3-12 End of Day: Soybeans Close Higher on Friendly CONAB Numbers; Corn Sharply Unchanged, Wheat Mixed
All prices as of 2:00 pm Central Time
| Corn | ||
| MAY ’24 | 441.75 | 0 |
| JUL ’24 | 453.75 | 0 |
| DEC ’24 | 472.75 | 0 |
| Soybeans | ||
| MAY ’24 | 1196 | 16.75 |
| JUL ’24 | 1208.5 | 16.75 |
| NOV ’24 | 1187.25 | 14.5 |
| Chicago Wheat | ||
| MAY ’24 | 547.5 | 0.25 |
| JUL ’24 | 560.75 | -0.25 |
| JUL ’25 | 624.25 | -3.25 |
| K.C. Wheat | ||
| MAY ’24 | 597.25 | -1.5 |
| JUL ’24 | 587.5 | -0.25 |
| JUL ’25 | 628 | -0.75 |
| Mpls Wheat | ||
| MAY ’24 | 672 | 2 |
| JUL ’24 | 675.5 | 2 |
| SEP ’24 | 681.25 | 2.5 |
| S&P 500 | ||
| JUN ’24 | 5240 | 54.25 |
| Crude Oil | ||
| MAY ’24 | 77.28 | -0.25 |
| Gold | ||
| JUN ’24 | 2182.9 | -27.1 |
Grain Market Highlights
- Two-sided trade in the corn market balanced a friendly CONAB forecast of Brazil’s corn production and a bearish US supply situation with little fresh market news as corn futures settled mostly unchanged across the board.
- CONAB’s lower forecast for Brazil’s soybean crop of 146.9 mmt, compared to the USDA’s 155 mmt estimate, gave May soybeans a bullish shot in the arm to rally within 3 ½ cents of the 50-day moving average and its highest close since early February.
- Soybean oil closed sharply higher and lent additional support to soybeans, with support coming from higher palm oil and reports that Ukraine’s sunflower crop is down 5.5% from last year. Soybean meal regained some ground from yesterday’s losses, posting a modest $2.0 gain.
- The wheat complex settled the day mixed following yesterday’s strong closes across the board. Lower production and stocks estimates for Brazil, Ukraine, and India gave the markets an initial boost to start the day, but prices drifted off the highs in choppy trade to close mid-range in all three classes.
- To see the updated US 6 – 10 day temperature and precipitation outlooks, and the 2-week precipitation forecast for Brazil, 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. In late February, after languishing in a downtrend that began last October and managed funds posting a record net short position exceeding 340,000 contracts, front month corn posted a bullish key reversal. Since that time, the market has rallied as the funds covered some of their short positions, though they remain heavily short the market, which could fuel an extended rally as we head 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. After posting a bullish key reversal in late February, Dec ’24 rallied along with front month corn as funds exited some of their record net short position. As we quickly approach the spring planting window, a lot of uncertainty remains, and the near record short position that the funds continue to carry is supportive and could fuel further short covering and higher prices for Dec ’24. 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 springtime 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
- Today was a consolidation day in the corn market as overall news remained quiet for the session. Corn futures saw two-sided trade with a 7-cent trading range as the May futures finished unchanged on the session.
- Corn futures have traded higher and near the top of the daily trading range for the past three sessions, but today buying strength faltered. This may be an indicator that upward momentum has slowed, or farmer selling limited the market upside.
- The bearish fundamental picture of front-end corn supplies is still a major limiting factor in the corn market rally. With today’s close, corn futures are still trading at a 4-week high, and 33 cents off the most recent low on the May futures.
- The Brazilian Agriculture Agency, CONAB, released their March corn crop projections this morning. CONAB lowered the expected Brazilian corn production estimate to 112.75 mmt, down nearly 1 mmt from last month and just over 19 mmt under last year on reduced planted area and dry weather in the early growing season. Total corn exports from Brazil where left unchanged from last month’s report at 32 mmt.
- Brazil’s weather will stay a focus in the corn market. Forecasts for a ridge of heat building over central Brazil later in the week help support Brazilian and US corn prices. If weather conditions become less favorable, additional weather premium may be added into the corn market.
Above: On March 7th the corn market closed above the 20-day moving average for the first time since late December. If it can push through and close above the 435 – 445 resistance area it could test the January high of 452 ¼. If they fall back, and close below 421, the bottom of the recent range, then they may slide to test downside support between 400 and 410.
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. Since old crop soybeans broke out of the 1290 – 1400 range in January, prices appear to have made a near term low. Managed funds have also established a record net short position for this time of year, and world carryout has dropped according to the USDA. While new lows could still be made, US planting is not far off, and the funds current short position could fuel an extended short covering rally on a smaller South American crop, lower world soybean carryout, and potential US weather concerns. Should that happen, Grain Market Insider will look at making additional sales if prices post an historically modest 30% retracement back toward the 2022 high of 1759.
