Commodity Futures Trading

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Natural Gas Rest Day as Rising Trend Retained
By: Bruce Powers | January 23, 2025

• Natural gas maintains its rising trend but faces resistance near $4.09 and $4.33, signaling potential challenges for bullish continuation amid consolidation.

Natural gas rose slightly above Wednesday’s high of 4.01 on Thursday, reaching 4.05 before sellers took back control and prices dropped. Although a continuation of yesterday’s rally was triggered today there was little upside follow through and the day is likely to end with a decline and a close below yesterday’s high.

However, natural gas remains in a rising trend channel that showed renewed strength yesterday on a successful retest of support around the 20-Day MA. That advance completed a 50% retracement at 4.02. The day ended with a bullish reversal day and a strong close at 4.00, essentially at the high. Those short-term signs of improving demand have a good chance of continuing, at least for a few days.



Rising into Consolidation

Trading remains within a rough two-week trading range reflecting some degree of consolidation near trend highs. Therefore, volatility may stay muted and choppy for the time being. Today could be a rest day following the bounce yesterday from the 20-Day MA (3.80) support zone that includes the day’s low at 3.71, now a higher swing low. That low is now part of the price structure of higher swing highs and higher swing lows pertaining to the rising trend.

Above 4.05 Shows Strength

A rally above today’s high of 4.05 will signal strength and the possibility of testing higher resistance levels. The 61.8% retracement of the most recent downswing is at 4.09, while a monthly high from December is at 4.20. There is confirmation of the monthly high at the 78.6% retracement, also at 4.20. Resistance could be seen around either of those price areas.

Higher up is a significant price level, a lower swing high and double top at 4.33. That swing high was a little shy of the recent trend high at 4.37. An advance above 4.33 would be needed before there was a clear bullish continuation signal for the trend. Until then the expectation is for resistance to be seen and further fluctuations within a range.

Key Support at 3.71

Nonetheless, a sign of weakening would first be indicated on a drop below this week’s low at 3.71. There is subsequently an identified potential support zone down to 3.64. Consequently, the 3.64 should provide a more significant price level as a drop below it looks like it leads to a lower potential support zone from 3.52 to 3.51. The lower price level is the 61.8% Fibonacci retracement.

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Chop in Overbought CBOT Markets. The Corn & Ethanol Report
By: Daniel Flynn | January 23, 2025

We kickoff the day with Initial Jobless Claims, Continuing Jobless Claims, and Jobless Claims 4-Week Average at 7:30 A.M., EIA Natural Gas Storage at 9:30 A.M., EIA Energy Stocks at 10:00 A.m., 4-Week & 8-Week Bill Auction at 10:30 A.M., 15-Year & 30-Year Mortgage Rate at 11:00 A.M., 10-Year TIPS Auction at 12:00 P.M., Dairy Products Sales at 2:00 P.M., and Fed Balance Sheet at 3:30 P.M.

The Conference Board’s Leading Economic Index turned lower in December following a fractional uptick in November. The index was 101.6, just above the October low, which was the lowest it had been since December 2016. Compared to a year ago, the index was down 3% marling the 30th consecutive month of year-over-year declines. It’s been the longest period of year-over-year drops since 2006-2009 and the longest stretch of year-over-year declines without and official recession being declared. The December downtick resulted from poor consumer confidence related to weak manufacturing orders, an increase of initial jobless claims, and a decline in building. The Conference Board noted that half of the 10 index components contributed positively and that a 6 and 12-month growth rates were less harmful. Additionally, growth momentum is expected to remain strong, with US real GDP expected to increase by 2.3% in the first half of 2025. The outlook for the US economy stays strong into Q3 2025.

USDA News:

The USDA announced the sale of 136,000 MT’s (5.4 Mil Bu) of corn to an unknown buyer. A South Korean deed group reportedly bought 136,000 MT’s of optional origin feed corn between $251-$252/MT CIF for April/May shipment. Algeria is seeking 240,000 MT of feed corn, the deadline for the tender is today.

