4-23 End of Day: Higher Wheat Complex Lends Support to Corn and Beans
All prices as of 2:00 pm Central Time
| Corn | ||
| MAY ’24 | 443 | 3.25 |
| JUL ’24 | 452.5 | 2.75 |
| DEC ’24 | 474.75 | 2.25 |
| Soybeans | ||
| MAY ’24 | 1167.5 | 6.5 |
| JUL ’24 | 1182 | 5.5 |
| NOV ’24 | 1174 | 2.25 |
| Chicago Wheat | ||
| MAY ’24 | 585 | 14.75 |
| JUL ’24 | 602.75 | 15.25 |
| JUL ’25 | 666.5 | 8.25 |
| K.C. Wheat | ||
| MAY ’24 | 608.75 | 11.25 |
| JUL ’24 | 614.25 | 11.75 |
| JUL ’25 | 658.25 | 9.5 |
| Mpls Wheat | ||
| MAY ’24 | 666.5 | 10.75 |
| JUL ’24 | 672.25 | 9.5 |
| SEP ’24 | 681.25 | 9 |
| S&P 500 | ||
| JUN ’24 | 5112.5 | 65 |
| Crude Oil | ||
| JUN ’24 | 83.33 | 1.43 |
| Gold | ||
| JUN ’24 | 2339.4 | -7 |
Grain Market Highlights
- For the third day in a row, the wheat complex lent support to the corn market which saw follow through buying after yesterday’s close above the 50-day moving average for the first time in three weeks.
- Soybeans also closed higher for the third consecutive day while posting a 33-cent gain over the same time. Short covering in the front months likely led bull spreading across the market as the nearby contracts gained on the deferred ahead of May options expiration this Friday and First Notice Day next week.
- Another day of potential short covering by speculative traders led the wheat complex to achieve yet another day of strong gains, pushing both Chicago and KC to close above their respective 100-day moving averages.
- To see the updated US 7 day precipitation forecast, the 8 – 14 day Temperature and Precipitation Outlooks, and the 1 week precipitation forecast for Brazil and Argentina, 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
Although July ’24 corn has rallied beyond the congestion range on the front month continuous charts, it remains below its high of 460 that was posted on March 28. With little fresh bullish fundamental news, managed funds have maintained a significant net short position while the market became oversold. The market’s oversold conditions, combined with the large fund net short position, likely sparked the recent rise in prices and could fuel a more significant upside move as we move through planting and into the growing season. While the recovery in corn prices may encounter obstacles along the way, 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
- A strong wheat market supported the corn market for the third consecutive day, but technical resistance and large supply picture limited gains.
- Corn futures saw follow-through buying as the nearby contracts closed above the 50-day moving average on Monday for the first time in over three weeks. May futures also posted their highest daily close since February 9.
- The planting pace is still running ahead of the 5-year average. On the weekly crop progress report, corn planting reached 12% complete. This is up 6% from last week and 2% ahead of the 5-year pace.
- Weather models are predicting warmer, but wetter-than-normal conditions over the next two weeks. The current corn planting pace is off to a good start, but increased precipitation could slow progress going into May.
- The next few sessions could bring choppy trade to the corn market. May basis contracts will need to be priced or rolled in the next handful of days, May corn options expire on Friday this week, and first notice day for May futures is April 30. All three events will likely bring some volatility and price movement into 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.
Corn percent planted (red) versus the 5-year average (green) and last year (purple).
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 168,000 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 higher for the third consecutive day with the July contract gaining 33 cents since last Thursday’s close. Today, July beans may have met some resistance at the 50-day moving average, and a rally above that level could be significant. Futures were bull spread with the front months gaining on the deferred, likely as a result of short covering ahead of first notice day on April 30. Both soybean meal and oil ended the day higher.
- The USDA’s Crop Progress report was released yesterday afternoon and showed that 8% of the crop has been planted, which compares to 3% last week and is above the 5-year average of 4%. Recent rains have significantly improved soil moisture levels which gets planting off to a good start.
- In South America, the Brazilian soybean harvest is nearly complete while Argentina’s soybean bushels will be coming soon. Brazilian soybean prices remain lower than those of the US, which is likely to keep impacting US export levels. As Argentina’s harvest will result in a significant amount of soybean meal for export, there could be added pressure on US soybean meal prices.
- Yesterday’s export inspections for soybeans were encouraging totaling 16.0 mb for last week which was above the average needed to meet the USDA estimate for the third week, but total inspections are still 18.2% below last year.
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 1227. Below 1140 ¼ lies, key support near the February low of 1128 ½.
Soybeans percent planted (red) versus the 5-year average (green) and last year (purple).
