4-2 End of Day: Lower Outside Markets and Solid Winter Wheat Ratings Press Grains Lower
All prices as of 2:00 pm Central Time
| Corn | ||
| MAY ’24 | 426.5 | -9 |
| JUL ’24 | 441 | -8.25 |
| DEC ’24 | 468 | -6.75 |
| Soybeans | ||
| MAY ’24 | 1174 | -11.75 |
| JUL ’24 | 1187.75 | -11.75 |
| NOV ’24 | 1177 | -5.5 |
| Chicago Wheat | ||
| MAY ’24 | 545.25 | -11.75 |
| JUL ’24 | 561.75 | -11 |
| JUL ’25 | 637.75 | -3 |
| K.C. Wheat | ||
| MAY ’24 | 563.25 | -12.25 |
| JUL ’24 | 557.5 | -13.5 |
| JUL ’25 | 618.5 | -7.5 |
| Mpls Wheat | ||
| MAY ’24 | 627.5 | -7.25 |
| JUL ’24 | 637 | -7.5 |
| SEP ’24 | 647.5 | -6.25 |
| S&P 500 | ||
| JUN ’24 | 5250.5 | -44.75 |
| Crude Oil | ||
| JUN ’24 | 84.23 | 1.41 |
| Gold | ||
| JUN ’24 | 2291.9 | 34.8 |
Grain Market Highlights
- Weakness from the wheat complex and equity markets spilled over to the corn market which closed near the bottom of its 12 ¼ cent range.
- Soybeans followed the strength in soybean oil, trading higher in the day and fading to close lower alongside weaker soybean meal. Additional technical selling came as prices fell below the 20 and 50-day moving averages.
- The strong crush pace is likely adding pressure to soybean meal as inventories begin to swell and export demand wanes from increased supply from South America. Soybean oil, on the other hand, continues to see strong domestic demand as demonstrated by lower year-over-year stock which is lending the product support along with strong world veg oil prices.
- The wheat complex closed lower in all three classes, with Minneapolis printing a new contract low and low close. Strong winter wheat ratings and lower outside markets provided the incentive to sellers to press the markets lower.
- To see the updated US 6 – 10 day Temperature and precipitation outlooks, and the 7-day forecast precipitation for Brazil and N. Argentina, courtesy of the NWS, 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
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
- It was a difficult day in the grain markets as strong selling pressure in the wheat market from favorable crop ratings spilled over into the corn market. Outside market weakness in the equity markets also helped add to the volatility as corn prices pushed the May futures to their lowest prices since March 5.
- Charts saw technical selling as corn prices pushed lower for the second consecutive session, trading below the most recent low of 426 in the May futures to 424 ½. The weak price action, poor money flow, and lack of bullish news will likely keep sellers active in upcoming sessions.
- Good precipitation forecast for the corn belt is likely to improve dry areas of the corn belt still reflected on the Drought Monitor maps. U.S. weather is looking more favorable for a potential good start to the 2024 U.S. corn crop.
- Brazil weather is still trending overall favorable for development of the second (safrinha) corn crop. There are no short-term issues now, but South American weather will remain a key market driver in the weeks ahead.
- Ethanol grind for the first half of the marketing year has been strong. During this period (Sept.-Feb.) corn used for ethanol totaled 2.712 billion bushels or up 6.4% over last year. This domestic demand is trending ahead of the USDA expect pace for the marketing year.
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 close above 445, they could then test the January high of 452 ¼. 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 gave little in the way of outright bullish information to trigger great amounts of short covering as their March 1 stocks and prospective soybean plantings estimates were relatively neutral and came in as expected by the market. That said, Managed Money still held a sizable 135,000 contract net short position in the most recent Commitment of Traders report, which can still fuel a short covering rally if issues come up this season, with planting not that far off. Otherwise, prices may still be at risk of retesting the recent lows this spring if weather stays benign and planting goes smoothly.
- 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 significantly lower which marks the fifth consecutively lower trading day in the May contract. Pressure continues to come from last week’s USDA report, which showed higher intended planted acres than last year and pressure from lower soybean meal. Soybean oil closed higher and initially supported soybeans earlier in the day before fading.
