4-19 End of Day: Markets Close Higher as Traders Cover Shorts From a Mostly Down Week
All prices as of 2:00 pm Central Time
| Corn | ||
| MAY ’24 | 433.5 | 6.75 |
| JUL ’24 | 443 | 6.75 |
| DEC ’24 | 466.25 | 6.25 |
| Soybeans | ||
| MAY ’24 | 1150.5 | 16.25 |
| JUL ’24 | 1165.75 | 16.75 |
| NOV ’24 | 1161 | 11.75 |
| Chicago Wheat | ||
| MAY ’24 | 550.25 | 13.5 |
| JUL ’24 | 566.75 | 13.75 |
| JUL ’25 | 643.25 | 14.5 |
| K.C. Wheat | ||
| MAY ’24 | 581.5 | 4.25 |
| JUL ’24 | 583 | 7.75 |
| JUL ’25 | 630.5 | 6.75 |
| Mpls Wheat | ||
| MAY ’24 | 647 | 8.25 |
| JUL ’24 | 652.5 | 9.5 |
| SEP ’24 | 662 | 9.5 |
| S&P 500 | ||
| JUN ’24 | 5008.75 | -40.25 |
| Crude Oil | ||
| JUN ’24 | 82.18 | 0.08 |
| Gold | ||
| JUN ’24 | 2411.3 | 13.3 |
Grain Market Highlights
- Increased tensions in the Middle East triggered a short covering rally that helped July corn rally back toward its 50-day moving average. Further support came from fresh corn sales to Mexico, and an EPA announcement allowing an expanded sale of E-15 gasoline.
- July soybeans closed the day posting a bullish key reversal, on short covering from last night’s Israeli attacks on Iran and another flash sale to unknown destinations. Higher meal and oil, and wet conditions in Argentina also contributed to the positive tenor.
- The wheat complex settled higher in all three classes with Chicago showing the most gains. Possible short covering triggered by last night’s events in the Middle East, with higher Matif wheat and carry over strength from neighboring corn and beans adding support.
- To see the updated US 7-day precipitation forecast, and the 6 – 10 and 8 – 14 day Temperature and Precipitation Outlooks courtesy of NOAA and The Climate Prediction Center 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. 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 saw a short covering rally to end the week as concerns about escalating tensions in the Middle East between Israel and Iran spooked the markets on the overnight session. Friday’s price action was very similar to last Friday’s trade. Even with today’s strength, July corn traded 4 ¼ cents lower on the week and posted its lowest weekly in 7 weeks.
- The USDA announced a flash export sale of corn to Mexico this morning. Mexico purchased 216,500 mt (8.5 mb) of corn with 23,000 mt for the current marketing year and 193,500 mt for the 24/25 marketing year.
- The Environmental Protection Agency (EPA) issued an emergency fuel waiver to allow E15 gasoline to be sold nationally during the summer driving season. The program goes into effect on May 1, with sales running from June 1 – September 1. The waiver was passed to limit price shock concerns if tensions increased in the Middle East.
- Current precipitation and cool weather across the Corn Belt this week have likely limited planting progress in key corn producing states. Corn planting reached 6% complete last week, and concerns will increase if the pace is slow going into May. Typically, the US corn crop is approximately 27-30% planted by the end of April.
- The corn market may see selling pressure moving into the end of the month. Producers who hold May basis contracts will need to price or roll those contracts by first notice day, April 30, for May futures. This could bring a natural selling environment into the weak market tone for the corn market.
Above: The corn market transitioned lead months from May to July making the chart look like prices have gapped higher due to the 11-cent premium to July. The market remains largely rangebound and a close above 460 could allow prices to test the 495 – 510 area. 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 139,000 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 closed significantly higher to finish the week after overnight it was reported that Israel sent attack drones to Iran in an escalation of Middle Eastern tensions. This caused crude oil to jump over three dollars at one point before it faded this morning. Soybeans may also have gotten a boost from higher corn as a result of the new EPA decision regarding E15.
- July soybeans have trended lower over the past month and are now just 25 cents off their low that was made in February. For the week, July soybeans lost 21 cents and November lost 15 ¼ cents. July soybean meal lost $0.90 for the week at $343.20, and July soybean oil lost 1.51 cents ending at 44.94 cents.
