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5-3 End of Day: South American Rains and Lower Russian Wheat Estimates Likely Spark More Short Covering

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Carryover strength from neighboring soybeans and wheat lent support to July corn futures which closed fractionally higher at its 100-day moving average after trading up to resistance and fading at midday.

  • Continued production concerns in South America kept soybean meal and soybeans on an upward trajectory going into the weekend. Another day of sharp gains in meal lent support to soybeans which likely experienced additional short covering by the Managed funds. July meal had its highest close since early January.

  • Soybean oil on the other hand consolidated for the third consecutive day, held back again by lower world veg oil prices and slowing demand for biofuel use.

  • Reduced Russian wheat production and export estimates by IKAR, along with dryness in Australia and higher Matif wheat, likely triggered more short covering in the wheat complex. July Chicago and KC contracts both rallied sharply before hitting resistance near their respective 200-day moving averages and settling below. Minneapolis, on the other hand settled with modest gains, mid-range, after trading both sides of unchanged.   

  • To see the updated US 5-day precipitation forecast, the US 6 – 10 and 8 – 14 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.

Note – For the best viewing experience, some Grain Market Insider content is best viewed with your phone held horizontally.

Corn

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:

  • Corn futures faded off early session strength but finished mostly higher on the session to end the week. Strong buying in both the wheat and soybean markets supported corn futures. For the week, the July corn futures traded higher for the second consecutive week gaining 10 ¼ cents, and the highest weekly close since January.

  • The Buenos Aires Exchange cut its projection for the Argentina corn production estimate to 46.5 mmt from 49.5 mmt. This newest projection is down 10 mmt from the early season estimate. Final production of corn in Argentina has been impacted by insect, disease, and weather damage.

  • Weather conditions in southern Brazil remain a concern with heavy rain and flooding impacting corn and soybean harvest in the region. Central Brazil is trending drier with high temperatures, which could pressure the development of the second (safrinha) crop corn.  These concerns have added some weather premium into the corn market this week.

  • Weather models are forecasting rounds of precipitation to push through the Corn Belt, which could limit planting until the middle of May. Corn planting is off to a good start, but forecasted rains could push overall progress to delayed or late.

  • Managed money is still estimated to hold a large net short position in the corn market. The concerns this week have helped trigger a short covering rally. The weekly Commitment of Traders report later this afternoon will give a clearer picture regarding the money flow in the corn market.

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.

Soybeans

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:

  • Soybeans ended the day sharply higher for the third consecutive day with the July contract up 52 cents and November up 41 ½ cents since Wednesday. Soybean meal has been the driver behind the gains in soybeans with another higher close today although soybean oil ended the day lower. Issues with harvest in South America have provided support.

  • For the week, July soybeans gained 37 ¾ cents ending at 1215, November soybeans gained 26 ¼ cents to 1201, July soybean meal gained a whopping $27.50 for $372.20, and July soybean oil lost 2.46 cents closing at 43.08 cents. Soybean meal has been the clear leader as major harvesting delays in Argentina due to excessive rains threaten yields and therefore soybean meal exports.

  • 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.

  • This week’s export sales report was relatively poor for soybeans at 15.5 million bushels and export shipments at 9.9 mb, but this morning, private exports reported to the USDA a flash sale of 122,000 metric tons of soybeans for delivery to unknown destinations during the 23/24 marketing year.

Above: The May 2nd close above 1191 ¾ resistance opened the door for the market to make a run toward and test resistance around the 1227 March high. A close above there could lead to a test of the January high around 1248. Initial support below the market remains between 1145 and 1140, if prices slide back toward key support and the February low of 1128 ½.

Wheat

Market Notes: Wheat

  • Wheat closed sharply higher in both the Chicago and Kansas City classes, with Minneapolis posting more modest gains. Today’s drop in the US Dollar Index was supportive, while fund short covering is likely the main driver of the market’s current momentum. Concerns regarding dryness in Russia and Australia, along with the worst flooding in southern Brazil since 1941, have all lent support to the wheat market.

  • Paris milling wheat futures surged higher today, helping the US market. The September contract gained 7.25 Euros to 235.00, closing well above the 200-day moving average. Prior to breaking through this resistance last week, it has not traded above that average since July of last year.

  • This week, rains in Russian wheat growing areas were less than expected. This is causing production concerns and adding support to futures pricing. IKAR reportedly decreased their Russian wheat production estimate by 2 mmt to 91 mmt, while also reducing their export estimate by 1.5 mmt to 50.5 mmt. For reference, the USDA is using a figure of 91.5 mmt of production with exports at 52 mmt.

  • Wheat planting continues to move forward in Australia, but more moisture is needed. The hope is that the transition from El Nino to La Nina will bring rain to recharge the soils. Friday and Saturday storms should bring precipitation to eastern regions, but the area may be limited to the northern part of New South Wales.

  • From a technical point of view, the July contracts of both Chicago and KC futures ran into resistance at their 200-day moving averages again. After rallying above that level for the second time in as many weeks, both classes closed below it today, and it may take more friendly news to see wheat rally significantly above these levels.

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 large 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.

  • 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: After failing to close above the December high of 630, Chicago wheat retreated and found initial support near the 200-day moving average. If initial support holds, and the market turns back higher, a close above the recent 633 ¼ high could open the door for a test of 664 resistance. Otherwise, if prices retreat, initial support is likely around 575 and the 50-day moving average.

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. While low world export prices continue to be a drag on US demand and prices, and it is likely that Managed funds covered a significant portion of their net short positions, it is also quite possible that they remain short the market. Which could still push prices higher if production concerns persist.

  • Grain Market Insider sees a continued opportunity to sell a portion of your 2023 HRW wheat production. Dryness in the Southwestern Plains and Russia, along with elevated geopolitical tensions in the Middle East and Black Sea spurred Managed funds to cover some of their extensive short positions in the wheat complex. As a result, the July ’24 KC wheat futures contract is about 50 cents higher than our previous old crop sales recommendation, and near both the 200-day moving average and the resistance area of last December’s highs. Considering this rally may primarily be weather driven and could be short-lived, as well as being limited on time before the 2024 crop is harvested, we advise you to take advantage of these elevated prices to sell another portion of your 2023 HRW wheat inventory.

  • 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: Even though initial support below the market between 620 and 625 remains intact, July KC wheat continues to struggle to close above the 200-day moving average. A close above the recent high of 664 may open the door for the market to test the 678 – 700 area. While a close below 620 may put it on track to test support near the 100-day moving average and the broad support area of 605 – 551.

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 quite possibly 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.

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.

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5-2 End of Day: South American Harvest and Crop Concerns Rally Soybeans and Corn

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Overly wet conditions in Southern Brazil, combined with potential planting delays from additional wet weather in the Midwest, helped push July corn to close just at its highest level since February and just below its 460 March high.

  • Flooding in Brazil with continued rain in N. Argentina and frost concerns in S. Argentina drove soybean meal $15.90 higher, and likely triggered a round of short covering in July soybeans which closed at their highest level since late March.

  • Record census crush for March may have also helped beans rally, but soybean oil stocks in the same report also rose more than expected adding a bearish tilt to bean oil demand, which could negatively impact soybeans.

  • KC wheat led the wheat complex higher again. While forecasted rains for the dry areas of western KS and the TX and OK panhandles will be welcome, more will be needed to alleviate drought conditions. Moreover, rainfall in the Black Sea region has fallen short of initial expectations, exacerbating concerns in that area as well.

  • To see the updated US 5-day precipitation forecast, and US Drought Monitor maps depicting changes from last week and crop areas in drought, courtesy of NOAA, NWS, CPC, USDA and NDMC scroll down to the other Charts/Weather section.

Note – For the best viewing experience, some Grain Market Insider content is best viewed with your phone held horizontally.

Corn

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:

  • Potential planting delays and wetness in Southern Brazil helped push corn futures higher on Thursday. July corn closed at its highest price level since early February.

  • Grain markets became concerned about current weather conditions in Brazil and Argentina.  Wet weather in Rio Grande Do Sol has damaged the late corn and soybean harvest, which triggered short covering in the soybean market. Central Brazil is trending drier with high temperatures, which could pressure the development of the second (safrinha) crop corn. With these concerns and a corn market holding a large net short position, a short covering rally was triggered on Thursday.

