2-16 End of Day: Soybeans Stage a Small Recovery on Short Covering Ahead of the Long Weekend
The CME and Total Farm Marketing offices will be closed Monday, February 19, in observance of Presidents Day
All prices as of 2:00 pm Central Time
| Corn | ||
| MAR ’24 | 416.5 | -1.25 |
| JUL ’24 | 440.25 | 0.5 |
| DEC ’24 | 458.75 | 2 |
| Soybeans | ||
| MAR ’24 | 1172.25 | 10 |
| JUL ’24 | 1184.75 | 9.5 |
| NOV ’24 | 1148.5 | 7.75 |
| Chicago Wheat | ||
| MAR ’24 | 560.5 | -6.5 |
| JUL ’24 | 561.75 | -8.25 |
| JUL ’25 | 603.75 | -7.5 |
| K.C. Wheat | ||
| MAR ’24 | 567.25 | -8.5 |
| JUL ’24 | 555.25 | -8.25 |
| JUL ’25 | 598.75 | -11.5 |
| Mpls Wheat | ||
| MAR ’24 | 654.75 | -3.25 |
| JUL ’24 | 659.5 | -3.25 |
| SEP ’24 | 667 | -3.5 |
| S&P 500 | ||
| MAR ’24 | 5046.75 | 0.25 |
| Crude Oil | ||
| APR ’24 | 78.38 | 0.79 |
| Gold | ||
| APR ’24 | 2024.1 | 9.2 |
Grain Market Highlights
- Carryover weakness from the wheat complex weighed on the corn market, which also likely saw balanced support from neighboring soybeans and short covering ahead of the long three-day weekend, as prices settled mixed and near unchanged with the deferred contracts gaining on the nearby.
- March soybeans ended the day at the top end of the day’s range and just a penny and a half off its high as traders likely covered short positions ahead of the long Presidents Day weekend, and in anticipation of new potential Chinese business next week as the country returns from its weeklong New Year’s holiday.
- Soybean meal found support from potential short covering as prices reversed higher from being oversold and closed above yesterday’s high. Soybean oil on the other hand traded lower as sellers sent the market lower for the third day in a row. Yesterday’s huge 1.507 billion lbs NOPA soybean oil stocks estimate likely added fuel to today’s selling.
- All three wheat classes closed in negative territory for the day and the week, with both March KC and Minneapolis printing fresh contract lows. Despite this week’s losses, US wheat exports remain at a $25 – $30 per tonne disadvantage to Russian and Ukrainian offers.
- To see the updated US 7-day total precipitation forecast, 8 – 14 day US temperature and precipitation outlooks, and Brazil’s 2-week precipitation forecast, courtesy of the National Weather Service and the Climate Prediction Center, and NOAA, scroll down to the other Charts/Weather section.
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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. With a general lack of bullish news and an estimated US carryout over 2.1 billion bushels, front month corn has languished in a sideways to lower trend since printing a high last October. While the lack of a bullish catalyst has been disappointing, the market is in a significantly oversold condition, and managed funds continue to hold a sizable net short position. Either or both could trigger a short covering rally at any time heading into the spring planting window. For now, Grain Market Insider continues to sit 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 or even summer.
- No new action is recommended for 2024 corn. In January, Dec ’24 broke through the bottom end of the 485 ¾ to 602 range that had been in place since February ’22. While this was a disappointing development, bear spreading has allowed Dec ’24 to maintain more of its value versus old crop as traders attempt to price in a larger 2023 carryout with more uncertainty ahead for the 2024 crop. Additionally, Dec ’24 is significantly oversold on the weekly chart, which is supportive for a technical rally to begin at any time as the spring planting window quickly approaches. Given the amount of time and uncertainty that remains for the 2024 crop, Grain Market Insider will consider recommending additional sales on a retracement toward the low to mid 500 level.
- 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 next year. 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 were mixed as prices squared up off losses for the week going into the 3-day weekend. March futures lost 1 ¼ cents on the session, setting a new contract low and close. For the week, March futures traded 12 ½ cents lower, closing lower for the third consecutive week.
- The USDA Outlook Forum projections detailed the possibility of growing corn supplies into the next marketing year. The forecasted new crop carryout of 2.532 billion bushels put the Stocks–to-use ratio at 17.22%, which would be the highest ratio since 2006, which represents a burdensome potential corn supply.
- Weakness in the wheat market spilled over and limited rally potential in the corn market. Wheat futures broke to new contract lows as US wheat is still expensive on the global scale.
