01-04 End of Day: Wheat Posts Bullish Reversals Across the Board, Supporting Corn; Beans Retreat
All prices as of 2:00 pm Central Time
| Corn | ||
| MAR ’24 | 466.5 | 1.25 |
| JUL ’24 | 488.75 | 0.5 |
| DEC ’24 | 498.75 | 0.25 |
| Soybeans | ||
| MAR ’24 | 1267.5 | -9.5 |
| JUL ’24 | 1283 | -8 |
| NOV ’24 | 1220.75 | -4.5 |
| Chicago Wheat | ||
| MAR ’24 | 613.5 | 13.25 |
| JUL ’24 | 632 | 10 |
| JUL ’25 | 662 | 3.5 |
| K.C. Wheat | ||
| MAR ’24 | 625.75 | 4.25 |
| JUL ’24 | 632 | 3.5 |
| JUL ’25 | 663.75 | 2.75 |
| Mpls Wheat | ||
| MAR ’24 | 711.25 | 2.75 |
| JUL ’24 | 729 | 1.75 |
| SEP ’24 | 737.75 | 1.75 |
| S&P 500 | ||
| MAR ’24 | 4743.75 | -2.75 |
| Crude Oil | ||
| MAR ’24 | 72.32 | -0.57 |
| Gold | ||
| APR ’24 | 2071.6 | 8.9 |
Grain Market Highlights
- The surging wheat market lent positive support to corn which closed higher after uncovering buying interest two days in a row in quiet trade with little bullish news.
- Favorable weather in Brazil and weakness in both soybean meal and oil weighed on soybeans which reversed yesterday’s gains and posted a new low for the move.
- Brazil’s export offers for soybeans and meal for February forward are below US offers, which is also adding to the downward pressure on futures prices
- A firm close in Paris milling wheat and a steady US dollar helped spur short covering in the wheat market, as the March contract in all three classes rejected fresh one-month lows to close higher on the day.
- To see the updated US Drought Monitor, and Brazil’s 1-week forecast total precipitation, courtesy of NWS, NOAA, and NDMC scroll down to other Charts/Weather Section.
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Corn
Action Plan: Corn
Calls
2023
No New Action
2024
No New Action
2025
No New Action
Cash
2023
No New Action
2024
No New Action
2025
No New Action
Puts
2023
No New Action
2024
No New Action
2025
No New Action
Corn Action Plan Summary
- No new action is recommended for 2023 corn. After posting a high in October, front month corn futures have steadily drifted sideways to lower with a general lack of bullish news and an estimated carryout around 2.1 billion bushels. If the January USDA report fails to provide a bullish catalyst to the market, it remains at risk of continuing to languish in the same pattern. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.
- No new action is recommended for 2024 corn. Since late February ’22, Dec ’24 has been bound by 485 ¾ on the bottom and 602 on the top. During this time, Dec ’24 has held up better as bear spreading has allowed Dec ’24 to maintain more of its value versus old crop prices as traders attempt to price in a larger 2023 carryout with more uncertainty remaining for the 2024 crop. Moving forward, the risk for 2024 prices is the same as for 2023 prices, which is a continuation of a sideways to lower trend without a bullish catalyst. Grain Market Insider is watching for signs of a change in the current trend to look at recommending making additional sales and buying Dec ’24 call options. This past spring, Grain Market Insider recommended buying Dec ‘23 560 and 610 call options ahead of the summer rally and having those in place helped provide confidence to pull the trigger on recommending 2023 sales into that sharp rally, knowing that if corn kept rallying and went to 700 or 800 that the call options would protect those sold bushels.
- No Action is currently recommended for 2025 corn. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted two springs from now. It will probably be late winter or early spring of 2024 before Grain Market Insider starts considering the first sales targets.
To date, Grain Market Insider has issued the following corn recommendations:
Market Notes: Corn
- Buying in the wheat market helped pull corn futures higher on the session Thursday. March corn added 1 ¼ cents in an overall quiet trading session in the corn market with only a 5 ½ cent trading range for the day.
