5-7 End of Day: Turnaround Tuesday Strikes as Grains Close Mostly Lower Following Monday’s Rally
All prices as of 2:00 pm Central Time
| Corn | ||
| JUL ’24 | 467 | -2 |
| DEC ’24 | 488.5 | 0 |
| DEC ’25 | 496.75 | 0.25 |
| Soybeans | ||
| JUL ’24 | 1246.5 | -2.25 |
| NOV ’24 | 1228 | 8.25 |
| NOV ’25 | 1203.25 | 9 |
| Chicago Wheat | ||
| JUL ’24 | 642.75 | -6 |
| SEP ’24 | 663.75 | -4.75 |
| JUL ’25 | 715.5 | -1.25 |
| K.C. Wheat | ||
| JUL ’24 | 664 | -11.25 |
| SEP ’24 | 676.25 | -10 |
| JUL ’25 | 712.25 | -2.25 |
| Mpls Wheat | ||
| JUL ’24 | 719 | -6.5 |
| SEP ’24 | 724.75 | -6 |
| SEP ’25 | 716.25 | 0.5 |
| S&P 500 | ||
| JUN ’24 | 5206 | -0.5 |
| Crude Oil | ||
| JUL ’24 | 78.13 | -0.01 |
| Gold | ||
| AUG ’24 | 2344.5 | -8.9 |
Grain Market Highlights
- Farmer selling and bear spreading weighed on the nearby end of the corn futures market which turned lower from overnight strength on slower than anticipated planting progress. The slower planting progress helped support new crop futures.
- Like corn, the soybean market saw a fair amount of bear spreading which supported the new crop end of the futures market due to the slower than expected planting pace, with nearby old crop contracts showing small losses.
- Soybean meal and oil also reversed directions with oil gaining on meal as traders likely booked profits and covered some recent long meal, short oil positions. The net changes in both products largely offset each other with little net affect on nearby Board crush margins or soybeans.
- All three wheat classes saw lower closes with bear spreading noted in both Chicago and KC where the nearby contracts lost to the deferreds. Rain in dry HRW areas and lower Matif wheat may have triggered profit taking from the recent rally, as winter wheat good to excellent ratings increased 1%.
- 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
Despite July ’24 corn rallying beyond the congestion range on the front-month continuous charts, the market exhibits signs of being overbought, potentially adding resistance to higher prices. However, managed funds have retained a significant net short position, likely sparking the recent rally which could fuel a more substantial upside move as we progress through planting and into the growing season. Despite potential obstacles, overall market conditions and seasonal tendencies continue to support a sustained 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
- Front end corn futures reversed lower from overnight strength as increased producer selling in the US and South America may have limited gains. A slower than anticipated planting pace supported new crop futures as bear spreading was evident across grain markets on Tuesday, with deferred contracts gaining on the nearby.
- The USDA reported crop progress and planting pace on Monday afternoon. US corn planting slowed last week due to wet weather as only 36% of the crop was planted as of Sunday. This was up 9% from last week and below market expectations. The 5-year average was at 39%, and with only 36% of the crop planted, 2024 has become the third slowest planting pace over the last 10 years. Only 2019 and 2022 were slower.
- The planting pace will continue to struggle as another weather system moves across the Corn Belt this week. The forecast is showing a break in the weather in the middle of the month, but expectations are for a warm and wetter forecast into the end of May.
- The USDA will release the next WASDE report on Friday morning. The May report will give the market its first estimates for the 24/25 marketing year and updates for the current marketing year. Old crop corn carryout is expected to decrease slightly, but 24/25 will likely show the potential for large production and increased carryout year over year.
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 percent planted (red) versus the 10-year average (blue) 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
In early May the soybean market rallied out of its congestion range and above the March highs as Managed funds likely covered some of their net short positions. While the current supply/demand situation remains somewhat bearish, Managed funds remain net short the market and this breakout opens the door for a run towards the 1290 ¾ – 1296 ¾ chart gap and resistance area just above there if further production concerns arise in the coming weeks. Otherwise, if weather conditions cooperate and planting progresses without major issues, prices could remain susceptible to a reversal from the recent highs.
