10-31-23 End of Day: Lack of bullish news weighs on corn & wheat; flash sale & rebounding meal support beans
All prices as of 2:00 pm Central Time
| Corn | ||
| DEC ’23 | 478.75 | 0.5 |
| MAR ’24 | 493 | 0.25 |
| DEC ’24 | 513 | 1.75 |
| Soybeans | ||
| NOV ’23 | 1287 | 4.25 |
| JAN ’24 | 1310.5 | 3.25 |
| NOV ’24 | 1266.75 | 1.75 |
| Chicago Wheat | ||
| DEC ’23 | 556.25 | -9.75 |
| MAR ’24 | 585.25 | -9 |
| JUL ’24 | 619.25 | -8.25 |
| K.C. Wheat | ||
| DEC ’23 | 629.25 | -15.75 |
| MAR ’24 | 641.25 | -15.25 |
| JUL ’24 | 656 | -14.75 |
| Mpls Wheat | ||
| DEC ’23 | 709.25 | -8.5 |
| MAR ’24 | 728.5 | -8.25 |
| SEP ’24 | 762.5 | -5 |
| S&P 500 | ||
| DEC ’23 | 4208.75 | 23 |
| Crude Oil | ||
| DEC ’23 | 81.15 | -1.16 |
| Gold | ||
| DEC ’23 | 1992.8 | -12.8 |
Grain Market Highlights
- A swift harvest pace and a lack of bullish news kept the corn futures caught between a firmer soybean market and weak wheat complex, to show only minor gains for its 5th day of consolidation.
- Bolstered by a 239k mt flash sale to Mexico, soybeans ended the day with relatively minor gains following a volatile trade that saw a 24-cent range and lower prices in the overnight.
- Though Argentina may be seeing some improvement, their available supplies remain low and continue to support soybean meal and soybeans. Bean oil, on the other hand, added resistance to soybeans as it retreated nearly 2% on weaker palm and crude oil.
- Solid crop ratings, poor exports, and a lack of fresh bullish news pressed the wheat complex lower again today as Russia continues to export wheat at discount prices.
- To see the updated US 3-4 week Temperature and Precipitation Outlooks, the South American 1-week precipitation forecast, and the GRACE-Based Root Zone Soil Moisture Drought Indicator courtesy of the NWS, CPC, NASA and the National Drought Mitigation Center scroll down to other Charts/Weather Section.
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Corn
Action Plan: Corn
Calls
2023
No Action
2024
No Action
2025
No Action
Cash
2023
No Action
2024
No Action
2025
No Action
Puts
2023
No Action
2024
No Action
2025
No Action
Corn Action Plan Summary
- No new action is recommended for 2023 corn. On October 19, December corn closed above 500 for the first time since the end of July. While the market was unable to follow through to the upside, the overall trend remains positive with successively higher lows, from mid-August. If the market can maintain a close above 500 and the 100-day moving average, it may aim to test resistance near 547. Otherwise, if the market closes below the 50-day moving average near 485, it may run the risk of continuing to trend sideways to lower, with a worst-case scenario being a sideways to lower trend into late November, or even early January. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. So, for now, the thought process is to hold tight on any further sales recommendations until later this fall or early winter, with the objective of seeking out better pricing opportunities. If the market has not turned around by early winter, then Grain Market Insider may sit tight on the next sales recommendations until spring. If you end up harvesting more bushels than you can store this fall and must move them, consider protecting those sold bushels with either July or September ’24 call options.
- No new action is recommended for 2024 corn. The Dec ’24 contract has held up better than Dec ’23 as bear spreading over the last several months has brought increased buying interest into Dec ’24 and other further out contract months. Back in late July, the Dec ’23 contract traded up to a 25-cent premium over Dec ’24. Now, Dec ’24 holds about a 30 cent premium over Dec ’23. This bear spreading has held the Dec ’24 price up about 28 cents from its year-to-date low. The risk for 2024 prices is the same as for 2023 prices, which is a continuation of a lower trend without further bullish input. Grain Market Insider is watching for signs of a change in the current trend to look at recommending buying Dec ’24 call options. This past spring, Grain Market Insider recommended buying 560 and 610 Dec ’23 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
- Another sideways day of trade in the corn market as December futures gained ½ cent on the session. The Dec contract had a 5 ½ cent trading range on the day, trading within this narrow range for the 5th consecutive day as the market lacks fresh news.
- Corn harvest has moved to 71% complete as stated in the USDA Crop Progress report. This was slightly higher than market expectations and 5% above the 5-year average of 66%.
- South American weather is forecasted to stay dry and hot for areas of Brazil, and areas of Argentina are seeing signs of last year’s drought persist. While South American weather is still in its early stages, weather will grow more in importance in the weeks ahead. If soybean planting stays delayed, that could push planting of the key 2nd corn crop past the ideal weather window.
