3-20 End of Day: Soybeans Sharp Rally Supports Corn, as Wheat Closes off its Lows
All prices as of 2:00 pm Central Time
| Corn | ||
| MAY ’24 | 439 | -0.5 |
| JUL ’24 | 452.25 | 0 |
| DEC ’24 | 474.75 | 1.5 |
| Soybeans | ||
| MAY ’24 | 1209.5 | 24 |
| JUL ’24 | 1223.25 | 23 |
| NOV ’24 | 1200.25 | 19 |
| Chicago Wheat | ||
| MAY ’24 | 545 | -7.5 |
| JUL ’24 | 560.25 | -7 |
| JUL ’25 | 631 | -4 |
| K.C. Wheat | ||
| MAY ’24 | 580.5 | -2.25 |
| JUL ’24 | 573.75 | -1.75 |
| JUL ’25 | 622.75 | -0.75 |
| Mpls Wheat | ||
| MAY ’24 | 655 | -0.75 |
| JUL ’24 | 661 | -1.5 |
| SEP ’24 | 667.5 | -2 |
| Su0026P 500 | ||
| JUN ’24 | 5246.75 | 5 |
| Crude Oil | ||
| MAY ’24 | 81.36 | -1.37 |
| Gold | ||
| JUN ’24 | 2189.4 | 8.2 |
Grain Market Highlights
- Strength in soybeans and a bump in corn usage for ethanol production lent support to corn futures, which also came under pressure from the lower wheat market to close near unchanged in a tight 4-cent range.
- A flash sale of 120,000 mt for the 24/25 marketing year gave an extra boost to the soybean market, which closed above the 50-day moving average for the first time since December. Additional support came from both products which posted steady rallies to close sharply higher and add 4 ½ cents to May Board crush margins.
- Early weakness across the wheat complex gave way to bargain hunting which rallied all three wheat classes off midday lows. Although the complex closed lower on the day, Minneapolis and KC were the strongest performers settling near the top end of their trading ranges, while Chicago closed mid-range but still well off its lows.
- To see the updated US 7-day precipitation forecast, 6 – 10 day temperature and precipitation outlooks, and the 1-week precipitation forecast for Brazil and Northern Argentina, 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
- Corn futures stayed in consolidative trade with a narrow 4 cent trading range. The corn market seemed stuck between the selling pressure in the wheat market and the strength in the soybean market during the session. The May contract is still struggling with 440 overhead resistance, which has been holding the market in check.
- Weather forecasts for the US Corn Belt have turned wetter with combinations of rain or snow falling over the central Corn Belt. If realized, this precipitation could provide beneficial moisture to areas in need. This could help build a good base for the planting of the 24/25 corn crop in the US.
- Ethanol production last week averaged 1.046 million barrels a day. This was up 2.1% over the previous week and 4.9% over last year. Corn usage for the week was estimated at 103.82 mb, and is still ahead of the pace projected by the USDA.
- Weekly export sales will be reported on Thursday morning. Corn sales have been supportive, and expectations are for new sales to range from 800,000 – 1.4 mmt for last week. The previous week saw new sales of 1.283 mmt.
- 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.
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 rallied into the end of the day for a sharp gain driven by technical buying, Argentinian weather that may be too wet, a flash sale that was reported this morning, and higher soybean meal and soybean oil.
- May soybeans closed above the 12-dollar mark for the first time since the beginning of February, and short covering likely kicked in once soybeans rallied above the 50-day moving average at 1195. The funds have slowly unwound a portion of their net short position over the past few weeks and no longer hold a record short position.
- This morning, private exporters reported sales of 120,000 metric tons of soybeans for delivery to unknown destinations during the 24/25 marketing year. Overall, soybean sales have been sluggish as Brazil harvests their soy crop and maintains the competitive advantage in export sales.
- In South America, the weather has been good overall with abundant rain, but Argentina may be receiving too much rain which could be supporting soybean meal prices. Today’s rally could spark a large round of farmer selling in South America tomorrow, which could cause prices to sell off.
Above: The bearish reversal on March 14 indicates potential for a market reversal to the downside. For now, initial support near 1175 appears to be holding and the close above the 50-day moving average could indicate a shift in sentiment, with a potential test of the recent high at 1217 ½ before testing the January high of 1247 ½. If prices turn back and close below 1175, they may retreat further toward 1130 – 1140 support.
Wheat
Market Notes: Wheat
- Despite the strong close for soybeans, it did not do much to pull wheat higher. All three US wheat classes posted losses with Chicago leading the way down. Part of the weakness stemmed from a lower close for Matif futures, a general lack of friendly news, as well as a continued higher trend in the US Dollar Index.
- Egypt’s GASC is tendering for wheat, and today it was reported that Romania had the lowest offer at $232.50/mt FOB. Results of that tender are expected this afternoon.
- In other news, it was reported that Egypt will allot $2.66 billion for bread subsidies as part of the 24/25 budget. These subsidies provide reduced prices of bread and other staple foods to over half of their population. Egypt is a major wheat importer so this may provide some support to the market if they import more wheat.
- According to Ukraine’s Agricultural Ministry, winter crops as of March 15 are mostly satisfactory to good. Ukraine also planted a total of 4.4 million hectares of winter wheat, which accounts for 95% of their total wheat production.
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: US 7-day precipitation forecast courtesy of NOAA, Weather Prediction Center
Above: Brazil and N. Argentina 1-week forecast total precipitation courtesy of the National Weather Service, Climate Prediction Center
Above: Brazil and N. Argentina 1-week forecast precipitation, percent of normal, courtesy of the National Weather Service, Climate Prediction Center