread reaching a new low of $16¾ ahead of First Notice Day, signaling market softness and potential oversupply concerns.Export Sales Disappoint
U.S. corn exports for the week ending February 20 totaled 31 million bushels, falling at the low end of expectations and dampening market sentiment. Despite year-to-date commitments being up 28% from last year at 1.916 billion bushels, they align with only 78% of the USDA’s forecast, suggesting export demand may not meet projections.USDA Outlook Projects Acreage Increase
The USDA Outlook Conference forecasted 2025 U.S. corn acres at 94 million, up 3.4 million from last year, potentially yielding 15.585 billion bushels with a trendline yield of 181 bushels per acre. This could push ending stocks to 1.965 billion bushels, exceeding expectations by 50 million and adding bearish pressure to prices.Drought Impacts U.S. Corn Regions
U.S. corn acres under drought surged 11% to 56%, compared to 31% last year, raising concerns about 2025 production risks. While bulls see this as a potential price support factor, bears argue rapid spring planting could mitigate losses, contributing to current market uncertainty.Brazil Corn Production Slightly Up
Brazil’s 2024/25 corn production estimate rose slightly to 125.5 million tons, driven by favorable March weather outlooks for the Safrinha crop and a faster first-crop harvest pace. However, planting delays in key states like Mato Grosso (67.7% vs. 77.4% last year) could still impact yields, keeping global supply dynamics in focus.South Korea Boosts Corn Purchases
South Korea’s Feed Leaders Committee and Nonghyup Feed Inc. purchased 198,000-201,000 metric tons of feed corn, likely from the U.S., in international tenders. This demand provides a modest lift to U.S. export prospects, though it may not fully offset broader market weakness.
Soybean Prices: Key Events
Prices Slip Amid Mixed Signals
Soybean prices fell 2 to 5 cents, with May-25 futures carving out a monthly low and approaching the 100-day moving average at $10.32. Meal dropped $2.50 and oil was off 25 points, reflecting broader grain market weakness despite steady-to-firm spreads in the complex.Export Sales Meet Expectations
U.S. soybean exports hit 15 million bushels, aligning with market forecasts, with year-to-date commitments up 14% at 1.622 billion bushels. This represents 89% of the USDA’s forecast, above the historical average of 87%, though outstanding sales to China remain flat, tempering optimism.USDA Outlook Sees Acreage Decline
The USDA Outlook Conference pegged 2025 U.S. soybean acres at 84 million, down 3.1 million from last year, projecting production at 4.370 billion bushels and ending stocks at 320 million. This tighter supply outlook, 60 million below expectations, could offer future price support if weather risks materialize.Brazil Soybean Harvest Advances
Brazil’s 2024/25 soybean production estimate edged up to 170.4 million tons, with 36.4% harvested by February 23, nearly matching last year’s pace. Dry weather in the Central-West and Southeast has accelerated harvesting, supporting a record yield outlook despite delays in states like Mato Grosso do Sul.Drought Hits U.S. Soybean Regions
U.S. soybean acres in drought jumped 10% to 46%, compared to 28% last year, raising concerns about 2025 planting conditions. This could tighten domestic supply if prolonged, though current global abundance from Brazil keeps immediate price impacts in check.Argentine Crop Ratings Improve
The Buenos Aires Grain Exchange reported Argentine soybean ratings rose 7% to 24% good-to-excellent, with poor-to-very-poor ratings dropping to 33%. This improvement, amid expected heavy rains, could bolster global soybean supply and pressure U.S. prices further.
