11-14 Chicago and KC Wheat Post Losses Despite Gains Across the Grain Complex
All prices as of 2:00 pm Central Time
| Corn | ||
| DEC ’23 | 478.25 | 1 |
| MAR ’24 | 494.25 | 1.5 |
| DEC ’24 | 518 | 0.5 |
| Soybeans | ||
| JAN ’24 | 1389.75 | 7.25 |
| MAR ’24 | 1402.5 | 7.5 |
| NOV ’24 | 1311.5 | 4.5 |
| Chicago Wheat | ||
| DEC ’23 | 572 | -7 |
| MAR ’24 | 597.75 | -4.5 |
| JUL ’24 | 626.75 | -3.25 |
| K.C. Wheat | ||
| DEC ’23 | 639.75 | -1.75 |
| MAR ’24 | 649.5 | -2.5 |
| JUL ’24 | 662.75 | -2 |
| Mpls Wheat | ||
| DEC ’23 | 734.5 | 5.75 |
| MAR ’24 | 747.25 | 3.25 |
| SEP ’24 | 771.25 | 0.75 |
| S&P 500 | ||
| DEC ’23 | 4517 | 91.75 |
| Crude Oil | ||
| JAN ’24 | 78.21 | 0.02 |
| Gold | ||
| JAN ’24 | 1977.4 | 16.8 |
Grain Market Highlights
- Another 102k bu of private sale to Mexico reported by the USDA, and short covering triggered by strength in soybeans helped the corn market to extend the gains from yesterday’s rally and settle higher on the day, following choppy back and forth trade.
- After drifting lower overnight on profit taking, the soybean market regained upward momentum and support from strong soybean oil prices, rebounding meal, and the weak US dollar, to close the day just 1 ¾ cents off the high in a 23 cent range.
- Soybean meal came back from a lower open to close higher alongside soybean oil, which also followed through on yesterday’s gains with support from higher palm and crude oil. The move also pushed January Board crush margins higher, showing a 10 ¾ cent improvement.
- The sharp drop in the US dollar was no match for the sellers in the wheat market, as the complex settled the day mixed with Minneapolis the strong leg of the three, while Chicago and KC closed lower on the day, following two sided trade.
- A better than expected report on the Consumer Price Index triggered massive selling in the US dollar, which traded to fresh 2-month lows on the possibility that the Federal Reserve may refrain from further rate hikes. The lower dollar likely lent support across the commodity sector.
- To see the US 5-day precipitation forecast, the 8 – 14 day Temperature and Precipitation Outlooks, and the Brazil and Argentina average temperatures and 1-week precipitation forecasts, courtesy of NOAA, NWS, and the 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 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. Since the beginning of August, the corn market has traded sideways largely between 470 and 500. October’s brief breakout to 509 ½ and the subsequent failure to stay above the 50-day moving average indicates there is significant resistance in that price range. The failure of November’s USDA report to provide a bullish influence on the market puts the market at risk of drifting sideways to lower without a bullish catalyst. 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. Since late February ’22, Dec ’24 has been bound by 489 ¾ on the bottom and 600 on the top. After testing 491 to 547 last July, it has mostly traded between 500 and 525. During this time, Dec ’24 has held up better as bear spreading has allowed Dec ’24 to maintain more of its value versus Dec ’23 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 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 strong close in the soybean market and short covering in the corn market helped push prices higher for the second consecutive day. December corn added 1 cent to $4.78 ¼.
- Price action could be deemed disappointing after the strong start to the week on Monday. The true lack of follow-through on Tuesday is reflective of the bearish overall tone in the corn market. Resistance over the December contract is $4.80, which was tested and held during Monday’s trade.
- Corn harvest is moving into the later stages as the USDA pegged harvest at 88% complete, which was 2% below the analyst expectations, but 2 % faster than the 5-year average. The eastern Corn Belt and Wisconsin looked to be the biggest areas of delay.
- Weather forecasts stay extremely hot and dry for Brazil grain producing areas into the end of the week, but some potential rains over the weekend into next week. The accuracy of longer-range models is questionable. These forecasted rains will be key and extended models bring warm and dry conditions back through the end of November.
- Demand will stay in the focus of the market as export sales and shipments are below expectations. The USDA announced a flash sale of 101,745 mt (4 MB) of corn to Mexico for the current marketing year this morning. These sales are routine, and still are not the totals needed to ease the demand concerns for U.S. corn on the global export market.
Above: Front month corn posted a bullish key reversal after printing a new low for the move on Nov. 13. The market continues to show signs of being oversold, which is supportive to the reversal. If prices can push through overhead resistance near 484, prices could move higher to test 500 – 509 ½. If not, support below the market remains 460, with the next major area of support near 415.
Corn percent harvested (red) versus the 5-year average (green) and last year (brown).