CBOT Corn Surrenders Tuesday’s Rally; Fundamental Resistance Emerges Above $4.90:

March CBOT corn after reaching a fresh 8-month high ended lower amid renewed hints of widespread tariffs after Feb 1st, as the market was heavily overbought at the end of Tuesday’s trade. Cash ethanol production margins are negative across the W Midwest. A seasonal slowing of weekly ethanol grind occurs in the second half of winter. And the ethanol yields from corn are rising amid the dry nature of the 2024 crop. The elevated dry matter of corn kernels produces better ethanol yield and it will require fewer bushels for feed. Spot cash ethanol prices have rallied since late autumn-but only slightly. Cash ethanol since Jan 1st is up 3%; spot CBOT corn futures are up 7%. Ag Resources (ARC) notes that Argentine and Ukrainian exporters have opted to compete with US-origin corn at $4.80+. Ukrainian corn shipments as of late January total 11.% MMT’s which leaves an estimated 11-12 MMT’s to ship through early summer. Feb-March Ukrainian exports are expected to match last year’s pace. An early end to Brazil’s wet season is needed to sustain May CBOT corn above $5.00. Catch up on hedges at current prices as managed money is estimated long 355,000 contracts of corn futures.

Central US Weather Pattern Discussion

US Forecast Wetter in E Midwest/Delta in 8-15 Day Period; Expansive Wet Pattern Projected in February:

Precipitation-mostly rain-into Jan 30th stays confined to the Gulf region, but the major forecasting model’s agree precipitation expands into the Central Midwest Feb 1-6. Quietly, all but the Delta and far E Midwest have seen precipitation of just 0-50% of normal. An expanded pattern of rainfall in Feb/March is welcomed. A warm/wet February forecast. Rain/snow will be most welcomed in NE, and the Dakota’s, where, where drought lingers, and further erosion of longer term dryness is due in MS, AL, and GA. Recall early corn seeding in the South begins in late Feb/early March. Any late-winter cold favors Canada and the US Northern Plains. Relative warmth is forecast elsewhere. Operational models already project normal/above-normal Central US temperatures throughout the 6 to15-day period. Such warmth will be welcomed following the recent Arctic cold.

South American Weather Update

Needed Rain Forecast Across Mato Grosso; Additional Regional Soil Moisture Boosts to Occur in Argentina:

The forecast is viewed as improved with scattered showers impact the drier areas of Argentina’s southwestern Corn Belt, and as finally a 7-9 day period of warmth/dryness impacts Mato Grosso & Goias. Northern Brazilian dryness allows for soybean defoliation and early harvest, and an acceleration in harvest there is projected. Additional rain is needed in Southern Santa Fe & Entr Rios in Argentina, but enough rain falls in nearby Cordoba and N Argentina to stabilize yield potential. The GFS’s projected 8-day change is positive for soil moisture. The CFSv2 model features high odds that a more normal pattern of rain is established across Argentina in February, while a pattern of below-normal pattern of rain returns to N Brazil during safrinha pollination in Feb/Mar. Winter corn seeding should be rapid with additional acres expected to be planted on strong profit margins.

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Cattle jumps to new all-time high
By: Barchart | January 22, 2025

• Cattle jumps to new all-time high.



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Coffee on track for its highest closing price in history
By: Barchart | January 22, 2025

• Coffee on track for its highest closing price in history.



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Grains Report: Wheat, Rice, Corn and Oats, Soybeans, Canola and Palm Oil
By: Jack Scoville | January 22, 2025

• WHEAT

General Comments: All three markets closed higher on reports of stronger overseas values and very cold weather witnessed in the US Chart trends turned up. Russian and Ukrainian prices were higher and helped rally world values. Reports of weather problems in Australia also supported the world market as Australia has seen some extreme weather lately. The USDA reports were not bullish to Wheat as plantings were higher than trade expectations as were world ending stocks estimates. The growing conditions in the US are very good. Reports of very beneficial rains for the Great Plains and Midwest and reports of steady to firm prices quoted in Russia and steady prices Argentina were around and helped keep the US market mostly steady in current ranges. Wheat farmers in the US planted the Winter crops under good conditions. Australia has seen too much rain recently that has downgraded Wheat quality, but Australia still has a very big crop to sell into world markets.
Overnight News:
Chart Analysis: Trends in Chicago are mixed to up. Support is at 542, 533, and 526 March, with resistance at 561, 569, and 577 March. Trends in Kansas City are up. Support is at 569, 563, and 559 March, with resistance at 577, 588, and 591 March. Trends in Minneapolis are mixed to up. Support is at 598, 587, and 581 March, and resistance is at 611, 618, and 625 March.

