3-6 End of Day: Corn Settles Near Session Highs as Wheat Makes New Lows
All prices as of 2:00 pm Central Time
| Corn | ||
| MAY ’24 | 428.75 | 2.5 |
| JUL ’24 | 440 | 2.5 |
| DEC ’24 | 461 | 1.75 |
| Soybeans | ||
| MAY ’24 | 1148.25 | -0.75 |
| JUL ’24 | 1158.75 | -0.25 |
| NOV ’24 | 1142.25 | -2 |
| Chicago Wheat | ||
| MAY ’24 | 531 | -20 |
| JUL ’24 | 542.5 | -13.25 |
| JUL ’25 | 603 | -6.25 |
| K.C. Wheat | ||
| MAY ’24 | 556.25 | -13 |
| JUL ’24 | 546.25 | -11.5 |
| JUL ’25 | 595.25 | -7.25 |
| Mpls Wheat | ||
| MAY ’24 | 645.25 | -10.25 |
| JUL ’24 | 647.75 | -9.75 |
| SEP ’24 | 654 | -9.5 |
| S&P 500 | ||
| JUN ’24 | 5171 | 23.75 |
| Crude Oil | ||
| MAY ’24 | 78.34 | 0.93 |
| Gold | ||
| JUN ’24 | 2170.2 | 7.7 |
Grain Market Highlights
- The corn market experienced choppy trade on both sides of unchanged as it continues to consolidate ahead of Friday’s USDA WASDE report in search of direction. A surge of buying from strong corn usage for ethanol overcame the weakness of the wheat complex to allow May corn to close just ¾ of a cent off its high.
- The soybean complex settled the day mixed and well off the session’s lows. Late-day strength in soybean meal along with higher soybean oil, with help from higher palm oil, gave support to the soybean market as buyers returned.
- Declining FOB offers out of the Black Sea at about $190/mt, and Russian offers just under $200, along with rumors of Chinese US SRW cancellations, broke Chicago and KC wheat to new lows, while Minneapolis tested the bottom of its recent range. This recent round of negativity has given managed funds little reason to hold off on their selling as suggested by the rise in open interest for both Chicago and KC.
- To see the updated US 6 – 10 day temperature and precipitation outlooks, and the NASA-Grace drought indicator maps of the US and South America, courtesy of the NWS, CPC, NOAA, NASA Grace, and the 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
- No new action is recommended for 2023 corn. With a general lack of bullish news and an estimated US carryout nearing 2.2 billion bushels, front month corn has languished in a sideways to lower trend since printing a high last October. While the lack of a bullish catalyst has been disappointing, the market is in a significantly oversold condition, and managed funds continue to hold a substantial net short position. Either or both could trigger a short covering rally at any time heading into the spring planting window. As planting nears, and uncertainties increase, Grain Market Insider will consider recommending additional sales if prices recover back toward the 500 level.
- No new action is recommended for 2024 corn. In January, Dec ’24 broke through the bottom end of the 485 ¾ to 602 range that had been in place since February ’22. While this was a disappointing development, bear spreading has allowed Dec ’24 to maintain more of its value versus old crop as traders attempt to price in a larger 2023 carryout with more uncertainty ahead for the 2024 crop. Additionally, Dec ’24 is significantly oversold on the weekly chart, which is supportive for a technical rally to begin at any time as the spring planting window quickly approaches. Given the amount of time and uncertainty that remains for the 2024 crop, Grain Market Insider will consider recommending additional sales on a retracement toward the low to mid 500 level.
- No Action is currently recommended for 2025 corn. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next year. It will probably be late winter or early spring 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 traded slightly higher on the session, fighting off another day of selling pressure from the wheat market. May corn gained 2 ½ cents during the session while wheat futures pushed to new contract lows. The recent price action in corn has been friendly despite the overall lack of price movement.
- The corn market consolidated for the seventh consecutive day with a trading range from 420 – 430 on the May futures. Today’s session saw a narrow trading range of 6 ¼ cents from high to low as the corn market is looking for some near-term direction.
- The USDA will announce weekly export sales on tomorrow morning. The expectations for new corn sales last week are to range from 800,000 mt – 1.4 mmt for the 23/24 marketing year. Export sales last week were at 1.082 mmt for corn.
- The weekly ethanol report saw average daily production for the week ending March 1 at 1.057 million barrels. This was down 1.9% from last week, but up 4.7% from last year. Ethanol stocks rose to a new record for the week of 26.051 million barrels, pushing past last year’s old record high. Corn used during the week was 104.91 million bushels, which is trending ahead of the USDA ethanol grind targets for the marketing year.
- Price moves in the corn market are likely to stay choppy the remainder of the week until Friday’s USDA WASDE report. The market could see additional short covering. The report expects to see slight changes in US carryout projections. Analysts feel US corn carryout could drop by 15 – 20 mb to 2.159 mb with slight demand adjustments for ethanol usage or a slight bump in export totals.
