2-21 End of Day: Corn and Beans Set New Lows for the Move
All prices as of 2:00 pm Central Time
| Corn | ||
| MAR ’24 | 411 | -7.75 |
| JUL ’24 | 435.75 | -7.5 |
| DEC ’24 | 457.25 | -5.75 |
| Soybeans | ||
| MAR ’24 | 1160.75 | -18.25 |
| JUL ’24 | 1174 | -18 |
| NOV ’24 | 1145.75 | -12 |
| Chicago Wheat | ||
| MAR ’24 | 583.25 | 0.5 |
| JUL ’24 | 578 | -2 |
| JUL ’25 | 613 | -3.75 |
| K.C. Wheat | ||
| MAR ’24 | 577.25 | -8.5 |
| JUL ’24 | 568 | -4.75 |
| JUL ’25 | 610.25 | -3 |
| Mpls Wheat | ||
| MAR ’24 | 659.25 | -6.25 |
| JUL ’24 | 664.75 | -3.75 |
| SEP ’24 | 671.75 | -3.5 |
| S&P 500 | ||
| MAR ’24 | 4969 | -22.5 |
| Crude Oil | ||
| APR ’24 | 77.86 | 0.82 |
| Gold | ||
| APR ’24 | 2037 | -2.8 |
Grain Market Highlights
- Carryover pressure from soybeans weighed on the corn market along with improved South American weather and reports that Brazil’s safrinha corn crop is getting planted well ahead of last year’s pace. Both March and May corn gave up yesterday’s advances to print new contract lows and low closes.
- Despite reports of another South American crop watcher lowering Brazil’s soybean crop, the fact that Brazil’s soybean harvest is over 30% complete and entering the export pipeline at prices considerably lower than US offers, continues to weigh on the soybean market. Today, all three legs of the soybean complex posted losses, with both soybeans and meal giving up yesterday’s gains and March beans printing a new low for the move.
- While the lack of follow through from yesterday’s strong close in the wheat complex was disappointing, Chicago wheat clawed back most of the losses to close near the upper end of the range with the March contract posting a small gain. Upward resistance came from lower Matif wheat futures and reports that Russia’s FOB export prices dropped $5 per mt to $218.
- To see the updated US 6 – 10 day US temperature and precipitation outlooks, and the Grace-Based drought indicator for South America, courtesy of the National Weather Service and the Climate Prediction Center, NASA Grace and the NDMC, 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 broke to new lows during the session as selling pressure from the soybean market spilled over into the corn market. March corn lost 7 ¾ cents and May corn dropped 8 ¼ cents during the session.
- The March futures contract reaches First Notice Day, February 29. Until then, producers with basis contracts will need to roll to the next month or price bushels against the basis. The combination of pricing basis contracts and a large commercial net long position can pressure the corn market in this time window.
- With a strong harvest pace for Brazil soybean, the second crop corn planting is running well ahead of schedule. As of last week, an estimated 45.3% of the crop was planted versus 33.3% last year. The key producing state of Mato Grasso was 67.1% completed with the second crop corn.
- South American weather is currently non-threatening overall. The improved forecast should help maintain the forecasted strong Argentina corn crop and promote a good start to the second crop Brazil corn.
- The weekly corn export sales report will be pushed back until Friday morning due to the President’s Day holiday. US corn is very competitive on the global market at this point, and current export sales are trending 30% higher than last than last year’s levels.
Above: Front month corn rejected the reversal on Feb. 20 and turned back lower. The general lack of bullish news continues to drag on prices which could continue to drift lower toward 415 support in the May contract unless some bullish input enters the marketplace. If that happens and prices turn back higher, overhead resistance remains between 450 – 460.
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. Old crop soybeans continue to be in a downtrend that began with the early January breakout of the 1290 – 1400 range that had been in place since last fall. While South American weather has improved, questions remain regarding the crop size, and US planting season is now not that far off with its own potential concerns that could turn 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 ended the day sharply lower, wiping out all of yesterday’s gains and then some with pressure from improved South American weather and South American cash offers that are well below those from the US. Both soybean meal and oil closed lower as well while crude oil moved higher.
- US soybeans are currently 4% per metric ton more expensive than Brazil with the basis difference US +$1.58 over Brazil for the month of March. While yesterday’s export inspections were stronger than anticipated, the possibility of Chinese cancellations in favor of Brazilian soybeans remains.
- Brazil’s soybean crop is now estimated to be over 30% harvested, and estimates for total production are still being lowered. Agroconsult sees production at 152.2 mmt which is a reduction of 1.6 mmt, and another crop scout is estimating production at 145 mmt, far below the USDA’s last estimate of 156 mmt.
- While US soybean export sales are currently behind those of last year, Brazil’s exports remain strong. However, Brazilian export sales are expected to fall slightly for the month of February from last year. Exports are expected to reach 7.3 mmt for February, which compares to 7.55 mmt in the same month a year ago.
Above: Front month soybeans’ attempt to test overhead resistance failed after printing a high just above 1490. That failure suggests that overhead resistance now rests between 1490 and 1205 and that prices could drift further toward 1140 – 1145 support without fresh bullish input. The market continues to be oversold, which can provide additional support if a bullish catalyst does spur prices back higher.
Wheat
Market Notes: Wheat
- After trading in negative territory the majority of the day, March Chicago wheat managed to come back just above water by the close, with a gain of a half cent. Even though the rest of the Chicago contracts posted small losses, they still closed well off session lows – a potentially encouraging sign. What is discouraging is the fact that yesterday’s strength did not follow through today. But pressure from the rest of the grain complex as well as a lower close for Matif wheat offered no support during this session.
- On a bearish note, according to their Agriculture Minister, Russia may export 70 mmt of grain in 2024. This is an increase from the previous 66 mmt estimate. The planted area in 2024 is also expected to increase by 300,000 hectares to 84.5 million ha. This does not bode well for the export market, in which Russia is already dominant.
- According to the World Organization for Animal Health, a bird flu outbreak on farm in Peru led to the death of 4,000 birds via the virus; the remaining 27,000 animals were culled. While this may not have a direct impact on wheat at this time, the concern is that if the virus is spread on a large scale, it could affect feed demand.
- After a near term peak on the US Dollar Index last Wednesday, the trend since then has been downward. If it continues to fall, it will make US exports more competitive, benefiting the market. However, according to IKAR, Russia’s hard wheat FOB values fell this week by five dollars to $218 per mt. With what seems like a steady drop in their export values, it will be a difficult obstacle to overcome.
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: So far downside support near 555 continues to hold. Funds continue to hold a significant net short position in Chicago wheat, and that combined with the fact that the market continues to show signs of being oversold, could press prices higher into the 584 – 618 resistance level. For now, if prices can continue to proceed higher the next major resistance level may come in around 635 – 650. If they turn back lower, initial support remains near 555, with the next major support level down around 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
Active
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 sees a continued opportunity to sell 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: Front month KC wheat appears very oversold, and the reversal higher indicates support around 555. If prices continue to appreciate, they may run into overhead resistance between 590 and 600. If prices retreat back through 555, the next major support level remains below the market around 530.
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
Active
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 in the neighborhood of 700 – 725.
- Grain Market Insider sees a continued opportunity to sell 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: The bullish key reversal on Feb. 20 indicates that there is support below the market around 650. This reversal and the fact that the market is oversold could trigger short covering and lead prices toward 680 – 690 resistance. If the reversal doesn’t hold and prices retreat further, the next major support level remains near 595.
Other Charts / Weather
