5-6 End of Day: Positive Money Flow and Likely Short Covering Leads Beans and Wheat Sharply Higher
All prices as of 2:00 pm Central Time
| Corn | ||
| JUL ’24 | 469 | 8.75 |
| DEC ’24 | 488.5 | 5.75 |
| DEC ’25 | 496.5 | 2.5 |
| Soybeans | ||
| JUL ’24 | 1248.75 | 33.75 |
| NOV ’24 | 1219.75 | 18.75 |
| NOV ’25 | 1194.25 | 16.75 |
| Chicago Wheat | ||
| JUL ’24 | 648.75 | 26.25 |
| SEP ’24 | 668.5 | 25.5 |
| JUL ’25 | 716.75 | 18.75 |
| K.C. Wheat | ||
| JUL ’24 | 675.25 | 25 |
| SEP ’24 | 686.25 | 23 |
| JUL ’25 | 714.5 | 19.5 |
| Mpls Wheat | ||
| JUL ’24 | 725.5 | 11 |
| SEP ’24 | 730.75 | 11.25 |
| SEP ’25 | 715.75 | 13 |
| S&P 500 | ||
| JUN ’24 | 5196 | 41.25 |
| Crude Oil | ||
| JUL ’24 | 78.17 | 0.41 |
| Gold | ||
| AUG ’24 | 2357.2 | 26.6 |
Grain Market Highlights
- At the open of today’s day session, the corn market quickly transitioned from negative to positive, with July corn closing just a penny off the high. Managed funds likely covered more short positions, supported by money flowing into the commodity markets and big positive moves in wheat and soybeans.
- July beans settle at their highest level since January after 4 consecutive higher closes as traders likely cover short positions.
- Soybean meal and oil added additional support to soybeans as they both closed sharply higher today and pushed July Board crush margins 8 ½ cents higher. Harvest delays in Argentina and flooding in S. Brazil both contributed to the rally.
- Following a weak start to the day due to more than expected rain in the southwestern Plains, all three wheat classes rebounded to settle sharply higher, supported by higher soybeans and dry conditions in the Black Sea region. July Chicago wheat posted its highest close since last December, while July KC posted its highest close since November.
- To see the updated US 5-day precipitation forecast, the US 6 – 10 day Temperature and Precipitation Outlooks, as well as the 1-week total precipitation for Brazil and N. Argentina, courtesy of NOAA, NWS, and CPC 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 fund’s large 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, the market now shows signs of being overbought, which could add resistance to higher prices. Despite potential obstacles along the way, overall market conditions and seasonal tendencies 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 July ’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
- Strong money flow into the grain markets helped to lift corn futures higher on the session. July corn futures closed at their highest point since January 12 as funds continued to cover short positions.
- On last week’s Commitment of Traders report, managed money reduced their net short position to 218,040 contracts, reduced by 20,506 contracts from last week as of April 30. With the recent price action, estimates will have funds under 200,000 short contracts and challenging the lowest net short since the start of the year.
- The USDA will release its next estimate of planting pace this afternoon. Expectations for corn planting are to be 39% complete as of May 5. This would be up 12% from last week, and in line with the 5-year average.
- Weekly export inspections showed good movement for corn exports last week. The USDA inspected 50.8 mb (1.286 mmt) of corn for shipment last week. Total inspections are now at 1.299 billion bushels, up 33% over last year, while the USDA is forecasting a 26% year-over-year increase.
- Weather models are forecasting rounds of precipitation to push through the Corn Belt, which could limit planting until the middle of May. The recent 6–10 day forecast is showing a drier than normal pattern going into the middle of the month. Dry weather would be helpful in keeping the planting pace on target after an overall wet couple of weeks in the Corn Belt.
Above: July corn pierced the 200-day moving average and closed above 460 resistance, opening the door for a potential run toward the 495 – 510 resistance area. The market is showing signs of being overbought, which can be an obstacle to a higher move while adding fuel to any decline. To the downside, initial support may be found between 445 and 435, with greater support down near 421.
Above: Corn Managed Money Funds net position as of Tuesday, April 30. Net position in Green versus price in Red. Managers net bought 20,506 contracts between April 24 – 30, bringing their total position to a net short 218,040 contracts.