• RICE:

General Comments: Rice closed higher yesterday. Prices got very cheap early this Winter but have rebounded as farmers have not been selling. Export sales have not been strong, and domestic demand is there but is not strong enough right now to bid prices much higher. Milling yields have been called poor at 50 lbs instead of 55 lbs. There are some questions about the milling quality of the new crop Rice and that will help keep demand from mills for good Rice stronger than it might have been. The trends are still up the daily charts. Generally weak Asian prices are still reported. Brazil prices remain strong, but the difference is gone to world buyers as the Real is much lower against the US Dollar.
Overnight News:
Chart Analysis: Trends are up. Support is at 1443, 1434 and 1423 March and resistance is at 1500, 1516, and 1530 March.

• CORN AND OATS

General Comments: Corn closed higher and at new highs for the move yesterday on news of less than expected rains for Argentina and southern Brazil. The rains will help preserve strong yield potential although more will be needed soon. The overall market fundamentals remain bullish. USDA surprised the market by cutting yield estimates in its reports released a week ago. The yield and production estimates were below all trade guesses. US ending stocks were equal to the lowest trade estimate. The export demand in recent weeks has been very strong and it seems like some of the buying is in anticipation of the new presidential regime starting here next week. President Trump has promised new tariffs on goods and services and some buyers may be making purchases now to avoid the potential for the tariff later. The US is also the major supplier to the world of Corn right now so the sales could hold relatively strong even with trade wars possible. It is now very cold in the Midwest so it will get harder for Corn buyers to convince farmers to sell. Oats were higher.
Overnight News: Unknown destinations bought 136,000 tons of US Corn
Chart Analysis: Trends in Corn are up. Support is at 460, 457, and 453 March, and resistance is at 499, 504, and 508 March. Trends in Oats are up. Support is at 358, 350, and 343 March, and resistance is at 376, 383, and 394 March.

• SOYBEANS

General Comments: Soybeans closed as beneficial rains were not seen in southern Brazil and Argentina. More rain will be needed before the harvest to finish the crops. The fundamentals remain mixed to bearish. Bullish US production estimates released by USDA a week ago showed that ending stocks are now estimated at 350 million bushels. This is still a lot of Soybeans but much less than before. President Trump wants to stop the use of bio fuels as part of his war on the green economy hurt demand ideas for Soybean Oil. The tariffs that Trump plans to impose could be a detriment to sales of all products. Brazil looks to produce much more than a year ago and some estimates range as high as 175 million tons for the country. Brazilian farmers have planted what is expected to be a very big crop in central and northern areas of the country. Demand has been very strong so far this year, in part as many buyers try to get bought ahead of any new tariffs that the Trump administration might impose and in part as the dryness seen before the harvest made US Soybeans easier to store for use down the road. Soybeans are offered cheaper in South America now and the weekly export sales report showed less sales than seen earlier in the season.
Overnight News:
Analysis: Trends in Soybeans are mixed. Support is at 1049, 1030, and 1009 March, and resistance is at 1079, 1090, and 1095 March. Trends in Soybean Meal are mixed to up. Support is at 395.00, 299.00, and 294.00 March, and resistance is at 305.00, 310.00, and 315.00 March. Trends in Soybean Oil are mixed. Support is at 4530, 4480, and 4370 March, with resistance at 4710, 4790, and 4940 March.

• PALM OIL AND CANOLA

General Comments: Palm Oil closed lower today on reports of weaker demand. Indonesia wants to use a blend of 40% of Plam Oil in its gasoline mixtures, but this has proved to be expensive and might need to be reduced and allow for increased exports. Demand from China has not been good and demand from India has been reduced. Ideas of weaker production caused by too much rain and reports of good demand provided support. Chart trends are down. Canola was lower along with the strength in the Canadian Dollar. The market is holding above the December highs in part due to the bullish USDA reports. The harvest is over in Canada and the crops are locked away in the bin. Producers will try to wait for higher prices before selling much, especially with the cold weather in place now.
Overnight News:
Chart Analysis: Trends in Canola are mixed to down. Support is at 603.00, 592.00, and 589.00 March, with resistance at 634.00, 641.00, and 648.00 March. Trends in Palm Oil are mixed to down. Support is at 4100, 4020, and 3910 April, with resistance at 4300, 4350, and 4440 April.