Wheat Prices: Key Events
Sharp Price Drops Across Classes
Wheat prices plummeted 13 to 19 cents, with Chicago SRW leading the decline and all May-25 contracts hitting monthly lows. The March/May SRW spread sank to $16½, reflecting weak demand and bearish sentiment as markets reload short positions.Export Sales Underperform
U.S. wheat exports totaled 10 million bushels, at the low end of expectations, with year-to-date commitments up 10% at 733 million bushels but only 86% of the USDA forecast. Class-specific disparities—HRW up 47%, SRW down 35%—highlight uneven demand, pressuring prices.India Faces Wheat Crop Risks
India braces for a scorching March with temperatures potentially exceeding 40°C (104°F), threatening wheat yields for the fourth consecutive year. As the world’s second-largest producer, reduced output could force import tax cuts, potentially lifting global prices later.USDA Outlook Boosts Wheat Acres
The USDA Outlook Conference projected 2025 U.S. wheat acres at 47 million, up 0.9 million from last year, with production at 1.926 billion bushels and ending stocks at 826 million. This aligns with trade expectations but adds to current supply pressure amid non-threatening U.S. weather.U.S. Soil Moisture Concerns Linger
Soil moisture levels remain adequate in HRW wheat regions like Kansas but are alarmingly low in SRW areas of the Midwest, posing risks for 2025/26 production. While winterkill threats have eased, a volatile March could elevate spring freeze risks, keeping traders cautious.Russia Trims Wheat Export Forecast
Russia’s IKAR consultancy cut its 2024/25 wheat export forecast to 42.5 million tonnes from 43 million and lowered its 2025 production estimate to 81 million tonnes. This slight reduction could tighten global supply later, though current market focus remains on ample near-term stocks.
Soybean Technical Analysis
The technical data presents a mixed picture for soybean prices. Short-term indicators (5-day and 20-day moving averages, Stochastic %K, and MACD) suggest a bearish trend with oversold conditions, potentially setting the stage for a short-term rebound. The significant 200-day price drop (-198.0) and negative MACD values (-15.2 at 20-day) indicate lingering downward pressure, but the positive year-to-date change (+8.0) and the 50-day Stochastic %K (56.25%) suggest underlying strength. The rising ATR (9.5) and historic volatility (20.28% at 50-day) imply that any movement—up or down—could be pronounced.
Given these factors, I predict that soybean prices may experience a short-term recovery from their current oversold levels, potentially moving back toward the 20-day moving average (1008.2) or the 50-day moving average (992.7) as support. However, without a sustained bullish crossover in the MACD or a break above the 200-day moving average (1025.1), the longer-term trend remains uncertain, with risks of further declines if momentum shifts downward.
Recommendations for Farmers
Short-Term Strategy (Next 2-4 Weeks):
Hold Off on Selling: With Stochastic indicators signaling oversold conditions (14-day and 20-day %K below 20%), consider holding current stocks to capitalize on a potential short-term price rebound toward 1008.2. Monitor the 5-day moving average (996.5) as a near-term support level.
Set Price Targets: Plan to sell if prices approach 1008.2 or 1025.1 (200-day moving average), locking in gains during a potential upswing.
Risk Management:
Use Hedging Tools: Given the high volatility (ATR 9.5, Historic Volatility 20.28%), utilize futures contracts or options to hedge against unexpected price drops. Consider a put option to protect against further declines below 992.7.
Diversify Sales: Spread out sales over the next month to mitigate risk from sudden price swings.
Long-Term Strategy (Next 3-6 Months):
Monitor MACD and Moving Averages: Watch for a bullish MACD crossover (above 0) and a break above 1025.1 (200-day moving average) as confirmation of a sustained uptrend. If these occur, consider increasing market exposure.
Prepare for Volatility: The rising ATR and historic volatility suggest preparing for larger price movements. Maintain a cash reserve to take advantage of buying opportunities if prices drop significantly.
Operational Adjustments:
Cost Control: With uncertain price direction, focus on reducing input costs (e.g., fertilizers, fuel) to maintain profitability if prices remain flat or decline.
Stay Informed: Regularly review updated technical data, as market sentiment can shift rapidly, especially with the current volatility.
Given the dynamics, farmers should adopt a cautious yet opportunistic approach. Leverage the current oversold signal for a potential short-term gain, but remain vigilant for long-term trends by tracking key indicators like MACD and moving averages. Below are the specific technical indicators of note.
Key Technical Indicators and Standout Numbers
Moving Averages (Price Trends):
5-Day: 996.5
20-Day: 1008.2
50-Day: 992.7
100-Day: 977.3
200-Day: 1025.1
Year-to-Date: 1003.4
Observation: The 5-day and 20-day moving averages (996.5 and 1008.2) are below the 200-day moving average (1025.1), suggesting a short-term bearish trend within a longer-term bullish context. The 50-day moving average (992.7) is close to the 5-day, indicating potential support levels.