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
In mid to late April soybeans posted an intermediate low and a bullish reversal with some subsequent short covering which rallied the market back toward early April’s congestion area. While that initial rally was limited, and the current supply/demand situation remains somewhat bearish, Managed funds remain short about 149,000 contracts according to the latest Commitment of Traders report. This could still fuel an extended short covering rally should any production concerns arise in the coming weeks. 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 July ’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 sharply higher again to kick off the week and have now posted 4 consecutively higher closes with the July contract gaining a whopping 85 ¾ cents since just last Wednesday. Both products closed higher but soybean meal was the clear leader with gains of over 4% as South American flooding threatens yields.
- In Brazil, the last of the soybeans left in the field are deteriorating as heavy flooding disrupts harvest in Rio Grande do Sul. Reuters has estimated that Brazil’s total soybean production could fall by as much as 15% in that state for a total production of 19 to 20 mmt where the previous estimates had been closer to 22 mmt.
- Today’s soybean export inspections were within the range of trade guesses at 12.8 mb for the week ending Thursday, May 2. This was greater than last week’s inspections but still put the total for 23/24 at 1.438 billion bushels, which is down 18% from the previous year. The USDA is estimating total soybean exports at 1.700 bb for 23/24 which would be down 15% from last year, but that number could change in Friday’s Supply and Demand report.
- Friday’s CFTC report surprisingly showed funds as net sellers of 222 contracts of soybeans as of April 30, which increased their net short position to 149,236 contracts. It should be noted that the more significant rally came the following day with the July contract gaining 37 ¾ cents on the week.
Above: A close above the 1248 late January high opens the door for the market to target the 1290 ¾ – 1296 ¾ gap, and then the 1328 – 1352 resistance area. A slide back lower may encounter support in the congestion area between 1192 and 1146, with key support near the February low of 1128 ¼.
Above: Soybean Managed Money Funds net position as of Tuesday, April 30. Net position in Green versus price in Red. Money Managers net sold 222 contracts between April 24 – 30, bringing their total position to a net short 149,236 contracts.
Wheat
Market Notes: Wheat
- Despite a weaker start to the session, possibly influenced by rains in the southwestern Plains, all three US wheat classes closed sharply higher. Support came from the surging soybean market and expectations of continued dry weather in Russia and Ukraine. Additionally, Paris milling wheat futures saw a significant jump, with the September contract gaining 10.25 euros per metric ton, marking its highest level since mid-September 2023.
- Weekly wheat inspections at 11.8 mb bring total 23/24 inspections to 634 mb, which is down 7% from last year. Inspections are currently behind the pace to meet the USDA’s goal. There will need to be about 55 mb more wheat exports in May to reach the USDA’s 710 mb export goal.
- IKAR has reportedly lowered their estimate of Russia’s wheat crop by 2 mmt to 91 mmt. There is talk that there may be a further decline to 90 mmt. And with dry weather anticipated to continue into mid-May, there may be cuts to both Russian and Ukrainian wheat production down the road. In addition, IKAR has also said that the Russian wheat export values rose by four dollars last week to $216 per mt.
- Managed funds bought back a signification amount of wheat last week. The combined short position in all three US classes now totals only 87,000 contracts. This is the smallest net short position since September of last year. Between April 23 and 30, their short position in Chicago wheat, in particular, declined by about 37%, from just over 76K contracts to just under 48K.
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
New Alert
Sell JUL ’25 Cash
Puts
2023
No New Action
2024
No New Action
2025
No New Action
Chicago Wheat Action Plan Summary
After holding downside support near 550, Chicago wheat staged a rally, likely fueled by Managed fund short covering and HRW crop concerns, that took it through the major moving averages on the continuous chart, and towards last December’s highs. Although bearish fundamentals remain, and the market shows signs of being overbought which adds downside risk, Managed funds still hold a net short position that has the potential to drive an extended short covering rally should any crop more 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. Since weather became a much more dominant story for the wheat market, it appears that Chicago wheat may have established a springtime low. In light of this, Grain Market Insider has issued two separate recommendations to exit the second half of the July ’24 Chicago wheat 590 puts that were recommended for purchase last August. Considering that the crop is still developing, and weather remains a factor, we are aiming to recommend further sales within the 685 – 715 range versus July ’24 futures.
