2-26 End of Day: The Grain Complex Closes in the Green After Reversing off the Day’s Lows
All prices as of 2:00 pm Central Time
| Corn | ||
| MAR ’24 | 407 | 7.25 |
| JUL ’24 | 433.75 | 7.5 |
| DEC ’24 | 457 | 7.5 |
| Soybeans | ||
| MAR ’24 | 1136 | 3 |
| JUL ’24 | 1155.25 | 4 |
| NOV ’24 | 1129.75 | -0.5 |
| Chicago Wheat | ||
| MAR ’24 | 577.25 | 3.75 |
| JUL ’24 | 577 | 7 |
| JUL ’25 | 619.25 | 9.75 |
| K.C. Wheat | ||
| MAR ’24 | 583.75 | 15 |
| JUL ’24 | 566.5 | 8.5 |
| JUL ’25 | 607.5 | 4.5 |
| Mpls Wheat | ||
| MAR ’24 | 648.25 | 6.75 |
| JUL ’24 | 657.75 | 5.75 |
| SEP ’24 | 665.75 | 5.25 |
| S&P 500 | ||
| MAR ’24 | 5091.75 | -9.75 |
| Crude Oil | ||
| APR ’24 | 77.62 | 1.13 |
| Gold | ||
| APR ’24 | 2038.5 | -10.9 |
Grain Market Highlights
- Once new lows were posted in the March and May corn futures contracts, prices rebounded to close with a bullish reversal as traders likely covered short positions. Weekly corn export inspections came in at a marketing year high and managed funds show a new record net short position of nearly 341k contracts.
- Early weakness on reports of additional cargoes of Brazilian soybeans entering the US East Coast for Perdue Farms gave way to higher prices after making fresh contract lows in both the March and May contracts, with support coming from firmer soybean oil and corn.
- KC wheat led the wheat complex higher with positive closes and bullish reversals in all three classes. Solid wheat export inspections that came in at a 7-week high and above expectations lent support along with higher corn futures.
- To see the updated US 5-day precipitation forecast, 6 – 10 day temperature and precipitation outlooks, as well as the 1-week precipitation forecasts for South America courtesy of the NWS, CPC, 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 prices rebounded on the session today as the market saw moderate gains. March corn gained 7 ¼ cents and May futures added 8 cents during the session.
- Corn futures saw a short covering rally as the managed money moved to a record short position on last week’s Commitment of Traders report. As of last Tuesday, hedge funds were short of a net 340,723 contracts, pushing through the previous record short position from 2019.
- The strong price action on Monday has the corn market improved technically as daily charts posted key reversals on the session. With a heavily oversold market, prices could see an additional corrective bounce, despite overall bearish fundamentals.
- In Brazil, second crop corn plant progress is running well ahead of the 5-year pace. Weather at this point is not an issue, but talk of a possible change in the weather patterns is a focus of the markets, helping lead to the short covering rally.
- Weekly export shipments for corn were strong last week. US exporters shipped 48.9 mb (1.242 mmt) of corn, which was above expectations. Currently export inspections are up 36% over last year, and slightly ahead of the pace to meet the USDA’s export targets.
Above: On February 26, the May corn contract posted a bullish reversal indicating support just below the market rests just above 400 psychological support near 410. If this support level holds, the market may run into upward resistance between 435 and 450. If 400 support does not hold, further support should come in around 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. 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 were mixed throughout the day with prices significantly lower near midday before rebounding into the close. The front months ended higher, while the November contract was slightly lower. This was also the theme for soybean meal and oil in which the front months gained on the deferred months, although the deferred contracts in meal did settle lower on the day.
- Soybean export inspections were within expectations totaling 35.8 mb for the week ending Thursday, February 22. Total inspections for 23/24 are now at 1,214 mb, which is down 22% from the previous year. No flash sales were reported today or last week, and last week’s export sales report was a marketing year low with net cancellations.
