3-21 End of Day: Markets Settle in the Green Across the Board but Off Their Highs
All prices as of 2:00 pm Central Time
| Corn | ||
| MAY ’24 | 440.75 | 1.75 |
| JUL ’24 | 454 | 1.75 |
| DEC ’24 | 476.75 | 2 |
| Soybeans | ||
| MAY ’24 | 1212 | 2.5 |
| JUL ’24 | 1225.75 | 2.5 |
| NOV ’24 | 1204.25 | 4 |
| Chicago Wheat | ||
| MAY ’24 | 546.75 | 1.75 |
| JUL ’24 | 562 | 1.75 |
| JUL ’25 | 632.25 | 1.25 |
| K.C. Wheat | ||
| MAY ’24 | 581.75 | 1.25 |
| JUL ’24 | 575.5 | 1.75 |
| JUL ’25 | 623.75 | 1 |
| Mpls Wheat | ||
| MAY ’24 | 656.5 | 1.5 |
| JUL ’24 | 661.5 | 0.5 |
| SEP ’24 | 668.5 | 1 |
| S&P 500 | ||
| JUN ’24 | 5304 | 17.25 |
| Crude Oil | ||
| MAY ’24 | 81 | -0.27 |
| Gold | ||
| JUN ’24 | 2205.2 | 22.8 |
Grain Market Highlights
- Carryover strength from the soybean complex and concerns about too much rain in Argentina helped support the corn market that saw both sides of unchanged and closed with small gains across the board.
- Soybeans started off strong in the overnight session with support coming from soybean meal on talk of damage to the Argentine soy crop from recent heavy rains. Although, May soybeans ultimately retreated from the 1226 ¾ high on increased US and Brazilian farmer selling.
- Soybean oil ended lower on the day, adding upward resistance to soybeans as it came under pressure from lower Malaysian palm oil, crude oil, and heating oil following early strength on talk of potential losses to the Argentine soybean crop.
- Despite poor weekly export sales and rising estimates of Russia’s wheat crop by SovEcon, all three wheat classes were able to rally off their respective lows and settle higher on the day.
- Today, the US Dollar posted a turnaround from yesterday’s losses, which were in response to the Federal Reserve’s decision to keep interest rates unchanged. This reversal may have added some upside resistance to the grain markets.
- To see the updated US Drought Monitor and the Seasonal US temperature and precipitation outlooks, courtesy of the NDMC, 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
- Buying strength in the grain markets supported corn futures in Thursday’s session. Strong overnight strength pushed May futures to their highest levels in over a month, but prices faded and stayed tagged near the 440 level.
- Weekly export sales for corn remain supportive. The USDA reported new sales last week of 46.7 mb (1.185 mmt), which were within expectations. Total corn sales commitments now total 1.642 billion bushels, trending 19% higher than last year.
- South American weather is non-threatening overall. Areas of Brazil have received rainfall for the second (safrinha) crop corn as planting finishes. There are regional reports of stress due to heat, but the weather trend still looks favorable. Argentina weather is seeing an overall drier outlook as the crop nears completion.
- The recent price strength reflects managed money’s lifting of short positions before the beginning of the US growing season. The market will watch early season weather and determine the next direction for corn prices.
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 refrain from making further sales until the market rebounds towards the 1300 level, which represents a modest 30% retracement from the 2022 high.
- 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 ultimately ended the day higher but were volatile throughout the day with overnight trade seeing May futures up as much as 18 cents and down as much as 5 cents this afternoon. Soybean meal ended higher with support from Argentina’s excess of rain, while soybean oil was lower.
- Soybeans have been making technical rallies after surpassing the 50-day moving average with likely short covering taking place by the funds. However, when prices rallied overnight, it spurred increased farmer selling in the US and Brazil, which added downward pressure to prices.
- Today’s export sales report showed an increase of 18.2 mb of soybean export sales for 23/24 which was within the range of trade expectations. Soybean sales commitments are down 19% from a year ago. Last week’s export shipments of 28.4 mb were above the 15.9 mb needed each week to meet the USDA’s expectations. Primary destinations were to China, Mexico, and Indonesia.
- South American weather has been wet overall and may cause harvest delays in Brazil until next week. Argentina is also reportedly too wet which could cause some damage to their soy crop. Argentina is the number one exporter of soybean meal, so this is likely the reason for the recent rally.
Above: Although May soybeans rejected a rally through the previous high of 1217 ½, they closed higher on the day and could still rally further. If downside support near 1175 continues to hold and prices close above 1226 ¾, the market could continue and test the January high of 1247 ½. If not, the market runs the risk of retreating down toward the 1130 – 1140 support area.
Wheat
Market Notes: Wheat
- All three US wheats managed to close marginally higher, despite a two-sided trade and some negative influences.
- SovEcon is said to have increased their Russian 24/25 wheat production estimate by 1.2 mmt to 94 mmt, versus 92.8 mmt for the 23/24 season, and the USDA’s estimate of 91.5 mmt. This is also well above the five-year average of 86.7 mmt.
- To add to negativity, the US Dollar Index surged today, hovering near recent highs above 104, and while Paris milling wheat futures closed marginally higher today, they ran into resistance around the 40 and 50-day moving averages. These combined factors may have limited the upside movement of US futures today.
- The USDA reported a decrease of 4.0 mb of wheat export sales for 23/24 and an increase of 10.5 mb for 24/25. Shipments last week at 14.5 mb were below the pace of 17.9 mb needed per week to reach the USDA’s goal of 710 mb of 23/24 wheat exports.
- In the face of recent cancellations, China may have record grain imports for 2024. Their Australian wheat imports from January and February are nearly four times what they were a year ago. China is the world’s largest wheat buyer and is also a major importer of ag goods, reportedly spending a total of $234 billion on imports last year.
- According to Coceral, the European grain harvest, including both the EU and the UK, is projected at 295.5 mmt. That is down 1 mmt from their December estimate of 296.5 mmt, but would still be above the 292.4 mmt from the 2023 harvest. The main reason cited for the projected decline is wet weather that delayed planting.
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 inability of the market to surpass the 50-day moving average suggests considerable resistance in this area, potentially leading to a test of support near the 551 ½ low. However, if prices reverse course and manage to close above the 50-day moving average, there’s a possibility of a rally towards the congestion range between 610 and 640. Although there seems to be substantial support around 551 ½, a breach below this level could lead to a test of 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
