1-31 End of Day: Continued Hot and Dry Argentine Weather Supports Beans and Corn
All prices as of 2:00 pm Central Time
| Corn | ||
| MAR ’24 | 448.25 | 0.5 |
| JUL ’24 | 466.5 | -0.75 |
| DEC ’24 | 480 | -0.25 |
| Soybeans | ||
| MAR ’24 | 1222.25 | 3.5 |
| JUL ’24 | 1241.75 | 5.5 |
| NOV ’24 | 1199.75 | 2.5 |
| Chicago Wheat | ||
| MAR ’24 | 595.25 | -10.25 |
| JUL ’24 | 610.25 | -10 |
| JUL ’25 | 650.5 | -6.75 |
| K.C. Wheat | ||
| MAR ’24 | 622 | -8.75 |
| JUL ’24 | 615.5 | -8 |
| JUL ’25 | 650 | -10 |
| Mpls Wheat | ||
| MAR ’24 | 692.25 | -7.5 |
| JUL ’24 | 704.5 | -6.5 |
| SEP ’24 | 713 | -6.5 |
| S&P 500 | ||
| MAR ’24 | 4906.5 | -44.5 |
| Crude Oil | ||
| MAR ’24 | 75.98 | -1.84 |
| Gold | ||
| APR ’24 | 2062.4 | 11.5 |
Grain Market Highlights
- Support from soybeans and an extended hot and dry Argentine forecast helped rally the corn market to close near the day’s highs following choppy two-sided trade.
- Strength from soybean meal carried over to pull soybeans off their midday lows to settle in the green, as the trade grapples with hot/dry Argentine weather and anticipates record crush numbers in tomorrow’s census crush report.
- Soybean oil settled near unchanged but saw continued pressure from lower world veg oils and crude oil as Chinese import demand remains a concern. Soybean meal recovered from midday weakness and extended yesterday’s rally to settle $5.30 higher on the day, as buyers re-entered the market with possible short covering.
- All three wheat classes closed lower on the day as anticipation of additional rain moving into Kansas and western Nebraska weighed on the wheat complex along with a new low close in France’s Matif March wheat futures.
- To see the updated US 7-day precipitation forecast, 8 – 14 day temperature and precipitation outlooks, and the 2-week GFS precipitation forecast for South America, courtesy of the National Weather Service, NOAA, and the Climate Prediction Center, scroll down to the 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. Front month corn has languished in a sideways to lower trend since printing a high in October, with a general lack of bullish news and an estimated US carryout over 2.1 billion bushels. The failure of the USDA’s January report to provide the bullish news necessary to turn prices higher was disappointing and the market remains at risk of remaining in the same pattern. With that being said, managed funds continue to hold a sizable net short position, which could trigger a short covering rally if a bullish catalyst enters the scene. 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. Following the January USDA Supply and Demand update, Dec ’24 broke through the bottom end of the 485 ¾ to 602 range that had been in place since February ’22. While this is a disappointing development, bear spreading has allowed Dec ’24 to maintain more of its value versus old crop, as traders attempt to price in a larger 2023 carryout with more uncertainty remaining for the 2024 crop. Grain Market Insider continues to watch for signs of a change in the current trend to look at recommending making additional sales and buying Dec ’24 call options.
- 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 next year. 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
- Trade was quiet in the corn market as prices consolidated at the top of yesterday’s range. March corn futures finished ½ cent higher in a narrow trading range of only 5 ½ cents.
- The corn market was lacking news overall and was likely a follower of other grains. Weakness in the wheat market limited gains, but a late push higher by soybeans helped pull corn futures off the lows for the day.
- Argentina weather has been a focus in recent session. Afternoon weather models pushed some moisture chances until later in the weekend, which help support the corn and soybean markets into the close.
- Weekly ethanol production rebounded but was still a disappointment. Last week, ethanol production was 991k bd, up from 818k bd last week, but was still 5% below last year’s level. Production has dropped below the pace to hit USDA market year corn usage target. Last week, only 99 million bushels of corn were used in the ethanol grind.
- The USDA will release weekly corn export sales on Thursday morning. This is a key export window for US corn against global suppliers. Expectations for new sales to range from 800,000 – 1.3 mmt. Last week corn sales were 954,796 mt.
- With Managed Money holding an extremely large short position in the corn market, the recent price strength could lead to additional short covering going into tomorrow’s session, but export demand will be a key as the market works through a perceived heavy front end corn supply.
Above: Front month corn posted a key bullish reversal on January 30. This indicates there is significant support below the market around 436, and that prices could retest the 460 resistance area. If the market were to reject the bullish reversal and turn lower, the next major level of support below 436 remains near 415.
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. In early January, front month soybeans broke through the bottom side of the 1290 – 1400 range that had been in place since mid-October. As South American weather forecasts improved, the potential for a reduction in the record large global carryout also lessened, bringing prices down toward the 1180 support level. For now, 1180 support appears to be holding, and though the weak price action has been disappointing, time remains in the South American growing season, and the old crop marketing year, for unforeseen changes to push prices back higher. Given the potential of a downside breakout back in December, Grain Market Insider recommended adding to sales as prices remained historically good, and Grain Market Insider will continue to look at additional sales opportunities heading into spring.