- Grain Market Insider recommends selling another portion of your estimated 2025 SRW wheat production. Since our last sales recommendation for next year’s SRW wheat crop, July ’25 Chicago has rallied over 70 cents and is approaching the 62% retracement level from the March low back to contract highs as Managed funds cover their extensive net short positions on world production concerns for this year’s crop. While plenty of time remains for other bullish factors to enter the scene that could push prices further, this rally may primarily be weather driven and short-lived, and we advise you to take advantage of these elevated prices to sell another portion of your estimated 2025 SRW production.
To date, Grain Market Insider has issued the following Chicago wheat recommendations:
Above: Support near the 200-day moving average has held, and the close above 633 ¼ opens the door for the market to test the area of 664 and then 684 as it moves toward the July high of 777 ¼. A slide lower and close below 593 ½ may encounter support around the 50-day moving average (567) with 548 support below that.
Above: Chicago Wheat Managed Money Funds net position as of Tuesday, April 30. Net position in Green versus price in Red. Money Managers net bought 28,318 contracts between April 24 – 30, bringing their total position to a net short 47,866 contracts.
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
Between the end of February and the middle of April, KC wheat was mostly rangebound between the mid 590’s on the topside and mid 550’s down low, with little to move prices higher. All the while Managed funds continued adding to their large net short positions. Toward the end of April, dryness in the Black Sea region and the US HRW growing areas started becoming more concerning and triggered a short covering rally across the wheat complex, driving prices to levels not seen since last December. Although low world export prices continue to be a drag on US demand and prices, and while Managed funds covered a significant portion of their net short positions, they remain short the market, which could still push prices higher if production concerns persist.
- No new action is recommended for 2023 KC wheat. Considering time is getting limited before the ’24 crop harvest, we recommended two sales on this most recent runup in prices to get old crop HRW wheat marketed. With that said, we are currently evaluating the market situation before setting a target for what will likely be our last sales recommendation for the 2023 HRW crop year.
- No new action is recommended for 2024 KC wheat. Since weather has become a much more dominant driver, marked by the market breaking out of its 2-month long 552 – 605 trading range, we recently recommended making a sale for the 2024 crop considering weather rallies can be short lived. Seeing that the crop is still developing, and weather has become a larger factor, we are currently targeting the 760 – 780 range 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 May 6 close above the 664 and the 200-day average opens the door for the market to make a run toward psychological resistance near 700, with additional resistance above there around 722. If the market reverses lower, initial support may come in near 623 and again near 600.
Above: KC Wheat Managed Money Funds net position as of Tuesday, Apr. 30. Net position in Green versus price in Red. Money Managers net bought 18,598 contracts between Apr. 24 – 30, bringing their total position to a net short 29,610 contracts.
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
Between mid-February and much of April Minneapolis wheat traded mostly sideways to lower with little bullish fundamental news to drive prices higher. In late April, driven by world wheat crop concerns and dryness in the HRW growing areas, and fueled by likely Managed fund short covering, Minneapolis wheat rallied back toward the January highs. Although bullish fundamentals remain scarce, and the market shows signs of being overbought, historical seasonal trends typically strengthen as we approach late spring and early summer. Furthermore, Managed funds still hold a net short position that could fuel an extended rally if more production concerns arise.
- No new action is recommended for 2023 Minneapolis wheat. Following the recent breakout to the upside and the subsequent rally off the April lows, we recommended making a sale to take advantage of the elevated prices. The current strategy is to look for an extension of the rally toward last December’s highs and target 725 – 750 to recommend additional 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: While the close above 712 in the July contract puts the market on track to continue toward the November high of 752, it could still face resistance in the 725 – 735 area. The close above 712 also puts the market solidly in overbought territory and at risk of a downturn. Should this occur, initial support may come around 690, with further support between 675 and 660.
Above: Minneapolis Wheat Managed Money Funds net position as of Tuesday, Apr. 30. Net position in Green versus price in Red. Money Managers net bought 15,262 contracts between Apr. 24 – 30, bringing their total position to a net short 9,294 contracts.
Other Charts / Weather
Above: US 5-day precipitation forecast courtesy of NOAA, Weather Prediction Center.
Above: Brazil and N. Argentina 1-week forecast total precipitation courtesy of the National Weather Service, Climate Prediction Center.