3-8 End of Day: Markets End the Week on a Positive Note Following a Benign USDA Report
All prices as of 2:00 pm Central Time
| Corn | ||
| MAY ’24 | 439.75 | 1.75 |
| JUL ’24 | 451.75 | 2.25 |
| DEC ’24 | 472 | 3 |
| Soybeans | ||
| MAY ’24 | 1184 | 17.75 |
| JUL ’24 | 1195.5 | 19.5 |
| NOV ’24 | 1173.75 | 20 |
| Chicago Wheat | ||
| MAY ’24 | 537.75 | 9.25 |
| JUL ’24 | 550.25 | 10.25 |
| JUL ’25 | 617 | 11.5 |
| K.C. Wheat | ||
| MAY ’24 | 588.75 | 14 |
| JUL ’24 | 574.25 | 13.25 |
| JUL ’25 | 617 | 11 |
| Mpls Wheat | ||
| MAY ’24 | 662.75 | 8 |
| JUL ’24 | 666.25 | 8.75 |
| SEP ’24 | 671.5 | 8.25 |
| S&P 500 | ||
| JUN ’24 | 5214.25 | -10.5 |
| Crude Oil | ||
| MAY ’24 | 77.52 | -0.8 |
| Gold | ||
| JUN ’24 | 2204.9 | 19 |
Grain Market Highlights
- Carryover strength from higher soybeans and wheat lent support to the corn market that settled just off the day’s high in an 8 ½ cent range, following a rather uneventful USDA report. Additional short covering from what was reported in last week’s COT report, likely added to this week’s strength.
- Upon the USDA’s WASDE release, the soybean market was met with no changes to US ending stocks where a 4 mb rise was expected, and only a minor reduction to Brazil’s soybean production. All three markets in the soybean complex rallied after the report’s release with solid gains for both soybeans and meal. Soybean oil encountered overhead resistance near the 50-day moving average, and with weakness in the crude and heating oil markets, still settled lower on the day, but higher for the week along with soybean meal.
- Despite another round of Chinese cancellations of US SRW and an increase to US ending stocks in today’s USDA report, the wheat complex closed the day on a positive note, and for the week, both KC and Minneapolis settled in the green, with 9 ¾ cent and 18 ¼ cent gains respectively. The strong gains on relatively neutral data could indicate a near-term bottom may be in.
- To see the updated US 7-day forecast precipitation, the 8 – 14 day temperature and precipitation outlooks, and the 2-week precipitation forecast for South America, 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
- 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
- After a very quiet USDA March report, buying strength in wheat and soybean markets helped lift corn futures higher to end the week. May corn gained 1 ¾ cents on the session, posting its highest close since February 14. For the week, May corn futures gained 15 cents.
- Additional fund short cover helped trigger the rally in corn futures this week. Last week on the Commitment of Trader’s Report, funds exited over 45,000 short contracts, and that path was likely again this week.
- On the March USDA WASDE report, the USDA left the US corn balance sheet unchanged from February. The only changes were to the Argentina corn crop, raised by 1 mmt to 56 mmt, and an overall reduction in the world ending stocks to 319.63 mmt, lower than market expectations.
- Corn charts have improved technically, and with follow through buying on the weekly chart, may help bring additional buying strength next week. May is challenging a key resistance point at 440 on the charts.
- 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, Brazil’s second (safrinha) crop corn is being planted early and weather is supportive of good production.
Above: On March 7th the corn market closed above the 20-day moving average for the first time since late December. If it can push through and close above the 435 – 445 resistance area it could test the January high of 452 ¼. If they fall back, and close below 421, the bottom of the recent range, 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
- 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 soybeans began the day on the negative side of unchanged but reversed course along with soybean meal on the release of the USDA WASDE report. May soybeans rallied into the close to post its second consecutive close above the 20-day moving average with a 33 ½ cent gain on the week. Soybean meal closed $7.0 higher on the day, while bean oil also clawed its way of the low, but still closed 0.18 cents lower on the day, with weakness from the energy sector.
- Today the USDA released its updated WASDE report for March, and it made no changes to US soybean ending stocks. When looking at South America, they did reduce Brazil’s soybean production by only 1 mmt, where a 4 mmt drop was expected, to 155 mmt and left Argentina’s production unchanged at 50 mmt, where a minor 0.3 mmt increase was expected. The overall lack of significant changes by the USDA and the market closing higher, could indicate that a near-term low is in place.
- Argentina’s soybean crop conditions grew from 82% “normal to excellent” to 83% for the week ending March 4th. The Buenos Aires Grain Exchange cited recent rainfall in the northern areas of the country for the gain.
- Brazil’s Trade Ministry published updated export information for the month of February that showed soybean exports for the month were up 27% from last year, with total shipments to China showing a 42.2% increase.
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
- Today’s USDA report was the focus of traders’ attention but there was not much to write home about. In general, the report was very neutral. As for wheat specifically, US ending stocks were raised to 673 mb from 658 mb in February. The world carryout was revised slightly lower to 258.8 mmt, compared to 259.4 mmt previously. The USDA did also cut US exports from 725 to 710 mb for the 23/24 season. Production estimates for Australia and Russia were both increased by 0.5 mmt apiece. Despite the relatively impartial data, wheat ended with decent session gains, potentially indicating that the market has found a bottom for the time being.
- This morning another confirmed cancellation of US SRW wheat to China was announced. This time 110,000 mt were taken off the books. Interestingly the market didn’t seem to pay much attention to this news, possibly meaning that it was already baked into the market after the cancellation rumors and sharply lower trade on Wednesday.
- Adding some support to the wheat market is the recent drop in the US Dollar Index. Having started the week around the 104.00 level, the past few sessions have seen it decline to a low around 102.35 today. This afternoon it is trending back towards neutral, but since it usually shares an inverse relationship with wheat prices, a continued fall may lead to some bullish sentiment for wheat.
- Argentina announced plans to construct a new port near the Rosario area on the Parana River. Reportedly, the government will invest about $550 million into the project. The region where it will be built is already a major ag center and accounts for over 80% of their ag exports; construction is set to begin this month. Argentina is a major exporter of soybean oil & meal, along with corn, and wheat.
- According to FranceAgriMer, the French soft wheat crop was rated 68% good to very good as of March 4. This is unchanged from last week but is well below the 95% rating at the same time last year. In addition, Paris milling wheat futures closed higher today and appear to have also put in a near-term bottom. This may have also lent some support to the US market today.
- According to the UN’s Food and Agriculture Organization, global ’24 wheat production is expected to increase 1% year on year to 797 mmt. If true, this would still be below the record high in 2022. The FAO says that the US wheat crop could top 51.5 mmt, beating last year. However, production in the EU may fall slightly to 133 mmt due to the heavy rain and snow that affected planting in France and parts of Germany.
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 and move toward a net neutral cost on the remaining position, 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: The March 6th low of 551 ½ has held so far with the market testing the upper end of the congestion area near 590. If the market can close above there, it could then make a run toward the 50-day moving average, and then the congestion range between 610 and 640. If the market does turn lower, the next major level of support below 551 ½ may come in 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
Above: US 7-day precipitation forecast courtesy of NOAA, Weather Prediction Center.
Above: Brazil 2-week forecast total precipitation courtesy of the National Weather Service, Climate Prediction Center.
Above: Argentina 2-week forecast total precipitation courtesy of the National Weather Service, Climate Prediction Center.