3-22 End of Day: Beans End Up Lower on the Week as Corn and Wheat Stage Recoveries
All prices as of 2:00 pm Central Time
| Corn | ||
| MAY ’24 | 439.25 | -1.5 |
| JUL ’24 | 452 | -2 |
| DEC ’24 | 475.25 | -1.5 |
| Soybeans | ||
| MAY ’24 | 1192.5 | -19.5 |
| JUL ’24 | 1205.5 | -20.25 |
| NOV ’24 | 1187 | -17.25 |
| Chicago Wheat | ||
| MAY ’24 | 554.75 | 8 |
| JUL ’24 | 569.5 | 7.5 |
| JUL ’25 | 639.25 | 7 |
| K.C. Wheat | ||
| MAY ’24 | 590.5 | 8.75 |
| JUL ’24 | 584.75 | 9.25 |
| JUL ’25 | 632 | 8.25 |
| Mpls Wheat | ||
| MAY ’24 | 661 | 4.5 |
| JUL ’24 | 665.75 | 4.25 |
| SEP ’24 | 672.5 | 4 |
| S&P 500 | ||
| JUN ’24 | 5303.25 | 0.75 |
| Crude Oil | ||
| MAY ’24 | 80.64 | -0.43 |
| Gold | ||
| JUN ’24 | 2185.5 | -21 |
Grain Market Highlights
- Another announced corn sale to Mexico and a solid recovery in wheat wasn’t enough for the corn market to overcome the weakness in the soybean pit. May corn futures struggle to stray from the 440 level as they close the week in a relatively tight consolidation range.
- Yesterday’s short covering in the soybean market was met with both technical and farmer selling, and today, the technical selling intensified once prices dropped below yesterday’s lows. Weakness from soybean meal and oil contributed to the declines.
- Soybean meal and oil both ended the day in the red today, with the lingering effects of large February crush supplies looming, along with lower palm oil and weakening renewable diesel margins weighing on bean oil. May Board crush margins also came under pressure, losing 4 ¾ cents.
- The wheat complex had a wild ride which tested the lows of this week’s consolidation ranges for all three classes before buyers emerged. Technical buying and higher Matif wheat futures helped all three classes closed near the top end, with Chicago and KC posting 20-cent ranges, while Minneapolis saw a 13-cent range.
- To see the updated US 7-day precipitation forecast, 8 – 14 day temperature and precipitation outlooks, and the 2-week precipitation forecast for Brazil and N. Argentina, 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
- Despite an announced corn sale and strength in the wheat market, the selling pressure in the soybean market limited upside potential in the corn futures on Friday. The May contract finished softer, still tied to the 440 level on the charts. For the week, May futures did finish 2 ½ cents higher.
- May corn futures remain in a tight overall trading range, as they continue to consolidate. Since March 7th, May corn futures have been tied to the 440 price level with closes ranging from as high as 441 ¾ to a low of 433 during that time frame.
- The USDA announced a flash sale on corn to Mexico. Mexico continues to be a strong buyer of US corn, purchasing another 10.4 mb (263,000 mt), split with 173,000 mt of old crop and 90,000 mt for the 24/25 marketing year.
- The Buenos Aires Gran exchange lowered their projection for the Argentina corn crop to 54 mmt, down 2.5 mmt from their last forecast. The reduction was due to dry weather in February and the impact of plant pathogens. Even with the reduction, this will be the largest projected corn crop in Argentina since 2018-19.
- The CFTC will release the next Commitment of Traders report this afternoon. Managed money has been exiting their overall short position in recent weeks with the recent price strength. Last week, managed funds held a net short position of 255,982 contracts, up nearly 84,000 contracts for the low three weeks ago.
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 ended the day sharply lower to finish out the week after showing promise earlier on by rallying above the 50-day moving average. Poor export sales and the ongoing Brazilian soybean harvest has made sustaining rallies difficult. Both soybean meal and oil ended the day lower as well.
- For the week, May soybeans lost 5 ¾ cents, November soybeans lost 3 ¾ cents, May soybean meal gained $4.40, and May soybean oil lost 1.78 cents. Funds were likely exiting some of their short position this week, but the short covering was met by increased farmer selling.
- The Brazilian soybean harvest is expected to be 70% complete by this weekend and some work could be delayed due to rain. In Argentina, soybean crop ratings came in with 31% rated good to excellent and 16% rated poor to very poor. Argentinian crop conditions could deteriorate further if the country continues to receive too much rain.
- Yesterday afternoon, Argentina’s Buenos Aires Grain Exchange cut its estimates for the 23/24 corn crop but kept soybean production unchanged at 52.5 mmt. Argentina is the world’s largest exporter of soybean meal, so any issues in the growing season could be friendly to meal.
Above: Although May soybeans rejected a rally through the previous high of 1217 ½, they could still test the January high of 1247 ½ if downside support near 1175 continues to hold and if prices close above 1226 ¾. If not, the market runs the risk of retreating down toward the 1130 – 1140 support area.
Wheat
Market Notes: Wheat
- Wheat pushed higher again today with a positive close for all three US classes. Support came from Paris milling wheat futures which rallied sharply and finished near session highs, gaining 5.75 to 7.50 Euros per metric ton. The higher close for US wheat also came despite the US Dollar rising again today to the highest level since mid-February.
- May Chicago wheat broke through technical resistance around the 21-day moving average, which may allow some room to run before the next level of resistance around the 40 and 50-day moving averages. Some of today’s firmness in wheat may also be tied to the EU imposing tariffs on Russian grain imports.
- Egypt has confirmed that future purchases of wheat will be through tenders, and no longer through private negotiations. The use of private deals began a few years ago, likely due to supply disruptions caused by the Ukraine war. It is unclear if this change is a temporary measure in which they will return to private transactions again, or if this is a permanent.
- According to the USDA, as of March 19, an estimated 12% of the US winter wheat crop is experiencing drought. This represents a 2% improvement from 14% the week prior. As for spring wheat, the area in drought remained steady at an estimated 30% for the same timeframe.
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
New Alert
Sell JUL ’25 Cash
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.
- Grain Market Insider recommends selling a portion of your 2025 SRW wheat crop. In mid-February, the July ’25 Chicago wheat contract broke through the bottom of the long standing 640 – 685 trading range and traded down to the 597 ½low. Prices have now rallied 50% back toward the high of the range. While a lot of time remains in which many unforeseen circumstances can unfold to move prices even higher, Grain Market Insider recommends taking advantage of this rally, and these historically good prices, to make an early sale and begin marketing your 2025 SRW crop.
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
Above: US 7-day precipitation forecast courtesy of NOAA, Weather Prediction Center
Above: Brazil and N. Argentina 2-week forecast total precipitation courtesy of the National Weather Service, Climate Prediction Center