- 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 ended the day mixed in bear spreading trade which saw the front months slightly lower but gains in the deferred months. Prices were likely correcting a bit after the recent rally and ahead of the USDA report on Friday. Soybean meal finished the day lower while soybean oil was higher. Since May 1, funds are estimated to have short covered 35,500 contracts of soybeans.
- Yesterday’s Crop Progress report showed that the soybean crop is 25% planted which was below the trade estimate of 28% and compares with 18% last week. Soybean plantings are still above the 5-year average of 21% but could slip if progress is stalled again this week. 9% of the crop has emerged.
- Early trade estimates for Friday’s USDA report have the 23/24 soybean ending stocks relatively unchanged, and the ending stocks for 24/25 are estimated at 439 mb, using a soybean yield of 52.0 bpa. The Argentinian bean crop is expected to be revised lower to 49.7 mmt from 50 mmt, and Brazil’s production is expected to be lowered to 152.5 mmt from 155 mmt last month.
- The flooding in Rio Grande do Sul has had a large impact on this rally and has now been declared a state of emergency. The flooding has specifically benefitted soybean meal as Brazil typically exports a portion of its bean crop to Argentina to be crushed. The flooding comes after a season that suffered through drought conditions as well further impacting yields in those areas.
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: Soybeans percent planted (red) versus the 10-year average (blue) and last year (purple).
Wheat
Market Notes: Wheat
- After a few strong sessions, wheat, along with the rest of the grain complex, took a breather with lower closes in all three classes. Bear spreading was noted in Chicago and KC wheat, in which nearby contracts were under heavier selling pressure compared to deferred. This could be a result of profit taking after the strong rally, with the recent rains throughout the nation’s midsection. Matif wheat futures closed marginally lower today as well, offering no support to the US market.
- On yesterday afternoon’s Crop Progress report, the USDA said that the winter wheat condition improved 1% to 50% good to excellent. Looking at the breakdown, SRW wheat is rated 74% GTE, while HRW is only 45% GTE. Additionally, spring wheat planting went from 34% complete a week ago to 47% done this week. This is well above last year’s 21% and the 5-year average at 31%.
- The weather forecast for southwest Russia and eastern Ukraine could feature a hard freeze later this week which may provide some support to wheat. Black Sea wheat is still the world’s cheapest, but with Russian export values said to be firming, it could lead to more competitive US exports.
- According to Stats Canada, Canadian wheat stocks at the end of March totaled 11.756 mmt. This was below the expectations for a 12.2 mmt figure, but this is also well below 13.9 mmt last year. Excluding durum wheat, the stocks total 10.1 mmt. This adds to the overall bullish picture for wheat futures.
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
Active
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, fueled mostly by Managed fund short covering, HRW crop concerns, and dryness in southern Russia, that took it through the major moving averages on the continuous chart, and towards last December 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 these concerns linger or intensify.
- 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 sees a continued opportunity to sell 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 (568) with 548 support below that.
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 590s on the topside and mid 550s 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 US wheat exports continue to struggle to compete on the world market, which can keep a lid on US 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: Winter wheat condition percent good-excellent (red) versus the 10-year average (blue) 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
From mid-February through most of April, Minneapolis wheat traded mostly sideways to lower, lacking significant bullish fundamental news to drive prices upward. However, in late April, spurred by concerns over the world wheat crop and dry conditions in the HRW growing regions, Minneapolis wheat experienced a rally back towards last fall’s highs. Despite lingering obstacles for the US wheat market and indications of overbought conditions, historical seasonal trends typically strengthen in late spring and early summer. Moreover, the fact that Managed funds still maintain a net short position suggests the potential for an extended rally if further production concerns emerge.
- 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: Spring wheat percent planted (red) versus the 10-year average (blue) and last year (purple).
Other Charts / Weather
Above: US 5-day precipitation forecast courtesy of NOAA, Weather Prediction Center.
Above: Brazil and N. Argentina 1-week forecast precipitation, percent of normal, courtesy of the National Weather Service, Climate Prediction Center.