Midwest Weather Forecast: Mostly dry. Temperatures should average below normal.

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Softs Report: Cotton, OJ, Coffee, Sugar, Cocoa
By: Jack Scoville | January 22, 2025

• COTTON

General Comments: Cotton was higher yesterday and price trend started to change to up. The US Dollar was weaker and Crude Oil futures have been weaker. Selling has come from news that Trump will impose some big tariffs on China, but the tariffs have not been posted as of yet. China has big problems with its domestic economy with consumer buying interest not strong and many people not working. The government has said it will take stimulus measures for the economy there next year, but its Cotton demand is expected to stay soft. There are still reports of weaker demand potential against an outlook for good US production in the coming year.
Overnight News:
Chart Trends: Trends in Cotton are mixed to up. Support is at 66.20, 65.60, and 65.00 March, with resistance of 68.70, 69.10 and 69.40 March.

• FCOJ

General Comments: FCOJ closed higher yesterday as another cold front is expected in the east early this week and could damage crops. Chart trends are mixed to up on the daily charts. The short term supply scenario remains very tight as USDA maintained its Florida production estimate at 12 million boxes and estimated US production at 60.3 million boxes from 60.6 million in its previous estimate. The lack of lower production goes against ideas of declining demand and even if demand is holding well. The market remains well supported in the longer term based on forecasts for tight supplies in Florida. The reduced production appears to be mostly at the expense of the greening disease and some extreme weather seen in the last couple of years. There are no weather concerns to speak of for Brazil or Florida right now, but cold weather for Florida this week should be monitored in case damage becomes possible.
Overnight News:
Chart Trends: Trends in FCOJ are mixed to up. Support is at 474.00, 467.00, and 461.00 March, with resistance at 499.00, 507.00, and 512.00 March.

• COFFEE

General Comments: New York was a little lower and London was higher yesterday on reports of improving rains for central Brazil and reduced offers by Vietnam producers with the Tet holiday here. The rains in Brazil are falling in the dry southern area as central areas have had good rains in recent weeks and are already in good condition. Tight Arabica availability went against tight Robusta availability as the harvest has stalled in Vietnam due to too much rain. The rains are also hurting the quality of the harvest as it is more difficult to dry and store the beans correctly. Reports of reduced offers from Brazil on weather induced short crops continue and there are also reports of too much rain in parts of Central America damaging crops there. The flow of coffee from Brazil should slow this year, an off-year in the country’s biennial crop cycle, while dry weather last year could also reduce the size of the 2025/26 harvest.
Overnight News: The ICO average price is 306.00 ct/lb.
Chart Trends: Trends in New York are mixed. Support is at 314.00, 301.00, and 290.00 March, and resistance is at 342.00, 347.00 and 353.00 March. Trends in London are mixed to down. Support is at 4770, 4630, and 4510 March, with resistance at 5350, 5400, and 5550 March.

• SUGAR

General Comments: New York and London were lower yesterday. Ideas of increasing Brazil and Asian production are keeping prices low overall. India has announced a new 1.0 million ton export program. Center-south Brazil, India, and Thailand all have improved production potential. The Brazilian Real has been very weak lately to encourage sales and help keep pressure on prices. Trends are mixed in both markets on the daily charts and on the weekly charts. Indian and Thai mills are expecting strong crops of cane. Supplies available to the market could be less in the next six months due to adverse growing conditions seen in Brazil during the production period. Total Brazil production has been affected by drought seen earlier in the year and the fires that destroyed crops in some areas.
Overnight News:
Chart Trends: Trends in New York are down. Support is at 1760, 1730, and 1700 March and resistance is at 1900, 1940, and 2000 March. Trends in London are mixed to down. Support is at 460.00, 454.00, and 448.00 March, with resistance at 495.00, 501.00, and 510.00 March.

