3-28 End of Day: Corn Settles Higher as Stocks and Acreage Come in Below Expectations
The CME and Total Farm Marketing Offices will be Closed Friday, March 29, 2024, in Observance of Good Friday
All prices as of 2:00 pm Central Time
| Corn | ||
| MAY ’24 | 442 | 15.25 |
| JUL ’24 | 454.5 | 15.25 |
| DEC ’24 | 477.75 | 15.5 |
| Soybeans | ||
| MAY ’24 | 1191.5 | -1 |
| JUL ’24 | 1205.25 | -1.25 |
| NOV ’24 | 1186.25 | 2.75 |
| Chicago Wheat | ||
| MAY ’24 | 560.25 | 12.75 |
| JUL ’24 | 575.75 | 13 |
| JUL ’25 | 640.75 | 4.75 |
| K.C. Wheat | ||
| MAY ’24 | 585.25 | 7 |
| JUL ’24 | 579.75 | 5.75 |
| JUL ’25 | 629.25 | 4.25 |
| Mpls Wheat | ||
| MAY ’24 | 645 | -6 |
| JUL ’24 | 653 | -4.25 |
| SEP ’24 | 661 | -3.5 |
| S&P 500 | ||
| JUN ’24 | 5316.75 | 8.5 |
| Crude Oil | ||
| MAY ’24 | 83.03 | 1.68 |
| Gold | ||
| JUN ’24 | 2241.3 | 28.6 |
Grain Market Highlights
- Despite decent weekly export sales, corn trade prior to today’s USDA March 1 Grain Stocks and Planting Intentions report was lackluster. However, upon the report’s release, which revealed stocks and acreage numbers below expectations, May corn rallied 21 ¼ cents before settling 6 cents off its high.
- Soybeans settled mixed but well off their lows with support from higher corn and soybean oil. The USDA’s quarterly stocks and acreage estimates for soybeans were mostly neutral as they came in right in line with trade estimates and above last year’s numbers.
- The USDA numbers for wheat overall were relatively neutral with total acres just below trade estimates, while March 1 stocks were 34 mb above the average trade guess. Support for both Chicago and KC wheat came from neighboring corn futures and higher Matif wheat which also saw a bullish reversal. Minneapolis likely saw pressure from increased spring wheat acres that came in above expectations and last year’s totals.
- To see the updated US Drought Monitor, 7-day precipitation forecast, and the 8 – 14 day temperature and precipitation outlooks, courtesy of the NWS, CPC, NOAA, and NDMC 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
From the low on February 26 to the high on March 12, May corn experienced a significant rally of nearly 40 cents. However, since then, it has consolidated within a narrow trading range, fluctuating mostly between 430 and 445. During this period, Managed Money has reduced its net short position by approximately 53,000 contracts, although it still holds a historically large short position of around 243,000 contracts. The size of Managed Money’s net short position, coupled with prevailing macro oversold conditions, suggests potential for further upside as we head into spring planting. While the recovery in corn prices may encounter obstacles, overall market conditions remain conducive to a continued price recovery into May and June.
- No new action is recommended for 2023 corn. The target range to make additional sales is 480 – 520 versus May ’24 futures. 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. We are targeting 520 – 560 to recommend making additional sales versus Dec ‘24 futures. For put option hedges, we are looking for 500 – 520 versus Dec ‘24 before recommending buying put options on production that cannot be forward priced prior to harvest.
- No Action is currently recommended for 2025 corn. At the beginning of the year, Dec ’25 corn futures left a gap between 502 ½ and 504 on the daily chart. Considering the tendency for markets to fill price gaps like these, we are targeting the 495 – 510 area to recommend making additional sales.
To date, Grain Market Insider has issued the following corn recommendations:
Market Notes: Corn
- Corn futures posted strong double-digit gains after buyers stepped into the market with the USDA report that showed planting intentions and grain stocks were below market expectations. For the week, May corn finished 2 ¾ cents higher.
