2-8 End of Day: Beans Higher, Wheat and Corn Lower Following USDA and CONAB Data Dump
All prices as of 2:00 pm Central Time
| Corn | ||
| MAR ’24 | 433.25 | -1 |
| JUL ’24 | 454 | -1.5 |
| DEC ’24 | 472.25 | -1.5 |
| Soybeans | ||
| MAR ’24 | 1193.5 | 4.5 |
| JUL ’24 | 1209.25 | 2.25 |
| NOV ’24 | 1172.75 | 2 |
| Chicago Wheat | ||
| MAR ’24 | 588.5 | -13.5 |
| JUL ’24 | 597.25 | -13.25 |
| JUL ’25 | 636.5 | -11.25 |
| K.C. Wheat | ||
| MAR ’24 | 601 | -17.25 |
| JUL ’24 | 593.5 | -16 |
| JUL ’25 | 632 | -13 |
| Mpls Wheat | ||
| MAR ’24 | 683.75 | -12.5 |
| JUL ’24 | 688 | -12.5 |
| SEP ’24 | 694 | -12.5 |
| S&P 500 | ||
| MAR ’24 | 5012.5 | -2.75 |
| Crude Oil | ||
| APR ’24 | 76.41 | 2.5 |
| Gold | ||
| APR ’24 | 2047.3 | -4.4 |
Grain Market Highlights
- Corn futures ended the day slightly lower after digesting a mixed bag of data from the USDA. US ending stocks for corn came in slightly higher than last month at 2.172 billion bushels, while world corn ending stocks came in lower than last month at 322.06 mmt in today’s WASDE report.
- Soybean futures closed higher today despite a smaller than expected cut to Brazilian soybean production in today’s USDA WASDE report. CONAB cut their Brazilian soybean production estimate this morning down to 149.4 mmt, this compares to today’s USDA Brazilian soybean production estimate at 156 mmt.
- Soybean oil futures were higher again today, marking their fourth consecutive session of gains, while soybean meal futures were lower on the day.
- Wheat prices were lower today after the USDA’s WASDE report showed larger than expected US wheat ending stocks. World wheat ending stocks, on the other hand, came in below expectations given increased exports in Ukraine, Australia, and Argentina versus last month’s estimates.
- To see the updated US Drought Monitor, and the 2-week Brazil forecast precipitation anomaly, courtesy of the National Weather Service and the Climate Prediction Center, 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 does show signs of being oversold, and managed funds continue to hold a sizable net short position, which could trigger a short covering rally if bullish input enters the scene. 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.
- 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 remaining for the 2024 crop. Additionally, Dec ’24 does show signs of being oversold on the weekly chart, which is supportive if a bullish catalyst enters the scene. Given the amount of 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
- On a day with a lot of data, corn futures finished lower on the day. March corn lost 1 cent, but again posted a new contract low and low close during the session as the market digested CONAB, USDA and weekly export information.
- The USDA raised the U.S. corn carryout by 10 mb to 2.172 billion bushels by making a small reduction of 10 mb to the industrial usage of corn. This carryout increase was above market expectations, which were looking for a small decrease month over month.
- Regarding South American production, the USDA made minimal changes to their Brazil and Argentina corn production forecasts. The USDA left Argentina unchanged at a projected crop of 55 MMT from last month, but lowered the Brazil forecast by 3MMT to 124 MMT.
- The Brazil Ag Agency, CONAB, released their month production numbers for corn this morning. CONAB dropped their corn production forecast to 113.7 MMT, down from 117.6 in January. The USDA is at 124 MMT. CONAB lowered their demand forecast and export projections to reflect a possible increase in total corn carryout at the end of the market year, despite the reduced production.
- Weekly export sales for corn were near the top end of expectations. Last week, U.S. exporters posted new sales of 1.219 MMT (48.0 mb). Total sales commitments are reaching 1.374 billion bushels, up 30% from last year. USDA announced a flash export sale of 200,000 MT (7.1 mb) of corn to Columbia this morning. This was the second announce flash sale this week, as the U.S. corn export window is open and available.
Above: The breach of the previous low of 436 puts front month corn at risk of drifting lower without any new bullish input. For now, the next major level of support lies near 415. Should a bullish catalyst enter the scene to move prices higher, overhead resistance may be found 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. In early January, front month soybeans broke through the bottom side of the 1290 – 1400 range that had been in place since mid-October. As South American weather forecasts improved, the potential for a reduction in the record large global carryout also lessened, bringing prices down toward the 1180 support level. For now, 1180 support appears to be holding, and though the weak price action has been disappointing, time remains in the South American growing season, and the old crop marketing year, for unforeseen changes to push 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. After the Nov ’24 contract broke through the bottom side of the 1233 – 1320 range, prices continued to retreat as South American weather conditions improved. Even though Nov ’24 runs similar downside risks as the front month contracts, which could press new crop prices toward 1150 or possibly the May ’23 low near 1115, plenty of time remains to market this crop. 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. Additionally, the possibility remains that prices could retest the 2022 highs, at which point Grain Market Insider may 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 slightly higher after a day of volatile trade, which saw March soybeans as low as $13.80-1/2. The WASDE report was relatively bearish, but the data that was released by the USDA was in conflict with earlier data released by Brazil’s CONAB. Soybean meal ended the day lower, while soybean oil was higher, along with higher crude oil.
- Today, the USDA released its WASDE report, which had a bearish tone for soybeans. The US carryout for 23/24 was increased to 315 mb from 280 mb due to a decrease in exports. Brazilian soybean production was only lowered to 156 mmt from 157 mmt last month when the average trade guess was closer to 153 mmt. Argentinian production was unchanged at 50.0 mmt.
