4-11 End of Day: Markets Close Lower Following USDA’s Neutral to Bearish WASDE Report
All prices as of 2:00 pm Central Time
| Corn | ||
| MAY ’24 | 428.75 | -5.5 |
| JUL ’24 | 441 | -4.75 |
| DEC ’24 | 466 | -4.25 |
| Soybeans | ||
| MAY ’24 | 1159.25 | -5.5 |
| JUL ’24 | 1172.5 | -5.5 |
| NOV ’24 | 1164.25 | -5 |
| Chicago Wheat | ||
| MAY ’24 | 551.75 | -6.75 |
| JUL ’24 | 566.25 | -7.25 |
| JUL ’25 | 636 | -7.25 |
| K.C. Wheat | ||
| MAY ’24 | 583.25 | -11.25 |
| JUL ’24 | 578.5 | -9.25 |
| JUL ’25 | 628.75 | -7.75 |
| Mpls Wheat | ||
| MAY ’24 | 637 | -14.75 |
| JUL ’24 | 645.25 | -13.75 |
| SEP ’24 | 655.75 | -13 |
| S&P 500 | ||
| JUN ’24 | 5256.75 | 49 |
| Crude Oil | ||
| JUN ’24 | 84.46 | -0.98 |
| Gold | ||
| JUN ’24 | 2381 | 32.6 |
Grain Market Highlights
- A smaller than expected drop in 23/24 corn carryout and disappointing weekly export sales figures, that were a marketing year low, contributed to the negativity in the corn market, which posted a bearish reversal and closed just off the session’s lows.
- The soybean market closed mid-range and well below major moving averages following a neutral to bearish USDA report that showed US ending stocks above the average trade guess and no downward revisions to South American production.
- Soybean oil closed sharply lower, as bean oil stocks in today’s WASDE report rose by 45 million lbs on increased production and imports. Meal on the other hand saw no changes in its balance sheet and settled higher, which helped offset oil’s negative influence on beans.
- Higher than anticipated US ending stocks and increases to both Russian and Ukrainian export estimates by the USDA weighed on all three classes of wheat. Both May Chicago and Minneapolis continued their slides from yesterday’s highs, and while KC traded lower, it held support between the 50 and 20-day moving averages. All three closed near session lows.
- To see the updated US 5-day precipitation forecast, and the US Drought Monitor, courtesy of the NWS and NOAA and NDMC scroll down to the other Charts/Weather section.
Note – For the best viewing experience, some Grain Market Insider content is best viewed with your phone held horizontally.
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 252,000 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, like the rest of the grain markets, were under pressure during the session. The combination of disappointing export sales, and an overall neutral to bearish USDA WASDE report kept sellers active in the corn market. The weak price action will leave the market open to additional selling pressure into the end of the week.
- The USDA lowered corn ending stocks to 2.122 billion bushels in today’s WASDE report. This was accomplished by adding 25 mb to feed usage demand and 25 md added to ethanol usage. This was still slightly above market expectations but reflected the good domestic corn demand in the first quarter.
- In South American corn production, the USDA stayed relatively unchanged in their production forecasts. The USDA lowered their Argentina corn crop forecast by 1 mmt to 55 mmt, and left the Brazil forecast unchanged at 124 mmt. These numbers still hold a large spread over analyst and private forecasts for each country.
- Weekly corn export sales were disappointing last week at 12.8 mb (325,500 mt). This was a marketing year low and well below the range of analysts’ expectations. Japan was the largest buyer of US corn last week, and total export commitments for the marketing year stand at 1.739 billion bushels, up 17% from a year ago.
- With the USDA report passed, the market will shift its focus to weather forecasts. Expectations are for temperatures into the end of April to stay above normal, which could allow for planting progress to pick up speed for this year’s US corn crop. The biggest near-term concern could be wet planting in the eastern corn belt with predicted rains.
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 breakout and close above resistance between the recent high of 448 and the January high of 452 ¼, they could run toward the next major resistance level of 495 – 510. 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’s April Supply and Demand report failed to provide significant bullish data to prompt substantial short covering, as it mainly reflected recent demand challenges and an increase in ending stocks that aligned with the market’s expectations. However, Managed Money retains a considerable net short position near 138,000 contracts, as of the latest Commitment of Traders report. This could still fuel a short covering rally should complications arise during planting season, which has just begun. Otherwise, if weather conditions cooperate and planting progresses without major issues, prices could remain susceptible to revisiting recent lows throughout the spring.
- 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 ended the day lower following a neutral to slightly bearish WASDE report which notably did not show a downward revision in Brazilian soybean production. May soybeans moved further away from and closed well below the 40-day moving average which had previously been support. Soybean meal closed higher while soybean oil was lower along with palm oil.
- Key takeaways from today’s USDA report include the absence of adjustments to Argentina and Brazil’s estimated soybean production, which remain at 55 mmt and 155 mmt, respectively, both above trade estimates. US ending stocks saw an increase to 340 mb from last month’s 315 mb exceeding trade estimates. Furthermore, world ending soybean stocks were slightly lower than the previous month’s estimate at 114.22 mmt, also surpassing the average trade guess.
