Grain marketing commentary

David Reinbott
Agriculture Business Specialist
University of Missouri Extension

February 28, 2018

USDA Reports and Supply & Demand Tables


Weather problems in South America, fewer corn acres in the U.S. and good demand have all have helped move prices higher.  Argentina’s corn and soybean production continuous to get smaller as the drought persists.   Brazil’s soybean crop looks Ok but due to wet weather at harvest, it is delaying their planting of their double crop corn.  This puts the corn crop at greater risk of dry weather during pollination and grain fill. 


For the U.S., if we plant 90 million acres, the same number as last year, ending stocks would still be in the 2.1 to 2.3 billion bushel range.  However, if acres are down 1.0. million to 89 million acers and 174 bushel trend line yield, ending stocks would fall to approximately 2.0 billion bushels.  If the yield falls into the 167 – 168 bushel range, ending stocks would be in the 1.5 – 1.6 billion bushels.


May futures has rallied 25 cents since January 12.  Prices are in a solid uptrend.   Technically, May futures has rallied to the 200-day moving average at $3.79.  This is a very important technical resistance level.  The next price target above the 200 moving average is the 50% retracement of this summer’s move at $3.93.  The technical 62% retracement is at $4.02.   The support is at the 8 Exponential moving average (EMA) at $3.76 and then at $3.72.  I would use these price levels to make any old crop sales.


December futures have also rallied off the January 12 low.  It did break above the 200 day moving average at $3.98 and the next price targets are $4.05, 50% retracement and $4.11, 62% retracement.  The 8 EMA is at $3.98 and the next support is at $3.95.   I believe making some new crop sales is not a bad idea.  I would use these price targets to make some sales and use the 8 EMA and 20 EMA to trigger sales on declines. 




As I mentioned in corn, the dry weather in South America especially in Argentina has helped rally soybean prices.  However, U.S. and world ending stocks are still large.  At this time to make a major dent in world ending stocks it will depend upon how long the drought in Argentina persists, and any major reduction in U.S. production for 2018.

For 2018, if acres stay unchanged from last year at 90.0 million, which is highly unlikely, and trend line yields at 48.5 bushels, ending stocks would be in the 500 to 550 million bushel range.  If acres are up 1.0 million then ending stocks could be in the 550 to 600 million-bushel range.  However if yield is trimmed 5% from trend line to 46.0 bushels/acre, ending stocks are around 300 million bushels.    In addition, Chinese imports of our soybeans continue to be under estimated over the years and ending stocks could be even lower.  So even with more acres, it will not take much of a yield drop to get stocks a little tighter and prices more volatile.   


Technically, May soybeans have rallied almost $1.00 and November 65 cent off the low on January 12.  May futures took out the high from last summer at $10.50.  The next price target would be $10.80.  The 8 EMA is at $10.44 to trigger an old crop sale on a retracement.  For November futures, it closed above last summer’s high this week at $10.30.  The next resistance levels are at $10.45, 50% retracement, $10.71, 62% retracement.  Support is at the 8 EMA at $10.28.  I think we could have a pullback in prices at any time, so making some new crop and old crop sales at these levels is not a bad idea.




Wheat prices will continue to be hampered by large stocks in the U.S. and world.  Projections for this marketing year is less acres but ending stocks still in the 900 million to 1 billion bushel range.   However, concerns with the winter wheat crop conditions have helped spark prices higher. 


Technically, July 2018 wheat futures closed above the 200 day moving average at $4.93.  The next resistance levels are at $5.25, 50% retracement, $5.45, 62% retracement.  Support is at the 8 EMA at $4.86 and then at $4.73.  Just as in corn and soybeans, watch the basis and scale in sales if we reach any of these price targets or break a major moving average. 





Cotton has also rallied on exports and speculative buying.  Projections are for acres to be up 600,000 – 700,000 for 2018.  Ending stocks are projected to remain unchanged at this time at 6.0 million bales. 


It is important for a cotton producer to remain in close contact with his cotton buyer to get the most current price quotes.


Technically, May futures has support at 77 cents and resistance at 84 cents.  December futures has resistance at 78 cents and the next level is at 85 cents.  The price support levels are at the 8 EMA at 76.5 cents and 75.0 cents.  I would use the price targets to make some sales or a break below a major moving average. 





U.S. rice ending stocks for 2018-19 are projected to increase 10 million cwt to 39.7.  Acres are projected to increase 400,000. 


For cash rice quotes, contact your rice buyer to get the most current price quotes and cash price outlook.  


Technically, May futures has support at $12.10 and resistance at $12.80.   I do not see any major price rallies unless U.S. acres come in less than projected or better exports or production problems in the world.