- Brazil’s CONAB also released estimates for production, but they were in stark contrast with the USDA’s estimates with 149.40 mmt of soybeans expected and 113.70 mmt of corn expected. Traders seemed unsure about which agency was correct, which caused volatile trade.
- Today’s export sales report was poor for soybeans, with sales below the lowest range of estimates at 12.5 mb for 23/24. This was down 25% from the prior 4-week average. Export shipments of 60.8 mb last week were well above the 22.7 mb needed each week to meet the USDA’s estimates, and primary destinations were to China, the Netherlands, and Mexico.
Above: Front month soybeans appear to have rejected the recent bullish reversal, but so far, support around 1180 remains intact and the market shows signs of being very oversold on the weekly charts. If this support level holds, the market’s oversold status should be supportive. Right now, overhead resistance comes in between 1205 and 1210, with additional resistance around 1225. Support below the 1180 area remains between 1140 and 1145.
Wheat
Market Notes: Wheat
- All three US wheat futures classes posted double digit losses today. The WASDE report was relatively neutral when it came to the wheat numbers, but futures were under pressure even before the data was released. This is likely a result of continued cheapness of Russian offerings, along with some meteorologists predicting that the polar vortex may not dip into the US at the end of the month, potentially eliminating the threat of winterkill.
- On today’s report, the USDA projected US wheat carryout at 658 mb, up from the average trade guess of 649 mb and the January estimate of 648 mb. In terms of global numbers, wheat ending stocks were projected at 259.4 mmt, down just slightly from an average pre-report estimate of 260.1 mmt and a 260.0 mmt estimate in January.
- As far as additional data, total wheat use was estimated at 1.869 bb, down from 1.879 bb last month. Globally, world wheat production was pegged at 785.74 mmt, up from last month’s estimate of 784.91 mmt. Other notable figures include Australian production at 25.5 mmt, unchanged from last month, and Ukraine exports at 15.0 mmt vs 14.0 mmt in January. Additionally, Russian exports were kept the same at 51.0 mmt.
- The USDA also reported weekly export sales today and said there was an increase of 13.9 mb of wheat export sales for 23/24 and an increase of 0.3 mb for 24/25. Shipments last week at 11.6 mb were behind the pace needed of 17.2 mb every week to meet the USDA’s goal of 725 mb. On today’s report, that export estimate was unchanged from last month.
- According to their Bureau of Meteorology, Australia had their warmest winter on record. Additionally, it was their eighth warmest year on record overall. Furthermore, as claimed by Copernicus, Europe’s Earth observation agency, globally 2023 was the hottest year on record.
- Statistics Canada also released data today. They said that as of December 31, 2023, wheat stocks fell because of lower production, down 10.3% year over year at 20.7 mmt. Moreover, wheat exports at 10.6 mmt were up 2.7%, which surpassed the five-year average.
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: Chicago wheat has been in a congestion pattern bordered between 614-618 on the top and 584 on the bottom. A breakout through the top end could send prices toward the 640 – 650 resistance area, while a downside breakout may find initial support around 573 with more support around 556.
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 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.
- No new action is recommended for 2024 KC wheat. At the end of August, the July ’24 contract broke out of roughly a one-year trading range and stepped down to a 609 ¼ low in late November, largely driven by managed fund selling in the front month on weak US export demand and lower world wheat prices. Since then, the funds covered part of their large short position which also rallied prices in the July ’24 contract. While bearish headwinds remain, managed funds continue to hold a sizable, short position, and price seasonals remain positive for adding weather risk premium. These are two factors that could fuel additional short covering and rally prices in the months ahead. Back in August, Grain Market Insider recommended buying Jul’24 KC wheat 660 puts to protect the downside following the range breakout. As the market recently got further extended into oversold territory and the July contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. Moving forward, Grain Market Insider is prepared to recommend exiting the last 25% on any further supportive market developments.
- 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 will probably be mid-winter before Insider starts considering the first sales targets.
To date, Grain Market Insider has issued the following KC recommendations:
Above: KC wheat continues to consolidate just below the 50-day moving average, which is acting as mild resistance to the upside. If the market does breakout to the upside, it may encounter additional resistance near the recent high of 641. To the downside, the next major support level remains between 595 and 575.
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 the 2023 New Crop. For the last six months, front month Minneapolis wheat has slowly stair-stepped lower with 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, support may be building in the 670 – 675 area, 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 around 725 – 750.
- No new action is recommended for 2024 Minneapolis wheat. Much like the front month contracts, Sept ’24 has been in a downward trend since last summer. And just as Sept ’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 a 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 following a 1-year range breakout in KC wheat, and in November recommended exiting 75% of the originally recommended position as July ’24 KC wheat showed signs of support around 630. While in the same time frame, Grain Market Insider also recommended making an additional sale as the Sept ’24 Minneapolis contract broke long time 743 support. Grain Market Insider remains prepared to recommend exiting the last 25% of the open puts on any further supportive market developments and consider recommending additional sales if prices make a modest retracement of the 2022 highs.
- 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 next year. It will probably be mid-winter 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 consolidate with overhead resistance remaining between 710 and 720, and nearby support just under the market at 688. If prices break through nearby support, they may fade and test the January low of 678 ¾. Support below there may come in around 669.
Other Charts / Weather
Above: US Drought Monitor as of February 6, 2024
Above: Brazil 2 week forecast total precipitation anomaly courtesy of the National Weather Service, Climate Prediction Center.