12-18 End of Day: Monday Markets Close Mixed; Beans Higher; Corn and Wheat Lower.
All prices as of 2:00 pm Central Time
| Corn | ||
| MAR ’24 | 477 | -6 |
| JUL ’24 | 499.5 | -5.25 |
| DEC ’24 | 508.5 | -3.75 |
| Soybeans | ||
| JAN ’24 | 1327 | 11.25 |
| MAR ’24 | 1340 | 8.5 |
| NOV ’24 | 1284 | 7.75 |
| Chicago Wheat | ||
| MAR ’24 | 617 | -12.25 |
| MAY ’24 | 628 | -11.5 |
| JUL ’24 | 633.75 | -10.5 |
| K.C. Wheat | ||
| MAR ’24 | 627.75 | -15 |
| MAY ’24 | 632.75 | -14.75 |
| JUL ’24 | 637.75 | -14 |
| Mpls Wheat | ||
| MAR ’24 | 721.5 | -9.25 |
| JUL ’24 | 738.5 | -7 |
| SEP ’24 | 745.75 | -5.75 |
| S&P 500 | ||
| MAR ’24 | 4798.5 | 30.5 |
| Crude Oil | ||
| FEB ’24 | 72.93 | 1.15 |
| Gold | ||
| FEB ’24 | 2041 | 5.3 |
Grain Market Highlights
- Weekly corn export inspections came in at 37 mb, near the high end of expectations but below the average needed to reach the USDA’s estimate. That and weakness from the neighboring wheat complex weighed on corn futures, which closed near the bottom of the somewhat tight 7 ¼ cent range.
- The soybean complex got an added boost from an announcement reported by Reuters that Argentina is moving toward increasing its export tax on soybean meal and oil from 31% to 33%.
- Soybean oil got additional support from higher energy markets and higher Malaysian palm oil, which carried over to Board crush margins that gained 11 ¾ in the spot January contracts and 8 ½ cents in the March.
- The wheat complex saw two-sided trade that was mostly lower, with the day’s losses led by the KC contracts. A forecast for the return of moisture to the central and southern Plains added resistance, along with weekly export inspections that came in below expectations and the level needed to reach the USDA’s goal. Although the recent sales to China should show up in the coming weeks.
- To see the updated US 6 – 10 day temperature and precipitation outlooks, as well as the Brazil and Argentina 1 week total accumulated precipitation, courtesy of the National Weather Service, 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 December’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. 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. 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 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 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
- As the trading volume began to thin going into the holiday trade, the sellers were active in the corn and wheat markets. March corn lost 6 cents and closed at its lowest point since November 30. The weak price action and close will leave the corn market vulnerable to additional selling pressure going into Tuesday.
- Weekly export sales for corn 947,000 mt (37.3 mb) for the week ending December 14. Total inspections for 23/24 are now at 399 mb, up 27% from the previous year. The USDA is estimating corn exports at 2.100 bb in 23/24, up 26% from the previous year.
- China imported 3.59 mmt (141 mb) of corn in November, a record volume for any month. That comes despite China’s report of a record corn crop this past growing season. Total January-November imports were up 12% from last year, largely due to increased arrivals from Brazil. The strong import total brings concerns that China may not need US corn.
- Ethanol margins should see some price support with a potential turn in energy prices. Both crude oil and gasoline prices saw support on concerns of trade disruptions in the Red Sea and the Suez Canal. Crude oil traded 2-3% higher during the session.
- South American weather should remain good for Argentina and Brazil’s first crop corn in the coming week, but it’s still a concern in the longer view for the corn market. The impact of the potential of the Argentina crop returning to normal production will bring competition for US corn in the export market this spring.
Above: Since the middle of November, the corn market has been rangebound between 470 on the downside and 497 on the upside. Upside resistance appears to be heavy given the bearish reversal that was posted on December 6. That heavy resistance also extends up to the October high of 509 ½, which the market will need more bullish influence to trade through. If the market retreats through nearby 470 support, major support remains near 460.