- Technically, corn futures are trying to turn higher with two consecutive high trading sessions, and trading over yesterday’s low. Large supplies keep the rally limited and bullish news remains quiet for the corn market.
- The USDA will release weekly export sales on Friday morning. Expectations are for new sales to range from 500,000 mt – 1.20 mmt for last week. The previous week saw reported new sales of 1.24 mmt for US corn.
- South American weather looks to stay favorable for crops and is a limiting factor to grain prices. Some of the driest areas of Brazil saw recent beneficial rains, and near-term forecasts keep the weather pattern more active.
- Since March futures have become the lead month, the National corn basis has risen around 10 cents and been trending slightly higher. The tight basis may be reflective of slow producer selling into the end of the year, and the cash market may need to firm in order to trigger grain movement out of producers’ hands at these price levels.
Above: To start the year, March corn broke through 470 at the bottom end of the range that was held since the middle of November and is showing signs of being oversold, which can be supportive if prices turn higher. Currently, major support rests around 460 with the next major support area near 415. Above the market, resistance remains near the 50-day moving average and again between 495-500.
Soybeans
Action Plan: Soybeans
Calls
2023
No New Action
2024
No New Action
2025
No New Action
Cash
2023
No New Action
2024
No New Action
2025
No New Action
Puts
2023
No New Action
2024
No New Action
2025
No New Action
Soybeans Action Plan Summary
- No new action is recommended for 2023 soybeans. Front month soybeans recent downside breakout of the 1290 – 1400 range indicates the risk that prices may continue to retreat toward 1180, as forecasts for improved South American weather lessen the potential for the record large global carryout to be reduced. Given the potential of a downside breakout, Grain Market Insider recently recommended adding to sales as the current price level is still historically good. It’s been disappointing how the market has been unable to push higher despite the South American production concerns. Because of that, Grain Market Insider’s concern is that, if the weather pattern doesn’t remain adverse, the path of least resistance could be lower. Grain Market Insider will continue to look at additional sales opportunities, as well as potential re-ownership strategies.
- No new action is recommended for the 2024 crop. The Nov ’24 contract recently broke through the downside of the 1233 – 1320 range that has been in place since the end of July. With this downside breakout and considering the bullish influence of adverse South American weather which appears to be improving, Nov ’24 runs the risk of retreating towards 1150 unless another bullish catalyst enters the market. If prices find support and turn back higher, Grain Market Insider recently recommended buying Nov ’24 1280 and 1360 calls to give you confidence to make sales against anticipated 2024 production and to protect any sales in an extended rally. Grain Market Insider will also continue to watch for any sales opportunities.
- No Action is currently recommended for 2025 Soybeans. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted two springs from now, and it may be some time before conditions are conducive to consider making any recommendations. Be patient as we monitor the markets for signs of improvement.
To date, Grain Market Insider has issued the following soybean recommendations:
Market Notes: Soybeans
- Soybeans ended the day lower after a slight recovery yesterday, but ultimately posted the lowest close since May of last year. Both soybean oil and meal were lower as well as rains continue to fall in Brazil and the forecast remains favorable.
- While rain has fallen in the driest areas of central and northern Brazil over this past week with more rain in the forecast, some of the soybeans planted earlier in the season were too far gone and have started being harvested early but, in some cases, torn up completely so that safrinha corn could be planted.
- Trade has been mainly focused on South American weather, but the upcoming WASDE report could cause focus to shift. The USDA’s last estimate for Brazilian soybean production was 161 mmt, but estimates from private analysts have been in the range of 151 to 158 mmt.
- China is reportedly planning to ramp up its farm technology and innovation so that farming productivity can be accelerated, and it can become more sustainable domestically. China has invested heavily in agriculture in Brazil but continues to work towards increased self-reliance regarding food security.
