3-7 End of Day: Corn and Beans Surge Higher, Wheat Mixed Ahead of USDA WASDE on Friday
All prices as of 2:00 pm Central Time
| Corn | ||
| MAY ’24 | 438 | 9.25 |
| JUL ’24 | 449.5 | 9.5 |
| DEC ’24 | 469 | 8 |
| Soybeans | ||
| MAY ’24 | 1166.25 | 18 |
| JUL ’24 | 1176 | 17.25 |
| NOV ’24 | 1153.75 | 11.5 |
| Chicago Wheat | ||
| MAY ’24 | 528.5 | -2.5 |
| JUL ’24 | 540 | -2.5 |
| JUL ’25 | 605.5 | 2.5 |
| K.C. Wheat | ||
| MAY ’24 | 574.75 | 18.5 |
| JUL ’24 | 561 | 14.75 |
| JUL ’25 | 606 | 10.75 |
| Mpls Wheat | ||
| MAY ’24 | 654.75 | 9.5 |
| JUL ’24 | 657.5 | 9.75 |
| SEP ’24 | 663.25 | 9.25 |
| S&P 500 | ||
| JUN ’24 | 5226.25 | 52.5 |
| Crude Oil | ||
| MAY ’24 | 78.2 | -0.21 |
| Gold | ||
| JUN ’24 | 2187 | 8.2 |
Grain Market Highlights
- Corn futures surged higher on Thursday on likely continued short covering by the funds ahead of tomorrow’s USDA March WASDE report.
- Stronger than expected weekly soybean export sales gave soybean futures enough momentum to close above their 20-day moving average today, something they have been unable to do since mid-December.
- Wheat futures were mixed on Thursday with KC and Minneapolis prices surging higher while Chicago futures closed slightly lower after this morning’s confirmation that China had indeed cancelled 113,000 mt of US SRW recently.
- To see the updated US 3 to 7-day mean max temperature anomaly forecast courtesy of NOAA as well as the 4-week class changed of the US Drought Monitor for the North Central States as of February 6, 2024, courtesy of NOAA and the UNL 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
- The corn market broke out of the most recent consolidation range with strong price action and gains on the session. May corn gained 9 ¼ cents to finish with its highest close since February 14. On the week, May corn has added 13 ¼ cents going into Friday and the March WASDE report.
- The market could see additional short covering before tomorrow’s USDA WASDE report. 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. The report will be released at 11:00 CST.
- Weekly export sales remain supportive of the corn market. The USDA announced new sales for the marketing year totaling 1.110 MMT (43.7 mb) accumulated last week. Total corn sales commitments are now at 1.544 billion bushels, up 28% from last year. Japan was the top buyer of US corn last week.
- Brazil weather will stay a focus in the corn market. With production estimates already lowered for this season due to lower planted areas, late season dry weather could limit production further, supporting corn prices. Currently, the second crop Brazil corn is being planted early and weather is supportive of good production.
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
- Soybeans began the trading day strong out of the gate on last night’s open, and steadily climbed into the day session that was met with back-and-forth two-sided trade, with some likely short covering ahead of tomorrow’s March USDA WASDE update. May soybeans ended the day just above the 20-day moving average for the first time since mid-December. Both soybean meal and oil traded higher on the day and lent support to soybeans, with oil gaining on meal. May Board crush margins also gained on the day to close at 79-1/4 up two cents.
- The USDA released its weekly export sales for the week ending February 29, which showed stronger than expected soybean sales at 22.5 mb for the 23/24 season and 2.4 mb for 24/25. With sales of old crop beans marking a 7-week high. To date, old crop soybean sales remain behind last year’s commitments by 19% where the USDA is currently forecasting a 14% drop. Current outstanding sales to China/unknown of 116 mb are down from 149 mb this time last year.
- China’s soybean imports for the Jan-Feb time frame dropped to a 5-year low of just 13.04 mmt according to the General Administration of Customs. The drop represents an 8.8% decline from the same time last year. Poor crushing margins and delayed shipments were among the reasons given.
- Soybean prices and export sales continue to run into resistance with Brazil’s ongoing soybean harvest which has filled their export pipeline with much cheaper supplies. Brazil’s export offers have caught a bid in the last day or so and risen about 30 cents on increasing demand, though they remain about 80 cents cheaper than US offers.
- Tomorrow’s WASDE report isn’t expected to include any major surprises, but analysts expect that the US soybean carryout will see a slight increase of about 5 mb possibly by a decrease in exports. The trade will still focus on the USDA’s estimates on South American production, where the Argentine soybean crop is expected to increase slightly to 50.3 mmt, while Brazil’s is expected to decrease to 152.8 mmt, from last month’s 156 mmt forecast.
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
- Wheat closed sharply higher in the Kansas City contracts, and moderately higher in Minneapolis, but was mixed in Chicago futures. The likely culprit for the pressure was confirmation this morning (of yesterday’s rumor) that China did indeed cancel 130,000 mt of SRW wheat for 23/24. With about 49 mb of sales to China beforehand, the number is now reduced to about 44 mb on the books. This morning the USDA also reported an increase of 10.0 mb of wheat export sales for the 23/24 season, along with an increase of 2.4 mb for 24/25.
- Tomorrow’s focus by traders will be on the monthly WASDE report. The USDA is not expected to change much in terms of the wheat numbers, however. US 23/24 wheat carryout is expected to remain unchanged from last month at 658 mb, while world ending stocks are anticipated to decrease slightly, from 259.4 mmt in February to 259.1 mmt this month.
- According to StoneX, Brazil’s 24/25 wheat crop is expected to increase 14% year on year to 9.2 mmt of production. The estimate for the previous year came in at 8.1 mmt. This is also despite planting area anticipated to decrease by 11%. Therefore, the increase in the production estimate is attributable to expectations of higher yield.
- India’s wheat crop experienced heavy rain and hail last weekend in the northwest growing region. An estimated 150,000 hectares were affected by the storm, and while damage is still being assessed, this may lower the chance that they harvest a record crop. In February, it was forecast by their farm ministry that the country would collect 112 mmt. But the potential for hotter than normal weather this month may also limit this figure before harvest begins in April.
- Weather in South America remains mostly favorable for now. But according to the Rosario Grain Exchange, there is about a 77% chance that a La Nina weather pattern will develop by October. This is a concern for Argentinian farmers as this is closely associated with drought conditions for them. This would affect the growth of the wheat crop but may also affect corn and soybean plantings next season.
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
Active
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 sees a continuing opportunity to sell 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