Above: The corn market continues to consolidate following the bullish key reversal on February 26. Overhead resistance remains between 435 and 445. If the prices close below 421, the bottom of the recent range, then they may slide to test downside support between 400 and 410 unless a positive input enters the scene to turn prices back higher.
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
- No new action is recommended for 2023 soybeans. Old crop soybeans continue to be in a downtrend that began with the early January breakout of the 1290 – 1400 range that had been in place since last fall. While South American weather has improved, questions remain regarding the crop size, and US planting season is now not that far off with its own potential concerns that could turn prices back higher. Given the potential of a downside breakout back in December, Grain Market Insider recommended adding to sales as prices remained historically good, and Grain Market Insider will continue to look at additional sales opportunities heading into spring.
- No new action is recommended for the 2024 crop. Since the beginning of the year, Nov ’24 has continued to recede alongside the 2023 old crop contracts as South American weather stabilized and the market deals with bourgeoning domestic supplies and slow demand. While this decline in prices is disappointing, planting season is not far off, and plenty of time remains to market this crop, with many unknowns that can rally prices yet ahead. Considering the amount of uncertainty that lies ahead with the 2024 soybean crop, Grain Market Insider 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 2022 highs in the upper 1300s going into spring/summer, at which point Grain Market Insider would consider recommending additional sales.
- No Action is currently recommended for 2025 Soybeans. Grain Market Insider isn’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
- The soybean complex closed the day mixed with soybeans still lower from yesterday’s weakness, while soybean oil gained on meal as it garnered strength from higher palm oil. While soybeans closed lower on the day, late day strength in soybean meal lent support to the bean market enabling it to claw back most of its losses.
- As the Brazilian harvest continues, US soybean prices and export sales continue to struggle with US offers 113 cents over Brazil for April delivery, and while US soybean meal premiums aren’t as extreme, they are $22/mt over Argentina’s $372/mt.
- Analyst Dorab Mistry stated that he expects 2024 palm oil production in the world’s two largest producers, Indonesia and Malaysia, to drop by 1 million metric tons collectively, just as 23/24 world demand is expected to increase by 6 mmt with supplies increasing just 3.1 mmt. Additionally, Indonesia’s palm oil exports are anticipated to fall to 29.5 mmt from last year’s 32.2 mmt, as they are expected to increase their biofuel blending rate to 40% from 35%. This could press prices higher for the world’s most widely used veg oil and support bean oil prices.
- There continues to be a wide range of estimates for South American soybean production. This Friday the USDA will release its updated March WASDE report, and while only minor changes are expected to US carryout, the market will likely keep a close eye on where the USDA lands with its upcoming South American production forecasts, mainly Brazil. The current average estimate are for a slight increase to Argentina’s crop, and 3.2 mmt decrease to Brazil’s.
Above: After posting a low of 1128 ½ on February 29, soybeans rallied back higher on short covering. The market remains oversold on the weekly chart and continues to provide underlying support. For now, resistance above the market remains between 1190 and 1205, with initial support still just below 1130. If prices were to decline further, major support below the market may enter in around 1040 – 1050.
Wheat
Market Notes: Wheat
- All three US wheat classes closed sharply lower. Rumors that China might cancel some open US wheat sales allowed the floodgates to open. Additionally, dirt cheap FOB values out of the Black Sea, around $190/mt are not helping the situation. For comparison, US wheat offers are said to be about forty to fifty dollars above that level.
- Paris milling wheat futures also closed lower today, with new contract lows being made in the May through December 2024 futures. This is despite the French wheat crop being in much poorer condition compared to last year but indicates that their exports are also struggling against competition out of the Black Sea.
- Algeria may have purchased up to 900,000 mt of milling wheat on an international tender. It is also believed that they may have done so at $38/mt cheaper than their previous tender. While the origin is unknown, there is a good chance that the Black Sea is involved. To add to the bearishness, Vladimir Putin recently stated that Russia may export 65 mmt of grain in the 23/24 season. For reference, they exported 60 mmt in 22/23.
- According to the Buenos Aires Grain Exchange, rainfall in Argentina is expected to decline as El Nino gives way to a more neutral pattern, and this may bring a drier fall for the South American nation. Wheat planting for the 24/25 season is set to begin in May, and if a La Nina pattern does develop, as some are predicting, it could once again bring drought to Argentina. For comparison, Argentina had their worst drought on record during La Nina in the 22/23 season.
- Stats Canada will release Canadian planting intention estimates on Monday. Based on farmer surveys, the average pre-report estimate of all wheat acreage comes in at 26.7 million. This is in the middle of the range of estimates, with 26.0 ma on the low end and 27.4 ma on the high side. For reference, all wheat acreage in 2023 came in at 27.03 ma.