  • Weather models are forecasting rounds of precipitation to push through the Corn Belt, which could limit planting until the middle of May. Corn planting is off to a good start, but forecasted rains could push overall progress to delayed or late.

  • Weekly exports sales for corn were within expectations. Last week, US exporters registered new sales of 29.9 mb (758,000 mt) of old crop corn and 1.3 mb (33,670 mt) for new crop. Japan was the largest buyer of US corn last week. Total corn sales commitments now total 1.840 billion bushels, up 23% from last year.

  • The strong closing and price action at the end of the session could trigger additional buying to start the overnight session. With the market holding a large short position, the possibility remains that price momentum could be turning higher in the short term.

Above: The corn market continues to struggle to rally with overhead resistance remaining around 460 in the July contract. A breakout above there could allow prices to test the 495 – 510 area. If prices break to the downside and close below 421, they could slide further to test 400 – 410 support.

Soybeans

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:

  • Soybeans closed sharply higher today with the July contract breaking out of its recent sideways range and testing highs from early April. The November contract closed right below its 100-day moving average. The rally in soybeans today was fueled by a very significant jump in soybean meal which closed $15.90 higher in the July at $364.90, an increase of 4.56%. Soybean oil closed slightly lower.

  • Argentina and S. Brazil are currently dealing with continuous rains that have kept farmers out of the fields and unable to harvest the crop timely. In addition to the rains, temperatures are now forecast to drop in S. Argentina which could cause frost conditions and further damage the crop. This is supportive to soybean meal because Argentina is the number one exporter of the product and any threat to its production could lower Argentine exports giving the export business to the US.

  • Today’s export sales report showed an increase of 15.2 million bushels of soybean export sales for 23/24 and an increase of 0.3 mb for 24/24. This was within analysts’ expectations but was on the lower side of the trade range. Last week’s export shipments of 9.9 mb were below the 12.8 mb needed each week to meet the USDA’s estimates. Primary destinations were to Japan, Indonesia, and Mexico.

  • March census crush reported by US NASS yesterday afternoon came in at a record high for the month of March at 203.73 mb. While this was a new record, still showing strong domestic demand, the number was below the range of estimates. Bean oil stocks for the month of March were reported at 2.369 billion pounds, though lower than year ago levels, they were higher than trade expectations and are likely weighing on bean oil prices.

Above: The May 2nd close above 1191 ¾ resistance opened the door for the market to make a run toward and test resistance around the 1227 March high. A close above there could lead to a test of the January high around 1248. Initial support below the market remains between 1145 and 1140, if prices slide back toward key support and the February low of 1128 ½.

Wheat

Market Notes: Wheat

  • Wheat finished the session with modest gains when compared with the surging soybean market. After the reversal off the recent high, one must wonder if wheat would have had a positive close today if it weren’t for the soy rally. Today the US Dollar Index did fade to the lowest level in two weeks, which may have also helped support grain markets.

  • The USDA reported net sales cancellations totaling 0.7 mb of wheat for 23/24 and an increase in sales of 15.0 mb for 24/25. The cancellations are disappointing, however, last week’s shipments of 18.7 mb did exceed the 16.4 mb pace needed per week to reach the USDA export goal of 710 mb. Shipments now total 615 mb, which is up 2% from last year.

  • Western Kansas and the panhandles of Texas and Oklahoma are set to receive some rain, which should help ease the dry conditions there. Though this will bring relief, more moisture will be needed to eliminate drought conditions. According to the USDA 28% of the US winter wheat area is in drought as of April 30, a 2% improvement from last week’s 30%. However, the spring wheat area in drought increased 1% to 27% for the same period.

  • According to their supply minister, Egypt may import as much as 5.7 mmt of wheat during the 24/25 fiscal year (starting in July). Additionally, their current stocks are estimated to be sufficient for three months, with the government having purchased 1.1 mmt from domestic farmers since mid-April.

  • India is expected to face severe heat in May, according to their meteorological department. With talk that they will need to import wheat. Elsewhere, rains in southern Russia and parts of Ukraine this week have been less than anticipated. With expectations for a drier pattern to return, this may be supportive to the US futures market.

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 large 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.

  • Grain Market Insider sees a continued opportunity to sell the remaining, previously recommended 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 when they were about double of the original entry price, and in April we recommended covering another 25% of the original position when support around 550 was uncovered. Given today’s market action, it appears that July ’24 Chicago wheat may have found support around the 200-day moving average on the continuous chart and considering that the July ’24 590 puts have done their job of protecting the value of unsold 2024 bushels, we recommend exiting any remaining put options.

  • 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: After failing to close above the December high of 630, Chicago wheat retreated and found initial support near the 200-day moving average. If initial support holds, and the market turns back higher, a close above the recent 633 ¼ high could open the door for a test of 664 resistance. Otherwise, if prices retreat, initial support is likely around 575 and the 50-day moving average (currently 564).

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. While low world export prices continue to be a drag on US demand and prices, and it is likely that Managed funds covered a significant portion of their net short positions, it is also quite possible that they remain short the market. Which could still push prices higher if production concerns persist.

  • Grain Market Insider sees a continued opportunity to sell a portion of your 2023 HRW wheat production. Dryness in the Southwestern Plains and Russia, along with elevated geopolitical tensions in the Middle East and Black Sea spurred Managed funds to cover some of their extensive short positions in the wheat complex. As a result, the July ’24 KC wheat futures contract is about 50 cents higher than our previous old crop sales recommendation, and near both the 200-day moving average and the resistance area of last December’s highs. Considering this rally may primarily be weather driven and could be short-lived, as well as being limited on time before the 2024 crop is harvested, we advise you to take advantage of these elevated prices to sell another portion of your 2023 HRW wheat inventory.

  • Grain Market Insider sees a continued opportunity to sell a portion of your 2024 HRW wheat production. Since the end of July, the wheat market has been in a downtrend with no significant selling opportunities, while many uncertainties remain that could drive prices even higher. The market is now approximately 90 cents off the March low and entering an area of heavy resistance that coincides with a 25% retracement of the recent downtrend back toward the July high. Grain Market Insider recommends taking advantage of this rally to make an additional sale on your 2024 crop.

  • 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: After failing to close above the 200-day moving average and posting a bearish reversal on April 29, the KC wheat market retreated and closed through 640 initial support. The market could now be on track to test support near the 100-day moving average (near 604) and the broad support area of 605 – 551. If prices turn back higher and close above 664, they could then run to test the 678 – 700 area.

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 quite possibly 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: The market’s test of the 700 – 712 area has put it into overbought territory and is at risk of falling back. Should this occur, initial support may come between 675 and 660, with further support down toward 632 and 625 ¼. Conversely, if prices close above 712 and continue toward the November high of 752, they may encounter more resistance between 725 and 735.

Other Charts / Weather

Above: US 5-day precipitation forecast courtesy of NOAA, Weather Prediction Center.

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5-1 End of Day: Corn and Beans Settle Higher with a Wet Forecast Ahead

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • The corn market reversed itself to the upside after July corn took out yesterday’s low and pierced its 50-day moving average. The reversal higher may provide some support for tomorrow’s trade.

  • July soybeans saw choppy trade to close higher on the day with potential support from a wet forecast ahead and concern over planting delays.

  • Soybean meal gapped lower on the open of the overnight session and continued to trade lower on news that workers ended their strike in Argentina. Meanwhile bean oil recovered some of yesterday’s losses and closed higher after chopping sideways for much of the day.

  • KC wheat led the wheat complex lower again in today’s trade with little direction provided by either the US Dollar or Matif wheat. July KC wheat held support near its 20-day moving average, while July Chicago found support near its 100-day ma.

  • To see the updated US 5-day precipitation forecast, and US Seasonal Drought Outlook, courtesy of NOAA, NWS, NCEP and CPC scroll down to the other Charts/Weather section.

Note – For the best viewing experience, some Grain Market Insider content is best viewed with your phone held horizontally.

Corn

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:

  • Corn futures worked off session lows during the day to finish moderately higher. More importantly, the firm price action posted a price reversal on the charts, which could signal some follow-through strength into tomorrow’s session.