Wheat
Market Notes: Wheat
- Wheat had another strong close, with double digit gains in all three US classes, despite a neutral to lower close for Paris milling wheat futures. The US Dollar Index did drop today, which may have lent some support. From a technical perspective, both July Chicago and KC wheat closed above their 100-day moving averages today, which may now act as support if the market drops back.
- Speculative traders are believed to be buyers in the ag complex yesterday and today. It will take some time for this to be reflected, if true, in the Commitments of Traders report. If funds are exiting short positions it may help to explain the recent rally over the past few sessions.
- Yesterday afternoon, the USDA released its crop progress report. The winter wheat crop saw a larger than expected good to excellent rating reduction of 5% from last week, to 50%. Moreover, 17% of the crop is currently headed, surpassing the average of 13%. Additionally, the spring wheat crop is 15% planted, exceeding the 10% average and marking a significant increase from the 7% reported last week.
- According to the European Union’s Monitoring Agricultural Resource Unit, warmer than average temperatures in spring along with adequate rainfall have been a benefit to crops across most of the continent. However, too much wet weather in northwestern Europe during the fall and winter may mean that some areas are unlikely to fully recover.
- The wheat planting region in Brazil is expected to decline due mainly to high production costs. Some areas of central Brazil have already seen wheat planting begin, but end users in Brazil may focus more on imports of wheat from Argentina, which is more competitive vs the Brazilian spot 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
After failing to break through downside support around 550 and likely fueled by the large managed fund net short position, July ’24 Chicago wheat has rallied through the 100-day moving average on the front month continuous chart for the first time since January. Although bearish fundamentals remain, the fund’s large net short position has the potential to drive an extended short covering rally should any crop concerns arise 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. Back in August we recommended buying July ’24 590 puts to prepare for further price erosion. Since then, we recommended exiting half of the original position to get closer to a net neutral cost, and then most recently, we recommended exiting another half of the remaining position to lock in further gains in case prices continue higher, leaving 25% of the original position in place. We continue to target a market rebound back towards 675 – 715 versus July ’24 futures before recommending any additional sales. As for the open July ’24 590 put position, we are looking for prices between 475 – 500 versus July ’24 futures to before we recommend exiting any of the last 25%.
- 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: July Chicago wheat rallied through resistance and the recent high of 574 ¾ before encountering heavier selling near the 200-day moving average (MA) and psychological resistance around 600. A close above the 200-day MA could pave the way for testing the December high of 630, with resistance levels between 617 and 622 before reaching that target. On the downside, if prices retreat, initial support is likely around 548, followed by 538.
Action Plan: KC Wheat
Calls
2023
No New Action
2024
No New Action
2025
No New Action
Cash
2023
Active
Sell JUL ’24 Cash
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. Even though demand fundamentals remain weak, we are entering the more dynamic part of the growing season, and with prices above 605, and considering managed funds still hold a considerable net short position, the market may still have more rally potential if unforeseen risks enter the market.
- Grain Market Insider sees a continued opportunity to sell a portion of your 2023 HRW wheat production. Since the end of February, the market has been moving sideways, constrained by slow export demand and low world export prices, which have capped US prices. July ’24 has returned to the upper end of the 555 – 605 trading range and is approaching resistance near the 100-day moving average. Given that time is getting more limited before the ‘24 KC crop gets harvested, Grain Market Insider is now looking for less aggressive rallies to get the last of the ‘23 KC crop moved.
- 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: The breakout and close above the March 10 high of 605 ¼ on April 22, opened up the possibility to test January’s 610 – 640 congestion area, a close above which could lead to further advancement toward more significant resistance in the 678 – 700 area. Should the market fall back and not rally, initial support may be found between the 50-day moving average and 678, with key support near the March low of 551 ½.
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 February, Minneapolis wheat has largely been rangebound, except for a temporary dip to set a new contract low, from which prices have recovered. Although an overall lack of bullish drivers remains, 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: The recent rally closed above the 50-day moving average, signaling a positive trend. However, it fell short of closing above the March high of 677 ¼. A breakthrough above this level could pave the way for further upward movement and a potential test of the 700 – 712 area. If not, initial support remains between 632 and 625 ¼, with major psychological support down toward 600 – 595.
Spring wheat percent planted (red) versus the 5-year average (green) and last year (purple).
Other Charts / Weather
Above: US 7-day precipitation forecast courtesy of NOAA, Weather Prediction Center.
Brazil 1-week forecast total precipitation courtesy of the National Weather Service, Climate Prediction Center.
Argentina 1-week forecast total precipitation courtesy of the National Weather Service, Climate Prediction Center.