3-18 End of Day: Grain Markets Mixed to Start the Week; Wheat Higher, Beans Lower, Corn Near Unchanged
All prices as of 2:00 pm Central Time
| Corn | ||
| MAY ’24 | 436 | -0.75 |
| JUL ’24 | 448.75 | -0.25 |
| DEC ’24 | 470.75 | 0 |
| Soybeans | ||
| MAY ’24 | 1187.75 | -10.5 |
| JUL ’24 | 1202.25 | -10.25 |
| NOV ’24 | 1180.5 | -10.25 |
| Chicago Wheat | ||
| MAY ’24 | 542.75 | 14.25 |
| JUL ’24 | 557.5 | 13.5 |
| JUL ’25 | 627.25 | 9 |
| K.C. Wheat | ||
| MAY ’24 | 573.75 | 7.5 |
| JUL ’24 | 567.5 | 7.75 |
| JUL ’25 | 616 | 7.5 |
| Mpls Wheat | ||
| MAY ’24 | 650.75 | 4.25 |
| JUL ’24 | 657.75 | 4.25 |
| SEP ’24 | 665 | 5 |
| S&P 500 | ||
| JUN ’24 | 5227.25 | 44.5 |
| Crude Oil | ||
| MAY ’24 | 82.21 | 1.63 |
| Gold | ||
| JUN ’24 | 2185.2 | 2.1 |
Grain Market Highlights
- The corn market gave up overnight strength shortly after the opening of the day session despite solid export inspections totaling 49 mb. Improved South American forecasts and increased Brazilian farmer selling limited the upside of a choppy trading day that saw both sides of unchanged.
- The brisk harvest pace in Brazil with farmer selling, and weakness from both soybean meal and oil contributed to the pressure in the soybean market as it continues to consolidate from last week’s rally.
- Following last week’s impressive run up on short covering, soybean oil saw a market reversal with sharp losses that, along with weaker soybean meal, added pressure to soybeans. Last Friday’s CFTC report showed that funds covered 29k of their net short soybean oil positions as of March 12, while also adding 3,300 contracts to their net short meal position.
- Reports of more drone attacks and increased tension between Russia and Ukraine helped give legs to the wheat complex that has been short on any war premium and near its lows. Additional support came from higher Matif wheat and potential short covering.
- To see the updated US 7-day precipitation forecast, 6 – 10 day temperature and precipitation outlooks, and 1-week precipitation forecast (also percent of normal) 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
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, 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 uncertainty of the spring planting window.
- No new action is recommended for 2023 corn. The recommendation for now is to hold off on additional sales until May corn recovers back toward the 500 level. If you need to move bushels for cash or logistics reasons, consider re-owning any sold bushels with September call options.
- No new action is recommended for 2024 corn. Given the amount of time and uncertainty that remains to market the 2024 crop, we will consider recommending additional sales on a retracement toward the low to mid 500 level.
- No Action is currently recommended for 2025 corn. For now, we aren’t considering any recommendations at this time for the 2025 crop that will be planted next year. It will probably be spring or summer 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
- Another quiet day overall in the corn market as corn prices were trapped between a weak soybean market and buying strength in the wheat markets. May futures had a tight 5 ½ cent trading range on the session as prices continue to consolidate.
- Weekly corn inspections toted 48.8 mb in another good week. Total corn inspections now total 909 mb, up 31% from last year. Current US corn export inspections are above the USDA’s estimated pace, which is forecasting a 26% rise over last year.
- Strong selling in the Brazilian corn futures market limited gains in US corn prices. Brazilian May corn futures contract was 2.5% lower on the session with improved rain chances in the near-term forecasts.
- Strong planting pace for the second crop Brazil corn crop is a limiting factor with the prospects of a longer growing season. AgRural estimated that 97% of the Brazil’s 2nd (safrinha) corn crop is planted, up from 93% last week and 91% from last year. Weather will remain a strong focus of the market over the next couple months as the crop develops.
- Managed hedge funds continue to lighten up on their short position in the corn market. It was still historically large overall, but funds exited 40,867 net short contracts on last week’s Commitment of Traders’ report. As of Tuesday, March 12, funds are still holding a net short position of 255,982 contracts.
Above: The corn market continues to battle the 50-day moving average and the 435 – 445 resistance area. If it can close above it, the market could then test the January high of 452 ¼. If prices fall back, and close below 421, then they may slide to test downside support between 400 and 410.
Above: Corn Managed Money Funds net position as of Tuesday, March 12. Net position in Green versus price in Red. Managers net bought 40,867 contracts between March 6 – 12, bringing their total position to a net short 255,928 contracts.
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
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.
- No new action is recommended for 2023 soybeans. The current recommendation is to hold off on making additional sales until prices post a modest 30% retracement back toward the 2022 high of 1759.
- No new action is recommended for the 2024 crop. Considering the amount of uncertainty that lies ahead with the 2024 soybean crop, we 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 we would consider recommending additional sales.
- No Action is currently recommended for 2025 Soybeans. We currently aren’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
- To kick off the week, soybeans closed firmly in the red, brought lower by both soybean meal and oil along with an uptick in Brazilian farmer selling. Export inspections were in line with expectations but did nothing to support futures.
- Export inspections today came in at 25.2 mb for the week ending Thursday, March 14. This was within analysts’ expectations and were above the 15 mb needed each week to meet the USDA’s forecast. Total inspections for 23/24 are at 1,314 mb, which is down 19% from last year.