- The strong price action on the session had May futures post its highest daily close since February 12. With the May futures showing a strong technical close over their 50-day moving average for the first time since October, they could see additional short covering and rally next week. Early week price action will be key in determining follow-through trade from today’s strength.
- The USDA projected corn planting intentions at 90.06 million acres for the upcoming market year. This was 1.7 million acres below expectations and the lowest in the past 2 years. The number of acres may have room to increase by the June Plantings report as 6.3 million acres of principal crop ground was removed from last year’s totals. The USDA is estimating all crop land to total 313.3 million acres, down from 319.6 million acres last year.
- The USDA Quarterly Grain Stocks report for corn showed a total of 8.347 billion bushels of supply, up 12.9% from last year. This total was 80 mb below market expectations as corn usage in the first quarter was stronger than expected. Of those grain stocks, 5.079 billion bushels were stored on farms, up 23% over last year. The large amount of on farm storage could be a limiting factor in corn prices as bushels move in the cash market.
- Weekly export sales reported this morning remain supportive for corn prices. Last week, exporters made new sales of 47.5 mb (1.207 mmt) of corn. This was near the top end of expectations. Cumulative corn sales now reach 1.689 billion bushels, up 19% from last year.
Above: Since the beginning of March, the corn market has been trading sideways, bound mostly by 445 up top and 430 down below. If prices can close above 445, they could then test the January high of 452 ¼. If they break out to the downside and close below 421, they could slide further to test 400 – 410 support.
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
The USDA gave little in the way of outright bullish information to trigger great amounts of short covering as their March 1 stocks and prospective soybean plantings estimates were relatively neutral and came in as expected by the market. That said, Managed Money still held a sizable 148,399 contract net short position in the most recent Commitment of Traders report, which can still fuel a short covering rally if issues come up this season, with planting not that far off. Otherwise, prices may still be at risk of retesting the recent lows this spring if weather stays benign and planting goes smoothly.
- No new action is recommended for 2023 soybeans. We are currently targeting a rebound to the 1275 – 1325 area versus May ’24 futures to recommend making further sales. If you need to move inventory for cash or logistics reasons, consider re-owning any sold bushels with September call options.
- 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. We are currently targeting the 1280 – 1320 range versus Nov ’24 futures, which is a modest retracement toward the 2022 highs, to recommend making 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 finished the day mixed with a slight loss in the front months and gains in the new crop. Futures rebounded from sharp losses earlier in the day prior to the release of the USDA Quarterly Stocks and Acreage report. The report was bullish for corn and relatively neutral for soybeans, but soybeans gained positive momentum from the gains in corn.
- Today’s USDA report was very much in line overall with the average trade guesses but still showed more expected soybean acres than last year. The USDA said that 86.51 million acres of soybeans would be planted in 2024 which compares with 83.6 ma last year. US soybean stocks were called at 1.845 billion bushes and were within trade expectations but higher than last year’s 1.687 bb.
- For the week, May soybeans lost just 1 cent, November soybeans lost 3/4 of a cent, May soybean meal lost $1.40 to $337.70, and May soybean oil gained 0.31 cents. Crush margins have declined recently but remain profitable enough to keep processors buying cash soybeans. The domestic demand for soybeans is needed as export sales have been very slow.
- With significant discrepancies between CONAB’s and the USDA’s estimates for Brazilian soybean production, Brazilian consultancy Agroconsult has now increased their estimates to 156.5 mmt citing an expansion of estimated planted area. This estimate is much closer to the USDA’s guess of 157 mmt and brings doubts to CONAB’s guess of 149 mmt.
Above: Although May soybeans rejected a rally through the March 14 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 closed higher in both Chicago and KC contracts, while posting small losses for Minneapolis. A lower acreage number than anticipated helped winter wheat to rally, while higher spring wheat acreage weighed on Minneapolis futures. The sharp rise in corn futures and a higher close for Matif wheat, which reversed from the recent downtrend, also added support.