  • Despite being off to a strong start, the corn planting pace is expected to slow over the next couple weeks. Weather models are forecasting rounds of precipitation to push through the Corn Belt, which could limit planting until the middle of May.

  • With producers busy in the fields, the cash market has improved, trying to pull bushels. In many areas, cash basis levels have improved. With the recent wetness, it will be more likely that we will see more corn movement into the cash market.

  • The USDA will release the weekly Export Sales report on Thursday morning. Expectations are for new sales to range from 650,000 – 1.3 mmt for the old crop and up to 300,000 mt for the new crop. US corn has remained competitive in the export market.

  • Ethanol production averaged 987,000 barrels/day last week, up 3.5% from the previous week and 1.1% over last year. Ethanol stocks are trending 9.1% below last year’s levels. Corn used for ethanol production last week totaled 97.97 million bushels, which was below the pace needed to reach the USDA marketing year target.

Above: The corn market continues to struggle to rally with overhead resistance remaining around 460 in the July contract. A breakout above there could allow prices to test the 495 – 510 area. If prices break to the downside and close below 421, they could slide further to test 400 – 410 support.

Soybeans

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:

  • Soybeans rebounded today from lower trade this morning and ended with a higher close which was led by gains in soybean oil. There may have been some support in soybean futures due to reports of planting delays caused by excessive rains that may be an issue for two more weeks. Soybean meal finished the day lower as Argentina harvests their soy crop and prepares to start exporting meal.

  • In Argentina, there had been an ongoing strike by dock workers and others who are unhappy with newly elected president Milei about proposed labor reforms and income taxes. The strike had shut down a major port, but the strike was lifted which could have been the reason why futures were so much lower this morning before rebounding.

  • Later today, the Census Crush numbers will be released for March, and they are expected to show total crush at 205 million bushels which would compare to 193.9 mb the previous month. Soybean oil stocks are expected to increase to 2.350 billion pounds from 2.146 billion in February.

  • In South America, the Brazilian soybean harvest is estimated at 90% complete. Similar to Argentina, the southern region of Brazil is receiving too much rain and holding up harvest progress. Both southern Brazil and Argentina are expected to continue receiving rains throughout the week.

Above: Since posting a bullish reversal on April 19, the market has struggled to stay above 1190. A close above the April 24, 1191 ¾ high could allow the market to run and test the 1227 March high. Otherwise, support below the market remains between 1145 and 1140, if prices slide back toward key support and the February low of 1128 ½.

Wheat

Market Notes: Wheat

  • Wheat closed lower again today, with KC futures under the most pressure. Paris milling wheat futures did not provide any direction today, as the Matif market was closed for the May Day holiday on Wednesday. The US Dollar has also lacked direction after trading on both sides of unchanged; traders may have been positioning themselves ahead of the Fed comments this afternoon regarding interest rates.

  • There continues to be some rain in the forecast for drier areas of Russia, which may in part be weighing on US futures. Russian and Ukrainian FOB export values also continue to add pressure as they are the world’s cheapest offers. Ukraine is said to have exported 1.9 mmt of wheat in April despite the damage to infrastructure and logistic challenges.

  • According to the USDA’s Foreign Agricultural Service, Australia’s wheat production is expected at 25.8 mmt for the 24/25 season. That would be about 3% below the 10-year average, and exports are anticipated to drop by 2.5 mmt to 17.5 mmt as well.

  • From a technical perspective, July Chicago wheat held support today at the 100-day moving average, which is around 595 ½. A similar story can be said for July KC wheat, which rebounded just above the 10-day moving average at 621.

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 large 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.

  • Grain Market Insider recommends selling 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 when they were about double of the original entry price, and in April we recommended covering another 25% of the original position when support around 550 was uncovered. Given today’s market action, it appears that July ’24 Chicago wheat may have found support around the 200-day moving average on the continuous chart and considering that the July ’24 590 puts have done their job of protecting the value of unsold 2024 bushels, we recommend exiting any remaining put options.

  • 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: After failing to close above the December high of 630, Chicago wheat retreated and found initial support near the 200-day moving average. If initial support holds, and the market turns back higher, a close above the recent 633 ¼ high could open the door for a test of 664 resistance. Otherwise, if prices retreat, initial support is likely around 575 and the 50-day moving average (currently 563).

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. While low world export prices continue to be a drag on US demand and prices, and it is likely that Managed funds covered a significant portion of their net short positions, it is also quite possible that 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.

  • Grain Market Insider sees a continued opportunity to sell a portion of your 2024 HRW wheat production. Since the end of July, the wheat market has been in a downtrend with no significant selling opportunities, while many uncertainties remain that could drive prices even higher. The market is now approximately 90 cents off the March low and entering an area of heavy resistance that coincides with a 25% retracement of the recent downtrend back toward the July high. Grain Market Insider recommends taking advantage of this rally to make an additional sale on your 2024 crop.

  • 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: After failing to close above the 200-day moving average and posting a bearish reversal on April 29, the KC wheat market retreated and closed through 640 initial support. The market is now on track to test support near the 100-day moving average (near 604) and the broad support area of 605 – 551. If prices turn back higher and close above 664, they could then run to test the 678 – 700 area.

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 quite possibly still hold a net short position, that could fuel an extended rally if more production concerns arise.

  • Grain Market Insider sees a continued opportunity to sell a portion of your 2023 Spring wheat crop. Since the end of July, the wheat market has been in a downtrend due to lower world prices, with no significant rallies to take advantage of. While many unknowns remain that could move prices even higher, the market is now more than 50 cents off its low and entering an area of heavy resistance that coincides with a 23% retracement back to the July high. Grain Market Insider advises taking advantage of this rally, and these still historically good prices, to make an additional sale on your 2023 crop.

  • 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 market’s test of the 700 – 712 area has put it into overbought territory and is at risk of falling back. Should this occur, initial support may come between 675 and 660, with further support down toward 632 and 625 ¼. Conversely, if prices close above 712 and continue toward the November high of 752, they may encounter more resistance between 725 and 735.

Other Charts / Weather

Above: US 5-day precipitation forecast courtesy of NOAA, Weather Prediction Center.

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4-30 End of Day: Overbought Conditions Bring Out Commodity Sellers on a Risk Off Day

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Despite the broader market selloff, July corn managed to find support near its 50-day moving average and stave off heavy losses with support from cash markets and the lack of deliveries on First Notice Day.

  • July soybeans faced significant pressure from both products in the day session after an overnight rebound attempt stalled at its 50-day moving average and led to its lowest close in over a week.

  • Lower palm oil due to weak export demand, and a year over year drop in bean oil usage for biofuel weighed heavily on soybean oil which closed at a fresh three-year low. Meal also closed lower, despite support from the strike and rainy conditions in Argentina.

  • Overbought conditions, along with lower Matif wheat and a higher US dollar brought the sellers out in the wheat complex. KC led the complex lower with its double-digit losses, while Minneapolis and Chicago both rebounded from their respective lows, with July Chicago finding support near its 100-day moving average.

  • To see the updated US 5-day precipitation forecast, US 6 – 10 day Temperature and Precipitation Outlooks, and 1-week precipitation forecast for Brazil and N. Argentina courtesy of NOAA and The Climate Prediction Center scroll down to the other Charts/Weather section.

Note – For the best viewing experience, some Grain Market Insider content is best viewed with your phone held horizontally.

Corn

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 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:

  • Despite strong selling in other grain markets, corn futures only saw moderate losses, supported by firm cash markets and zero deliveries against the May futures contract with the arrival of First Notice Day.

  • The lack of deliveries may be reflective of the lack of farmers selling stored bushels. The cash basis market has been supportive of prices as producers have been more focused on planting the next crop versus marketing stored bushels. With more farmers out of fields this week due to wetness, the cash market may see more bushels moving in the days ahead.

  • Corn planting is still running well ahead of schedule as producers pushed to get acres planted before last week’s rain. The corn crop was 27% planted, up 15% from last week. This is also trending 5% above the 5-year average and 4% above last year. Strong progress was noted in western and southern parts of the Corn Belt last week.

  • The planting pace is expected to slow over the next couple weeks. Weather models are forecasting rounds of precipitation to push through the Corn Belt, which could limit planting until the middle of May.

  • Reports of strong farmer selling in Brazil and Argentina have been limiting the corn market’s rally potential. The movement of corn in South America is making more bushels available to the export market, which could limit US near-term export demand.

