2-23 End of Day: Disappointing Export Sales Contribute to the Grain Market’s Slide
All prices as of 2:00 pm Central Time
| Corn | ||
| MAR ’24 | 399.75 | -6.25 |
| JUL ’24 | 426.25 | -4.5 |
| DEC ’24 | 449.5 | -3.75 |
| Soybeans | ||
| MAR ’24 | 1133 | -14.75 |
| JUL ’24 | 1151.25 | -9.5 |
| NOV ’24 | 1130.25 | -4.75 |
| Chicago Wheat | ||
| MAR ’24 | 573.5 | -9.75 |
| JUL ’24 | 570 | -10 |
| JUL ’25 | 609.5 | -6.5 |
| K.C. Wheat | ||
| MAR ’24 | 568.75 | -5.25 |
| JUL ’24 | 558 | -8 |
| JUL ’25 | 603 | -7 |
| Mpls Wheat | ||
| MAR ’24 | 641.5 | -9.75 |
| JUL ’24 | 652 | -7.75 |
| SEP ’24 | 660.5 | -6.5 |
| S&P 500 | ||
| MAR ’24 | 5100.75 | 3 |
| Crude Oil | ||
| APR ’24 | 76.5 | -2.11 |
| Gold | ||
| APR ’24 | 2048.5 | 17.8 |
Grain Market Highlights
- Mediocre corn export sales that came in at a 6-week low, along with lower soybeans added to the negativity in the corn market that closed lower for the third day in a row and below 400 for the first time since October of 2020.
- Dismal export sales for soybeans at 2.1 mb and a marketing year low weighed heavily on March soybeans which posted a new contract low and low close.
- Soybean meal and oil both closed lower on the day adding to the negative tone in the soybean complex. While the March contracts in both meal and oil posted new contract lows and low closes, March Board crush margins posted a 5-cent gain.
- All three wheat classes closed lower on the day with Chicago and Minneapolis the weakest of the three. Pressure from lower corn and soybeans, along with weaker Matif wheat added to the negativity. For the week, both Chicago and KC were able to hold earlier gains while Minneapolis posted a net loss.
- To see the updated US 7-day precipitation forecast, 8 – 14 day temperature and precipitation outlooks, as well as the 2-week precipitation forecasts for South America courtesy of the NWS, CPC, and NOAA, scroll down to the 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. 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 stayed under selling pressure for the third consecutive session as the March futures lost 6 ¼ cents and May lost 5 cents. This is the 12 lower session in the last 16 trading sessions, and March corn closed under the key 400 psychological price level. The last time corn closed under 400 was in October of 2020.
- The month of February has been difficult on the corn market as prices were down 16 ¾ cents on the week and have lost 48 ½ cents so far this month. This month saw a combination of factors, basis contract pricing, March option expiration, and First notice day approaching on the 29th, which have all added to the market volatility.
- Weekly export sales for corn were within trade expectations, but softer compared to previous weeks. Last week, the US sold 32.3 mb (820,400 mt) for the 23/24 marketing year. This was down 37% from the previous week and 30% from the prior 4-week average. Total sales are still running up 29% from last year.
- The Brazilian corn market traded sharply lower on the session, testing limit down during the day. Rumors of China buying Ukrainian corn at less than $230/mt, cheaper than US and Brazil prices pressured the corn market.
- On Thursday’s report, weekly ethanol production ticked up last week to 1.084 million barrels/day, up 5% from last year. Ethanol stocks slipped to 25.5 million barrels, and 108.6 million bushels of corn were used last week in ethanol production, which is still running ahead of USDA expected pace for the marketing year.
Above: The corn market continues to drift lower with little bullish input to trigger a turnaround from extreme oversold conditions. Psychological 400 support rests just below the current market, with further support down around 390. If prices can hold support and turn back higher, overhead resistance remains between 450 and 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 ended the day significantly lower for a third consecutive day and have lost 45 cents just within these last three days. Export sales were very poor, weather in South America has been favorable, and non-commercials continue to sell contracts, potentially generating new record short positions. March soybeans made a new contract low today and both soybean meal and oil were lower as well.
- For the week, March soybeans lost 39 ¼ cents to end at 1133, March soybean meal lost $14.10 to $331.50, and March soybean oil lost 1.57 cents to 44.02 cents.
- The USDA reported an increase of only 2.1 mb of soybean export sales for 23/24, which was way below expectations and a marketing year low. There were net cancellations by China which could become a theme with Brazilian soybeans so much cheaper than the US. Year to date commitments are now 20% below that of last year. Export shipments for last week of 44.0 mb were significantly higher than the 19.1 mb needed each week to achieve the USDA’s export estimate of 1.720 bb. Primary destinations were to China, Mexico, and Indonesia.
- 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.
Above: After posting a recent high just above 1190, the market has drifted lower into 1140 support from October 2020. If 1140 support fails, the next major support level may come in between 1040 and 1050. Otherwise, 1190 – 1205 may act as resistance if prices turn back around.
Wheat
Market Notes: Wheat
- All three US wheat futures classes closed lower today, in tandem with Paris milling wheat. Pressure stemmed from another day of lower corn and soybean prices. Additionally, US wheat may be coming out of dormancy early, due to the recent warm weather. The Plains states have chances of moisture in the second week of the forecast but may be warmer than normal through the end of the month. However, conditions look much better when compared to a year ago at this time.
- Weekly wheat export sales were on the disappointing side. The USDA reported an increase of 8.6 mb for 23/24 and an increase of 1.7 mb for 24/25. Shipments last week were only 13.7 mb, which is behind the 17.7 mb pace needed per week to reach the USDA’s export goal of 725 mb. However, commitments at 655 mb are up 6% from last year and above the USDA’s estimated pace.
- According to FranceAgriMer, as of February 19, French wheat was rated just 69% good to very good. For reference, the crop was rated at 95% a year ago. Weather is cited as the reason for the decline. France already struggled to get the crop sown due to wet weather late in the planting season.
- Through the week ending February 17, Mississippi River barge shipments declined 8.4% from the previous week at 535k versus 584k tons. However, wheat in particular saw an 18.5% increase in shipments, at 32k versus 27k tons. Although, year on year wheat shipments are down 10.3%.
- In general, there has not been much news directly affecting wheat this week. This may indicate that the back and forth trade is technical in nature. When bulls think price has gone low enough, they start to buy, and the funds may be selling any rallies. And though wheat ended the week with a negative tone, March Chicago wheat did gain 13 cents on a weekly basis.
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 the early December runup on Chinese buying, the July ’24 contract has gradually stair stepped its way lower and erased those gains. In the meantime, 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 December’s brief runup, prices have continued to erode as US exports continue to suffer from lower world export prices. Although fundamentals remain weak, considering the market is at levels not seen since spring of 2021, and funds continue to hold a considerable net 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: Since rejecting the bullish reversal on Feb. 20, the May ’24 contract traded through 650 support and continues to show signs of being oversold, which is supportive if a bullish catalyst presents itself to turn prices back higher. If prices progress to the downside, the next major support level below the market may come in near 600.
Other Charts / Weather
Brazil 2-week forecast total precipitation courtesy of the National Weather Service, Climate Prediction Center.
Argentina 2-week forecast total precipitation courtesy of the National Weather Service, Climate Prediction Center.