12-22 End of Day: Markets Consolidate as Quiet Holiday Trade Dominates.
The CME and Total Farm Marketing offices will be closed
Monday, December 25, in observance of Christmas
All prices as of 2:00 pm Central Time
| Corn | ||
| MAR ’24 | 473 | 0.5 |
| JUL ’24 | 495.5 | 0.5 |
| DEC ’24 | 504.5 | 0.75 |
| Soybeans | ||
| JAN ’24 | 1299.75 | 2.5 |
| MAR ’24 | 1306.25 | 4.5 |
| NOV ’24 | 1258 | 5 |
| Chicago Wheat | ||
| MAR ’24 | 616.25 | 3.75 |
| MAY ’24 | 627.5 | 3.5 |
| JUL ’24 | 634.75 | 3 |
| K.C. Wheat | ||
| MAR ’24 | 623 | -3.75 |
| MAY ’24 | 627.25 | -3 |
| JUL ’24 | 631.5 | -1.5 |
| Mpls Wheat | ||
| MAR ’24 | 714.25 | 0 |
| JUL ’24 | 732.5 | -0.5 |
| SEP ’24 | 740.5 | -0.5 |
| S&P 500 | ||
| MAR ’24 | 4803.75 | 7 |
| Crude Oil | ||
| FEB ’24 | 73.77 | -0.12 |
| Gold | ||
| FEB ’24 | 2065.3 | 14 |
Grain Market Highlights
- A lack of fresh news and consolidation ahead of the extended holiday weekend drove the corn market in choppy, two-sided trade and a tight 2 ½ cent range to close the day fractionally higher.
- Expectations of beneficial rains in the parched areas of Brazil continue to keep a lid on the soybean market even as traders square positions ahead of the long weekend.
- Soybean meal and oil traded in opposite directions through the day, but with 61% of the Board crush value, meal continues to be the dominant product of the two. Today’s higher meal prices carried over and supported soybeans to a higher close and Board crush, which gained 2 ½ cents in the March contracts.
- Expectations of additional beneficial rain in the southern plains and much of the Midwest added overhead resistance to the wheat market which ended the day mixed, with KC and Minneapolis mostly lower, while Chicago settled mostly higher following two-sided trade.
- To see the updated US 7-day precipitation forecast, 8 – 14 day temperature and precipitation outlooks, and Brazil’s 2-week precipitation forecast, courtesy of the National Weather Service, and NOAA, 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 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. 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
- It was a very quiet day in the corn market as prices finished the week slightly higher. March futures had a 2 ½ cent trading range on the day and closed ½ cent higher. For the week, March corn still finished 10 cent lower and posted a contract low weekly close.
- The corn market was lacking little fresh news as trade consolidated before the Christmas holiday break.
- Going into 2024, the corn export program will be a key to prices. Total corn commitments are running at 52.8% of the total USDA export sales projections. This totals 1.109 billion bushels, which is up 1.2% ahead of the average pace for this point in the marketing year. The corn export window is looking to be more aggressive in the early part of 2024.
- The closure of two major rail crossings into Mexico, caused by the migrant crises at the southern border, limited corn shipments into Mexico and pressured the corn market. This afternoon, the American Rail Association announced that the US-Mexico rail border was reopened.
- Argentina weather has been favorable for planting this season’s corn crop. Buenos Aires Grain Exchange estimates that corn planting is nearly 59% complete and overall conditions are good/excellent. Despite weather concerns in Brazil, a return of strong Argentina corn production will limit the upside potential in the corn market.
Above: After posting bearish reversals on December 6 and 8, the market slowly eroded and traded through 470 support. Without fresh bullish input, the market runs the risk testing major support near 460. If a bullish catalyst does enter the market, overhead resistance comes in between 490 and 497, and again near 510.
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. 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 higher to close out the week but remain near the bottom of their trading range as wetter Brazilian weather pressures the soy complex. For the week, March soybeans lost 25 ¼ cents, March soybean meal lost $5.50, and March soybean oil lost 1.13 cents.
- While last week featured at least one soybean flash sale each day of the week, there was only one flash sale reported this week of 132,000 mt on Tuesday which was to unknown destinations. There is still a window for US exports, but it will close soon as Brazil begins their soybean harvest within the next few months.
- This week’s export sales report showed decent numbers for soybeans at 78 mb with 5 mb of that amount for delivery in the 24/25 marketing year. Shipments were down 17%, but China and unknown destinations were buyers of 54 mb, a large portion of total export sales.
- Estimates for Brazilian production have fallen slightly, and private analysts are forecasting a range between 150 mmt and 160 mmt. The USDA still have their estimate at 161 mmt, but that may be revised lower in the next WASDE report. Argentina’s crop has been planted in good conditions and the planting progress is now 69% complete. Some of Brazil’s losses in production could be made up by Argentina.
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.
Wheat
Market Notes: Wheat
- Wheat had a mixed close today with small gains in Chicago but losses in KC and a relatively neutral close for MPLS. The KC futures in particular had heavier selling in the front months versus the deferred. This bear spreading may be a result of the southern Plains forecast that has more rain on the way this Saturday which should offer improved conditions to the HRW crop.
- Offering support to the wheat complex is the fact that the US Dollar Index continues to fall. As of this writing it is well above the daily low but still trading below the 102 level. If it continues to retreat, it should make US grain exports more attractive to world importers, offering a boost to the market.
- This morning, no resolution to the closed railway crossings between the US and Mexico (due to the migrant crisis) had been reached. As of this afternoon, it is being reported that border patrol will re-open the crossings today, a full five days after they were initially closed. According to the Union Pacific railway, up to $200 million per day of freight, including grain, was not able to be transported during the closure.
- The damage from the recent heavy storm in Argentina that affected infrastructure and left many without power is still being assessed. However, according to the Buenos Aires Grain Exchange, the wheat crop was not materially damaged based on initial reports. They also did not make any adjustments to the wheat production estimate of 14.7 mmt, and harvest is said to be 65% complete versus 55% last week.
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. 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. From the end of July, the July ’24 contract has slowly stepped its way down to a low of 586 in sympathy with the front month contract where managed money established a large short position during that time. Since then, July ’24 rallied alongside the March ’24 contract, as the funds covered over 30k contracts of their nearly 130k short contract position. While bearish headwinds remain, the funds continue to carry a large short position and seasonals remain supportive for the addition of weather risk premium, which are two factors that could fuel further short covering and another leg up in prices. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. 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.
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 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 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: Since posting bearish reversals on December 6 and 8, the market has been consolidating while holding support around 625, with close in resistance just overhead at the 50-day moving average. If the market breaks lower, the next area of support may come in around 595 and 575. Resistance above the 50-day moving average remains around 675 – 680.
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. 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.
Other Charts / Weather
US 7-day precipitation forecast courtesy of NOAA, Weather Prediction Center.
Brazil 2-week forecast total precipitation courtesy of the National Weather Service, Climate Prediction Center.