2-22 End of Day: Corn and Beans Continue Lower Thursday
All prices as of 2:00 pm Central Time
| Corn | ||
| MAR ’24 | 406 | -5 |
| JUL ’24 | 430.75 | -5 |
| DEC ’24 | 453.25 | -4 |
| Soybeans | ||
| MAR ’24 | 1147.75 | -13 |
| JUL ’24 | 1160.75 | -13.25 |
| NOV ’24 | 1135 | -10.75 |
| Chicago Wheat | ||
| MAR ’24 | 583.25 | 0 |
| JUL ’24 | 580 | 2 |
| JUL ’25 | 616 | 3 |
| K.C. Wheat | ||
| MAR ’24 | 574 | -3.25 |
| JUL ’24 | 566 | -2 |
| JUL ’25 | 610 | -0.25 |
| Mpls Wheat | ||
| MAR ’24 | 651.25 | -8 |
| JUL ’24 | 659.75 | -5 |
| SEP ’24 | 667 | -4.75 |
| S&P 500 | ||
| MAR ’24 | 5101.25 | 105 |
| Crude Oil | ||
| APR ’24 | 78.55 | 0.64 |
| Gold | ||
| APR ’24 | 2032.9 | -1.4 |
Grain Market Highlights
- Spot corn futures fell to a new contract low for the ninth time in the past 12 trading days today as competition from cheap Ukrainian corn has likely drawn potential buyers away from US corn.
- Soybean futures closed lower again today as pressure from ongoing Brazilian harvest, as well as an improved short-term forecast for Argentina and Southern Brazil plagued the entire soybean complex.
- Wheat futures were unable to build on strong upside momentum at the beginning of the daily trading session today as Chicago futures closed just slightly higher while KC and Spring wheat futures closed lower. Spillover weakness from corn and soybean futures added outside pressure.
- To see the updated US Drought Monitor as well as the US Monthly Drought Outlook courtesy of NOAA, UNL and the NCEI 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 for the second consecutive session and have traded lower 5 out of the past 6 sessions. March corn lost 5 cents, and May was 5 ¾ cents lower on the day. Going into Friday, the March corn futures is trading 10 ½ cents lower on the week.
- Friday’s session could have an increased amount of volatility as March grain options expire. Markets can typically move to areas with a large open interest for specific options and increase volatility during the trading day.
- 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.
- The Rosario Grain Exchange in Argentina lowered its estimated corn crop for this growing season to 57 MMT down 2MMT from 59 MMT last month. The exchange stated that production losses due to heat wave in January and early February impacted production forecasts.
- The weekly corn export sales report will be pushed back until Friday morning due to the President’s Day holiday. Expectations for new corn sales are to range from 700,000 – 1.5 MMT for last week as U.S. corn is still competitive in the global export market at this point.
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. Since the beginning of the year, Nov ’24 has continued to recede alongside the 2023 old crop contracts as South American weather stabilized and the market deals with bourgeoning domestic supplies and slow demand. While this decline in prices is disappointing, planting season is not far off, and plenty of time remains to market this crop, with many unknowns that can rally prices yet ahead. 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. Based on our research, the possibility remains that prices could retest the 2022 highs in the upper 1300s going into spring/summer, at which point Grain Market Insider would 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 sharply lower for the second consecutive day for a combined loss of 31 cents in the March contract. Pressure has come from the ongoing Brazilian harvest, improved weather in South America, and cheaper Brazilian soybean offers compared to the US.
- Both soybean meal and oil closed lower today as well with both March soybean meal and soybean oil making new contract lows. Crush margins have narrowed significantly from January but remain profitable for now.
- In Brazil, soybean basis fell today and soybeans FOB in Paranagua have reportedly fallen to 80 cents below March futures in the US. This comes amid harvest in which Brazil is over 30% completed. Estimates for total production are still within a very wide range with the lower estimates at 145 mmt and the USDA’s highest estimate at 156 mmt.
- A large factor in yesterday’s lower prices in the grain complex came from the release of the Federal Reserve meeting minutes which showed that the Fed is more concerned about cutting rates too fast rather than keeping them high. This could cause the dollar to rally, which is bearish for commodities.
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 a strong start to the session, wheat closed with only small gains in Chicago, and losses in Kansas City and Minneapolis futures. Early strength may have been fund short covering, however spillover weakness in the corn and soybean markets may take some of the blame for the sharp turnaround.
- Paris milling wheat futures closed with a gain of 3.75 Euros per metric ton in the front month March contract. This, along with a significant decline in the US Dollar added to early support. However, the Dollar gained strength throughout the day, adding pressure back onto the market by the close.
- Reportedly, the Biden administration may issue new sanctions on Russia beginning March 1. The announcement may be made as soon as tomorrow. At any rate, wheat out of the Black Sea region continues to be offered much more cheaply than other origins, as long as this remains the case it will be difficult for US futures to rally.
- Managed funds are still said to hold a hefty net short position in both Chicago and KC wheat. If the market does receive friendly news in the form of weather, politics, or something else, it could lead to a short covering rally. However, they are also momentum traders, and may add short positions until there is a better sign of a bottom.
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