Above: The corn market continues to struggle to rally with overhead resistance remaining around 460 in the July contract. A breakout above there could allow prices to test the 495 – 510 area. If prices break to the downside and close below 421, they could slide further to test 400 – 410 support.

Above: Corn percent planted (red) versus the 10-year average (blue).

Soybeans

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 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:

  • Soybeans finished the day sharply lower due to big losses in soybean oil for the second consecutive day. This morning, there were 533 soybean deliveries reported against the May contract and 2,101 deliveries against May soybean oil. Soybean meal was lower today as well but not by as much as soybean oil which lost over 3% as it followed palm oil lower.

  • Yesterday afternoon, the USDA released its Crop Progress report which showed that 18% of the soybean crop has been planted as of this past Sunday. This compares to 8% last week and the 5-year average of 10%. Progress was one point higher than the average trade guess.

  • In the eastern part of the Corn Belt, continuous rains are causing some planting delays that are expected to last until May 18. In Argentina, continuous rains are falling as well, which is keeping farmers out of the field and unable to harvest soybeans which could lead to lower total production if yields are impacted.

  • In South America, the Brazilian soybean harvest is estimated at 90% complete. Similar to Argentina, the southern region of Brazil is receiving too much rain and holding up harvest progress. Both southern Brazil and Argentina are expected to continue receiving rains throughout the week.

Above: Since posting a bullish reversal on April 19, the market has struggled to stay above 1190. A close above the April 24, 1191 ¾ high could allow the market to run and test the 1227 March high. Otherwise, support below the market remains between 1145 and 1140, if prices slide back toward key support and the February low of 1128 ½.

Above: Soybeans percent planted (red) versus the 10-year average (blue).

Wheat

Market Notes: Wheat

  • Wheat experienced a negative close across all three US futures classes, with KC contracts leading the way with double-digit losses. Additionally, lower Matif futures and a stronger US Dollar failed to offer any support, suggesting a risk-off session as numerous other commodities also closed lower. Equities mirrored this trend, with the Dow dropping over 400 points at the time of writing.

  • From a technical perspective, all three US wheat classes are either at or near overbought levels, signaling a potential correction to the downside. In particular, daily stochastics indicate potential sell signals, suggesting further downward momentum. However, July Chicago wheat managed to find support at its 100-day moving average (596) and closed above that level.

  • According to yesterday afternoon’s Crop Progress report from the USDA, winter wheat conditions fell by 1% to 49% rated good to excellent. Despite recent declines, conditions remain significantly better than a year ago and are the highest for this time of year since 2020. Additionally, 30% of the crop is now headed, marking an increase from 23% last year and 21% on average. The USDA also reported that 34% of the spring wheat crop is planted, a substantial jump from 10% a year ago and 19% on average.

  • Two vessels containing Russian wheat destined for Egypt are reportedly being held up in port by the Russian government, despite passing inspection by Egyptian officials. This news follows the delay of two vessels in March and early April.

  • Brazil’s wheat planted area may shrink this year after increasing by over 70% between 2019 and 2023. CONAB is anticipating a 4.7% drop in area compared to last season, citing uncertain weather, lower prices, and higher costs as contributing factors to the potential decline.

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 large 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. 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: After failing to close above the December high of 630, Chicago wheat retreated and found initial support near the 200-day moving average. If initial support holds, and the market turns back higher, a close above the recent 633 ¼ high could open the door for a test of 664 resistance. Otherwise, if prices retreat, initial support is likely around 575 and the 50-day moving average (currently 563).

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. While low world export prices continue to be a drag on US demand and prices, and it is likely that Managed funds covered a significant portion of their net short positions, it is also quite possible that they remain short the market. Which could still push prices higher if production concerns persist.

  • Grain Market Insider sees a continued opportunity to sell a portion of your 2023 HRW wheat production. Dryness in the Southwestern Plains and Russia, along with elevated geopolitical tensions in the Middle East and Black Sea spurred Managed funds to cover some of their extensive short positions in the wheat complex. As a result, the July ’24 KC wheat futures contract is about 50 cents higher than our previous old crop sales recommendation, and near both the 200-day moving average and the resistance area of last December’s highs. Considering this rally may primarily be weather driven and could be short-lived, as well as being limited on time before the 2024 crop is harvested, we advise you to take advantage of these elevated prices to sell another portion of your 2023 HRW wheat inventory.

  • Grain Market Insider sees a continued opportunity to sell a portion of your 2024 HRW wheat production. Since the end of July, the wheat market has been in a downtrend with no significant selling opportunities, while many uncertainties remain that could drive prices even higher. The market is now approximately 90 cents off the March low and entering an area of heavy resistance that coincides with a 25% retracement of the recent downtrend back toward the July high. Grain Market Insider recommends taking advantage of this rally to make an additional sale on your 2024 crop.

  • 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: After failing to close above the 200-day moving average and posting a bearish reversal on April 29, the KC wheat market retreated and closed through 640 initial support. The market is now on track to test support near the 100-day moving average (near 604) and the broad support area of 605 – 551. If prices turn back higher and close above 664, they could then run to test the 678 – 700 area.

Above: Winter wheat condition percent good-excellent (red) versus the 5-year average (green) and last year (pink).

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 quite possibly still hold a net short position, that could fuel an extended rally if more production concerns arise.

  • Grain Market Insider sees a continued opportunity to sell a portion of your 2023 Spring wheat crop. Since the end of July, the wheat market has been in a downtrend due to lower world prices, with no significant rallies to take advantage of. While many unknowns remain that could move prices even higher, the market is now more than 50 cents off its low and entering an area of heavy resistance that coincides with a 23% retracement back to the July high. Grain Market Insider advises taking advantage of this rally, and these still historically good prices, to make an additional sale on your 2023 crop.

  • 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 market’s test of the 700 – 712 area has put it into overbought territory and is at risk of falling back. Should this occur, initial support may come between 675 and 660, with further support down toward 632 and 625 ¼. Conversely, if prices close above 712 and continue toward the November high of 752, they may encounter more resistance between 725 and 735.

Above: Spring wheat percent planted (red) versus the 10-year average (blue).

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.

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4-29 End of Day: Midwestern Rains Pressure Chicago Wheat and Corn; Soybean Meal Supports Beans

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Weakness in Chicago wheat and the potential effect of First Notice Day kept the corn market in a choppy 4 ¼ cent range that limited any potential upside influence from the soybean market.

  • Soybeans also saw choppy two sided trade as they were caught between sharply higher soybean meal and sharply lower soybean oil. The overall gain in meal not only supported soybeans, but also expressed itself in a 3 ½ cent gain in July Board crush.

  • A Bloomberg report noting a surge of alternative feedstocks for biofuel use may have been the catalyst for the sharply lower trade in soybean oil today, as it points to potentially much lower soybean oil demand than previously thought. Conversely, a strike in one of Argentina’s largest ag export ports likely led to today’s surge in soybean meal, as it could lead to higher US soybean meal demand.

  • Chicago wheat, influenced by recent rains in the Midwest and in the dry areas of southern Russian, led the winter wheats lower, while potential spring wheat planting delays lent support to Minneapolis contracts.

  • To see the updated US 5-day precipitation forecast, US 6 – 10 day Temperature and Precipitation Outlooks, and 1-week precipitation forecast for Brazil and N. Argentina courtesy of NOAA and The Climate Prediction Center scroll down to the other Charts/Weather section.

Note – For the best viewing experience, some Grain Market Insider content is best viewed with your phone held horizontally.

Corn

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 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:

  • The influence of First Notice Day for the May contract and selling in the SRW wheat market limited gains in the corn market, as it remains rangebound with choppy trade.

  • The USDA will release the latest round of crop progress numbers this afternoon, with expectations for corn planting to be 27% complete, up 15% from last week. This will keep the planting pace head of the 5-year average. Expectations are for a large jump in planting progress to have occurred in western and southern areas.

  • Planting pace is expected to slow over the next couple weeks. Weather models are forecasting rounds of precipitation to push through the corn belt, which could limit planting until the middle of May.

  • This morning, the USDA released weekly export inspections. Last week US exporters inspected 48.3 mb (1.226 mmt) of corn for export, below the previous week’s total. Cumulative export inspections now total 1.245 billion bushels, which is 32% ahead of last year’s pace.