Above: March soybeans opened the year with breaking through 1292 support, leaving a gap on the daily chart between 1290 ¾ and 1296 ¾ that the market may try to fill. If prices turn back higher to fill the gap, resistance may come in near the 50 and 100-day moving averages, while support rests below the market around 1250.
Wheat
Market Notes: Wheat
- The wheat market put some green back on the board, led by double-digit gains in the front months of the Chicago class. Part of the strength in wheat today may be a result of the US Dollar Index finally taking a breather from its recent rally. From a big picture perspective, it is still in an uptrend but has traded lower in today’s session.
- Helping US wheat was a higher close in Paris milling wheat futures. With a reversal today off the contract low in the March contract of 218.00 Euros per mt, that contract gained 2.00 for the day to close at 221.25. Along with being very technically oversold, the reversal may indicate more upside that could offer support to US wheat as well.
- Ukraine said that they have removed mines and explosives on 208,000 hectares of land, the equivalent of about 800 square miles. This land is now available to farmers and if their yields remain consistent with this harvest, they will reportedly be able to grow about 1 mmt of grain on the returned land.
- Russia and Ukraine will experience an arctic storm that brings extreme cold to both countries. While some areas have snow cover, there are some regions without any snow, bringing the threat of winterkill to those parts of the wheat crop. It is difficult to determine the exact impact this is having on trader sentiment; it may take time to see if any real damage is done before the market has any reaction.
- Though it broke below the six-dollar level again today, the March Chicago contract did manage a close above both the 40 and 50-day moving averages which are converged near 605, and also just above the 100-day moving average of 612 ½. This makes the technical picture look a little more friendly and may trigger further buying interest.
Action Plan: Chicago Wheat
Calls
2023
No New Action
2024
No New Action
2025
No New Action
Cash
2023
No New Action
2024
No New Action
2025
No New Action
Puts
2023
No New Action
2024
No New Action
2025
No New Action
Chicago Wheat Action Plan Summary
- No new action is currently recommended for 2023 Chicago wheat. Between late July and the end of November, front month Chicago wheat trended lower, driven mostly by weak US demand and lower world wheat prices. During that time, and as managed funds established most of their short position of nearly 120,000 contracts, the market became extremely oversold. Since then, as the market rallied to a high of 649 ½, China made several US SRW wheat purchases, and funds covered more than 23,000 short contracts. During that runup, Grain Market Insider recommended making an additional sale to take advantage of the elevated prices in case the rally was temporary since US wheat prices remain elevated relative to other world exporters, despite the increase in demand. If the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.
- No new action is recommended for 2024 Chicago wheat. From the end of July, the July ’24 contract has slowly stepped its way down to a low of 586 in sympathy with the front month contract where managed money established a large short position during that time. Since then, July ’24 rallied alongside the March ’24 contract, as the funds covered over 30k contracts of their nearly 130k short contract position. While bearish headwinds remain, the funds continue to carry a large short position and seasonals remain supportive for the addition of weather risk premium, which are two factors that could fuel further short covering and another leg up in prices. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. Back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.
- No action is currently recommended for 2025 Chicago Wheat. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next fall. It will probably be mid-winter before Grain Market Insider starts considering the first sales targets.
To date, Grain Market Insider has issued the following Chicago wheat recommendations:
Above: March Chicago wheat is challenging support near 600, and the 50 and 100-day moving averages. If support holds, resistance overhead remains near 650. If not and the market breaks further, the next level of major support comes in near 556.
Action Plan: KC Wheat
Calls
2023
No New Action
2024
No New Action
2025
No New Action
Cash
2023
No New Action
2024
No New Action
2025
No New Action
Puts
2023
No New Action
2024
No New Action
2025
No New Action
KC Wheat Action Plan Summary
- No new action is recommended for 2023 KC wheat crop. After posting an 80-cent rally in late November and early December, front month KC wheat has languished and drifted lower while retracing about 50% of the upward move. Managed funds continue to carry a significant short position, and even though bullish headwinds like weak US demand and low world wheat prices remain, this could fuel a return to higher prices as winter weather risks add volatility to the market. Grain Market Insider’s strategy is to look for price appreciation this winter, as weather becomes a more prominent market mover, and may consider suggesting additional sales if prices become over-extended.