Corn Managed Money Funds net position as of Tuesday, December 12. Net position in Green versus price in Red. Managers net bought 8,963 contracts between December 6 – 12, bringing their total position to a net short 151,570 contracts.
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. Front month soybeans continue to be rangebound, largely between 1290 and 1400. At some point, the front month will eventually break out of that range, and if it breaks out to the downside, then the first risk would be 1180. If the breakout occurs to the topside, then the first opportunity would be 1510. The biggest looming catalyst behind a potential downside breakout is the projected record global carryout of soybeans, while the biggest looming catalyst for a potential upside breakout is continued adverse South American weather. Given the uncertainty of which direction the market will go, 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 planting disruptions. 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 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. 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 May. 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 earliest. 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 firmly higher as trade waits to see if the wetter Brazilian forecast materializes or remains hot and dry. Both soybean meal and oil ended the day higher as well with some support from a jump in crude oil prices.
- Additional support came from an announcement out of Argentina stating that the government will look to increase export taxes on both soybean meal and oil from 31% to 33% as they attempt to raise funds and fight the extreme inflation that is plaguing the country. The increase in taxes hits especially hard considering the large amount of soybean meal that they are expected to export in the coming marketing year.
- Crude oil prices jumped this morning after BP announced that they were pausing all Red Sea shipments of oil following attacks on vessels by Iran-backed Houthi rebels. Many freight firms have suspended transportation in the wake of the attacks, and this increase in crude prices has been supportive to soybean oil.
- Weekly US export inspections for soybeans were good totaling 51.9 mb for the week ending December 14. This was toward the upper range of analysts’ expectations but was still down 17% from the previous year. Total inspections for 23/24 are now at 778 mb.
Above: After posting a high of 1398 ½ in November, soybeans found support around 1292. Overhead, nearby resistance remains near 1350 and again around 1400. If the market breaks support at 1292, it runs the risk of testing 1250.
Soybean Managed Money Funds net position as of Tuesday, December 12. Net position in Green versus price in Red. Money Managers net sold 5,784 contracts between December 6 – 12, bringing their total position to a net long 30,849 contracts.
Wheat
Market Notes: Wheat
- All three US wheat classes posted losses, with Kansas City leading the way lower. Rains in the US Southern Plains, along with a firmer US Dollar may have been keeping a lid on the wheat market today. Additionally, the lack of follow through Chinese purchases is viewed as negative.
- Disappointing weekly wheat inspections at 10.5 mb bring the 23/24 total inspections to 328 mb. That is down 22% from last year and is running behind the pace needed to meet the USDA’s goal.
- Saudi Arabia bought 1.35 mmt of wheat over the weekend. Russia is believed to be the one to fulfill this purchase. As long as Russia continues to remain the dominant player on the export front, it will be difficult for wheat prices to rally.
- Managed funds have recently reduced their net short position in wheat, but still hold about 70,000 short contracts of Chicago wheat. This does keep the market primed for more of a rally if there is a catalyst in the form of friendly news.
- According to India’s food secretary, the nation has no current plan to import wheat from Russia. Additionally, they will hold off on adjusting any wheat import duties.
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. Between late July and the end of November, front month Chicago wheat trended lower, driven mostly by weak US demand and lower world wheat prices. During that time, and as managed funds established most of their short position of nearly 120,000 contracts, the market became extremely oversold. Since then, as the market rallied to a high of 649 ½, China made several US SRW wheat purchases, and funds covered more than 23,000 short contracts. During that runup, Grain Market Insider recommended making an additional sale to take advantage of the elevated prices in case the rally was temporary since US wheat prices remain elevated relative to other world exporters, despite the increase in demand. If 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. Since July, new crop Chicago wheat has slowly worked its way lower with no significant opportunities to make additional sales. The lower market was driven mostly by managed fund selling from lower world wheat prices and weak US demand. As the market sold off, it became significantly oversold with managed funds building a short position in excess of 100,000 contracts. While bearish headwinds remain, the large fund short position and oversold condition of the market are two factors that could fuel a sizeable, short-covering rally. Additionally, price seasonals are supportive as prices tend to build in some risk premium going into the winter months. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion, 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 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. 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: After rallying to 649 ½, Chicago wheat became overbought and turned lower after the December 8 USDA report. Since then, the market has found nearby support near 600. Nearby resistance remains overhead near 650, with additional resistance between 660 and 665. If the market breaks nearby support, it may test the 50-day moving average, and then support near 556.
