Grains & Sugar - Weekly Recap 12/06/2024

Grains & Sugar - Weekly Recap 12/06/2024 Market Update ????

#corn #soybeans #wheat #sugar Joran Haugens, Portfolio Manager

Corn

Corn struggled to find direction this week, reflecting the typical quiet trading environment of the holiday season. Limited market activity and low volume highlighted a lack of conviction among traders. March 2025 futures led the way, showing resilience as prices tested initial resistance levels and major moving averages (“MA”s). Midweek, prices slid to test the 50% retracement level and the 100-day MA near $4.28. Technical indicators remain neutral, with the 20-, 50-, and 100-day MAs clustered within an 8-cent range, while the RSI hovers around 50.

On the fundamental side, traders monitored South American crop progress, Black Sea developments, and U.S. demand trends. International buyers remained active, securing forward coverage ahead of potential Q1 2025 tariff concerns. Weekly export sales came in strong at 1.732M, surpassing trade estimates, although no new sale announcements were made.

With many participants stepping aside for the holidays, range-bound, thin trading is expected to continue. Support sits at $4.25, with further downside at $4.00, while resistance remains at $4.50 and $4.70–$4.85.

Soybeans

Soybeans traded sideways this week, with futures holding between resistance at the moving averages and psychological resistance near $10.00. January 2025 futures found underlying support near contract lows of $9.73? but lacked meaningful drivers for upward momentum. Traders stepped back, awaiting fresh input as South American planting progressed under mostly favorable conditions.

Improved rainfall in Brazil has advanced plantings to full speed, reducing earlier concerns about hot, dry conditions. Export demand provided some support, with weekly sales totaling 2.333M and additional sales to China reported. Palm oil prices slipped on slower demand but remain tight, spurring some fresh buying near recent highs.

Looking ahead, importers are locking in needs before President-elect Trump takes office, anticipating new tariffs on Chinese goods. Brazil continues to strengthen trade ties with China, potentially sidelining U.S. exports to China.

Futures remain range-bound, with downside targets at $9.50–$9.00 and short-term resistance at $10.25–$10.50. Biofuel credit adjustments and tight soybean oil margins will also influence the market in the coming months.

Wheat

Wheat rebounded late in the week after a quiet start. March 2025 futures hit a new contract low at $5.40?, pressured by improving U.S. conditions, active Black Sea exports, and limited fresh news. However, reports from Stats Canada of a lower-than-expected wheat crop at 34.958 MMT, along with Australian quality concerns and ongoing geopolitical risks, supported a recovery on Thursday.

Technically, wheat futures bounced from key support levels to test the 20-day MA.

Black Sea tensions, reports of poor Russian winter crop conditions, and rising Russian export taxes added to the bullish case, though skepticism remains regarding Russian claims. Wheat continues to face challenges moving forward but may offer long-term upside potential for buyers at depressed levels.

Sugar

Sugar traded in a declining flag pattern this week as the market absorbed improved production estimates from Brazil. The broader trend has been gradual decline since late September’s high, with choppy, range-bound activity dominating recent sessions.

Key support around $20.80–$20.50 held firm, aligning with 50% retracement levels based on one-year and recent highs and lows. A close below this range could trigger further weakness toward $20.00–$19.50. However, sugar futures showed resilience heading into the weekend, breaking above the 20-day MA, and inching toward $22.00.

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Drought Indicators source: NASA

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