3-13 End of Day: Markets Close Mixed; Soybeans Find Support from Higher Bean Oil
All prices as of 2:00 pm Central Time
| Corn | ||
| MAY ’24 | 441.25 | -0.5 |
| JUL ’24 | 453.5 | -0.25 |
| DEC ’24 | 473 | 0.25 |
| Soybeans | ||
| MAY ’24 | 1196.75 | 0.75 |
| JUL ’24 | 1210.25 | 1.75 |
| NOV ’24 | 1186 | -1.25 |
| Chicago Wheat | ||
| MAY ’24 | 544.25 | -3.25 |
| JUL ’24 | 558.25 | -2.5 |
| JUL ’25 | 624.75 | 0.5 |
| K.C. Wheat | ||
| MAY ’24 | 587.5 | -9.75 |
| JUL ’24 | 579.5 | -8 |
| JUL ’25 | 623.25 | -4.75 |
| Mpls Wheat | ||
| MAY ’24 | 663.5 | -8.5 |
| JUL ’24 | 667.5 | -8 |
| SEP ’24 | 672.5 | -8.75 |
| S&P 500 | ||
| JUN ’24 | 5242.75 | 1.5 |
| Crude Oil | ||
| MAY ’24 | 79.39 | 2.14 |
| Gold | ||
| JUN ’24 | 2202.9 | 15.2 |
Grain Market Highlights
- The corn market saw choppy two-sided trade in a tight 6 ¼ cent range and a mixed close with the deferred contracts gaining on the nearby. Weekly corn usage for ethanol remained supportive, though ethanol production slipped from the previous week’s totals.
- Strength from soybean oil helped May soybeans claw their way to 3 ½ cents higher on the day before settling back to just above unchanged and just below the 50-day moving average.
- Soybean oil gained on meal again as it closed higher for the third day in a row and challenged its 100-day moving average with support from higher world veg oil prices. Meal, on the other hand, slipped and closed lower in today’s session as the prospect of cheaper South American supplies continues to weigh on US prices.
- The wheat complex did an about face as all three classes closed lower, giving up yesterday’s advances. A quiet news day, lower Matif wheat, and rumors of more possible Chinese SRW cancellations brought back the sellers and weighed on the market.
- To see the updated US 7-day precipitation forecast, the US and Brazil NASA-Grace drought indicator maps, and the 2-week precipitation forecast for Brazil, courtesy of the NWS, CPC, NOAA, and NASA-Grace, 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
- The Wednesday price action in corn futures matched Tuesday’s as prices consolidated with a relatively quiet 6 ¼ cent trading range. May corn slipped ½ cent on the session.
- The weekly ethanol report saw production slip last week to 1.024 million barrels/day, down slightly from the week prior. There were 102.6 million bushels of corn used in last week’s ethanol grind which is still slightly ahead of the pace needed to reach USDA corn usage targets. Ethanol stocks slipped to 25.8 million barrels.
- With the recent price rally, the market will be watching if the higher prices impact export sales totals. The USDA will release weekly export sales on Thursday morning. Expectations for new sales to range from 800,000 mt – 1.4 mmt for the current marketing year. Last week, corn export sales reached 1.109 mmt.
- Brazil’s weather will stay a focus in the corn market. Forecasts for Brazil corn growing regions trending warmer and drier into April help support Brazilian and US corn prices. If weather conditions become less favorable, additional weather premium may be added into the corn market.
- Managed funds are still holding a large short position in the corn market. The recent price strength has funds covering some of those short positions to take risk off the table with questionable weather forecasts for Brazil and in anticipation of the US planting of this year’s crop.
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 finished the day mixed with the May and July contracts closing slightly higher while the deferred months were lower. Soybeans were significantly lower earlier in the day and rallied thanks to gains in soybean oil. Soybean meal closed lower.
- The rally off today’s lows in soybeans can be mainly attributed to the support in soybean oil which is a result of reduced palm oil production in recent forecasts. Stats Canada has also cut its estimates for canola production which has been bullish for all edible oils.
- 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 may bring prices back down.
- Brazil’s soybean harvest is over 55% completed but in the main growing area of Mato Grasso, harvest is 84% complete. The nearby forecast is calling for little rain in Brazil which should see harvest continuing without issue.
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
- All three US wheat classes closed with losses in tandem with Paris milling wheat futures. A lack of fresh fundamental news, along with rumors that there may be more Chinese cancellations led to a weaker trade. So far, China has cancelled 18.5 mb of US SRW wheat purchases, but some analysts think there could be an additional 10-15 mb cancelled soon.
- According to the USDA as of March 5, about 14% of the US winter wheat area is experiencing drought. Additionally, 30% of the spring wheat crop is in drought. As spring approaches in the northern hemisphere, dry pockets in the US may become more of an issue that, if they persist, may lead to higher commodity prices. However, cheap Russian wheat exports may limit upside potential for now.
- On a bullish note, Indian wheat stocks have hit a seven-year low, which may make them a net importer. They are the world’s third largest wheat producer behind China and the EU. But due to weather problems and increased domestic demand they may no longer be a net exporter.
- House democrats are attempting to circumvent the house speaker’s control to vote on a $95.3 billion aid package for Ukraine and Israel. Of that total, $60 billion is said to be allocated for Ukraine’s military defense. As both wars rage on, the impact on the wheat market appears to be minimal at this time; Ukraine has been very successful at exporting ag goods even without the approval of Russia.
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
Active
Exit Half JUL ’24 590 Puts ~ 67c
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.
- Grain Market Insider sees a continuing opportunity to sell half of your July ‘24 590 Chicago Wheat puts. Last August Grain Market Insider recommended buying July ’24 590 Chicago wheat puts for approximately 31 cents in premium plus commission and fees to protect the downside from potential price erosion. At the time, US export demand was very weak with lower world export prices, and July Chicago wheat had just broken through support near 610. The breaking of 610 support increased the risk of the market retreating further. Since that time July ’24 Chicago wheat has dropped about 110 cents, with the July ’24 590 Chicago wheat puts gaining about 200% in value. Though world export prices remain low, plenty of time remains to market the ’24 crop, and following this market drop, any increase in demand or threat of yield loss could rally prices. Grain Market Insider recommends selling half of the previously recommended July ’24 590 Chicago wheat puts to lock in gains and move toward a net neutral cost on the remaining position, which will continue to protect any unsold bushels 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: After posting a bullish reversal on March 11, prices appear to have stalled around 555 and could retreat toward the support area near the recent low of 523 ½. Below there, further support may be found around 470 – 488. If prices regain their bullish footing, and close above 556, they then could challenge the 50 and 100-day moving averages that coincide with the 585 – 620 congestion area.
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: For now, it appears that May KC wheat has rejected the advances above the 50-day moving average and may retreat back toward support around the 551 ½ low with minor nearby support around 570. If prices can penetrate and close above the 50-day moving average, they could still make a run toward the 610 to 640 congestion area.
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.