- In today’s Quarterly Stocks and Acreage report, total wheat acreage was reported at 47.5 million acres, slightly below the trade estimate of 47.7 million acres and a 3% decrease from last year’s 49.6 million acres. Notably, winter wheat acreage declined to 34.1 million acres, down 7% from 36.7 million acres the previous year. However, spring wheat acreage reached 11.3 million acres, exceeding both the trade estimate of 10.9 million acres and last year’s 11.2 million acres.
- Quarterly wheat stocks at 1.087 bb were above the average trade guess of 1.053 bb, and above last year’s 941 mb by 16%. When broken down, on farm stocks were estimated to be 271.9 mb, with off farm stocks at 815.5 mb.
- Today the USDA also released weekly export sales. The USDA reported an increase of 12.5 mb in wheat export sales for 23/24, along with an increase of 7.8 mb for 24/25. However, last week’s shipments of 15.0 mb were below the 18.2 mb needed per week to reach the USDA’s export goal of 710 mb. So far, wheat sales commitments total 688 mb, up 4% from last year.
- In other news, the European Commission estimated that EU soft wheat production will decline 4% year-on-year to 120.8 mmt from 125.6 mmt, previously. Wet weather in the fall caused issues for planting, and France has crop conditions well below last year. And while exports are expected to have little change around 31 mmt, stocks may decline from 19.9 to 12.1 mmt.
- According to the USDA, as of March 26, approximately 17% of the US winter wheat crop is experiencing drought, along with 25% of the spring wheat area. For winter wheat, this is an increase from 12% the week prior, while spring wheat declined from 30% a week ago.
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
Active
Sell JUL ’25 Cash
Puts
2023
No New Action
2024
No New Action
2025
No New Action
Chicago Wheat Action Plan Summary
Since making a fresh low in early March, Chicago wheat has traded mostly sideways with relatively small gains capped by overhead resistance. Although the lack of any bullish information has been disappointing, the market remains oversold on a macro level, and managed funds continue to hold a significant net short position. Either or both of these factors 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, we are targeting a market rebound back towards 675 – 715 versus May ’24 futures before recommending any additional sales. As for the open 590 put position, we are looking for prices between 475 – 500 versus July ’24 futures to before we recommend exiting half of the remaining July ’24 590 puts.
- Grain Market Insider sees a continued opportunity to sell 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 rallied 50% back toward the high of that 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 posted a bearish reversal on March 25, indicating there is significant resistance above the market near the 50-day moving average. Prices could still challenge the 50 and 100-day moving averages, and the 585 – 620 congestion area if they rebound and close above 567. Otherwise, if they retreat and close below 523 ½, they run the risk of trading down toward the next major support level near 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 the end of February, prices have been trading in a broad range, bound mostly by 555 on the downside and 605 up top, with little fresh bullish news to trade, while 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 unforeseen risks enter the market.
- No new action is recommended for 2023 KC wheat crop. As weather becomes a more dominant market mover, we are targeting 670 – 700 versus May ’24 futures to recommend making additional sales. This area represents a modest 20% retracement back toward the 2022 highs.
- 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. The current strategy is to target 625 – 650 versus July ’24 futures to recommend additional sales.
- 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: There remains considerable resistance in the area between the 50-day moving average and the March 10 high of 605 ¼. If prices can close above 605 ¼, they could continue towards the congestion range between 610 and 640. Otherwise, if they retreat back below initial support of 575, prices could potentially test the 551 ½ March low.
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 target 675 – 700 to recommend more sales.
- 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. The current strategy is targeting the 775 – 815 area versus Sept ’24 to recommend making additional sales. We are also targeting the 850 – 900 area to recommend buying upside calls to help protect any sales that would have been made.
- 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 sideways with overhead resistance near the 50-day moving average. Initial support remains below the market near the 641 low with more support near 600 if prices fall further. Up top, if the market reverses and closes above the 50-day moving average and 675 – 680 resistance, it could challenge the 700 – 710 area.
Other Charts / Weather
Above: US 7-day precipitation forecast courtesy of NOAA, Weather Prediction Center