  • On Friday’s Commitment of Traders Report, managed funds reduced their net short position in the corn market to 238,546 net short corn contracts as of April 23, a reduction of 41,024 from the previous week.

Above: The corn market continues to struggle to rally with overhead resistance remaining around 460 in the July contract. A breakout above there could allow prices to test the 495 – 510 area. If prices break to the downside and close below 421, they could slide further to test 400 – 410 support.

Corn Managed Money Funds net position as of Tuesday, Apr. 23. Net position in Green versus price in Red. Managers net bought 41,024 contracts between Apr. 17 – 23, bringing their total position to a net short 238,546 contracts.

Soybeans

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 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:

  • Soybeans ended the day higher thanks to an impressive showing from soybean meal which saw the July futures up $9.60 which was a gain of 2.79%. July soybean futures once again rallied up to their 40-day moving average but failed and drifted lower into the day. Soybean oil was sharply lower.

  • A bearish factor for soybean oil and other veg oils has been a surge in imports of used cooking oil for the use of biofuel production in the US. Bringing in this cheap imported oil has reduced profits for soybean processors which has caused crushing to slow and may cause a change in plans to expand processing plants. There has been a lot of optimism that the increased use of biodiesels would support the soy complex, but this development may exert an adverse effect.

  • For the week ending Thursday, April 18, the USDA reported that soybean inspections totaled 9.2 mb. This was within the range of trade expectations but below last week’s, which were 16.3 mb. Total inspections for 23/24 are now at 1.424 billion bushels, which is down 18% from the previous year.

  • The US share of Chinese imports has significantly fallen as both Argentina and Brazil continue to put out larger crops each year lessening the need for US purchases. Chinese imports from the US are expected to fall by 24% with Argentina picking up that business.

  • In Argentina, the world’s largest soybean meal exporter, a strike was called by the oilseed workers’ union at the country’s largest agricultural export port to begin today. The strike is to protest against the government’s labor reforms and new taxes. It is said that the strike would also affect 80% of the companies that use the port.

Above: Since posting a bullish reversal on April 19, the market has struggled to stay above 1190. A close above the April 24, 1191 ¾ high could allow the market to run and test the 1227 March high. Otherwise, support below the market remains between 1145 and 1140, if prices slide back toward key support and the February low of 1128 ½.

Soybean Managed Money Funds net position as of Tuesday, Apr. 23. Net position in Green versus price in Red. Money Managers net bought 18,891 contracts between Apr. 17 – 23, bringing their total position to a net short 149,014 contracts.

Wheat

Market Notes: Wheat

  • Wheat closed mixed, with pressure on Chicago and KC futures, but gains in Minneapolis. Weakness for the SRW wheat stemmed from recent rains in the US Midwest, as well as the potential for some of the drier areas of southern Russia to receive limited moisture this week. A lower close in Matif wheat also weighed on the US market.

  • Weekly wheat export inspections of 17.7 mb bring the 23/24 total to 622 mb. Inspections are slightly ahead of the pace needed to meet the USDA’s goal.

  • Australia was mostly dry over the weekend, but eastern areas may see storms later this week and into the weekend. While their wheat planting continues to move forward, more moisture is needed, so this system will be beneficial if rain does develop.

  • Russia’s state weather forecaster indicates the potential continuation of drought conditions in some of their vital wheat-growing regions until mid-May. While conditions are projected to be relatively average for most of the European part of Russia, concerns arise for the eastern part of the Southern Federal District, where a lack of moisture may impact winter crops.

  • The New Zealand National Institute for Water and Atmospheric Research has said they expect El Nino to ease by June, with La Nina expected to form between July and September. Some forecasters have already said that El Nino is fading, but most are in agreement that La Nina weather conditions will develop in mid to late summer in the northern hemisphere.

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 has taken it through the major moving averages on the continuous chart, and towards last Decembers highs. Although bearish fundamentals remain, and the market shows signs of being overbought which adds downside risk, Managed funds quite possibly still hold a large 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. 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’s close above the 200-day MA opens the door to test the December high of 630. On the downside, if prices retreat, initial support is likely around 575 and the 50-day moving average (currently 562).

Chicago Wheat Managed Money Funds net position as of Tuesday, Apr. 23. Net position in Green versus price in Red. Money Managers net bought 20,219 contracts between Apr. 17 – 23, bringing their total position to a net short 76,184 contracts.

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. While low world export prices continue to be a drag on US demand and prices, and it is likely that Managed funds covered a significant portion of their net short positions, it is also quite possible that they remain short the market. Which could still push prices higher if production concerns persist.

  • Grain Market Insider sees a continued opportunity to sell a portion of your 2023 HRW wheat production. Dryness in the Southwestern Plains and Russia, along with elevated geopolitical tensions in the Middle East and Black Sea spurred Managed funds to cover some of their extensive short positions in the wheat complex. As a result, the July ’24 KC wheat futures contract is about 50 cents higher than our previous old crop sales recommendation, and near both the 200-day moving average and the resistance area of last December’s highs. Considering this rally may primarily be weather driven and could be short-lived, as well as being limited on time before the 2024 crop is harvested, we advise you to take advantage of these elevated prices to sell another portion of your 2023 HRW wheat inventory.

  • Grain Market Insider sees a continued opportunity to sell a portion of your 2024 HRW wheat production. Since the end of July, the wheat market has been in a downtrend with no significant selling opportunities, while many uncertainties remain that could drive prices even higher. The market is now approximately 90 cents off the March low and entering an area of heavy resistance that coincides with a 25% retracement of the recent downtrend back toward the July high. Grain Market Insider recommends taking advantage of this rally to make an additional sale on your 2024 crop.

  • 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 market’s ability to close above the 610 – 640 congestion area puts it on track to further test overhead resistance in the 678 – 700 area. Should the market fall back, initial support may be found near 640 and again between 605 and 551 ½.

KC Wheat Managed Money Funds net position as of Tuesday, Apr. 23. Net position in Green versus price in Red. Money Managers net bought 1023 contracts between Apr. 17 – 23, bringing their total position to a net short 48,208 contracts.

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 quite possibly still hold a net short position, that could fuel an extended rally if more production concerns arise.

  • Grain Market Insider sees a continued opportunity to sell a portion of your 2023 Spring wheat crop. Since the end of July, the wheat market has been in a downtrend due to lower world prices, with no significant rallies to take advantage of. While many unknowns remain that could move prices even higher, the market is now more than 50 cents off its low and entering an area of heavy resistance that coincides with a 23% retracement back to the July high. Grain Market Insider advises taking advantage of this rally, and these still historically good prices, to make an additional sale on your 2023 crop.

  • 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 market’s test of the 700 – 712 area has put it into overbought territory and is at risk of falling back. Should this occur, initial support may come between 675 and 660, with further support down toward 632 and 625 ¼. Conversely, if prices close above 712 and continue toward the November high of 752, they may encounter more resistance between 725 and 735.

Minneapolis Wheat Managed Money Funds net position as of Tuesday, Apr. 23. Net position in Green versus price in Red. Money Managers net bought 1,042 contracts between Apr. 17 – 23, bringing their total position to a net short 24,556 contracts.

Other Charts / Weather

Above: US 5-day precipitation forecast courtesy of NOAA, Weather Prediction Center.

Brazil and N. Argentina 1-week forecast total precipitation courtesy of the National Weather Service, Climate Prediction Center.

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4-26 End of Day: Mixed Close as Wheat Continues Higher with Corn and Beans Lower

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Corn closed just off the day’s low following choppy two sided trade that continued to consolidate in narrow range from Tuesday, with today’s May options expiration possibly contributing to the late day weakness.

  • Soybeans also saw choppy back and forth trade in a rather tight 8 ½ cent range that closed just above the 20-day moving average. Weakness in soybean meal with likely profit taking from the week added resistance.

  • The wheat complex ended the week strong with gains seen across the board for the sixth consecutive day. Overbought conditions and strength in the US dollar may have contributed to the weakness in the Chicago contracts, which closed the day well off their highs. While concerns for further dryness in the HRW growing areas helped support KC into the close.

