2-27 End of Day: Corn and Wheat Maintain Yesterday’s Strength, While Beans Fade
All prices as of 2:00 pm Central Time
| Corn | ||
| MAR ’24 | 408.25 | 1.25 |
| JUL ’24 | 436 | 2.25 |
| DEC ’24 | 460 | 3 |
| Soybeans | ||
| MAR ’24 | 1131.25 | -4.75 |
| JUL ’24 | 1151.5 | -3.75 |
| NOV ’24 | 1129.75 | 0 |
| Chicago Wheat | ||
| MAR ’24 | 586 | 8.75 |
| JUL ’24 | 586.25 | 9.25 |
| JUL ’25 | 628.25 | 9 |
| K.C. Wheat | ||
| MAR ’24 | 593.5 | 9.75 |
| JUL ’24 | 576.25 | 9.75 |
| JUL ’25 | 616 | 8.5 |
| Mpls Wheat | ||
| MAR ’24 | 658.75 | 10.5 |
| JUL ’24 | 666.5 | 8.75 |
| SEP ’24 | 673.5 | 7.75 |
| S&P 500 | ||
| MAR ’24 | 5084.5 | 4.25 |
| Crude Oil | ||
| APR ’24 | 78.76 | 1.18 |
| Gold | ||
| APR ’24 | 2040.1 | 1.2 |
Grain Market Highlights
- Choppy two-sided trade dominated the corn market which settled midway in a rather tight 5 ¼ cent range with only modest gains from yesterday’s key reversal higher. Support came from continued technical short covering and a higher wheat market, while upward resistance came from generally favorable SA weather and weaker soybeans.
- Early follow through strength from the overnight session faded throughout the day in soybeans with weakness carrying over from lower soybean meal and rumors that one of China’s major trading firms may look to switch US purchased beans to a cheaper SA origin for spring delivery.
- Soybean meal and oil diverged in today’s trade with soybean oil settling higher on the day and following through on yesterday’s rally, with strength coming from higher Malaysian palm oil and crude oil. Meal retreated from overnight gains to make new contract lows. Slowing US feed demand and competition from cheaper Argentine supplies added to the downward pressure.
- More technical short covering from yesterday’s bullish reversals and comments from Ukraine’s President Zelensky stating that the country may not be able to defend its own export corridor without additional help, added to today’s bullish tone in the wheat complex. All three classes of the wheat complex closed in the upper end of their respective ranges for the second day in a row.
- 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 nearing 2.2 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 substantial net short position. Either or both could trigger a short covering rally at any time heading into the spring planting window. As planting nears, and uncertainties increase, Grain Market Insider will consider recommending additional sales if prices recover back toward the 500 level.
- 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
- For the second consecutive session, corn futures finished higher, holding on to yesterday’s gains. May corn futures gained 2 cents on the session. This is the first time since February 13th that corn futures posted consecutive daily gains. Despite the recent strength, the overall trend in the corn market remains bearish.
- Corn prices were supported by additional short covering and technical buying after Monday’s turn higher and strong price action. Strength in the wheat market spilled over and helped support corn futures. The heavy supply picture and soybean prices fading, limited gains in the corn market on the session.
- The corn market may stay choppy through the end of the week. Squaring up trade for the end of the month, and the influence of price action during first notice day on the March contract will likely keep the market choppy. First notice day is on Thursday this week.
- In Brazil, second crop (safrinha) corn planting progress is running well ahead of the 5-year pace. The Brazil Ag agency, CONAB, reported that planting of the Safrinha corn in Brazil was 59% complete last week. The strong early planting pace and overall friendly weather pattern should get the second crop corn off to a good start.
- Confirmation of China buying Ukrainian corn limited market upside. Prices paid for the purchase were $227-$230/mt including freight. The prices are cheaper than current US export bids.
Above: On February 26, the May corn contract posted a bullish reversal indicating support 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 ended the day lower after mixed trade throughout the session which saw prices as much as 16 cents higher earlier in the day before soybean meal faded, weighing on soybeans. Soybean oil managed to close higher along with crude oil. The majority of selling pressure was in the front months with November beans unchanged on the day.
- Bullish news early in the day came from the announcement by private exporters of 123,000 metric tons of soybeans for delivery to unknown destinations for 23/24. This was the first flash sale reported in over a week as cheaper Brazilian soybeans take export demand from the US.
- Brazil’s soybean harvest is now estimated at 40% complete which compares with 33% the previous year at this time. 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.
- Domestic demand has remained firm thanks to profitable crush margins, despite having narrowed over the past few months. The use of soybean oil as renewable diesel has been supportive to demand.
Above: Front month soybeans appear to have rejected the bullish reversal from February 26. However, for now, initial support between 1133 and 1140 still holds. If prices can rally back and recover from being oversold, they may hit resistance between 1190 and 1205. Otherwise, if they decline further, major support below the market may enter in around 1040 – 1050.
Wheat
Market Notes: Wheat
- All three US wheats were higher again today. Funds may be covering more of their short positions as the technical recovery continues. Additional support may have stemmed from comments by Ukraine’s President Zelensky; he indicated that without US military assistance, they may not be able to defend their humanitarian corridor in the Black Sea.
- Some parts of the US have seen abnormally warm or even record temperatures this month. Areas of Nebraska and the Texas panhandle saw upwards of 80 to 90 degrees, and strong winds may be stressing the HRW crop. And with a major cold front moving through the Midwest over the next 24 hours, there are concerns that some areas may have the opposite problem, frost damage.
- Heavy rain over the weekend hit parts of Australia from the remnant of tropical cyclone, Lincoln. In general, however, soil moisture is lacking in much of the country ahead of wheat planting, with more rain needed in the coming months to recharge moisture levels.
- Several states released their individual winter wheat conditions. Kansas rated their crop 57% good to excellent, up from 54% in the week ending January 28, and just 13% was rated poor to very poor. Colorado and Nebraska saw slight declines, but most states that released data showed improvements.
- Brazil’s wheat imports are said to be on the rise due to a lack of available high quality domestic wheat. According to Secex, Brazil’s wheat imports as of the third week in February totaled 383,950 tons, compared with 291,630 last February. Additionally, exports at just 56.090 million metric tons are well below the 533.42 mmt for the same time period in 2023.
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. In mid-February, July ’25 Chicago wheat broke through the bottom of the long established 632 – 685 trading range to a new low just below 600. For now, that new low is holding, and the market is correcting its oversold condition. So far, Grain Market Insider’s strategy for the 2025 crop year has been to sit tight. However, if prices rally toward the mid-600s, we will consider taking advantage of the still 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 also 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, major support 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, which 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
US 5-day precipitation forecast courtesy of NOAA, Weather Prediction Center.
Brazil 1-week forecast precipitation, percent of normal, courtesy of the National Weather Service, Climate Prediction Center.
Argentina 1-week forecast precipitation, percent of normal, courtesy of the National Weather Service, Climate Prediction Center.