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
New Alert
Exit Half JUL ’24 590 Puts ~ 67c
2025
No New Action
Chicago Wheat Action Plan Summary
- No new action is currently recommended for 2023 Chicago wheat. The wheat market has continued to be dominated by lower world export prices that have stymied US export sales and depressed US prices. In early December, Grain Market Insider recommended taking advantage and making a sale on a short covering rally which was sparked by several Chinese purchases of US wheat. Since then, China has been silent in the US wheat export market, and prices remain somewhat elevated. 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.
- Grain Market Insider recommends selling half of your July ‘24 590 Chicago Wheat puts at approximately 67 cents in premium minus fees and commission. Last August Grain Market Insider recommended buying July ’24 590 Chicago wheat puts for approximately 31 cents in premium plus commission and fees to protect the downside from potential price erosion. At the time, US export demand was very weak with lower world export prices, and July Chicago wheat had just broken through support near 610. The breaking of 610 support increased the risk of the market retreating further. Since that time July ’24 Chicago wheat has dropped about 110 cents, with the July ’24 590 Chicago wheat puts gaining about 200% in value. Though world export prices remain low, plenty of time remains to market the ’24 crop, and following this market drop, any increase in demand or threat of yield loss could rally prices. Grain Market Insider recommends selling half of the previously recommended July ’24 590 Chicago wheat puts to lock in gains in case prices rally back, and holding the remaining puts, which will continue to protect any unsold bushels if prices erode further.
- No action is currently recommended for 2025 Chicago Wheat. In mid-February, July ’25 Chicago wheat broke through the bottom of the long established 632 – 685 trading range to a new low just below 600. For now, that new low is holding, and the market is correcting its oversold condition. So far, Grain Market Insider’s strategy for the 2025 crop year has been to sit tight. However, if prices rally toward the mid-600s, we will consider taking advantage of the still historically good prices to make sales recommendations.
To date, Grain Market Insider has issued the following Chicago wheat recommendations:
Above: With falling Russian and Black Sea export prices still pressuring the wheat market, May Chicago wheat remains in a downtrend, which is showing signs of being oversold. Assuming the current trend remains, the next major support level below the market may come in around 470 – 488. If the market does turn back higher, initial resistance may come in near 555, with heavy resistance up above around 590 – 600.
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
- No new action is recommended for 2023 KC wheat crop. 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, considering the market is at levels not seen since spring of 2021, and funds continue to hold a considerable net short position, these factors could trigger a return to higher prices if any unforeseen risks enter the market. Grain Market Insider’s strategy is to look for price appreciation as weather becomes a more prominent market mover and may consider suggesting additional sales if prices make a modest 20% retracement of the 2022 highs back toward 700.
- No new action is recommended for 2024 KC wheat. Since the beginning of the year, the July ’24 contract has been in a downtrend alongside the front month contracts, while also setting new contract lows and becoming very oversold. During this time, managed funds have maintained a net short position in the front month of around 35,000 contracts. While this net short position is about 15,000 contracts smaller than it was at the end of November, it is still large enough to trigger a short covering rally, much like the one that began in late November, and could easily translate to higher prices for July ’24 as well as the front months. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside, and as the market got further extended into oversold territory, Grain Market Insider recommended exiting 75% of the originally recommended position. Recently, Grain Market Insider also recommended exiting the remaining 660 puts to protect any gains that have been made. Considering bullish headwinds remain, and the equity gained from the closed July 660 put position, Grain Market Insider is prepared to consider recommending additional sales for the 2024 crop if July ‘24 retraces back toward the January highs in the mid-640s.
- No action is currently recommended for 2025 KC Wheat. Grain Market Insider isn’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: Having May KC wheat trade below 556 ¾ puts the market at risk of declining further unless some bullish input triggers a market turnaround. Should that happen, prices could test overhead resistance near 590 before challenging more resistance around 605. Otherwise, if prices decline further, support down below could be found near 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
- No new action is currently recommended for 2023 Minneapolis wheat. Since last summer, front month 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 here. Grain Market Insider’s 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. Much like the front month contracts, Sep ’24 has been in a downward trend since last summer. And just as Sep ’24 has been influenced to the downside by the front months, it could be similarly influenced to the upside by the front months if a bullish impetus enters the scene and triggers an extended short covering rally due to the fund’s large short position. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside (due to their higher liquidity and correlation to Minneapolis), and as the market got further extended into oversold territory, Grain Market Insider recommended exiting 75% of the originally recommended position. Recently, Grain Market Insider recommended exiting the remaining 660 puts to protect the gains that have been made. From here, Grain Market Insider is prepared to consider recommending additional sales for the 2024 crop 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. Grain Market Insider isn’t 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: May Minneapolis wheat appears to be consolidating after posting a bullish reversal on February 26. If prices continue higher, they may run into resistance around 675 – 680. If prices turn back lower, the next major support level below 640 may come in near 600.
Other Charts / Weather