  • To see the updated US 7-day precipitation forecast, US 8 – 14 day Temperature and Precipitation Outlooks, and 1-week precipitation forecast for Brazil and N. Argentina courtesy of NOAA and The Climate Prediction Center scroll down to the other Charts/Weather section.

Note – For the best viewing experience, some Grain Market Insider content is best viewed with your phone held horizontally.

Corn

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. 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 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:

  • Choppy, two-sided trade in the corn market to end the week. Overall strength in the wheat market helped support corn futures, but prices failed to push through resistance before turning softer into the close. For the week, July corn futures closed 7 cents higher.

  • May options expired today, and that may have accounted for the end of session selling pressure. Price volatility may continue Monday with First Notice Day for May grain contracts on Tuesday, May 30.

  • Weather models are shifting to a warmer and more active pattern going into early May. The western corn belt likely showed good planting activity and progress, but the eastern corn belt saw limited progress. Last week, corn planting reached 12% complete nationally.

  • Recent rainfall has proven beneficial for areas experiencing moisture deficits, as evidenced by Thursday’s drought monitor maps, which indicated a contraction of the drought area. Moreover, forecasted rainfall for the upcoming week is expected to contribute to further moisture recovery. Presently, approximately 23% of corn acres are affected by some form of drought.

  • Cash market have likely helped support corn futures this week. The average US corn basis levels have firmed in most cash markets. End users are trying to pull bushels in to meet demand, as producers are focused on planting this year’s crop.

Above: The corn market continues to struggle to rally with overhead resistance remaining around 460 in the July contract. A breakout above there could allow prices to test the 495 – 510 area. If prices break to the downside and close below 421, they could slide further to test 400 – 410 support.

Soybeans

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:

  • Soybeans closed lower for the day with this being the third consecutive lower close in the July contract after three days in a row of gains. Prices have faltered and been unable to close above the July 20-day moving average for the past two days. Soybean meal ended the day lower while soybean oil was higher along with both palm and crude oil.

  • For the week, July soybeans gained 11 ½ cents at 1177 ¼, November soybeans gained 13 ¾ at 1174 ¾, July soybean meal gained $1.50 at $344.70, and July soybean oil gained 0.60 cents at 45.54 cents. While soybeans bounced well off their recent lows, there was less bullish news regarding them than in corn and wheat.

  • The Brazilian harvest is essentially complete, whereas Argentina’s crop is in good shape with harvest underway. Meanwhile, US soybean planting is moving along with wet conditions. This compares to corn which is struggling in South America and may see production revisions lower.

  • In Argentina, the 23/24 corn harvest is now called at 19.8% complete which compares to 17.2% the previous week. Prices may have found some support with leaf hopper insects transmitting a disease among the Argentine crop that will cause yields to drop. Additionally, the corn crop is dealing with dryness and heat.

Above: Since posting a bullish reversal on April 19, the market has struggled to stay above 1190. A close above the April 24, 1191 ¾ high could allow the market to run and test the 1227 March high. Otherwise, support below the market remains between 1145 and 1140, if prices slide back toward key support and the February low of 1128 ½.

Wheat

Market Notes: Wheat

  • Wheat managed to eke out another positive close in Chicago futures, although they finished well below the daily highs. Conversely, KC and Minneapolis contracts displayed more strength, with July Chicago rallying above the 200-day moving average for the first time since July 2023. However, the rally encountered strong resistance as it retreated below the 628 level by the close.

  • Storms sweeping across the central Midwest are expected to bring drought relief to many areas, although regions such as southwest Kansas and the panhandles of Oklahoma and Texas were largely unaffected. This discrepancy may result in further declines to the HRW crop rating next week and could explain why KC wheat closed notably stronger than Chicago wheat today.

  • The US Dollar Index continues to chop around with back-and-forth action. Despite being in a downtrend since mid-April, its strength today may have contributed to the decline in Chicago futures by the close. Moreover, technical indicators suggesting that Chicago wheat is overbought may have added to the weakness.

  • The International Grains Council forecasts a US wheat crop of 1.94 billion bushels for 24/25, potentially the largest in eight years. This projection could limit long-term upside movement for futures from a fundamental perspective.

  • The European Commission has revised down its estimate of Europe’s 24/25 soft wheat crop to 102.2 mmt, compared to 120.8 mmt in March. Additionally, exports are forecasted at 31 mmt, with stocks at 12.2 mmt. This decline may be attributed to excessive wet weather in certain areas, with the French wheat crop now rated at just 63% good to excellent, the lowest in four years.

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 has taken it through the major moving averages on the continuous chart, and towards last Decembers highs. Although bearish fundamentals remain, and the market shows signs of being overbought which adds downside risk, Managed funds quite possibly still hold a large 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. 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’s close above the 200-day MA opens the door to test the December high of 630. On the downside, if prices retreat, initial support is likely around 575 and the 50-day moving average (currently 561).

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. While low world export prices continue to be a drag on US demand and prices, and it is likely that Managed funds covered a significant portion of their net short positions, it is also quite possible that they remain short the market. Which could still push prices higher if production concerns persist.

  • Grain Market Insider recommends selling a portion of your 2023 HRW wheat production. Dryness in the Southwestern Plains and Russia, along with elevated geopolitical tensions in the Middle East and Black Sea spurred Managed funds to cover some of their extensive short positions in the wheat complex. As a result, the July ’24 KC wheat futures contract is about 50 cents higher than our previous old crop sales recommendation, and near both the 200-day moving average and the resistance area of last December’s highs. Considering this rally may primarily be weather driven and could be short-lived, as well as being limited on time before the 2024 crop is harvested, we advise you to take advantage of these elevated prices to sell another portion of your 2023 HRW wheat inventory.

  • Grain Market Insider sees a continued opportunity to sell a portion of your 2024 HRW wheat production. Since the end of July, the wheat market has been in a downtrend with no significant selling opportunities, while many uncertainties remain that could drive prices even higher. The market is now approximately 90 cents off the March low and entering an area of heavy resistance that coincides with a 25% retracement of the recent downtrend back toward the July high. Grain Market Insider recommends taking advantage of this rally to make an additional sale on your 2024 crop.

  • 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 market’s ability to close above the 610 – 640 congestion area puts it on track to further test overhead resistance in the 678 – 700 area. Should the market fall back, initial support may be found near 640 and again between 605 and 551 ½.

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 quite possibly still hold a net short position, that could fuel an extended rally if more production concerns arise.

  • Grain Market Insider sees a continued opportunity to sell a portion of your 2023 Spring wheat crop. Since the end of July, the wheat market has been in a downtrend due to lower world prices, with no significant rallies to take advantage of. While many unknowns remain that could move prices even higher, the market is now more than 50 cents off its low and entering an area of heavy resistance that coincides with a 23% retracement back to the July high. Grain Market Insider advises taking advantage of this rally, and these still historically good prices, to make an additional sale on your 2023 crop.

  • 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 market’s test of the 700 – 712 area has put it into overbought territory and is at risk of falling back. If that happens, initial support may come between 675 and 660, with further support down toward 632 and 625 ¼.

Other Charts / Weather

Above: US 7-day precipitation forecast courtesy of NOAA, Weather Prediction Center.

Brazil and N. Argentina 1-week forecast total precipitation courtesy of the National Weather Service, Climate Prediction Center.

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4-25 End of Day: Wheat Complex Moves Higher Once Again; Strong Export Sales for Corn

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Corn futures were higher on the day, battling back from yesterday’s losses. Strong weekly export sales and a continued move higher in wheat futures helped aid today’s move in corn.

  • Soybean futures ended the day mixed but well off of their session lows. Soybean meal was lower while soybean oil futures were higher with outside support from higher crude oil prices.

  • All three wheats closed higher today marking the fifth consecutive daily close higher across the board. Dryness concerns in the US Plains as well as weather concerns around the world continue to cause likely short covering helping to move wheat prices higher.

  • To see the updated US Drought Monitor as well as the US 7-day precipitation forecast, courtesy of the UNL, NOAA and The Climate Prediction Center scroll down to the other Charts/Weather section.

Note – For the best viewing experience, some Grain Market Insider content is best viewed with your phone held horizontally.

Corn

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:

  • A good week of exports sales and continued strength in the wheat markets supported corn futures. Corn prices are consolidating at the top of this week’s range going into Friday trade. For the week to this point, July corn traded 9 cents higher, and December added 10 cents.