- The lack of fresh news and ongoing harvest pressure will likely keep the path of least resistance lower in the corn market unless some more friendly news were to develop in the near term
- Last week, managed money funds were reported as net short 100,430 corn contracts, reducing their short positions by 8,440 contracts. Global and US corn supplies are still heavy, and funds will still need a reason to exit those remaining short positions, which is lacking at this time.
Above: The corn market has largely been rangebound since the beginning of August, with only minor short covering moving the market higher until recently. With the market trading up to 509 ½ and failing, the next major resistance level now sits at that recent high, with further resistance near the July 31 high of 516 ¼. If the market retreats, the next major support level remains near 460.
Soybeans
Action Plan: Soybeans
Calls
2023
No Action
2024
No Action
2025
No Action
Cash
2023
No Action
2024
No Action
2025
No Action
Puts
2023
No Action
2024
No Action
2025
No Action
Soybeans Action Plan Summary
- No new action is recommended for 2023 soybeans. At the end of August, the soybean market turned lower and didn’t find any significant buying interest until it traded down to 1251 in early October. Since then, the nearby contract rallied through resistance near 1287 on its way to the recent high of 1334 and testing the 50-day moving average. Looking back, since last May, nearby soybeans have been in a range from 1435 up top to 1251 down below. Last summer, Grain Market Insider did make two sales recommendations in the 1310 – 1360 price window versus Nov ’23. Given that those sales recommendations were made and given that now is not the time of year to be making many sales, if any, Grain Market Insider is content to hold tight on any further sales recommendations until later this fall or early winter. The focus for strategy right now is to be on the lookout for any call option buying opportunities. If you end up harvesting more bushels than you can store this fall, consider protecting any sold bushels with July or Aug ’24 call options.
- No action is recommended for the 2024 crop. Nov ’24 has traded at a discount to the 2023 crop for nearly its entire contract life and that discount extended out to 142 versus the Jan ’24 contract in late July, with it recently trading between 17 ¾ and 66 cents. Since July, the Nov ’24 contract has mostly traded between 1250 and 1320 and is currently testing the bottom end of that range. To date, Grain Market Insider has not recommended any sales for next year’s soybean crop. First sales targets will probably be early winter at the soonest. Currently, Grain Market Insider’s focus is also on watching for any opportunities to recommend buying call options.
- 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 slightly higher after a volatile day in which they opened lower overnight, gained as much as 15 cents in the November contract near midday, then faded into the close. Support came from higher soybean meal while soybean oil was lower along with lower crude and palm oil.
- Yesterday evening’s Crop Progress report showed that the soybean harvest is ahead of the normal pace at 85% complete. The 5-year average is 78%, and Illinois and Iowa are both far ahead of the average pace at 89% and 93% complete respectively.
- Today, private exporters reported sales of 239,492 metric tons of soybeans for delivery to Mexico during the 23/24 marketing year. This comes after multiple sales to China last week and impressive export inspections on Monday.
- In South America, planting is pressing on as chances for rain in central Brazil and Argentina improve slightly, but southern Brazil remains too wet. Argentina’s soybean production will very likely be much higher than last year’s drought ridden crop which will eventually impact the large US exports of soybean meal.
Above: In the middle of October, the market traded up to 1334 and pierced the upper end of resistance, and the 50-day moving average, before retreating lower. If the market can maintain a close above resistance at 1334, it would be poised to make a run to test 1370. Otherwise, initial support to the downside may be found near 1300 and again near 1273. Key support for the move remains down near 1250.
Wheat
Market Notes: Wheat
- The wheat market continues to see a lack of new bullish headlines, and that is keeping it under pressure. All three US futures classes, alongside Paris futures, closed with losses on the day. There have been no major updates regarding the war in the Middle East or the Black Sea, but Russia does continue to offer cheap wheat for export, around $230 per metric ton, further undercutting US offers.
- Yesterday afternoon the USDA said 84% of the winter wheat crop is planted, down just 1% from average. And with emergence at 64% (in line with the average), the crop was rated 47% good to excellent. While this may be just slightly lower than what the trade was looking for, it is well above last year’s initial rating of 28% GTE. This can be attributed to improved soil moisture and easing drought in the southern Plains.
- The US Dollar Index was on the rise again today and is close to testing the 107 level again. This, along with yesterday’s poor inspections data, a good crop rating, and no fresh news, all combined to offer weakness to the market. The silver lining may be Chinese demand, as they are reportedly ready to import a record amount of wheat due to damage to their crop. Recently they have been making purchases from Australia and France.
- In Brazil, unfavorable weather has impacted the quality of their wheat crop. This has caused their internal prices to recently increase. Additionally, a fire that broke out at one of the key ports in Brazil is causing grain shipping delays. The port in Paranagua is Brazil’s second largest, and this just adds to the logistics issues they have been facing recently with low river water levels.