• COCOA

General Comments: New York and London closed higher yesterday as Ivory Coast port arrivals and Ghana arrivals are expected to fade. There is talk that production will be short of demand for the fourth year in a row, but demand has been weakening. Chart trends are tuning up in both markets on the daily charts. Producers in Ghana and in Ivory Coast have been fighting against too much rain that has made it hard to harvest and deliver crops. It has been very dry in West Africa lately. Overall cocoa supply is set to remain sharply constrained for several seasons due to structural problems in Ivory Coast and Ghana.
Overnight News:
Chart Trends: Trends in New York are mixed. Support is at 10250, 9830, and 9450 March, with resistance at 11880, 12000, and 12910 March. Trends in London are mixed. Support is at 8500, 8160, and 7810 March, with resistance at 9380, 10200, and 10500 March.

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The Corn & Ethanol Report
By: Daniel Flynn | January 22, 2025

We kickoff the day with MBA 30-Year Mortgage Rate, MBA Mortgage Applications, MBA Mortgage Market Index, MBA Mortgage Refinance Index, and MBA Purchase Index at 6:00 A.M., Redbook YoY at 7:55 A.M., CB Leading Index MoM at 9:00 A.M., 17_Week Bill Auction at 10:30 A.M., 20-Year Bond Auction at 12:00 P.M., and API Energy Stocks at 3:30 P.M.\

The USDA’s ERS monthly update of US food expenditures showed that US home expenditures on food for at-home consumption rose 3% in November to an 11-month high of $95.7 billion and was 4% higher than a year ago. Food away from expenditures decline 3% from October but were 7% higher than last year at $144.4 billion. Total food expenditures of $210 billion were down less than 1% from October but were 5% higher than last year. Total expenditures were 46.4 billion less than the record set in December 2023. However, food expenditures tend to spike in December. If the recent 5% growth rate continued in December, total food expenditures will exceed $227 billion. The US food inflation rate has declined after peaking in August 2022. However, food prices continue to reach new record highs. The latest consumer price data showed that the Food Price Index in December reached a record high of 332.9, up 2.4 from a year ago. The pandemic and the accompanying expansion of the money supply considerably altered the long-term trajectory of food prices, which is not expected to slow anytime soon.

South American Weather Update

South Am Forecast Wet in Argentina; Buenos Aires Needs Rain; Drier Brazilian Pattern Aids early Harvest:

The South American forecast into Feb 1at is view as mixed but mostly improved. 4-day precipitation accumulation in Argentina range from .10-1.90”, with much of Cordoba and N Argentina crop areas favored with amounts of .40+’. Additional soaking rainfall is offered to the northern half of Argentina’s Ag Belt Jan 26-31. The Jan 15-31 EU model’s forecast is expecting net moisture loss in Buenos Aires, which is a concern, but the coverage of drought in Argentina will be getting smaller, not larger into early Feb. Rainfall of 1-2” is forecast next week in N Cordoba & Santa Fe in Argentina. A nearly ideal mix of rain & sun occurs in Brazil over the next two weeks. Most important is that the intensity of rainfall declines considerably in Mato Grosso & Goias into Jan 28th . This allows fields to dry and early soybean harvest to expand . Dryness there is welcomed following excessive precipitation since Jan 1st .

US Weather Pattern Discussion

US Snow Cover Retreats Ahead of Arctic Blat in the North; Temps Forecast to Moderate After the Next 24 Hours:

The amount of snow in New Orleans, Florida, Texas. And many other southern cities and states were unprecedented with a foot or more anow recorded in these places that have no snow removal equipment. Very dangerous & very scary. Another concern cis possible flooding with meltdown expected shortly. And the South has more recorded snow than usual bullseye’s in the North. Minimum temps on Mon & Tues were recorded as forecast, with sub-zero lows widespread and Tyes A.M. readings as low as negative 12-18 degrees in NE, SD, IA, and MN. Fortunately, temps should begin to moderate Wednesday and a pattern of normal/above normal temps is projected in the next 6-10 day period . Initial Feb temp guidance is also warmer than normal. The current North American snow cover has additional concerns of wheat winterkill damage but can’t be quantified but a sizable portion of winter wheat crops in TX, OK, KS, NE, SD, MO, and IL were exposed to overnight lows at or below zero. Ag Resources (ARC) also notes that the 60-day rainfall across the principal HRW Belt has been recorded at 10-40% of normal. The combination of frigid temps and developing Plains dryness raises the burden on Mar-May weather. A mild/wet spring is desired.