- The March futures contract is closing in on First Notice Day, February 29. In this window, producers with basis contracts and commercials with a large net long position in the corn market will need to roll to the next month or price bushels against the basis. This can add additional selling pressure to the already weak corn market.
- Managed and hedge funds are still pushing their possible record short position in the corn market as the market looks for bullish news. Funds were short 297,000+ net contracts last week on the Commitment of Traders report, and that position has likely grown given the market weakness.
Above: The continued slide in front month corn is knocking on the door of 415 support and is showing signs of being extremely oversold. If support can hold and a bullish story enters the market, the oversold status can bring additional support to rally prices back toward the 450 – 460 resistance area. If not, prices may continue to slide toward 400 psychological support or possibly 390.
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. In early January, front month soybeans broke through the bottom side of the 1290 – 1400 range that had been in place since mid-October. As South American weather forecasts improved, the potential for a reduction in the record large global carryout also lessened, bringing prices down toward the 1180 support level. For now, 1180 support appears to be holding, and though the weak price action has been disappointing, time remains in the South American growing season, and the old crop marketing year, for unforeseen changes to push prices back higher. Given the potential of a downside breakout back in December, Grain Market Insider recommended adding to sales as prices remained historically good, and Grain Market Insider will continue to look at additional sales opportunities heading into spring.
- No new action is recommended for the 2024 crop. After the Nov ’24 contract broke through the bottom side of the 1233 – 1320 range, prices continued to retreat as South American weather conditions improved. Even though Nov ’24 runs similar downside risks as the front month contracts, which could press new crop prices toward 1150 or possibly the May ’23 low near 1115, plenty of time remains to market this crop. Considering the amount of uncertainty that lies ahead with the 2024 soybean crop, Grain Market Insider recommended back in December buying Nov ’24 1280 and 1360 calls to give you confidence to make sales against anticipated production, and to protect any sales in an extended rally. Additionally, the possibility remains that prices could retest the 2022 highs, at which point Grain Market Insider may consider recommending additional sales.
- 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 next year, 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 closed higher to end the week as non-commercials likely took profits on their short positions. There was very little friendly news this week to support prices with bearish Outlook Forum numbers from the USDA and poor export sales. Soybean meal closed higher but soybean oil was lower.
- For the week, March soybeans lost 11 ¼ cents to end at 1172 ¼, March soybean meal lost $1.20 to end at $345.60, and March soybean oil lost 1.67 cents to end at 45.59 cents. Non-commercials were likely large sellers across the soy complex again this week with a near-record large short position.
- In Brazil, a spokesperson for the Ag Ministry has said that they expect total production for the 23/24 soybean crop to come in at 145 mmt or lower but estimates out of Brazil remain in stark contrast with the USDA’s last estimate of 156 mmt. Either way, total South American production should be above last year.
- Some positive news came from strong NOPA crush numbers yesterday but were still below the previous month, with the harsh January weather likely being a contributing factor. 185.8 mb of soybeans were crushed, which was below expectations but still a record number for January.
Above: With the failure of 1180 support, it appears that front month soybeans could continue to drift lower towards 1140 – 1145 without fresh bullish input to turn the market around. The market continues to show signs of being oversold which can add support if a reversal happens. Overhead, nearby resistance may come in between 1200 and 1205, with additional resistance around 1220 – 1225.
Wheat
Market Notes: Wheat
- The wheat complex ended the day in the red with all three classes posting heavy losses for the week; -35 ¼ cents in Chicago; -34 ¼ cents in KC; and -29 ¼ cents for Minneapolis. While March Chicago continues to hold above last November’s low of 556 ¼, both KC and Minneapolis wheat printed fresh contract lows in the March contracts.
- The recent drop in US wheat prices has done little to help the US competitiveness in the world export markets. The US still finds itself between $25 and $30 per tonne more expensive than Russian and Ukrainian offers, which continue to dominate the world wheat market.
- IKAR raised its forecast for Russia’s 2024 grain production to 146 mmt which includes 93 mmt of wheat. The updated forecast is just above the USDA estimate of 91 mmt and it lines up with SovEcon’s latest forecast of 93.6 mmt. IKAR also raised its export estimate to 52 mmt, 1 mmt above the USDA.
- The European firm Strategie Grains released its latest estimate of EU wheat production, and it came in at 122.6 mmt, near unchanged from last month. The firm noted high wheat ending stocks for the 23/24 season due to competition from Russia, and imports from Ukraine.
- Later this afternoon, the CFTC will release its Commitment of Traders report showing net positions for large speculative and commercial institutions as of Tuesday, February 13. Given the steep declines that occurred late this week, it is unlikely that this update will show substantial increases in net short positions. But, based on recent activity, it is estimated that Managed Funds hold a net short position totaling 80,000 contracts in Chicago wheat.