- In South America, there have been reports that Argentina is receiving too much rain which could be detrimental to their soybean crop. Yesterday, the Buenos Aires Grain Exchange said that 77% of the crop was rated good to excellent, but only 14% has been harvested. Brazil is likely over 90% finished with harvest at this point.
- In the US, planting has begun in the South and in the central Corn Belt, but many areas of the Midwest are still receiving rain and may have to wait to begin planting. Despite potential delays, these rains are helping areas with some of the worst soil moisture levels.
Above: April 19 July soybeans posted a key bullish reversal, marking support just below the market near 1145 which coincides with the March 6 low of 1140 ¼. Should this support area hold, prices could potentially rebound and test the March high near 1127. Below 1140 ¼ lies, key support near the February low of 1128 ½.
Wheat
Market Notes: Wheat
- Wheat ended the session with gains in all three classes, supported by higher corn and soybean futures, a higher close for Matif wheat, and consolidation of the US Dollar. Initial strength may have also stemmed from news that Israel attacked Iran. However, the market may have largely brushed this news aside as no greater conflict is expected. This may indicate that the grain complex, in general, is seeing a technical bounce from oversold levels.
- Much of the Midwest will see a cooler and drier pattern this weekend, and longer range models are predicting better rain chances for the Southern Plains. Western Kansas may miss much of this moisture though, which may keep their winter wheat conditions on the decline.
- India’s government has reported that wheat stocks as of April 1 totaled 7.5 mmt, down from 8.35 mmt last year and marking the lowest level in 16 years. This could be supportive to futures prices, as India may need to import more wheat to meet their domestic needs.
- SovEcon has reportedly lowered their forecast of Russian wheat production by 1 mmt to 93 mmt, which is still above the USDA figure of 91.5 mmt. Additionally, the Russian Ag Ministry has raised the wheat export tax by 5% to 3,443 rubles per mt.
- Farmers in Argentina are said to have called for the elimination of the 12% export tax on wheat, as they deal with high production costs and low domestic prices, affecting profitability. Wheat planting in Argentina is set to begin around mid-May.
- China expects another bumper crop of grains and oilseeds, attributed partially to increased planting areas for winter wheat and rapeseed. Government subsidies and favorable domestic prices are encouraging farmers to expand their operations as China aims to achieve a total grain production of 50 million metric tons by 2030.
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 ~ 43c
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.
- Grain Market Insider recommends covering half of the remaining July ’24 Chicago wheat 590 puts at current market prices, minus fees, and commission. Back in March, Grain Market Insider suggested covering half of the originally recommended July ’24 Chicago wheat 590 puts at approximately 67 cents in premium minus fees, and commission. At 67 cents, the puts were about double their original cost. In yesterday’s and today’s trading sessions, the July ’24 contract may have found support around the 550 level. Given the oversold nature of the market and increased global uncertainty, Grain Market Insider recommends covering another half of the remaining position to protect some of the current gains. This recommendation means that 75% of the original position should be closed out, leaving 25% of the original position to continue to provide downside protection in the event the market fails to rally off this 550 area.
- 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: Market weakness pushed July ’24 Chicago wheat below the 50-day moving average but 548 ½ initial support remains intact so far. If support holds, and prices rally back, they could still encounter resistance near the recent high of 574 ¾, before testing 585 – 620. Otherwise, if July ‘24 closes below 548 ¼, it remains at risk of drifting further to test the March low of 523 ½.
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 ½ in the July ’24 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
Since February, Minneapolis wheat has largely been rangebound, except for a temporary dip to set a new contract low, from which prices have recovered. Although a lack of bullish drivers and resistance from the 50-day moving average remain, historical seasonal trends typically strengthen as we approach late spring and early summer. Furthermore, managed funds continue to hold a substantial net short position, that potentially sets the stage for a short covering rally at any moment.
- 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: Despite recent bearish market reversals, July ’24 Minneapolis wheat remains rangebound since posting a low on April 3. Initial support below the market rests near 632, with the 625 ¼ April low just below that. Should these levels hold, and prices rally above 660 – 677 resistance, they could potentially test 700 – 712. If not, the market could drift toward 595 – 600 psychological support.
Other Charts / Weather
Above: US 7-day precipitation forecast courtesy of NOAA, Weather Prediction Center.