Corn Comments & Analysis

CBOT Corn Extends Politics-Driven Rally; Funds Long & Market Again Overbought:

President Trump playing possum with Mexico & Canada to further negotiate tariffs. The “Art of the Deal” could bring all sides together at the negotiating table and have a better trade agreement. CBOT futures scored newer highs, with July trading just above $5.00 as fear over blanket US tariffs ease for now. ARC also notes soybean harvesting in Mato Grosso is just 2% complete, vs. 13% a year ago., and little/no safrinha corn will be seeded in January. Additional rain is needed in La Pampa and Buenos Aires in Southern Argentina, and exportable corn supplies hinge upon South American weather for March-September delivery. The correlation between USDA’s January US stocks/use forecast and July CBOT corn. The market is reasonably priced at 44.80-$5.00, but further strength requires additional supply dislocation- or 50-100 Mil Bu of additional export demand. Brazilian weather uncertainty in March/April is noted, but the market is heavily overbought. A correction of 25-35 cents can unfold without fresh demand news. ARC’s work suggests rallies will be labored amid improving soil moisture in central and Northern Argentina. Tariffs on Mexico & Canada are set to be implemented on Feb 1st, unless they ger to the negotiating table, and cash corn basis bids continue to ease. Wheat is being priced into Plains cattle rations from July onward. Corn is overdone to the upside.

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Crude Oil Faces Pullback Risk After 26-Week Highs
By: Bruce Powers | January 21, 2025

• Crude oil reached a 26-week high last week but faces a bearish reversal after breaking $77.30, with key support and resistance levels defining its next move.

Crude oil completed a bullish measured move (purple arrows) at 80.30 last week on the way to a swing high of 80.86. In addition, a 78.6% Fibonacci retracement completed at 80.65. The week’s advance had previously shown strength by busting out above a top trendline that defines the top boundary of a large symmetrical triangle formation. In addition, the week ended above that line thereby confirming strength.

Last week’s closing was the highest weekly closing price in 26 weeks, and it reflects improving demand for crude oil. However, it looks like three weeks up following a bull flag breakout starting the end of last year maybe the end of the advance before profit taking takes hold, leading to a bearish retracement. The week ended weak, below the halfway point of the week’s trading range.



Bearish Weekly Reversal Triggers

Subsequently, a bearish weekly reversal triggered today, Tuesday, as crude fell below last week’s low of 77.30. This was the first time in seven weeks that a prior weekly low was broken to the downside and reflects the possibility that crude may have topped for now and heading into a correction. Nonetheless, support for the day was seen at 76.15 and it was followed by an intraday bounce. Interesting to see support was seen at the intersection of two trendlines.

Both the longer-term rising line across the bottom of the symmetrical triangle pattern and the more recent rising trendline for the near-term uptrend. Further, the 50-Week MA (not shown) is at 76.37, also in today’s support zone. Crude oil closed above the 50-Week line for the first time since July 2024 two weeks ago. This is the first pullback to test the 50-Week line as support.

Reaches Key Initial Support

It is possible that today’s low completes a pullback before crude is ready to proceed higher. If that is the case, then a decisive breakout above today’s high of 78.32 would provide a daily bullish reversal signal. The first barrier then confronted would be last week’s high of 80.76. If that high can be exceeded and crude stays above it, a breakout above the trendline and triangle formation will be confirmed.

Drop Below 76.15, Short-term Bearish

Otherwise, the expectation is for a deeper pullback first. A decline below today’s low of 76.15 would trigger a bearish continuation of the retracement. Price areas to watch for support on the way down include the 38.2% Fibonacci retracement and 200-Day MA at 75.54 and 75.42, respectively. A little lower is the 20-Day MA at 74.75 and the 50% retracement at 73.93.

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Funds Stay Active. The Corn & Ethanol Report
By: Daniel Flynn | January 21, 2025

We kickoff the day with Export Inspections at 10:00 A.M., 3-Month & 6-Month Bill Auction at 10:30 A.M., 32-Day Bill Auction and 52-Week Bill Auction at 12:00 P.M.

The Commitment of Traders report showed another week of large fund buying in the principal ag markets, much of which was driven by the market’s response to the January USDA reports. For the week ending Jan 14,funds were large buyers in corn, soybeans and soybean oil markets and also added their net long positions in lean hogs, live cattle and feeder cattle. Funds were light sellers of soybean meal and Chicago and Kansas City wheat markets. Across the 10 principal ag markets funds were net buyers of 139,401 contracts, lifting the net long position to 391,000contracts, the most since July 2023 and 2nd largest since Feb 2023.