- South American weather is expected to improve with central Brazil already receiving beneficial rains in Mato Grosso with more rains forecast later in the week for southern Brazil and Argentina. Brazil is reportedly 63% complete with harvest but there is still a large discrepancy in production estimates between CONAB and the USDA, with the USDA’s projection nearly 10 mmt higher.
- Friday’s CFTC report showed funds buying back soybeans but not in the same numbers as they did corn. They covered 16,862 contracts which leaves them net short 155,137 contracts and no longer holding a record short position.
Above: Following the brief run-up off the recent low, soybeans posted a bearish reversal on March 14, indicating a potential market reversal to the downside. Initial support down below may be found near 1175, and again between 1130 and 1140. If the market closes above the 50-day ma and continues higher, it may find resistance near the recent 1217 ½ high before testing the January high of 1247 ½.
Above: Soybean Managed Money Funds net position as of Tuesday, March 12. Net position in Green versus price in Red. Money Managers net bought 16,862 contracts between March 6 – 12, bringing their total position to a net short 155,137 contracts.
Wheat
Market Notes: Wheat
- Wheat closed higher across the board today and with double-digit gains for Chicago futures. Support came from higher Matif futures, as well as media reports that 16 Russian drones attacked the Odesa region in Ukraine, damaging ag infrastructure and again increasing tensions. This is reportedly in retaliation for recent Ukraine attacks on Russian oil refineries.
- Weekly wheat export inspections of 11.1 mb bring the total 23/24 inspections to 505 mb. That is down 16% from last year, with inspections running below the USDA’s projected pace. On the last WASDE report, the USDA reduced their wheat export estimate from 725 to 710 mb.
- Cheap Black Sea wheat may keep the lid on US futures for now. According to SovEcon, Russian exports of grain may reach 5.8 mmt in March, compared to 4.9 mmt in February. Additionally, Ukraine’s wheat exports since last July have totaled 12.9 mmt, which is a 5% year on year increase.
- The European Union is apparently considering restrictions on the import of ag goods from Russia in an effort to pressure the Kremlin. It is believed that transport through the EU to other countries will not be restricted, however.
- From March 6 to March 12, managed funds net sold 13,331 contracts of Chicago wheat to bring their total net short position to 78,870 contracts. That is a 20.3% increase and also a three-month high. It is possible that some of today’s positive price action was a result of funds covering some of those short positions.
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
Since the early December runup, Chicago wheat 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.
- No new action is currently recommended for 2023 Chicago wheat. 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. At the end of August, we 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. For now, the current recommendation is to hold off on making any additional sales unless the market moves back toward last summer’s highs. At which point, we are 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. The strategy for the 2025 crop year remains to hold off on making any sales. Though if prices rally toward the mid-600s, we will consider taking advantage of those better 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.
Above: Chicago Wheat Managed Money Funds net position as of Tuesday, March 12. Net position in Green versus price in Red. Money Managers net sold 13,331 contracts between March 6 – 12, bringing their total position to a net short 78,870 contracts.
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
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. Managed funds continue to hold a considerable net short position, and the market is at levels not seen since spring of 2021, which combined could trigger a return to higher prices if any unforeseen risks enter the market.
- No new action is recommended for 2023 KC wheat crop. The current strategy is to look for price appreciation as weather becomes a more prominent market mover and consider suggesting additional sales if prices make a modest 20% retracement of the 2022 highs back toward the upper 600s
- No new action is recommended for 2024 KC wheat. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside, and recommended exiting the original position in three separate tranches as the market got further extended into oversold territory to protect any gains that were made. Taking the equity gained from the closed July 660 put position into account, the current strategy for the 2024 crop is to wait for better opportunities and consider recommending additional sales if July ‘24 retraces back toward the January highs in the mid-630s.
- No action is currently recommended for 2025 KC Wheat. We currently aren’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 failure of the market to advance above the 50-day moving average indicates heavy resistance in the area, and it may test support near the 551 ½ low. Should prices turn around and close above the 50-day moving average, they could still make a run toward the 610 to 640 congestion area. While there appears to be significant support around 551 ½, if prices fall below there, they could test 530.
Above: KC Wheat Managed Money Funds net position as of Tuesday, March 12. Net position in Green versus price in Red. Money Managers net bought 5,339 contracts between March 6 – 12, bringing their total position to a net short 35,547 contracts.
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
Since last summer, 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.
- No new action is currently recommended for 2023 Minneapolis wheat. The current 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. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts (due to their higher liquidity and correlation to Minneapolis), to protect the downside, and recommended exiting the original position in three separate tranches as the market got further extended into oversold territory to protect any gains that were made. From here, the strategy for the 2024 crop is to consider recommending additional sales 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. We are currently not 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: Minneapolis wheat continues to trade in a congestion pattern following the retreat from overhead resistance near the 50-day moving average. Initial support below the market remains near the recent low of 641, with support near 600 if prices fall further. Overhead, if the market reverses and closes above 675 – 680 resistance, they could challenge the 700 – 710 area.
Above: Minneapolis Wheat Managed Money Funds net position as of Tuesday, March 12. Net position in Green versus price in Red. Money Managers net bought 2,437 contracts between March 6 – 12, bringing their total position to a net short 21,701 contracts.
Other Charts / Weather
Above: US 7-day precipitation forecast courtesy of NOAA, Weather Prediction Center
Above: Brazil 1-week forecast total precipitation courtesy of the National Weather Service, Climate Prediction Center
Above: Brazil 1-week forecast precipitation, percent of normal, courtesy of the National Weather Service, Climate Prediction Center