- This morning before the USDA report, Brazil’s CONAB released their own estimates for soybean production which was decreased to 146.522 mmt and is significantly lower than the 156 mmt that the USDA projected today.
- The weekly export sales report released today revealed an increase of 11.2 mb in soybean sales for the 23/24 season, falling on the lower end of expectations. Last week’s export shipments amounted to 18.5 mb, surpassing the 14.2 mb per week required to meet the USDA’s export estimate of 1.720 bb for 23/24. Primary destinations included China, Egypt, and Mexico.
Above: After closing below the 50-day moving average and 1168 support, the market is at risk of drifting lower and testing support between 1140 and the February low of 1128 ½. However, the market is also showing signs of being oversold, which can be supportive to a move higher. For now, initial resistance lies near the 50-day moving average of 1180 ½ with heavier resistance remaining near the recent high of 1226 ¾.
Wheat
Market Notes: Wheat
- Wheat prices declined across all three US futures categories, mirroring movements in Paris milling wheat futures. The primary influence today stemmed from the release of the monthly WASDE report, which highlighted elevated US ending stocks and expansions in Russian and Ukrainian exports.
- US wheat ending stocks were estimated at 697 mb, which was above the trade guess of 685 mb and the 673 mb estimate in March. As far as the world numbers are concerned, wheat carryout had little change at 258.3 mmt; the trade was looking for 258.6 mmt and for reference, the March figure was 258.8 mmt.
- Examining specific regions, Argentina’s ending stocks rose to 3.32 mmt from March’s 2.82 mmt, while Brazil’s stood at 1.0 mmt compared to 1.12 mmt previously. Ukraine’s stocks decreased to 1.58 mmt from 3.28 mmt, with Russia remaining unchanged at 12.44 mmt. Notably, the USDA raised both Russian and Ukrainian wheat exports by 1 mmt and 1.5 mmt, respectively. Australian exports were also raised by 0.5 mmt, while the EU saw a reduction of 2 mmt.
- In addition to the WASDE report, the market received weekly export sales data. The USDA reported a 3.0 mb increase in wheat export sales for 23/24 and a 10.1 mb increase for 24/25. Last week’s shipments totaled 23.0 mb, surpassing the 17.8 mb per week needed to meet the export estimate of 710 mb (unchanged from the previous month). Shipments to date stand at 557 mb, down 3% from last year but exceeding the USDA’s estimated pace.
- According to the USDA as of April 9, about 26% of the US spring wheat crop is in drought, a 1% increase from the previous week. In addition, 18% of the US winter wheat crop area is in drought. This is unchanged from last week, but it remains dry in some areas of the southern Plains and western Corn Belt where recent rains have missed. This may be reflected in declining conditions on next week’s Crop Progress report.
- Though nearly unchanged at the time of writing, the US Dollar Index scored a fresh near-term high today at 105.52. The higher the trend goes, the less competitive US exports become. This may be one of the main limiting factors for the nearby wheat market.
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
No New Action
2025
No New Action
Chicago Wheat Action Plan Summary
Since marking a fresh low in early March, Chicago wheat has traded mostly sideways, seeing limited upward movement due to overhead resistance. While the absence of bullish signals has been disappointing, managed funds continue to maintain a significant net short position. This suggests the potential for a short covering rally to emerge at any moment, especially as we enter the more dynamic 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.
- No new action is currently recommended for 2025 Chicago Wheat. We recently recommended initiating your first sales for the 2025 SRW crop year as prices pressed back toward the mid-600 range to take advantage of historically good prices for next year’s crop. Since plenty of time remains to market this crop, we are looking for further price appreciation and are currently targeting the 690 – 725 area to recommend making additional sales.
To date, Grain Market Insider has issued the following Chicago wheat recommendations:
Above: The market has fallen away from the 50-day moving average and may be at risk of testing the 523 ½ low if it closes below 537. If prices turn back around and close back above the 50-day moving average, they could still encounter resistance in the 585 – 620 area.
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. Considering the current US export demand challenges and the sideways nature of the wheat market, we are looking for prices to return to the upper end of the recent range and are targeting the 600 area versus May ’24 to recommend making additional sales.
- 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: Significant resistance remains within the range bound by the 50-day moving average and the March 10 high of 605 ¼. A close above 605 ¼ might pave the way for further advancement toward the congestion area of 610 – 640. Otherwise, should prices retreat below the initial support level of 561, there’s a possibility of testing the March low of 551 ½.
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
Minneapolis wheat has primarily traded within a range since last February until a recent breakout below its lower boundary, marking new contract lows and potentially signaling a continuation of the downtrend initiated last summer. Despite facing resistance from the 50-day moving average and a lack of bullish catalysts, seasonal patterns tend to improve heading into early summer. Furthermore, managed funds still maintain a large net short position, which might trigger 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: The recent turnaround after posting a 662 ¾ high and testing the 50-day moving average indicates heavy resistance in the 660 – 670 area. Prices may still challenge this area and close above it if a bullish catalyst enters the scene. If so, the next major resistance area may be near 700 – 712. If prices slide lower, and close below 638, there’s a risk of retracement towards psychological support at 600 and the March ’21 low of 596 ¼.
Other Charts / Weather
Above: US 5-day precipitation forecast courtesy of NOAA, Weather Prediction Center.