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 has traded through nearby resistance and the 50-day moving average and may be poised to test the August high. 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. Since the inception of the Nov ’24 contract, it has traded at a discount to the 2023 crop, from as much as 142 back in July, to as little as 17 ¾ in early October during harvest. And while the spread difference between the two crops has seen a good amount of volatility, Nov ’24 has been largely rangebound between 1250 and 1320 since it rallied off its 1116 ¼ low last July. 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 started off nearly 11 cents lower, but ultimately, finished the day higher thanks to strength in both soy products, strong Chinese demand, and hot and dry South American weather.
- Yesterday, soybean meal made new contract highs and was briefly limit up. A new high was made today in December, but the biggest gains were in soybean oil after Malaysian palm oil futures surged by 2.7%. India also increased its imports of palm and sunflower oil by 24% and 54% respectively from the previous year.
- As the meeting between Biden and Chinese President Xi approaches, there has been a sharp increase in the amount of soybeans purchased by China. In the past week, 106 mb of soybeans have been sold to China and unknown destinations with another sale of 7.5 mb reported yesterday.
- Brazil is reportedly 61% complete with soybean planting, but have endured very dry and hot weather with little relief in the forecast. It is estimated that at least 20% of the crop will be replanted and could be a large factor in non-commercials establishing a net long position recently of over 70,000 contracts.
Above: January soybeans closed sharply higher following a gap higher open on Nov. 13. The development is bullish, though resistance remains overhead between 1385 and 1410, and the market may seek to fill the gap left from 1349 ¾. If the market can close above 1410, it would be poised to make a run toward 1490 – 1505. If not, initial support below the market rests between 1336 and the 50-day moving average near 1317.
Soybeans percent harvested (red) versus the 5-year average (green) and last year (brown).
Wheat
Market Notes: Wheat
- After a two sided trade, Chicago and KC wheat closed in the red, while Minneapolis held gains. This is despite the sharply lower US Dollar Index, which at the time of writing is down 1.46 at 104.17. This huge move down is a result of today’s Consumer Price Index data that was unchanged for October, with expectations for a 0.1% increase. Additionally, the year on year increase of 3.2% was 0.1% lower than what was anticipated. This data suggests that the Federal Reserve may pause another interest rate increase.
- According to the USDA, the US winter wheat crop is now 93% planted, which is in line with the average, but down just slightly from last year. Also, 81% of the crop is emerged, but conditions were lowered 3% from last week to 47% good to excellent.
- The weather conditions in southern Brazil have been far too wet and it is affecting their wheat crop in terms of quality and production. According to CONAB, Brazil’s wheat crop projection comes in at 9.63 mmt – this is a 7.9% decrease from the October estimate. It is also down from the last crop of 10.55 mmt.
- Although France raised their corn crop estimate to 12.5 mmt (from 12.1 mmt), they kept their soft wheat crop production unchanged at 35.1 mmt. Europe has been too wet overall, but this does not seem to have affected wheat all that much.
- The CFTC report was released yesterday, delayed from Friday due to the Veteran’s Day holiday. The data showed that as of November 7th, funds reduced their net short position in Chicago wheat by 9,313 contracts to 92,262. Though nearly a 10% reduction, it remains a hefty, short position that keeps the market primed for a short covering rally if there is friendly news to support it.
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. After making a high in late July, the Dec ’23 contract trended lower until finding support at 540 on September 29, from which it rallied back, briefly piercing 600 and the 50-day moving average. The market now appears to be finding value in the 540 – 616 range established since early September, as weak US export demand, driven by cheap Russian exports, remains the dominant headwind to higher prices. 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 600s. 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 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 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: After trading toward the October highs on November 8, the wheat market has been consolidating. If it can press through nearby upside resistance and close above 604 ½, it may then be able to run and test resistance near 618. If the market turns back lower, support below the market may be found between 564 and 554.
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. Since late July the Dec ’23 contract has been in a downtrend that has had periods of relative stability, but not any significant reversals higher. The market once again found nearby support as it traded to, and held, its recent low of 625 ½. 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 breaking through the bottom of the consolidation range at 655, the market has drifted lower and tested minor support which has held so far with the low at 625 ½. The next level of major support below that remains near 575. Major resistance above the market remains around 690 – 700.
Winter wheat percent planted (red) versus the 5-year average (green) and last year (brown).
Winter wheat condition percent good-excellent (red) versus the 5-year average (green) and last year (pink).
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 September’s low close of 709 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: On November 7 the December contract posted a bearish reversal, which may indicate lower prices ahead unless bullish information enters the market to turn prices higher. Currently, upside resistance now lies between 735 and 755, with initial support below the market near 703. The next major level of support is near 669, the May ’21 low.
Other Charts / Weather
US 7 day precipitation forecast courtesy of NOAA, Weather Prediction Center.
Brazil average temperature courtesy of the National Weather Service, Climate Prediction Center.
Brazil 1 week forecast total precipitation courtesy of the National Weather Service, Climate Prediction Center.
Argentina average temperature courtesy of the National Weather Service, Climate Prediction Center.
Argentina 1 week forecast total precipitation courtesy of the National Weather Service, Climate Prediction Center.