John Simpson – January 29, 2025
A Bullish Outlook Across the Board
In my opinion, the grain markets are in a strong position for continued upside momentum. The latest Commitment of Traders (COT) report confirms that managed money has been adding to long positions across key grain futures, reinforcing the bullish sentiment in the market. Recent price action in corn, wheat, soybeans, soybean meal, and soybean oil suggests that buyers are stepping in at key support levels, pushing these markets higher.
I’ve been calling for higher grain prices in previous articles, and those outlooks continue to play out. My January 23rd report indicated that soybeans had broken through key resistance levels, and I targeted $11.00 as the next stop. Similarly, my analysis on January 17th highlighted strength in corn and soybean oil, with expectations for continued gains.
Corn: On the Path to $5.30?
- Current Price: Trading near $4.95 per bushel
- Support: $4.60
- Resistance: $5.30
Corn futures have been on an upward trajectory, supported by strong demand from ethanol producers and livestock feed operations. The latest COT report shows funds adding to long positions, suggesting continued confidence in the rally. With demand from the ethanol sector remaining steady and concerns over Argentine crop conditions, I see corn having room to push toward $5.30 in the near term. My January 8th article highlighted corn trading around $4.40, showing the significant upward movement we’ve seen in just a few weeks.
Soybeans: Uptrend Reconfirmed
- Current Price: Trading above $10.55 per bushel
- Support: $10.50-$10.60
- Resistance: $11.18
The bearish pressure from the large Brazilian crop is starting to fade as the market refocuses on U.S. demand and tightening global stocks. My past articles have highlighted the resilience of soybeans despite headwinds, and we’re now seeing that play out. In my opinion, soybeans remain positioned for a move to $11.18 as global demand continues to support the market.
Wheat: Turning the Corner with Even Higher Targets
- Current Price: Trading near $5.50 per bushel
- Support: $5.43
- Resistance: $6.33
Wheat futures have finally found some footing, breaking above key technical levels. I now believe that a close above $561.00 in wheat will confirm a bullish shift, with prices potentially moving as high as $6.33. Global supply concerns, particularly in Russia and the U.S., continue to provide a fundamental reason for strength.
Soybean Meal: Surpassing Expectations with Higher Targets
- Current Price: Trading near $308 per ton
- Support: $303
- Resistance: $320 and higher
I initially had a bearish stance on soybean meal but flipped my position once the market cleared $303. My reversal call has proven correct, as soybean meal has since climbed above $318. Given the strong demand for livestock feed and tighter soybean supply, I see further upside beyond $320.
Soybean Oil: Leading the Charge, Spread Still Unfolding
- Current Price: Trading near $45.00 per pound
- Support: $41.00
- Resistance: $50.00
Soybean oil remains one of the strongest performers in the grain complex. In my January 15th report, I discussed the potential for the July-December bean oil spread to widen, and that scenario is still unfolding. Strong biofuel demand and tightening supplies continue to push prices higher, and I maintain my $50.00 target for the near term.
Final Thoughts
The grain markets are in a strong position heading into February. The latest COT report confirms that funds are adding to long positions, with non-commercial traders increasing their net long positions in corn, soybeans, and wheat. As of January 14, 2025, non-commercial traders increased their net long positions in corn futures by approximately 14,737 contracts, bringing their total long positions to 312,483 contracts. Similarly, in the soybean market, non-commercial traders added about 9,861 contracts to their long positions, totaling 111,798 contracts. Wheat has also seen an increase in long positions, reflecting growing bullish sentiment. Technical indicators are pointing to higher prices, and fundamental factors support the ongoing rally. Corn, soybeans, wheat, soybean meal, and soybean oil all have upside potential in my opinion, and I will continue to monitor price action for further developments.
As always, this is just my opinion and should not be considered as financial advice. Market conditions can change rapidly, and it’s essential to stay informed and manage risk accordingly.
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John S. Simpson Jr. Senior Market Strategist Walsh Trading
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