- The Brazilian soybean harvest is now 38.03% complete which compares with 34.51% at this time last year. With Brazil’s harvest ongoing, cash soybeans have fallen to prices significantly below those in the US, and there have been recent reports of Brazilian soybeans being imported into the US.
- Friday’s CFTC report showed non-commercials selling 2,177 contracts of soybeans last week leaving them short 136,677 contracts. This is the largest net short position in soybeans since 2019. Today’s reversal could be an indication that the funds are beginning to lighten this short position, but it could also have to do with first notice day for March futures which is this Thursday.
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
- Wheat finally stopped the bleeding, posting a higher close in all three classes and a bullish reversal alongside corn and soybeans. Early weakness, in part due to another lower close for Matif futures, was rebuffed. However, there was no major news to trigger this rally, indicating that it was likely technical in nature.
- Weekly wheat inspections at 17.7 mb bring the total 23/24 inspections to 463 mb. All things considered this is a decent number for the week. But with that said, inspections are still down 18% from last year and running behind the USDA’s estimated pace.
- On a bearish note, Russian wheat exports continue to dominate. Their FOB wheat values are said to have declined again, to between $210 and $213 per mt. This may limit the upside potential of the US market for some time to come.
- Between February 14 and 20, funds are said to have added just over 18,000 short wheat contracts, bringing their combined Chicago and Kansas City net short position to just over 110,000 contracts. While not a record like in corn, it is still a large number of contracts that keeps the market primed for a potential short covering rally.
- According to Ukrainian officials, 160 tons of their grain was destroyed at a railway station in Poland due to large protests. While 160 tons is not much in the big picture, the reasoning for the destruction is what is important; Polish farmers are said to be protesting unfair competition from Ukraine. Despite a major war in their nation, the Ukrainians have been very successful at getting grain exported, even with the closure of the Black Sea Grain Initiative last July.
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. If prices continue above that, the next major resistance level may come in around 635 – 650. Otherwise, if they turn back lower, the next major support level below 555 may come in 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
No New Action
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.
- No new action is recommended for 2024 KC wheat. Since the beginning of the year, the July ’24 contract has been in a downtrend alongside the front month contracts, while also setting new contract lows and becoming very oversold. During this time, managed funds have maintained a net short position in the front month of around 35,000 contracts. While this net short position is about 15,000 contracts smaller than it was at the end of November, it is still large enough to trigger a short covering rally, much like the one that began in late November, and could easily translate to higher prices for July ’24 as well as the front months. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside, and as the market got further extended into oversold territory, Grain Market Insider recommended exiting 75% of the originally recommended position. Recently, Grain Market Insider also recommended exiting the remaining 660 puts to protect any gains that have been made. Considering bullish headwinds remain, and the equity gained from the closed July 660 put position, Grain Market Insider is prepared to consider recommending additional sales for the 2024 crop if July ‘24 retraces back toward the January highs in the mid-640s.
- 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
No New Action
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.
- No new action is recommended for 2024 Minneapolis wheat. Much like the front month contracts, Sep ’24 has been in a downward trend since last summer. And just as Sep ’24 has been influenced to the downside by the front months, it could be similarly influenced to the upside by the front months if a bullish impetus enters the scene and triggers an extended short covering rally due to the fund’s large short position. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside (due to their higher liquidity and correlation to Minneapolis), and as the market got further extended into oversold territory, Grain Market Insider recommended exiting 75% of the originally recommended position. Recently, Grain Market Insider recommended exiting the remaining 660 puts to protect the gains that have been made. From here, Grain Market Insider is prepared to consider recommending additional sales for the 2024 crop if Sep ‘24 posts a modest 22% retracement back toward the 2022 highs of 1400.
- 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 show signs of being oversold, and is supportive if prices follow through from the bullish reversal on February 26. If they follow through to the upside, resistance may come in around 675 – 680. If prices turn back lower, the next major support level below the market may come in near 600.
Other Charts / Weather