Price Change and Percent Change:
5-Day: -24.0 (-2.37%)
20-Day: -37.0 (-3.61%)
50-Day: +25.0 (-2.60%)
100-Day: -14.0 (-1.40%)
200-Day: -198.0 (-16.69%)
Year-to-Date: +8.0 (+0.82%)
Observation: Recent short-term price declines (-24.0 over 5 days and -37.0 over 20 days) contrast with a modest year-to-date gain (+8.0). The significant 200-day drop (-198.0 or -16.69%) indicates a longer-term correction, but the positive year-to-date change suggests some resilience.
Stochastic Indicators (Overbought/Oversold Conditions):
9-Day Stochastic %K: 34.51%
14-Day Stochastic %K: 16.01%
20-Day Stochastic %K: 14.58%
50-Day Stochastic %K: 56.25%
Observation: The 14-day and 20-day Stochastic %K values (16.01% and 14.58%) are well below 20%, signaling that soybeans may be in oversold territory, potentially indicating a reversal or bounce-back soon. The 50-day %K (56.25%) is nearing overbought levels, suggesting mixed signals across time frames.
Relative Strength and Percent R:
9-Day Relative Strength: 37.96%, Percent R: 100.00%
14-Day Relative Strength: 43.47%, Percent R: 100.00%
20-Day Relative Strength: 46.63%, Percent R: 100.00%
50-Day Relative Strength: 49.06%, Percent R: 48.21%
100-Day Relative Strength: 47.67%, Percent R: 48.21%
Observation: The Percent R at 100% for shorter periods (9, 14, and 20 days) indicates the market is at the lower end of its recent range, supporting the oversold condition. The 50-day and 100-day Percent R (48.21%) suggests a more neutral stance, aligning with the longer-term moving average trends.
Historic Volatility:
9-Day: 11.50%
14-Day: 11.87%
20-Day: 15.86%
50-Day: 20.28%
100-Day: 17.90%
Observation: Volatility has increased, with the 50-day historic volatility at 20.28%, indicating heightened price fluctuations. This suggests farmers should brace for potential sharp movements.
MACD Oscillator:
9-Day: -7.0
14-Day: -9.2
20-Day: -15.2
50-Day: 0.1
100-Day: -15.5
Observation: The MACD Oscillator is negative across most periods (-7.0 to -15.2), indicating bearish momentum in the short to medium term. However, the 50-day value of 0.1 suggests a potential convergence, hinting at a possible trend reversal.
Average True Range (ATR):
9-Day: 7.4
14-Day: 8.3
20-Day: 8.6
50-Day: 9.1
100-Day: 9.5
Observation: The ATR is rising (up to 9.5 over 100 days), reflecting increased price volatility, which could signal upcoming significant price swings.
Extended Commentary
Corn prices sharply declined as the market digested weak export sales, a significant increase in projected U.S. acreage, and deteriorating technical momentum. The USDA Outlook Conference’s projection of 94 million corn acres for 2025 adds a bearish tone, as the potential for a 15.6-billion-bushel crop would push ending stocks higher than previously anticipated. On the weather front, drought concerns in key U.S. growing regions continue to escalate, with 56% of corn acres now classified as drought-affected—an 11% increase from last year. However, with planting season still ahead, the market remains in a wait-and-see mode on whether these conditions persist or improve with spring moisture.
Soybean prices held up slightly better than corn but still trended lower as the South American harvest progressed and a growing global supply outlook pressured futures. Brazil’s production estimate totaled 170.4 million metric tons, with harvest now nearing 40% completion. In the U.S., the USDA forecasted a drop in soybean acreage to 84 million acres, which could lead to a tighter domestic supply. Still, the immediate impact remains muted as significant South American exports dominate the global marketplace. The Buenos Aires Grain Exchange also reported improved Argentine crop ratings, signaling that supply pressure could persist. Despite near-term headwinds, weather risks heading into the U.S. growing season may provide some price support.
Wheat markets continued their downward slide, led by weak export sales, deteriorating spreads, and a stronger dollar dampening global demand. While the USDA projected slightly higher U.S. wheat acreage at 47 million acres, market sentiment remains weak as global supplies remain ample. However, potential weather disruptions loom on the horizon, particularly in India, where extreme heat could threaten wheat yields, and in Russia, where export estimates have been trimmed slightly. The situation remains fluid, but unless significant production concerns materialize, wheat prices will likely stay under pressure soon.