- No new action is recommended for 2024 KC wheat. At the end of August, the July ’24 contract broke out of roughly a one-year trading range and stepped down to a 609 ¼ low in late November, largely driven by managed fund selling in the front month on weak US export demand and lower world wheat prices. Since then, the funds covered part of their large short position which also rallied prices in the July ’24 contract. While bearish headwinds remain, managed funds continue to hold a sizable, short position, and price seasonals remain positive for adding weather risk premium. These are two factors that could fuel additional short covering and rally prices in the months ahead. Back in August, Grain Market Insider recommended buying Jul’24 KC wheat 660 puts to protect the downside following the range breakout. As the market recently got further extended into oversold territory and the July contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. Moving forward, Grain Market Insider is prepared to recommend exiting the last 25% on any further supportive market developments.
- No action is currently recommended for 2025 KC Wheat. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next fall. It will probably be mid-winter before Insider starts considering the first sales targets.
To date, Grain Market Insider has issued the following KC recommendations:
Above: March KC wheat rejected an attempt to move higher near 650 and turned lower to test the bottom end of the recent range around 619. If the market continues to retreat, the next area of support remains near 595 and 575. Overhead, nearby resistance comes in around 650 and again between 675 – 680.
Action Plan: Mpls Wheat
Calls
2023
No New Action
2024
No New Action
2025
No New Action
Cash
2023
No New Action
2024
No New Action
2025
No New Action
Puts
2023
No New Action
2024
No New Action
2025
No New Action
Mpls Wheat Action Plan Summary
- No new action is currently recommended for the 2023 New Crop. Following last July’s rally, the market has slowly stair-stepped lower, primarily due to low world wheat prices, weak US export demand, and managed fund selling, with the funds building a record large short position as the market sold off. Since weak US export demand remains the main impediment to higher prices, the market continues to be at risk of further downside erosion. The record large fund short position could fuel a rally back higher if a bullish catalyst enters the scene. Earlier this year, Grain Market Insider made a sales recommendation during the July rally near 820, and with that sale in place, Grain Market Insider’s strategy is to look for price appreciation this winter with an eye on considering additional sales around 725 – 775, and again north of 800. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.
- No new action is recommended for 2024 Minneapolis wheat. At the end of August, the Sept ’24 contract traded to a peak of 871 ¾ and has continued to slowly stair-step lower, largely driven by lower world wheat prices, weak US export demand, and managed fund selling, and as the selloff progressed, the funds built up a record large short position. While bearish headwinds remain, the significant oversold condition of the market and the large fund net short position are two factors that could fuel a short-covering rally in the months ahead. Price seasonals are also supportive as prices tend to build in some risk premium going into the winter months. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside following a 1-year range breakout in KC wheat. Though recently, as the KC market extended further into oversold territory and the July ‘24 KC wheat contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. While in the same time frame, Grain Market Insider also recommended making an additional sale as the Sept ’24 Minneapolis contract broke long time 743 support. For now, moving forward, Grain Market Insider is prepared to recommend exiting the last 25% of the open puts on any further supportive market developments.
- No action is currently recommended for the 2025 Minneapolis wheat crop. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted two springs from now. It will probably be mid-winter before Grain Market Insider starts considering the first sales targets.
To date, Grain Market Insider has issued the following Minneapolis wheat recommendations:
Above: After making a new contract low on November 27, the March contract found buying interest from its oversold status and record fund short. Since then, the market posted a bearish reversal on December 6, showing significant resistance in the 750 area. If prices can break through upside resistance, they could run toward 790. If prices retreat, nearby support could be found around 718, with further support near the recent low of 697 ½.
Other Charts / Weather
