01-11 End of Day: Grains Settle Mixed as They Consolidate Ahead of Friday’s USDA Report.
The CME and Total Farm Marketing offices will be closed Monday, January 15, 2024, in observance of Martin Luther King Jr. Day
All prices as of 2:00 pm Central Time
| Corn | ||
| MAR ’24 | 457.75 | -1.75 |
| JUL ’24 | 479 | -2.25 |
| DEC ’24 | 489.75 | -2.25 |
| Soybeans | ||
| MAR ’24 | 1236.5 | 0 |
| JUL ’24 | 1256 | 0.75 |
| NOV ’24 | 1207 | 1.5 |
| Chicago Wheat | ||
| MAR ’24 | 603.75 | -7 |
| JUL ’24 | 624.75 | -7 |
| JUL ’25 | 659.25 | -6.75 |
| K.C. Wheat | ||
| MAR ’24 | 616 | -8.5 |
| JUL ’24 | 625.5 | -7.75 |
| JUL ’25 | 653.75 | -7.5 |
| Mpls Wheat | ||
| MAR ’24 | 700 | -7.75 |
| JUL ’24 | 718.5 | -7.75 |
| SEP ’24 | 727.5 | -8 |
| S&P 500 | ||
| MAR ’24 | 4812 | -8.25 |
| Crude Oil | ||
| MAR ’24 | 72.33 | 0.89 |
| Gold | ||
| APR ’24 | 2050.2 | 2.4 |
Grain Market Highlights
- Choppy trade dominated the corn which finished the day slightly lower. Export sales that came in on the low end of expectations lent resistance to prices despite a 175,000 mt sale to Mexico.
- Soybeans ended the day firmer following choppy two-sided trade, as the market garnered some support from short covering activity ahead of tomorrow’s USDA update.
- Soybean oil also lent strength to soybeans today as it continued to follow through on Monday’s bullish reversal and rallies in the energy sector. Soybean meal, on the other hand, declined again with pressure coming from slowing US demand amid the anticipated recovery of Argentine production.
- A bearish reversal in Paris milling wheat and US export sales that came in below expectations weighed on the wheat complex that saw a mild selloff in all three classes. Though weekly sales were below expectations, year-over-year sales remain 2% higher than last year.
- Consumer price data was released today and was 0.2% higher than expected on an annualized basis. This triggered some buying in the US dollar which showed only modest gains at the time of writing on thoughts the Federal Reserve may be less dovish with interest rates in 2024. Overall, lower prices for the US dollar are anticipated, which could lend support to commodities.
- To see the updated US Drought Monitor, and 2-week precipitation forecasts for Brazil and Argentina, courtesy of the NDMC, NWS, and CPC, scroll down to other Charts/Weather Section.
Note – For the best viewing experience, some Grain Market Insider content is best viewed with your phone held horizontally.
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
- Corn prices stay choppy going into Friday’s USDA report. March corn slipped 1 ¾ cents on the session and had a narrow 5 ¾ cent trading range as prices hover around the 460 level.
- This morning the USDA released weekly export sales for last week. US exporters reported new sales of 487,600 mt (19.2 mb) for the current marketing year. This total was at the low end of expectations by analysts and disappointing in a difficult demand market. Total corn sales commitments now total 1.192 billion bushels and are up 38% from a year ago.
- The USDA announced a flash sale of 175,000 mt (6.9 mb) of corn to Mexico for the current marketing year. This was the first announcement of an export sale of grain since December 19. The corn market is looking for additional export business, as the window for US corn exports should be more open before the South American harvest begins.
- The Rosario Grain Exchange raised its forecast for the 23/24 Argentina corn crop by 3 mmt. The exchange expects Argentina to produce 59 mmt of corn this season, which would be record production for the South American country.
- On Friday, the USDA will release the January WASDE, Crop Production and Grain Stocks reports. Expectations are for corn carryout projections to be reduced slightly as the USDA adjusts harvested acres and yield. Demand and first quarter usage will be closely watched, as improved feed demand at the end of the year could tighten overall supplies. Beside US totals, the markets will keep a close eye on any adjustments to Brazil and Argentina crop production.
Above: Since the end of December, the March corn contract has slid lower with only minor reversals. After breaking through 460, the market runs the risk of retreating toward the 415 support level without some bullish input. The market currently shows signs of being oversold, which can be supportive if a bullish catalyst arises to turn prices back higher. If one does enter the market, nearby upside resistance could be found around 470 and again near 481, with heavy resistance 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 that there is 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 began the trading session significantly higher overnight with the March contract as much as 10 cents higher, but both soybean and meal prices faded into the close with soybeans unchanged and meal lower. Soybean oil had support from higher palm and crude oil.
- Overnight, weather models were adjusted to show dryness in central and northern Brazil over the next 7-days, but the recent rains have been steady and have likely helped the crop out quite a bit. Brazil has some areas of very low yielding soybeans, but this may be partially priced in at this point.
- Tomorrow, the USDA will release the WASDE report, and traders will be watching the South American numbers closely. Brazil’s estimated soybean production will likely be reduced, but there is a chance that Argentina’s will be increased. US ending stocks for both corn and soybeans are expected to decline slightly when looking at the average trade guesses.