- No new action is recommended for the 2024 crop. Since the beginning of the year, Nov ’24 has tracked alongside the 2023 old crop contracts as South American weather stabilized and the market dealt with bourgeoning domestic supplies and slowing demand. While the decline in prices was disappointing, a near-term low may be in place. With planting season just ahead and plenty of time remaining to market this crop, many unknowns remain that can bring higher prices. 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 upper 1300 range near the 2022 highs 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 with support from a rally in soybean oil and the release of CONAB numbers showing lower expected soybean production in Brazil. May soybeans have now rallied over 67 cents from the low at the end of February. Soybean meal closed higher as well.
- Earlier today, CONAB released its estimate for the 2024 Brazilian soybean crop at 146.8 mmt. This was below the average analyst trade guess of 149 mmt and well off the estimate of 155 mmt that was just released by the USDA. The discrepancy between CONAB and the USDA has seemed to widen as harvest progresses.
- As the Brazilian harvest presses on, soybean premiums have trended higher since January due to a lack of farmer selling at those low prices. Higher Brazilian premiums have been bullish for US prices, but they could also spark farmer selling which could bring prices back down.
- Yesterday’s soybean inspections for the US of 26 mb brought inspections to a 23-week low with shipments down 19% from last year. Export demand will likely worsen as Brazil completes its harvest and Argentina continues its growing season.
Above: After posting a low of 1128 ½ on February 29, soybeans have rallied higher on short covering. The market remains oversold on the weekly chart and continues to provide underlying support. For now, resistance remains between 1190 and 1205, with the next area of heavy resistance between 1225 and 1250 if prices continue higher. Underneath, initial support remains between 1130 and 1140.
Wheat
Market Notes: Wheat
- Wheat was mixed to mostly lower today, though it did close within a penny or two of unchanged. By comparison, both May and September Matif wheat futures closed unchanged. After yesterday’s bullish key reversal in May Chicago wheat futures, it was somewhat disappointing that there wasn’t any strong follow through today. On a positive note though, there were no further announced cancelations of US wheat to China this morning.
- Wheat prices in Brazil continue to weaken, despite indications that their 23/24 wheat crop supply will be below demand. It is said that in Brazil, end users are looking for high quality wheat, but supply remains low. Internationally, prices have recently moved lower as well. Russia’s cheap exports are one of the main contributing factors. Their April FOB values have fallen to $198/mt, according to Sov Econ – this keeps the US uncompetitive on exports.
- CPI (Consumer Price Index) data this morning showed that inflation increased, with February higher than last year at 3.2% – the trade was looking for a 3.1% increase. In addition, the CPI was up 0.4% in the month of February alone, which was 0.1% higher than expectations. This indicates that the Federal Reserve may be slow to lower interest rates, affecting the US Dollar, and potentially wheat prices.
- Due to lower planted acreage, higher costs, and labor shortages, Ukraine’s 2024 grain and oilseed harvest could be down 8% versus last year, to 76 mmt. According to Ukrainian officials, wheat specifically may be down 14.5% to 20 mmt of production.
- CONAB released their estimates of Brazilian wheat production this morning, in which they projected a decline of 0.6 mmt to 9.6 mmt. For reference, the USDA is forecasting Brazil’s wheat production at 8.1 mmt. On a bullish note, India’s wheat stocks are said to have fallen to 9.7 mmt versus 11.7 mmt last year, which is the lowest March number in seven years.
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, the July ’24 contract has suffered in a lower trend while going on to make new contract lows. Although the lack of any bullish information has been disappointing, the market is in a significantly oversold condition, and managed funds continue to hold a significant net short position. Either or both could fuel a short covering rally at any time as we head into the more active part of the growing season. At the end of August, Grain Market Insider recommended purchasing July ‘24 590 puts to prepare for further price erosion, and recently recommended exiting half of those puts to lock in gains and get closer to a net neutral cost on the remaining position. If the market receives the needed input 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 remaining July ‘24 590 put position will add a layer of protection if prices erode further.
- 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: With the market posting a bullish key reversal on March 11, the market may challenge the 50-day and the 100-day moving averages that coincide with the congestion area between 585 and 620. Down below the market nearby support comes in near the March 11 low of 523 ½, with further support around 470 – 488.
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: The March 6th low of 551 ½ has held so far with the market testing the 50-day moving average. If the market can close above there, it could then make a run toward the congestion range between 610 and 640. If the market does turn lower, the next major level of support below 551 ½ may come in near 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: After breaking out of the consolidation range, there appears to be a rounded bottom formation in May Minneapolis wheat, which suggests that prices could test the 700 – 710 area if they can close above the 50-day moving average and nearby 675 – 680 resistance. If prices turn back lower, nearby support remains near 640, with major support near 600.
Other Charts / Weather
Above: Brazil 2-week forecast total precipitation courtesy of the National Weather Service, Climate Prediction Center.
Above: Brazil 2-week forecast precipitation, percent of normal, courtesy of the National Weather Service, Climate Prediction Center.