Grains & Sugar Weekly

Corn

Corn futures gained strength after the holiday weekend, rallying to a new recent high of $5.04 ½ and nearing the May 2024 peak. Traders awaited fresh headlines to drive the next move, but profit-taking emerged late in the week, pulling prices back from elevated levels. The USDA’s February crop report tightened U.S. and global supply outlooks, bolstering fund support for long positions. South American production prospects dimmed as hot, dry weather battered Argentina and Brazil, with the USDA and private analysts cutting estimates. Brazil’s delayed Safrinha planting further threatened yields, slowing production timelines.

Demand proved resilient. Strong U.S. export sales and inspections rolled in, aided by delayed tariff actions with key partners. The robust activity underscored importer interest despite the wait for new developments.

Resistance held firm at $5.00–$5.10; a barrier corn has struggled to breach in the past 20 years outside rare spikes, with added pressure near $5.25 as futures approached prior highs. Support stood at $4.85 (20-day average), where prices reverted amid quiet news and solidified near $4.70 (50% retracement from the January 21 low).

Key Levels: Resistance spans $5.00–$5.25. Support ranges from $4.85–$4.70.

Soybeans

Soybean futures rallied early in the month, driven by short-covering, but faltered as supportive momentum dried up. The lack of fresh, bullish input pushed prices lower with ease. The February USDA crop report added bearish pressure, raising U.S. stocks, though global stocks shrank with a 3 MMT cut to Argentina’s crop. Private analysts projected even steeper declines. Brazil’s production estimates held steady with minimal shifts, leaving the market uncertain until more harvest data clarified yields.

Trade factors are weighing on prices. The market is adequately supplied and U.S. sales are slowing amid tariff uncertainties—especially with China—and new supplies from the Brazilian harvest.

Prices surged through recent highs, tested the 200-day moving average, but broke back 50 cents under evident pressure. Futures settled between major moving averages, retreating to the 20-day, mirroring corn’s pattern.

Resistance is at $10.50 and will scale up to $10.75. Support rests at $10.20, where the 50- and 100-day averages converged. Firmer backing is expected between the 50% retracement and $10.00. Weather updates, South American yield reports, and trade developments—particularly tariff talks with China—warrant close attention.

Key Levels: Resistance lies at $10.50–$10.75. Support extends from $10.20–$10.00.

Wheat

Wheat futures climbed steadily after the USDA’s February report undershot stock estimates, sparking a short-covering rally that lifted prices through the week. The wheat-corn spread recovered from oversold territory, surpassing a $1.00 premium, though profit-taking late in the week shaved off some gains. Funds seized the bullish signal, pushing futures past key technical levels.

Global supply concerns underpinned the rise. Black Sea production faltered amid adverse weather, and export capacity tightened, shifting demand to the U.S., where sales stayed robust. Bearish pressures tempered the upside—inspections dropped, EU crop ratings improved, and favorable U.S. weather hinted at softer conditions ahead. Still, importers favored U.S. wheat over strained alternatives.

Resistance at $6.00 (200-day average) gave way briefly before prices pulled back, reflecting historical hesitation at that threshold. Support holds at $5.82 ½ (50% retracement from recent lows), with stronger stability near $5.75–$5.70, where the 20- and 100-day averages align.

Key Levels: Resistance spans $6.00–$6.03. Support lies at $5.75–$5.70.

Sugar

Sugar futures rocketed 378 points from the January 21 low, peaking this week as production woes mounted. India’s output forecasts plummeted, and Brazil’s cane suffered from inadequate rain, stunting development. A surging Brazilian Real squeezed export volumes, tightening global supply and igniting bullish fervor.

Futures smashed through the 100-day moving average and 61.8% Fibonacci retracement, closing strong despite late-week profit-taking signals. RSI hit overbought territory, suggesting a potential pause as traders weighed gains. No immediate supply shocks emerged, but the upward push reflected deep fundamental concerns.

Resistance builds at $0.2150, with bulls targeting $0.2200 if momentum persists. Support sits at $0.2050 (20-day average), with a firmer base at $0.2000, aligning with prior consolidation zones.

Key Levels: Resistance ranges from $0.2150–$0.2200. Support spans $0.2050–$0.2000.