Action Plan: Chicago Wheat
Calls
2023
No Action
2024
No Action
2025
No Action
Cash
2023
No Action
2024
No Action
2025
No Action
Puts
2023
No Action
2024
No Action
2025
No Action
Chicago Wheat Action Plan Summary
- No new action is currently recommended for 2023 Chicago wheat. Since making a mid-summer high in late July, the Dec ’23 contract has been in a downtrend, but after finding support at 540 on September 29, the market has steadily rallied, briefly piercing 600 and the 50-day moving average. With weak US export demand driven by cheap Russian exports being the dominant headwind, it appears that prices may be finding value in the 540 – 616 range established since early September. Grain Market Insider made sales recommendations in the late June rally around 720, and again earlier this fall near 604. With those two sales, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales in the 625 – 650 range. 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 Chicago wheat. The July ’24 contract has been trading at a premium to the Dec ’23 contract since late April, which has steadily increased to about 55 cents, September 29, it traded as far out as 71 ¾ cents. Fund positioning and weak fundamentals have driven Dec ’23 closer to the mid to upper 500 range, and July ’24 to the low to mid 600’s. The market risk for July ’24 remains the same as for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for this possibility, and 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 June’s highs, Grain Market Insider is prepared to recommend adding to current sales levels. 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 some 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 a year 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 Chicago wheat recommendations:
Above: On October 20, the December contract posted a bearish reversal after making a new recent high of 604 ½. The market has retreated and solidified resistance above the market that now stands between 604 ½ and 618. Without bullish input, the market is likely to trend sideways to lower with the next major support level between 547 and 540.
Action Plan: KC Wheat
Calls
2023
No Action
2024
No Action
2025
No Action
Cash
2023
No Action
2024
No Action
2025
No Action
Puts
2023
No Action
2024
No Action
2025
No Action
KC Wheat Action Plan Summary
- No new action is recommended for 2023 KC wheat crop. With prices falling below the October 12 low of 655 ¼, the Dec ’23 contract continues to search for support as it resumes the downtrend that has been in place since late July. Currently, weak US export demand, driven by cheap Russian exports, remains the dominant headwind, and the market is in need of bullish input to stabilize and rally prices back higher. If a bullish catalyst enters the market to push prices above 700, it may signal that a fall low is in place and would line up with the historical tendency for prices to appreciate into winter and early spring. Grain Market Insider’s strategy is to look for price appreciation going into this winter, as weather becomes a more prominent market mover with an eye on considering additional sales near 750 – 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 KC wheat. The July ’24 contract is currently trading near a 25-cent premium to July ’23, which is up significantly from last July’s 60-cent discount. Weak fundamentals have driven spread activity to push July ’23 toward its contract lows, while July ’24 has been able to maintain more of its value. The risk for the July ’24 contract is much like that for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July 660 puts to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 800 to take advantage of elevated prices before they eroded further. If the market receives the needed impetus to move prices back toward 750 – 800, Grain Market Insider is prepared to recommend adding to current sales levels. 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 some of the original cost and move toward a net neutral cost for the remaining position.
- 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 a year from now. 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: Since the end of September, KC wheat has been consolidating and recently broke through the bottom of the range at 655. The market is now poised to test minor support near 630, with the next level of major support remaining near 575. Resistance above the market remains around 690 – 700.
Action Plan: Mpls Wheat
Calls
2023
No Action
2024
No Action
2025
No Action
Cash
2023
No Action
2024
No Action
2025
No Action
Puts
2023
No Action
2024
No Action
2025
No Action
Mpls Wheat Action Plan Summary
- No new action is currently recommended for the 2023 New Crop. After making highs in July, and the subsequent downtrend to the October 2 low of 707 ½, the Dec ‘23 contract has traded mostly sideways with no significant reversal higher. With weak US export demand still the primary impediment to higher prices, the market remains at risk of trending lower if 707 ½ is violated to the downside unless another bullish impetus enters the scene. If that happens and prices begin to push back toward 775, it may signal that a near-term low is in place. 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 going into this winter with an eye on considering additional sales around 750 – 800, and again north of 825. 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. Even though the primary strategy is to look for higher prices, Grain Market Insider may also consider a “plan b” in the next couple of weeks if prices grind sideways to lower.
- No new action is currently recommended for 2024 Minneapolis wheat. In the last three months, the Sep ’24 contract has gone from a 60 – 80 discount to Dec ’23, to a 50-cent premium. Weak fundamentals led bear spreading to drive Dec ’23 in search of new contract lows, while Sep ’24 remains off its low from last May. The risk for the Sep ’24 contract is much like that of Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July KC 660 puts (for their greater liquidity, and correlation to Minneapolis pricing) to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 815 to take advantage of elevated prices. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further. Grain Market Insider will then be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.
- 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: Since the beginning of October, the market has been consolidating, with the upper end of the range acting as resistance. Initial support below the market lies near the October 2 low, between 711 and 707, with major support remaining near 665. If prices turn higher, initial resistance remains between 745 – 760.
Other Charts / Weather
