11-20 End of Day: Soybeans Rally Hard Supporting Corn as Wheat Breaks
All prices as of 2:00 pm Central Time
| Corn | ||
| DEC ’23 | 469.5 | 2.5 |
| MAR ’24 | 487.5 | 2.25 |
| DEC ’24 | 512.5 | 1 |
| Soybeans | ||
| JAN ’24 | 1367.25 | 27 |
| MAR ’24 | 1383.25 | 26.75 |
| NOV ’24 | 1304.75 | 21.5 |
| Chicago Wheat | ||
| DEC ’23 | 543.5 | -7.25 |
| MAR ’24 | 570.5 | -5.25 |
| JUL ’24 | 600 | -5.75 |
| K.C. Wheat | ||
| DEC ’23 | 610.5 | -7.5 |
| MAR ’24 | 620.25 | -7.25 |
| JUL ’24 | 632.75 | -6.25 |
| Mpls Wheat | ||
| DEC ’23 | 707.25 | -8.25 |
| MAR ’24 | 724 | -7.75 |
| SEP ’24 | 747.75 | -7.25 |
| S&P 500 | ||
| DEC ’23 | 4565.25 | 37.75 |
| Crude Oil | ||
| JAN ’24 | 77.8 | 1.76 |
| Gold | ||
| JAN ’24 | 1989.5 | -5.6 |
Grain Market Highlights
- Solid export inspections, a 104k mt sale to Mexico, and the prospect of Brazilian replanting brought support to the corn market that traded on both sides of unchanged before settling higher on the day.
- Soybeans saw action on the bottom side of unchanged before reversing and settling sharply higher in a classic bullish reversal. Meanwhile, soybean meal also followed suit in posting a bullish reversal, and bean oil rallied 118 points with support from higher crude oil.
- A sharp reversal in soybeans, strength in corn, and a weak US dollar were no match for slow overall US demand and cheap Russian prices, which led all three classes lower on the day.
- Argentina elected libertarian presidential candidate Javier Milei who is set to take office December 10th. His policies are generally viewed as supportive to Ag, and may be bearish long term due to added global supplies, but it’s unlikely that farmers will sell much before he takes office which could be supportive near term.
- To see the updated US 6 – 10 day Temperature and Precipitation Outlooks and the Brazil and Argentina 1-week forecast precipitation, courtesy of the National Weather Service, Climate Prediction 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. 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.
- 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
- Corn futures ended the day higher after a day of choppy trade that saw prices on either side of unchanged. A flash sale to Mexico, good export inspections, and the prospect of delayed Brazilian corn plantings were all supportive today.
- This morning, the USDA reported private export sales of 104,000 mt of corn for delivery to Mexico during the 23/24 marketing year. Export sales are currently running 33% above a year ago, with Mexico being the primary buyer.
- US weekly export inspections were released this morning and showed total corn inspections for 23/24 at 268 mb which is up 24% from the previous year. US corn is currently the cheapest feed grain available in the world right now, and this is allowing the USDA to estimate the 23/24 season’s corn exports 22% higher than last year’s.
- Brazilian soybean planting is quite behind for this time of year due to the extremely hot temperatures and dryness, and although they are slated to receive rain over the next week, some of the crop will be replanted which would delay their planting of safrinha corn. There have been reports that seed sales in Brazil are below expectations for corn.
Above: The nearby contract in corn has rolled from the December contract to the March, and while the chart looks like prices made a significant jump, it is in fact the premium in the March that is being represented on the chart. Upside resistance remains between 500 and 509 ½, while support below the market remains near 460, with the next major area of support near 415.
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 the 50-day moving average and tested 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. Seasonally, we are at the time of year when prices tend to rally into year’s end, and if the markets remain firm to higher in the next few weeks, Grain Market Insider may consider suggesting making additional old crop sales, while also continuing to be on the lookout for any call option buying opportunities to help protect current and future sales.
- 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 moved sharply higher today along with both soybean meal and oil. The election of Javier Milei as president in Argentina is having a temporarily bullish effect on prices as farmers may likely hold off on sales until Milei is sworn in on December 10. Technically, soybeans achieved a bullish key reversal today.
- With Argentina facing inflation above 140%, Milei has said he would move the country’s currency to the US dollar, as well as make sharp cuts in export taxes for agricultural goods. While this may be bearish in the long term, many farmers will presumably wait to sell cash grains until these tax cuts are in place.
- China has been a main buyer of US soybeans lately, but they have been buying from Brazil in bulk as well. October soy imports from Brazil to China were reported to be up 71% from last year to a whopping 4.8 mmt, while US soy exports to China for October were just over 228,000 mt.
- While non-commercials continue to hold net short positions in both corn and wheat, they have been growing their long soybean position. As of November 14, funds increased their net long position by 19,315 contracts to 87,913 contracts, they also hold a large net long position of 131,000 contracts in soybean meal.
Above: On November 15, January soybeans posted a bearish reversal after coming within 11 cents of the August high. Since then, prices have traded lower and filled the gap left from 1349 ¾. For now, heavy resistance remains between 1400 and 1410, with support below the market between 1336 and the 50-day moving average near 1318.