Chicago Wheat Managed Money Funds net position as of Tuesday, December 12. Net position in Green versus price in Red. Money Managers net bought 26,693 contracts between December 6 – 12, bringing their total position to a net short 69,529 contracts.
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 old crop KC wheat has been in a downtrend that has largely been driven by managed fund selling on low world wheat prices and weak US export demand. As the selloff progressed, the market became oversold, and the funds established the largest short position in three years. Even though bullish headwinds remain, these two factors have fueled the recent short-covering rally, which could extend much further if a bullish catalyst enters the market. This would also line up with the historical tendency for price appreciation as the market builds risk premium going into wintertime. Grain Market Insider’s strategy is to look for price appreciation going into 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 Jul ’24 contract broke out of roughly a one-year trading range, between 740 and 860, to the downside. Since that breakout, the market has continued to slowly stair-step lower, largely driven by managed fund selling, weak US export demand, and lower world wheat prices. As the selloff progressed, the funds built up the largest net short position in three years. While bearish headwinds remain, the significant oversold condition of the market and the large fund net short position are two factors that could fuel a short-covering rally in the months ahead. Price seasonals are also supportive as prices tend to build in some risk premium going into the winter months. Back in August, Grain Market Insider recommended buying Jul’24 KC wheat 660 puts to protect the downside following the range breakout. Though 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: Following bearish reversals on December 6th and December 8th, the market has shown that there is significant overhead resistance above 680. The market is also showing signs of being oversold following the recent runup, which adds upward resistance and could add pressure if the market continues lower. Below the market, initial support comes in near 630, with further support remaining around 595 and 575.
KC Wheat Managed Money Funds net position as of Tuesday, December 12. Net position in Green versus price in Red. Money Managers net bought 8,154 contracts between December 6 – 12, bringing their total position to a net short 30,704 contracts.
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. Following last July’s rally, the market has slowly stair-stepped lower, primarily due to low world wheat prices, weak US export demand, and managed fund selling. With the funds building a record large short position as the market sold off. Since weak US export demand remains the main impediment to higher prices, the market continues to be at risk of further downside erosion. The record large fund short position could fuel a rally back higher if a bullish catalyst enters the scene, and if that happens, 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 this winter with an eye on considering additional sales around 725 – 775, and again north of 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 Minneapolis wheat. At the end of August, the Sept ’24 contract traded to a peak of 871 ¾ and has continued to slowly stair-step lower, largely driven by lower world wheat prices, weak US export demand, and managed fund selling, and as the selloff progressed, the funds built up a record large short position. While bearish headwinds remain, the significant oversold condition of the market and the large fund net short position are two factors that could fuel a short-covering rally in the months ahead. Price seasonals are also supportive as prices tend to build in some risk premium going into the winter months. 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. Though recently, as the KC market extended further into oversold territory and the July ‘24 KC wheat contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. 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, moving forward, Grain Market Insider is 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.
Minneapolis Wheat Managed Money Funds net position as of Tuesday, December 12. Net position in Green versus price in Red. Money Managers net bought 123 contracts between December 6 – 12, bringing their total position to a net short 26,768 contracts.
Other Charts / Weather
Brazil 7-day total accumulated precipitation courtesy of the National Weather Service, Climate Prediction Center.
Argentina 7-day total accumulated precipitation courtesy of the National Weather Service, Climate Prediction Center.