2-28 End of Day: Corn Follows Through on Yesterday’s Gains, While Beans Firm and Wheat Slides
All prices as of 2:00 pm Central Time
| Corn | ||
| MAR ’24 | 413.25 | 5 |
| JUL ’24 | 440.25 | 4.25 |
| DEC ’24 | 463.25 | 3.25 |
| Soybeans | ||
| MAR ’24 | 1134 | 2.75 |
| JUL ’24 | 1155.75 | 4.25 |
| NOV ’24 | 1135 | 5.25 |
| Chicago Wheat | ||
| MAR ’24 | 571 | -15 |
| JUL ’24 | 578.5 | -7.75 |
| JUL ’25 | 625 | -3.25 |
| K.C. Wheat | ||
| MAR ’24 | 595.5 | 2 |
| JUL ’24 | 570.25 | -6 |
| JUL ’25 | 611.25 | -4.75 |
| Mpls Wheat | ||
| MAR ’24 | 651.75 | -7 |
| JUL ’24 | 660.75 | -5.75 |
| SEP ’24 | 667.5 | -6 |
| S&P 500 | ||
| MAR ’24 | 5073.75 | -16.25 |
| Crude Oil | ||
| APR ’24 | 78.45 | -0.42 |
| Gold | ||
| APR ’24 | 2040.8 | -3.3 |
Grain Market Highlights
- Solid weekly corn usage for ethanol production and continued short covering helped support the corn market for the third day in a row as traders squared positions ahead of month-end and tomorrow’s First Notice Day, when long March futures holders are notified of delivery against any open positions.
- The soybean complex closed in mixed fashion with beans following through on yesterday’s gains, while soybean meal and oil closed in opposite directions, with meal higher and bean oil weaker. Soybeans rallied into its midday highs but were unable to hold on to the rally as weakness from soybean oil weighed on Board crush values and soybeans from a weaker energy market.
- Following choppy trade, the wheat complex closed mostly lower on the day as it consolidates from being oversold with weakness spilling over from sharply lower Paris milling wheat. The March contracts likely saw additional volatility as participants squared positions ahead of First Notice Day.
- To see the updated US 7-day precipitation forecast, the US and South American root zone drought indicators, and the 2-week precipitation forecasts for Brazil courtesy of the NWS, CPC, NOAA, 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 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
- Corn futures saw positive money flow for the 3rd consecutive session on Wednesday as the market saw additional short covering and position squaring going into the end of the month and First Notice Day on the March futures. March and May corn futures added 5 cents respectively during the session.
- On Wednesday’s EIA report, weekly ethanol production slipped last week to 1.078 mbd, down slightly from last week and 7% from last year. There were 107 million bushels of corn used in ethanol production last week, which is still trending ahead of the pace needed to reach USDA projections. Ethanol stocks increased to 26 million barrels, which was at the high end of expectations and well above last year’s 24.8 million barrels level.
- The USDA will release weekly export sales on Thursday morning. Expectations for new sales to range from 600,000 – 1.2 mmt. Last week’s sales were 820,400 mmt. Corn sales need to push the top end of the range in this time window since the US is still competitive with global corn prices.
- The recent push higher in corn prices could be met by farmer selling, which will likely limit the potential in the near term since the corn market is still working through a picture of heavy front-end supplies of corn.
- Current Brazilian weather is still considered non-threatening for crops, helping the key second crop Brazilian corn crop get off to a strong start. Moisture levels overall are still limited, so rainfall will need to stay timely as the crop develops.
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 higher, but like yesterday, faded significantly from earlier morning highs. Soybeans have not rallied off their contract lows as well as corn has with the May contract just 12 cents off the low from Monday. Poor export sales and an ongoing Brazilian harvest have been bearish.
- Soybean meal finished the day higher after making a new contract low yesterday while soybean oil closed lower and near its contract lows. While crush margins have narrowed recently, they remain profitable, and domestic crush demand has been relatively supportive.
- South American weather has improved from January with harvest progressing in Brazil and now more than 40% complete, while Argentina has benefitted from scattered showers consistently. Argentina’s crop is expected to end up double the size or larger of last year’s drought ridden crop.
- Yesterday, there was bullish news early in the day of an 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.
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
- Wheat closed lower in all three US classes, except for March Kansas City, which gained 2 cents on the day. Weakness can be blamed in part on Paris milling wheat futures, which closed sharply lower. Also, the US Dollar Index was marginally higher at the grain close, but well off the daily high that provided early pressure as well. GDP data today showed that the economy remains strong; inflation might also show signs of easing. These factors may lead to the US Dollar strengthening which would continue to pressure wheat.
- Black Sea weather has been mostly favorable this winter, with good soil moisture levels, and the wheat in that region may be coming out of dormancy early due to warmer conditions. However, a cold front may move in next week. Nonetheless, nothing seems to be slowing down Russia’s exports. Their FOB values are said to have reached as low as $209 per metric ton. And with Ukraine’s grain shipments in February up 12% year on year, it is not surprising that US wheat is struggling.
- European Union soft wheat exports, as of February 22, were down 3% year on year at 20.5 mmt. Their export season begins July 1, and last year’s exports for this time frame totaled 21.1 mmt. North African countries were the leading importers of this wheat, with Morocco the front runner at 3 mmt.
- The warm and dry February here in the US has left the Mississippi River with low water levels; usually they are rising at this time of year. NOAA is projecting near-normal precipitation for March, which should help if forecasts verify. Currently, the upper Mississippi is set to reopen between March 4-16 which is a typical spring start date. While the direct impact to the wheat market is minimal at this time of year, the river is one of the main routes for US grain exports and is also vital for the shipping of fertilizer.
- With dryness and heavy winds, wildfires were said to have impacted 60 Texas counties, primarily in the panhandle. The fires are said to have also spread to parts of Oklahoma and Nebraska. This may have caused some damage to the wheat crop, but it will take some time to assess.
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. 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 700.
- 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: May KC wheat is correcting from being oversold as it consolidates after making a 556 ¾ low on Feb. 16, with nearby resistance just overhead between 590 and 600. So far, this support level is holding, and if prices break out to the upside, further resistance may come in around 610. If they break out to the downside, then the next major support area may be found 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 675 – 700.
- 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: May Minneapolis wheat appears to be consolidating after posting a bullish reversal on February 26. If prices continue higher, they may run into resistance around 675 – 680. If prices turn back lower, the next major support level below 640 may come in near 600.
Other Charts / Weather
US 7-day precipitation forecast courtesy of NOAA, Weather Prediction Center.
Brazil 2-week forecast total precipitation courtesy of the National Weather Service, Climate Prediction Center.