- The driver behind the rally in soybean oil prices has come from palm oil and other veg oils. Sunflower oil has been cheaper which has incentivized India to import 51% more sunflower oil in March and 3.3% fewer palm oil imports.
- Yesterday afternoon, the Fats and Oils report was released and saw a new record for February soybean crush at 196.4 mb. This was slightly lower than the average trade guess but was up 9.6% from last year. While bean oil stocks were down 9% from last year and below expectations.
- Agrural estimated the Brazilian soybean harvest at 74% complete as of March 28, and Argentina is just now beginning to harvest its soybeans. With the influx of new South American soybean inventories, US exports have been struggling, and yesterday’s export inspections reflected that with just 15.2 mb inspected putting the total for the year at 1,359 mb, 19% lower than the previous year.
Above: Since the middle of March, the soybean market has traded sideways mostly between 1210 and 1180. If 1175 support continues to hold and if prices close above the March high of 1226 ¾, there’s potential for a test of the 1247 ½ January high. If not, the market runs the risk of retreating down toward the 1130 – 1140 support area.
Wheat
Market Notes: Wheat
- Yesterday’s downward momentum carried through to another negative close for US wheat futures. Pressure stemmed from a lower close for Matif wheat, and lower markets in neighboring corn and soybean futures. The grain complex may also be experiencing some spillover from lower equity markets; at the time of writing, the Dow is down over 450 points.
- According to the USDA, the winter wheat crop is rated 56% good to excellent and just 11% poor to very poor. This is a relatively good rating when compared with recent years and may also account for some of today’s weakness. Last year, just 28% of the crop was rated Good to Excellent (GTE). When looking at the breakdown, HRW wheat was rated 54% GTE, while SRW was 68% GTE. The USDA also reported that 1% of the spring wheat crop is planted.
- India is expected to import wheat for the 24/25 season, according to the USDA Foreign Agricultural Service. The season begins in April, and imports may total 2 mmt due to good domestic demand coupled with a drop in government reserves. If true, this would be the first time India has been a net importer since the 17/18 season.
- Saudi Arabia reportedly purchased 795,000 mt of wheat in their tender for June/July delivery, which was more than the expected 595,000 mt. This is the first wheat tender by their General Food Security Authority this year – the last tender was in December of 2023 and resulted in a purchase of 1.353 mmt. In other tenders, Japan is looking for 113,000 mt of wheat from the US, Canada, and Australia.
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 making a fresh low in early March, Chicago wheat has traded mostly sideways with relatively small gains capped by overhead resistance. Although the lack of any bullish information has been disappointing, the market remains oversold on a macro level, and managed funds continue to hold a significant net short position. Either or both of these factors could fuel a short covering rally at any time as we head into the more active 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: Significant resistance remains above the market around the 50-day moving average. Should prices rebound and close above 567, they could still potentially challenge the 50 and then the 100-day moving averages, as well as the congestion area between 585 and 620. Although, if prices retreat and close below 523 ½, there’s a risk of trading downwards toward the next major support level situated around 488.
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. As weather becomes a more dominant market mover, we are targeting 670 – 700 versus May ’24 futures to recommend making additional sales. This area represents a modest 20% retracement back toward the 2022 highs.
- 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: There remains considerable resistance in the area between the 50-day moving average and the March 10 high of 605 ¼. If prices can close above 605 ¼, they could continue towards the congestion range between 610 and 640. Otherwise, if they retreat back below initial support of 575, prices could potentially test the 551 ½ March low.
Winter wheat condition percent good-excellent (red) versus the 5-year average (green) and last year (pink).
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 last summer, 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.
- 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: After breaking through the lower boundary of its sideways range, Minneapolis wheat is currently exhibiting signs of being oversold, raising the risk of drifting towards the psychological support at 600 and the March ’21 low of 596 ¼. However, this trajectory could change if an external bullish catalyst emerges. In which case, the oversold conditions could provide support, to help lift prices upwards to challenge the resistance zone around 660 – 670.
Other Charts / Weather
Brazil 5-day precipitation forecast courtesy of NOAA, Weather Prediction Center.