- Today’s export sales report was disappointing for soybeans with 10.3 mb sold for 23/24 which brings this year’s total sales 17% below last year at this time. Last week’s export shipments of 31.7 mb were above the 24.9 mb needed each week to meet the USDA’s estimates. Primary estimates were to China, Mexico, and Japan.
Above: Soybeans have steadily retreated after leaving a 6-cent gap between 1290 ¾ and 1296 ¾. The market is showing signs of being extremely oversold, which can be supportive if bullish information enters the market to turn prices around. If prices do turn back higher, resistance rests around the price gap and again near the 50-day moving average. Otherwise, the next major support level comes in near the November ’21 low of 1181.
Wheat
Market Notes: Wheat
- All three US wheat classes posted modest losses of about seven to eight cents for each class across the board. Some weakness may have stemmed from expectations for a relatively neutral report tomorrow in terms of the supply and demand numbers. Also, Paris milling wheat futures posted a reversal from yesterday, in which they took out yesterday’s high but also closed below yesterday’s low. This looks technically weak and offers no support for the US market.
- The USDA reported an increase of only 4.7 mb of wheat export sales for 23/24 and was below the lower end of expectations. However, shipments last week totaled 21.5 mb, which is above the pace of 16.8 mb needed per week to meet the USDA’s 725 mb export goal.
- The average trade guess for winter wheat acreage in tomorrow’s USDA update comes in at 35.9 million acres versus 36.7 in 2023. Some private guesses call for a reduction of up to 2 ma, though the range of estimates is relatively wide with 34.5 ma on the low end to 39.4 ma on the high end.
- The average pre-report estimate of US wheat quarterly stocks as of December 1 is pegged at 1.383 bb, versus 1.780 bb in September, and compares with 1.312 bb in December of 2022. In addition, US wheat ending stocks are expected to come in near unchanged at 658 mb, versus 659 mb in December.
- Turkey, Romania, and Bulgaria have reportedly joined forces to sweep the Black Sea for mines and defuse them. Additionally, other NATO members including the US and UK are being excluded from the operation; this is said to be in an effort to minimize tensions in that region. De-mining these areas will improve shipping safety for Ukrainian vessels carrying grain and other goods. In December, Ukraine shipped 4.8 mmt of grain via their own corridor; this is more than any single month during the export deal with Russia.
- Russia continues to offer the world’s cheapest wheat, with export values falling between $245 to $247 per mt FOB. Russia recently supplied most of the wheat for Egypt’s tender in which they purchased 6-7 cargoes of wheat.
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. The wheat market has continued to be dominated by lower world export prices that have stymied US export sales and depressed US prices. In early December, Grain Market Insider recommended taking advantage and making a sale on a short covering rally which was sparked by several Chinese purchases of US wheat. Since then, China has been silent in the US wheat export market, and prices remain somewhat elevated. Any remaining 2023 soft red winter wheat should be getting priced into market strength with the goal of having zero bushels unpriced by the end of January. Grain Market Insider won’t have any “New Alerts” for 2023 Chicago wheat – either Cash, Calls, or Puts, as we have moved focus onto 2024 and 2025 Crop Year Opportunities.
- No new action is recommended for 2024 Chicago wheat. Since early December, the July ’24 contract has traded mostly sideways to slightly lower after its brief short covering runup on Chinese buying. Although China has since been absent from the US wheat export market, managed funds continue to hold a sizeable, short position that could trigger another short covering rally if a bullish impetus enters the market. 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. Since early September, the July ’25 contract has been rangebound, largely between 650 on the bottom and 675 on the top. Grain Market Insider’s strategy for the 2025 crop year up to this point has been to sit tight. Though if prices break out of the topside of this range toward the 690 – 705 area, we will consider taking advantage of the rally and making sales recommendations.
To date, Grain Market Insider has issued the following Chicago wheat recommendations:
Above: March Chicago wheat continues to challenge support around the 50 and 100-day moving averages. If more bullish influence enters the market, prices could push higher to test overhead resistance near 650. If not, and prices begin to retreat, 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. For much of the second half of last year, driven mostly by fund selling and slow US export demand, front month Minneapolis wheat slowly stair-stepped lower until hitting the November low. During this time, managed funds also established a record net short position. Since then, with the market mostly sideways, the November low of 697 ½ has held, and prices have pierced the 50-day moving average just once. Although bearish headwinds remain, the large fund net short position could fuel a short-covering rally if a bullish catalyst enters the scene to move prices to close above the 50-day moving average. Back in June, 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.
- No new action is recommended for 2024 Minneapolis wheat. After trading to a peak of 871 ¾ last August, the Sept ’24 gradually retreated to a low in November in concert with the front month as managed funds built a record large net short position mostly on weak US export demand. And while Sept ’24 has failed to close above the 50-day moving average since late August, the 726 ¼ November low remains intact. Although bearish headwinds remain, the large fund net short position could fuel a short-covering rally if prices move higher and close above the 50-day moving average. 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, and in November recommended exiting 75% of the originally recommended position as July ’24 KC wheat showed signs of support around 630. 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, Grain Market Insider remains 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
Brazil 2-week forecast total precipitation courtesy of the National Weather Service, Climate Prediction Center.
Argentina 2-week forecast total precipitation courtesy of the National Weather Service, Climate Prediction Center.