  • USDA released weekly export sales on Thursday morning. USDA announced 1.3 MMT (51.2 mb) of old crop sales and 262,000 MT (10.3 mb) for new crop last week. 

  • Even as the corn market has rallied this week, average U.S. corn basis levels have firmed in most cash markets. End users are trying to pull bushels in to meet demand, as producers are focused on planting this year’s crop.

  • 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, with areas in the south and the western corn belt progressing quickly. The potential for increased precipitation could slow progress going into May.

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

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:

  • Soybeans ended the day mixed again with the front months lower and the new crop contracts higher just as they were yesterday. Soybean futures were significantly lower near midday but recovered into the close with July posting a small loss and ending just below the 40-day moving average. Soybean meal closed lower while soybean oil was higher along with palm oil.

  • Today’s export sales report was poor for soybeans with just 12 mb reported total, 8 mb for 23/24 and 4 mb for 24/25. This was below the lower range of trade expectations and puts old crop commitments down 18% from the previous year. Soybean meal sales were on the high end of expectations at 308k tons, and soybean oil sales were also above expectations.

  • Brazilian soybean exports are seen reaching 13.48 million tons for the month of April which compares to a forecast of 13.74 million tons the previous week. The strengthening of their currency, the real, makes importing Brazilian beans more expensive and could cause exports to slow slightly.

  • In South America, Brazil’s soybean harvest is nearly complete, and Argentina is forecast to get a break from the rain which should help their harvest advance. Argentina is expected to be about 25% complete by the end of this week. In the US, rains have delayed soybean plantings in some areas, but warm weather is in the forecast and should help with emergence.

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.

Wheat

Market Notes: Wheat

  • All three US wheat classes rallied again today; this marks the fifth consecutive higher close for May Chicago futures. Paris milling wheat futures are also on the rise, with the September contract breaking above the 200-day moving average for the first time since late July of 2023. The US Dollar Index was also lower today, and from a big picture perspective has been declining since April 16; this may be aiding the wheat rally.

  • US wheat weekly export sales were poor, with only 3.0 mb reported for 23/24. However, 13.7 mb were reported for 24/25 which, while not stellar, does look a bit better. Additionally, last week’s shipments of 21.1 mb were above the 17.1 mb needed each week to reach the USDA’s 23/24 export estimate of 710 mb.

  • According to Pakistan’s Federal Committee on Agriculture, the country will see a grain harvest of 29.7 mmt this year, which is under their 32 mmt target. Wheat production is estimated to be up 5.4% from a year ago, but they may still end up needing to import. In addition, there is still talk that India will need to import 3-5 mmt of wheat as well. Their supplies are said to be at a 16-year low, after the government sold wheat out of the reserves to reduce food prices.

  • Dry conditions are expected in Australia for most areas over the next week, but western regions and the east coast may see some shower activity. In any case, soil moisture is fair to poor in wheat planting areas. This may lead to some planting delays as farmers wait for moisture levels to improve.

  • According to the USDA, as of April 23 about 30% of the US winter wheat area is in drought, a sharp increase from 24% last week. With rain set to hit most of the Midwest this week and into the weekend, some of the dryness may be alleviated, however. In addition, 26% of US spring wheat acres are said to be in drought, unchanged from a week ago.  

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’s close above the 200-day MA opens the door to test the December high of 630. Although, it may encounter resistance between 617 and 622 before reaching that target. On the downside, if prices retreat, initial support is likely around 548, followed by 538.

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.

  • Grain Market Insider recommends selling a portion of your 2024 HRW wheat production. Since the end of July, the wheat market has been in a downtrend with no significant selling opportunities, while many uncertainties remain that could drive prices even higher. The market is now approximately 90 cents off the March low and entering an area of heavy resistance that coincides with a 25% retracement of the recent downtrend back toward the July high. Grain Market Insider recommends taking advantage of this rally to make an additional sale on your 2024 crop.

  • 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.

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 can potentially fuel a short covering rally.

  • Grain Market Insider sees a continued opportunity to sell a portion of your 2023 Spring wheat crop. Since the end of July, the wheat market has been in a downtrend due to lower world prices, with no significant rallies to take advantage of. While many unknowns remain that could move prices even higher, the market is now more than 50 cents off its low and entering an area of heavy resistance that coincides with a 23% retracement back to the July high. Grain Market Insider advises taking advantage of this rally, and these still historically good prices, to make an additional sale on your 2023 crop.

  • 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 market’s close above the March high of 677 ¼ could pave the way for further upward movement and a potential test of the 700 – 712 area. That said, the market is beginning to show signs of being overbought, which can be negative if prices reverse to the downside. If that happens, initial support remains between 632 and 625 ¼, with major psychological support down toward 600 – 595.

Other Charts / Weather

Above: US 7-day precipitation forecast courtesy of NOAA, Weather Prediction Center.

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4-24 End of Day: KC Wheat Leads the Wheat Complex Higher on More Potential Short Covering

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Despite another strong session in the wheat complex, the corn market disappointed as it failed to continue to the upside and posted a bearish reversal, closing just above yesterday’s low.

  • July soybeans were unable to continue its three-day rally after piercing its 50-day moving average and hitting resistance. Soybean oil, which closed the day in a bearish reversal, likely contributed to the resistance in soybeans as it posted a bearish reversal.

  • Higher Matif wheat, coupled with global war and weather concerns likely helped drive additional short covering and push the wheat complex higher for the fourth day in a row. The decline in open interest in the most active July contracts for both Chicago and Minneapolis in each session since Friday suggests that traders are unwinding their short positions.

  • To see the updated US 5 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.

Note – For the best viewing experience, some Grain Market Insider content is best viewed with your phone held horizontally.

Corn

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:

  • It was a disappointing day in the corn market as prices faded during the session. Even a strong wheat market for the day failed to help lift corn prices higher. Weak ethanol production numbers and position squaring for the end of the week limited corn market gains.

  • 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, 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.

  • Weekly ethanol production slipped to 954 thousand barrels/day last week. This was down 1.3% year-over-year and was the second lowest production week for the marketing year. 95.5 mb of corn were used in the ethanol grind last week, which was below the pace needed to reach USDA targets for the marketing year.

  • The USDA will release weekly export sales totals on Thursday morning. Expectations are for ales to range between 400,000 – 900,000 mt for old crop and 25,000 – 350,000 MT for new crop. Last week, export sales were soft with a combined 566,000 mt of new sales.

  • 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.

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

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:

  • Soybeans finished the day mixed with May and July ending lower and the deferred months higher. The July contract ended its three-day winning streak after meeting resistance at the 40 and 50-day moving averages. Soybean meal closed higher today while soybean oil was lower as it followed palm oil down.

  • The Brazilian soybean harvest is nearly completed, but the southern region where work is not completely done is forecast to receive rains which could delay the progress. In the US, rains are forecast to fall throughout the Corn Belt which could delay planting but will also benefit soil moisture ahead of a potentially dry La Nina year.

  • In South America, the Brazilian real has begun to rebound and Brazilian basis levels have moved higher which makes Brazilian soybeans more expensive to the rest of the world. While the US is still not competitive with Brazil, it could push some export business to the US.

  • Before today, soybeans had three consecutively higher closes which made for a gain of 33 cents in the July contract. A large part of that was likely short covering ahead of first notice day on April 30, but open interest declined from Friday through Tuesday which could indicate that funds are not opening new short positions in the July contract.

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.

Wheat

Market Notes: Wheat

  • Again, wheat managed to close higher across the board in all three classes, despite the US Dollar firming up today. Support came from higher trade in Matif futures, as well as the addition of global weather and war premium. All this combined has likely led to some short covering by the managed funds.

  • May Chicago wheat rallied through resistance at the 100-day moving average today and closed above this level for the first time since late January. The next major resistance might be at the 200-day moving average, which is around 619. May Chicago futures have not traded above that level since July of last year.

  • While a significant portion of the US Midwest is forecasted to receive beneficial rains starting later this week, the Southwestern Plains are anticipated to be excluded. This situation might contribute to the continued deterioration of HRW wheat crop ratings in that region, although SRW ratings may benefit from the rainfall.