Wheat
Market Notes: Wheat
- The wheat complex started the holiday week continuing last week’s slide lower with all three classes closing lower on the day and KC printing its lowest price since July ’21.
- The USDA released its weekly export inspections report today with a total of 13 mb of wheat inspected for export. The total was not only in line with trade expectations, it also met the average weekly total needed to reach the USDA’s current export goal.
- Low export prices out of Russia are nothing new and continue to weigh on the US export pace and prices. IKAR reported that Russian export prices remained steady at $230/mt FOB last week, while SovEcon reported that last week’s Russian grain exports dropped 9% from the previous week and totaled 810k mt.
- Though there is nothing confirmed, there has been talk of another attempt at a sanctioned grain export corridor for Ukraine that could increase their exports and lower insurance costs. So far, the Ukrainian Danube River corridor is working, with the river ports handling 27.6 mmt in the first 10 months of the year.
- Wet weather in southern Brazil is not just affecting corn and soybeans. Conab lowered its estimate for Brazil’s wheat crop to 9.63 mmt, down 7.9% from October’s estimate and 8.7% less than last year’s 10.55 mmt record crop.
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, nearby Chicago wheat 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. After retesting the 800 level back in July, new crop Chicago wheat retreated steadily until hitting the late September low of 610 ¼. Since then, prices have been mostly rangebound between 620 and 650. Just as fund positioning and weak fundamentals have driven old crop prices down closer to the mid to upper 500 range and new crop prices to the low to mid 600s. The risk of further new crop price erosion remains without fresh bullish input to move prices higher. 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 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: The nearby contract in corn has rolled from the December to the March, and while the chart looks like prices made a significant jump, it is in fact the premium in the March that is being represented on the chart. Upside resistance remains between 604 ½ and 618, while 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
Active
Exit Half JUL ’24 KC 660 Puts ~ 60c
2025
No Action
KC Wheat Action Plan Summary
- No new action is recommended for 2023 KC wheat crop. Since late July the nearby KC wheat 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.
- Grain Market Insider sees a continued opportunity to sell half of your July ‘24 660 KC Wheat puts at approximately 61 cents in premium minus fees and commission. Back in August, Grain Market Insider recommended buying July ’24 660 KC wheat puts for approximately 30 cents in premium, plus commission and fees, to protect the downside for both KC wheat and Minneapolis wheat (KC puts were recommended for Minneapolis due to KC wheat’s greater liquidity and high correlation to Minneapolis wheat). At the time, US export demand was very weak, and July KC wheat had just broken through long-term support near 738. The breaking of 738 support increased the risk of the market retreating further. Since then, July ’24 KC wheat has broken through the Sep ’21 low and nearly 100 cents, with the July ’24 KC wheat 660 puts gaining nearly 200% in value. Though US export demand remains weak, plenty of time remains to market the ’24 crop, and the Drought Monitor still shows dry conditions in the HRW and HRS growing areas. Following the recent market drop, any increase in demand or threat of yield loss could rally prices. Insider recommends selling half of the previously recommended July ’24 660 KC wheat puts to lock in gains in case prices rally back, and holding the remaining puts, which will continue to protect any unsold bushels if prices erode further.
- 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: After testing resistance at the upper end of the recent range near 660, the market has retreated and broken through 625 support. Without fresh bullish input, March ’24 runs the risk of retreating further and testing 575 support.
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
Active
Exit Half JUL ’24 KC 660 Puts ~ 60c
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, nearby Minneapolis wheat 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.
- Grain Market Insider sees a continued opportunity to sell half of your July ‘24 660 KC wheat puts at approximately 61 cents in premium minus fees and commission. Back in August, Grain Market Insider recommended buying July ’24 660 KC wheat puts for approximately 30 cents in premium, plus commission and fees, to protect the downside for both KC wheat and Minneapolis wheat (KC puts were recommended for Minneapolis due to KC wheat’s greater liquidity and high correlation to Minneapolis wheat). At the time, US export demand was very weak, and July KC wheat had just broken through long-term support near 738. The breaking of 738 support increased the risk of the market retreating further. Since then, July ’24 KC wheat has broken through the Sep ’21 low and nearly 100 cents, with the July ’24 KC wheat 660 puts gaining nearly 200% in value. Though US export demand remains weak, plenty of time remains to market the ’24 crop, and the Drought Monitor still shows dry conditions in the HRW and HRS growing areas. Following the recent market drop, any increase in demand or threat of yield loss could rally prices. Grain Market Insider recommends selling half of the previously recommended July ’24 660 KC wheat puts to lock in gains in case prices rally back, and holding the remaining puts, which will continue to protect any unsold bushels if prices erode further.
- 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: The nearby contract in corn has rolled from the December to the March, and while the chart looks like prices made a significant jump, it is in fact the premium in the March that is being represented on the chart. Nearby resistance remains near 755 with heavy resistance above the market near the September high of 791. Below the market initial support lies near 721, with major support down near 669, the May ’21 low.
Other Charts / Weather