- No new action is recommended for the 2024 crop. After the Nov ’24 contract broke through the bottom side of the 1233 – 1320 range, prices continued to retreat as South American weather conditions improved. Even though Nov ’24 runs similar downside risks as the front month contracts, which could press new crop prices toward 1150 or possibly the May ’23 low near 1115, plenty of time remains to market this crop. Considering the amount of uncertainty that lies ahead with the 2024 soybean crop, Grain Market Insider recommended back in December buying Nov ’24 1280 and 1360 calls to give you confidence to make sales against anticipated production, and to protect any sales in an extended rally. Additionally, the possibility remains that prices could retest the 2022 highs, at which point Grain Market Insider may consider recommending additional sales.
- 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 next year, 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 higher for the second consecutive day with support from higher soybean meal. Prices were lower for the majority of the day but rebounded into the close. Soybean oil was mixed and near unchanged with the front month ending higher but deferred months slightly lower.
- There has been little fresh news for the markets to trade on, but it is the last day of the month and non-commercials may be covering a portion of their short position. Yesterday, funds were estimated to have bought back 10,000 contracts of soybeans and likely bought more back today. They still hold a large net short position.
- The Brazilian soybean crop is now above 11% harvested, but production estimates are being dialed back again with Ag Resource pegging the total at 145.50 mmt which compares to 150.7 mmt in the previous forecast. The country’s soybean exports are expected to reach 2.49 mmt in January, well over the exports at this time a year ago.
- In Singapore, demand for biodiesel has more than tripled since 2022 for marine use in the Port of Singapore. Imports of seed oils from China rose by 30% in 2023, and this points to the growing use of soybean oil and other seed oils as biofuel globally.
- On tomorrow’s USDA census crush report, trade is expecting a record December US soybean crush at 206 mb. If true, that would be up from 200 mb in November, and compares to 187 mb last year.
Above: After printing a new low for the move and closing higher in a classic bullish key reversal, soybean may be on track to retest overhead resistance around 1250. If the market rejects the key reversal, initial support should be found near 1188 with further support near the November ’21 low of 1181.
Wheat
Market Notes: Wheat
- Despite corn and soybeans coming back at the close, wheat could not do the same and posted losses in all three classes. No support came from Matif futures, in which the front month March lost three Euros per mt and had a new contract low close.
- There has been talk that since China will allow imports of Argentinian wheat for the first time, Brazil may purchase their wheat needs from the US, compared to what they normally get from Argentina.
- According to Anec, January wheat exports in Brazil are anticipated to increased 5.2% when compared to last year, at 685,171 mt. Overall Brazil is a net importer of wheat but exports the lower quality portions of grain with 90% of it going to animal feed.
- A group of flour mills in South Korea has issued a tender for 100,000 mt of wheat to be sourced from the US and Australia. Taiwan is also tendering for US wheat, and Jordan has issued an international tender for 120,000 mt. At any rate, Russia remains the dominant exporter without much sign of slowing down. Their crops are also reportedly rated 96% good to satisfactory.
- This afternoon the Fed announced that they will hold rates steady, marking the fourth time in a row that there was no change. The US Dollar Index is not showing much response as of as of writing, with it right around the neutral level, although it has been on both sides of that today. According to the committee, rates will not see any cuts until there is greater certainty that inflation is approaching two percent.
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, prices appear to have found support above 585, and 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. Although, 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 mostly rangebound with 632 at the low end and 685 at the top. Grain Market Insider’s strategy for the 2025 crop year up to this point has been to sit tight. Though if prices rally toward the upper end of this range, we will consider taking advantage of the rally’s historically good prices to make sales recommendations.
To date, Grain Market Insider has issued the following Chicago wheat recommendations:
Above: The recent rally came within earshot of the 620 – 625 resistance area and was rejected. For now, minor nearby support may be found near the 100-day moving average. If that breaks, the market runs the risk of receding further with the next downside support near 573 and again around 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. Since last fall, front month KC wheat has been mostly rangebound between 678 up top and the 590 area down below. The latter has held as support for the past three months. Although fundamentals remain weak, considering support lies just below the market and managed funds continue to carry a sizable short position, these factors could trigger a return to higher prices if any unforeseen risks enter the market. Grain Market Insider’s strategy is to look for price appreciation as weather becomes a more prominent market mover and may consider suggesting additional sales if prices make a modest 20% retracement of the 2022 highs back toward 730.
- 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: KC wheat appears to be consolidating around the 50-day moving average following its rally, and it continues to show signs of being overbought. Currently, upside resistance sits near the recent high of 641, with the next major support level remaining between 595 and 575.
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 the last six months, front month Minneapolis wheat has slowly stair-stepped lower with little bullish news to move markets higher. During this time, the 50-day moving average has acted as resistance, above which the market has not been able to hold for very long. Managed funds have also established and maintained a record (or near record) short position for much of the same time. Although bullish headwinds remain, support may be building in the 670 – 675 area, and the large fund net short position continues to leave the market susceptible to a short-covering rally at any time here. Grain Market Insider’s strategy is to look for a modest retracement of the July high and consider additional sales around 725 – 750.
- No new action is recommended for 2024 Minneapolis wheat. Much like the front month contracts, Sept ’24 has been in a downward trend since last summer. And just as Sept ’24 has been influenced to the downside by the front months, it could be similarly influenced to the upside by the front months if a bullish impetus enters the scene and triggers a short covering rally due to the fund’s large short position. 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. Grain Market Insider remains prepared to recommend exiting the last 25% of the open puts on any further supportive market developments and consider recommending additional sales if prices make a modest retracement of the 2022 highs.
- 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 next year. 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: Front month Minneapolis wheat is correcting from becoming overbought on the recent rally. If prices continue to slide, the next level of support comes in around the January low of 678 ¾. While upside resistance remains between 710 and 720.
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.