3-19 End of Day: Wheat Helps Boost Corn, While Beans Close Mixed
All prices as of 2:00 pm Central Time
| Corn | ||
| MAY ’24 | 439.5 | 3.5 |
| JUL ’24 | 452.25 | 3.5 |
| DEC ’24 | 473.25 | 2.5 |
| Soybeans | ||
| MAY ’24 | 1185.5 | -2.25 |
| JUL ’24 | 1200.25 | -2 |
| NOV ’24 | 1181.25 | 0.75 |
| Chicago Wheat | ||
| MAY ’24 | 552.5 | 9.75 |
| JUL ’24 | 567.25 | 9.75 |
| JUL ’25 | 635 | 7.75 |
| K.C. Wheat | ||
| MAY ’24 | 582.75 | 9 |
| JUL ’24 | 575.5 | 8 |
| JUL ’25 | 623.5 | 7.5 |
| Mpls Wheat | ||
| MAY ’24 | 655.75 | 5 |
| JUL ’24 | 662.5 | 4.75 |
| SEP ’24 | 669.5 | 4.5 |
| S&P 500 | ||
| JUN ’24 | 5236.25 | 21.5 |
| Crude Oil | ||
| MAY ’24 | 82.75 | 0.59 |
| Gold | ||
| JUN ’24 | 2181.9 | -4 |
Grain Market Highlights
- With little fresh news to move the market, corn futures continued to consolidate as they settled near the top end of a rather tight 5-cent range, driven mostly by another strong day in wheat.
- Soybeans settled mixed with new crop gaining on old crop as rallies continue to get capped by overhead resistance with cheaper export premiums out of Brazil and anticipation of beneficial Midwest rain later this week and next.
- Soybean meal settled higher on the day after trading both sides of unchanged. Meal’s midday surge lent strength to soybeans that was ultimately overcome by weakness in soybean oil, which ultimately closed lower after being unable to hold above its 100-day moving average.
- To satisfy European farmers, the EU is expected to levy tariffs on cereal grain imported from Russia and Belarus. The report helped give a boost to the wheat complex which followed through on yesterday’s firm trade and closed higher across all three classes for the second day in a row.
- To see the updated US 6 – 10 day temperature and precipitation outlooks, 1-week precipitation forecast for South America, and the Grace-based root zone drought indicators for the US and South America 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
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
- The corn market saw some buying strength on Tuesday as prices posted moderate gains on the session. With overall news relatively quiet, a second day of strength in the wheat market and short covering helped support corn futures but failed to push through the 440 price level.
- The corn export market is supportive of prices as US corn is fairly priced versus global competition, and that has been reflected in multiple weeks of good export sales and shipments. The export sale and shipment pace is currently running ahead of the USDA target. With an overall heavy US supply picture, corn futures may be limited in rally potential so as not to price US corn out of the export market.
- The national average corn basis has improved again this past week. On Monday, the national basis was 26.4 cents under the May futures, reflecting limited participation of cash sellers at these price levels.
- Brazilian weather looks suitable overall for crop development of the second (safrinha) crop corn as planting finishes. There are regional reports on stress due to heat, but the weather trend still looks favorable.
- Chinese corn imports for January and February were approximately 6.190 mmt, up 165 year-over-year. US to China corn shipments in this window have been light, reflecting the impact of the strong Brazil corn export program this winter.
Above: The corn market continues to battle the 50-day moving average and the 435 – 445 resistance area. If it can close above 445, 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.
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
- Soybeans ended the day mixed with slight losses in the front months and a slight gain for new crop in quiet, range-bound trade. Soybean meal ended the day higher, but soybean oil was pulled lower by palm oil which may have seen some profit taking from its recent rally.
- Brazil’s harvest is over 63% complete with the main growing state of Mato Grosso 96% complete. Weather has been conducive to harvest, but production estimates are very varied. In Argentina, weather has been favorable and this morning, Dr. Cordonnier raised his estimate of Argentine production by 1 mmt to 51 mmt.
- In Indonesia, palm oil exports have fallen by 25.4% month over month to 1.59m tonnes from 2.13m tonnes in January. This has caused a rally in palm oil futures which has mostly supported soybean oil over the past week, although prices have begun to slip.
- Tomorrow, the Federal Reserve will announce whether they are cutting interest rates or holding off again. So far, with the US dollar higher, traders may be pricing in that they will not reduce rates. Often, when the dollar rallies, it can pressure commodity prices.
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.
Wheat
Market Notes: Wheat
- It was another up day for all three US wheat classes. Paris milling wheat futures again lent support with a higher close for the third consecutive session. Today’s move upward is also despite a higher trend in the US Dollar Index, and winter wheat conditions improving in three of the four reporting states. The only decline was in Oklahoma, with a 4% drop to 61% good to excellent.
- As mentioned yesterday, there is more talk that the EU is preparing to issue sanctions against Russia. Specifically, they may impose tariffs on grain imports. A duty of 95 euros per mt would be set in place for Russian (and Belarusian) cereal grains; a 50% tariff would be added to oil seeds and products. Furthermore, the Polish prime minister has called for an outright EU ban on imports of Russian ag goods.
- In southern Brazil, 2023 wheat production was down 35.9% from the previous year. And now, due to depressed prices, the planted area for 2024 may decrease. However, if production is average, it will lead to greater supply than a year ago. CONAB is projecting a 6% decrease in planted areas but a production increase of 18.4% from 2023 at 9.59 mmt.
- According to the Iraqi Ministry of Commerce, their country has achieved self-sufficiency with 2 mmt of wheat in reserves. They are said to use about 4.5 – 5.0 mmt of wheat per year. In other words, they will not need to import wheat to maintain their stocks for seven months; they are also anticipating a large upcoming crop. Additionally, they have been able to use groundwater to irrigate and grow large crops in recent years, in the face of the country’s worst drought on record.
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: Chicago wheat continues to trade in a congestion pattern bound by 556 on the topside, and 523 ½ on the bottom. If prices regain their bullish footing, and close above 556, they could challenge the 50 and 100-day moving averages that coincide with the 585 – 620 congestion area. Otherwise, if they retreat and close below 523 ½, the next level of major support may come in around 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
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.
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.
Other Charts / Weather
Above: Brazil 7-day total accumulated precipitation courtesy of the National Weather Service, Climate Prediction Center
Above: Argentina 1-week forecast total precipitation courtesy of the National Weather Service, Climate Prediction Center