South American Weather Forecast Near Term Consistent/Favorable; February Uncertain:

The major forecasting are in broad agreement that helpful /widespread rainfall impacts Argentina’s corn ag belt this weekend, while needed dryness/sunshine develops across soaked area of norther Brazil next week. The GFS model’s implied 8-day change in soil moisture with rainfall .75-2.00”in central Argentina stabilizing moisture & yield potential.

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Agricultural commodities not only lack indications of inflation, but they also fail to exhibit any signs of reflation.
By: Dean Christians | January 21, 2025

• Agricultural commodities not only lack indications of inflation, but they also fail to exhibit any signs of reflation.



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Natural Gas Tests 20-Day MA Support Amid Mixed Signals
By: Bruce Powers | January 20, 2025

• Rising trendline supports natural gas uptrend, but signs of a short-term top suggest bearish risks toward 3.39 and beyond if key levels fail.

Natural gas opened lower at the start of the week as it tested support around the 20-Day MA. Support for the day was seen at 3.76, at the time of this writing, while the high for the day was 3.86. The 20-Day MA is at 3.78. Although the area around the 20-Day line has been successfully tested as support more than a few times in the past month or more, natural gas fell below it on multiple occasions during that time before ending the day back above the 20-Day line. Be aware that the Martin Luther King Jr. holiday is being celebrated in the United States today and some futures trading hours are shortened.



Uptrend Remains Intact

The uptrend in natural gas remains intact with a rising trendline providing guidance for dynamic support below the 20-Day line. It is currently near a possible support zone from 3.67 to 3.64 or so. Notice how the trendline rises through that price zone is looking directly below today’s price action on the chart. A decisive drop below 3.64 could lead to still lower prices.

That would trigger a breakdown below the trendline and a daily close below the line would be needed to confirm the bearish implications. If this occurs, then there are two lower price levels that identify potential support. The first is the completion of a 61.8% Fibonacci retracement at 3.51.

50-Day MA Marks Lower Support

Nonetheless, it looks like there is a potentially more significant price level around the prior swing high of 3.39 as two indicators point to that price area. Notice that the 50-Day MA has just recaptured the 3.39 price level to arrive at 3.40. If the price area around the 50-Day line fails to provide support that leads to a bullish reversal, lower levels may be tested. Certainly, a full retracement back to the breakout area of a large symmetrical triangle at 3.02 looks possible if the bears take back control.

Bounce Looks Possible

A decisive breakout above today’s high will signal strength after buyers took back control following the low of 3.76. Regardless, a continuation of that strength might be difficult given recent signs of a short-term top. Last week a new trend high of 4.37 was met with a reversal day and a weak close. A second high was then generated last Thursday at 4.33. That sets up a potential falling ABCD pattern (not shown) with an initial target at 3.70. Notice that is very close to the 50% retracement.

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Commodities Daily Market Movers (% Price Change)
By: Marty Armstrong | January 18, 2025

• Top Movers

NY Natural Gas Futures 4.29 %
Cheese 3.85 %
White Sugar ICE Futures 2.65 %
LBMA Silver in USD 2.37 %
US - Gold/Crude Ratio 2.35 %

• Bottom Movers

NSW Baseload Electricity Continuous 7.39 %
Kuala Lumpor Palm Oil Crude Futures 4.14 %
Canola Futures 3.7 %
Orange Juice (NYCE) Futures 3.36 %
Cocoa (NYCSCE) Futures 2.95 %

*Close from the last completed Daily

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Commodities over the last year...
By: Charlie Bilello | January 16, 2025

• Commodities over the last year...

Cocoa: +144%
Coffee: +78%
Natural Gas: +41%
Silver: +37%
Gold: +34%
Aluminum: +20%
Copper: +17%
Lean Hogs: +15%
Zinc: +14%
Live Cattle: +13%
WTI Crude: +9%
Corn: +8%
Lumber: +6%
Brent Crude: +5%
CPI Inflation: +2.9%
Gasoline: +2%
Heating Oil: -2%
Nickel: -2%
Wheat: -6%
Soybeans: -15%
Cotton: -17%
Sugar: -20%

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