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. The wheat market has continued to be dominated by lower world export prices that have stymied US export sales and depressed US prices. In early December, Grain Market Insider recommended taking advantage and making a sale on a short covering rally which was sparked by several Chinese purchases of US wheat. Since then, China has been silent in the US wheat export market, and prices remain somewhat elevated. Any remaining 2023 soft red winter wheat should be getting priced into market strength with the goal of having zero bushels unpriced by the end of January. Grain Market Insider won’t have any “New Alerts” for 2023 Chicago wheat – either Cash, Calls, or Puts, as we have moved focus onto 2024 and 2025 Crop Year Opportunities.
- No new action is recommended for 2024 Chicago wheat. Since early December, the July ’24 contract has traded mostly sideways to slightly lower after its brief short covering runup on Chinese buying. Although China has since been absent from the US wheat export market, prices appear to have found support above 585, and managed funds continue to hold a sizeable, short position that could trigger another short covering rally if a bullish impetus enters the market. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. Although, 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. Since early September, the July ’25 contract has been mostly rangebound with 632 at the low end and 685 at the top. Grain Market Insider’s strategy for the 2025 crop year up to this point has been to sit tight. Though if prices rally toward the upper end of this range, we will consider taking advantage of the rally’s historically good prices to make sales recommendations.
To date, Grain Market Insider has issued the following Chicago wheat recommendations:
Above: The downside breakout from the 584 – 618 congestion pattern suggests that prices may attempt to test the next support level around 555. If the 555 can hold and prices turn back higher, upside resistance will again be found between 584 and 618. If not, the next major level of support remains near the September low of 540.
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
New Alert
Exit All JUL ’24 KC 660 Puts ~ 112c
2025
No New Action
KC Wheat Action Plan Summary
- No new action is recommended for 2023 KC wheat crop. Since last fall, front month KC wheat has been mostly rangebound between 678 up top and the 590 area down below. The latter has held as support for the past three months. Although fundamentals remain weak, considering support lies just below the market and managed funds continue to carry a sizable short position, these factors could trigger a return to higher prices if any unforeseen risks enter the market. Grain Market Insider’s strategy is to look for price appreciation as weather becomes a more prominent market mover and may consider suggesting additional sales if prices make a modest 20% retracement of the 2022 highs back toward 730.
- Grain Market Insider recommends selling the remainder of your July ‘24 660 KC Wheat puts at approximately 113 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 that time, the market continued to move lower, and the remaining put options have done their job of protecting the value of unsold 2024 bushels and have increased in value by approximately 275%.
- 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 may be late spring or summer before Grain Market Insider starts considering the first sales targets.
To date, Grain Market Insider has issued the following KC recommendations:
Above: The 575 support level in front month Chicago failed to hold and prices may continue to recede toward the next major support level around 530. That said, the market is showing signs of being extremely oversold, and if a bullish impetus arises, prices could turn back higher on short covering. If prices do turn around, overhead resistance may be found between 590 and 600.
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
New Alert
Exit All JUL ’24 KC 660 Puts ~ 112c
2025
No New Action
Mpls Wheat Action Plan Summary
- No new action is currently recommended for 2023 Minneapolis wheat. Since last summer, front month Minneapolis wheat has slowly stair-stepped lower with weaker world prices and little bullish news to move markets higher. During this time, the 50-day moving average has acted as resistance, above which the market has not been able to hold for very long. Managed funds have also established and maintained a record (or near record) short position for much of the same time. Although bullish headwinds remain, the market has become very oversold, and the large fund net short position continues to leave the market susceptible to a short-covering rally at any time here. Grain Market Insider’s strategy is to look for a modest retracement of the July high and consider additional sales around 725 – 750.
- Grain Market Insider recommends selling the remainder of your July ‘24 660 KC Wheat puts at approximately 113 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 that time, the market continued to move lower, and the remaining put options have done their job of protecting the value of unsold 2024 bushels and have increased in value by approximately 275%.
- 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 in the spring of next year. It may be late spring or summer before Grain Market Insider starts considering the first sales targets.
To date, Grain Market Insider has issued the following Minneapolis wheat recommendations:
Above: Front month Minneapolis wheat continues to drift lower, and with the failure of 669 support, the market is at risk of drifting further toward the next major support level around 595 unless a bullish catalyst enters the scene. Although, prices are trending lower. The market is showing signs of being oversold, which can be supportive if prices reverse from fresh bullish input. If that happens, the first level of resistance may come in around 680 – 690.
Other Charts / Weather