  • Eastern Ukraine and Southern Russia have been in a hot and dry pattern, threatening their wheat production. Although some moisture is expected soon, net drying is still expected, and the addition of weather premium may be in part why the market has rallied strongly over the past several sessions.

  • According to APK Inform, Ukraine has shipped 40 mmt of grain as of April 24, comparable to last year’s 40.7 mmt at the same time. Since July, Ukraine’s wheat exports have reached 15.2 mmt, slightly lower than the USDA’s estimate of 17.5 mmt. Additionally, SovEcon estimates that Russian wheat exports for April will reach 4.6 mmt, an increase from 4.4 mmt last year.

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’s close above the 200-day MA opens the door to test the December high of 630. Although, it may encounter resistance between 617 and 622 before reaching that target. On the downside, if prices retreat, initial support is likely around 548, followed by 538.

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.

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 can potentially fuel a short covering rally.

  • Grain Market Insider recommends selling a portion of your 2023 Spring wheat crop. Since the end of July, the wheat market has been in a downtrend due to lower world prices, with no significant rallies to take advantage of. While many unknowns remain that could move prices even higher, the market is now more than 50 cents off its low and entering an area of heavy resistance that coincides with a 23% retracement back to the July high. Grain Market Insider advises taking advantage of this rally, and these still historically good prices, to make an additional sale on your 2023 crop.

  • 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 market’s close above the March high of 677 ¼ could pave the way for further upward movement and a potential test of the 700 – 712 area. That said, the market is beginning to show signs of being overbought, which can be negative if prices reverse to the downside. If that happens, initial support remains between 632 and 625 ¼, with major psychological support down toward 600 – 595.

Other Charts / Weather

Above: US 5-day precipitation forecast courtesy of NOAA, Weather Prediction Center.

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4-23 End of Day: Higher Wheat Complex Lends Support to Corn and Beans

ByLisa Heder

All prices as of 2:00 pm Central Time

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.

Note – For the best viewing experience, some Grain Market Insider content is best viewed with your phone held horizontally.

Corn

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:

  • 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

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:

  • 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.

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.

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).

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.

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4-22 End of Day: Potential Short Covering Rally in Wheat Buoys Corn and Beans

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Sharply higher wheat markets and short covering by Managed funds helped briefly push July corn over its 100-day moving average for the first time since early August. Although July corn failed to close above its 100-day ma, it posted its highest close in 11 weeks.

  • Soybeans closed higher with support coming from both soybean meal and oil, along with potential short covering from oversold conditions. July soybeans managed to close higher for the second day in a row and pierce its 20-day moving average, though it settled 4 cents below it.

  • For the week ending April 16, Managed funds sold a record amount of soybean oil contracts for one week, just over 49,000 contracts. Today’s strength in bean oil may likely have been some short covering of those contracts which also carried over to the soybean market.

  • Higher Paris milling wheat, frost concerns in both the US and Europe, and yet another attack on an Odesa grain facility in Ukraine, all may have contributed to today’s short covering rally from oversold conditions in the wheat complex. Both KC and Minneapolis posted a third day of gains, while Chicago recorded its second, with all three classes closing solidly above their respective July contract 50-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 N. Argentina, courtesy of NOAA and The Climate Prediction Center scroll down to the other Charts/Weather section.

Note – For the best viewing experience, some Grain Market Insider content is best viewed with your phone held horizontally.

Corn

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:

  • Strong wheat markets and short covering in the agriculture space helped push corn futures higher in the session. The corn market rallied 13 cents off Friday’s low as managed funds covered some of their short positions that were added to last week.

  • On Friday’s Commitment of Traders report, managed funds grew their net short position in the corn market to a total of 279,570 contracts, adding a net 16,010 short contracts as of April 16. Beyond corn, managed funds are holding their largest net short in the Ag commodity sector in 4 ½ years. The ag sector in general saw strong buying across the board on Monday.

  • Weekly corn export inspection hit a marketing year high on Monday at 64 mb (1.64 mmt). Mexico was the top export destination for US corn last week. Total export inspections are up 35% from last year, while the USDA is targeting a 26% year-over-year increase.

  • Despite wet and cool conditions across most of the Corn Belt last week, corn planting is expected to reach 12% complete as of Sunday, April 21, and ahead of the 5-year pace. 

  • Over the next two weeks, weather models are predicting warmer, but wetter than normal conditions into the month of May. The planting pace is off to a good start, but increased precipitation could slow progress going into May.

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.

Above: Corn Managed Money Funds net position as of Tuesday, April 16. Net position in Green versus price in Red. Managers net sold 16,016 contracts between April 10 – April 16, bringing their total position to a net short 279,570 contracts.

Soybeans

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:

  • Soybeans closed sharply higher for the second consecutive day for a total gain of 27 ½ cents over the past two days. There was not much news to explain this rally, but it is likely that a large amount of short covering was occurring, and wheat was the primary leader in the grain complex today. Both soybean meal and oil ended the day higher, but soybean oil posted the majority of the gains.

  • For the week ending Thursday, April 18, soybean inspections totaled 16.0 mb which were within the range of trade guesses. Total inspections for 23/24 now total 1.414 billion bushels which is down 18% from last year, and the USDA is estimating total soybean exports at 1.720 bb which would be down 14%.

  • A large part of the recent selloff in soybeans has been due to the decline in exports from last year. This morning, it was reported that Chinese soybean imports from the US have been cut in half for the month of March while Brazilian imports increased by nearly the same amount. This is not particularly surprising as Brazilian soybeans are much less expensive than US soybeans, and China’s poor hog margins are discouraging feed consumption.

  • As of April 16, managed funds reportedly sold 28,565 contracts of soybeans which increased their net short position to 167,875 contracts. This puts funds near their record short position but also puts funds in a position to cover those short contracts if fundamentals become more bullish.

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.

Above: Soybean Managed Money Funds net position as of Tuesday, April 16. Net position in Green versus price in Red. Money Managers net sold 28,565 contracts between April 10 – April 16, bringing their total position to a net short 167,875 contracts.

Wheat

Market Notes: Wheat

  • Wheat closed sharply higher today, with gains of over 20 cents in Chicago, with KC and Minneapolis contracts not far behind. Paris milling wheat also jumped, with the May contract gaining 9.00 Euros per metric ton. There wasn’t a lot of fresh news to propel the market higher, which may indicate that it was a correction from oversold conditions with fund short covering. There was some Russian destruction of Ukrainian grain infrastructure over the weekend, but this was likely not the main driver today.

  • Parts of Europe and the US southwestern Plains had frost concerns over the weekend. While damage is not expected to be a major issue, this news may have lent some support to the strong rally in wheat today. In addition, the Canadian prairies are too dry and need some moisture to recharge their soils.

  • According to SovEcon, Russian grain exports last week totaled 1.25 mmt. Of that total, 1.07 mmt was wheat – for reference, the previous week was 1.14 mmt of wheat. Furthermore, they also reduced their estimate of the Russian wheat crop by 1 mmt to 93 mmt due to hot weather that may affect yields.

  • IKAR has said that Russia’s FOB wheat export values ended last week at $208 per mt – that is down from $210 the week prior. IKAR also increased their Russian wheat export estimate by 1 mmt to 53 mmt, vs the USDA at 52 mmt.

  • Weekly wheat inspections at 16.5 mb were decent and in line with expectations. This brings the 23/24 total inspections to 604 mb, down 8% versus last year, with inspections running below the USDA’s estimated pace.

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.

  • 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.

Above: Chicago Wheat Managed Money Funds net position as of Tuesday, April 16. Net position in Green versus price in Red. Money Managers net sold 9,835 contracts between April 10 – April 16, bringing their total position to a net short 96,403 contracts.

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.

  • Grain Market Insider recommends selling 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: 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.

Above: KC Wheat Managed Money Funds net position as of Tuesday, April 16. Net position in Green versus price in Red. Money Managers net sold 4,620 contracts between April 10 – April 16, bringing their total position to a net short 49,231 contracts.

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.

Above: Minneapolis Wheat Managed Money Funds net position as of Tuesday, April 16. Net position in Green versus price in Red. Money Managers net bought 1,509 contracts between April 10 – April 16, bringing their total position to a net short 25,598 contracts.

Other Charts / Weather

Above: US 7-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.