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2-7 End of Day: Demand Concerns Press Corn and Beans Lower; Wheat Rallies on Short Covering

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Weakness in soybeans and market rumors of China purchasing much cheaper corn from Ukraine weighed on the corn market, which posted a new contract low and low close.

  • Soybeans reversed gains from the last two days on reports of beneficial overnight rain in the Buenos Aires province of Argentina, and on rumors that China may have bought Argentine soybeans and could cancel an equal amount of previous US purchases.

  • Soybean meal also traded lower and added downward pressure on the soybean market. There was talk of Argentina importing Brazilian soybeans, which could reduce export demand for US meal. Soybean oil was the bright spot of the complex, which closed higher, gaining support from higher Malaysian palm oil and crude oil.

  • The wheat complex ended the day mostly higher with Chicago leading the way on more potential short covering ahead of tomorrow’s USDA report. There are also some concerns of winterkill with expectations of a polar vortex bringing frigid temperatures later this month to the winter wheat areas with little to no snow coverage.

  • To see the updated US and South American GRACE-Based Drought Indicator maps, and the 1-week GFS precipitation forecast for South America, courtesy of the National Weather Service, 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

  • No new action is recommended for 2023 corn. Front month corn has languished in a sideways to lower trend since printing a high in October, with a general lack of bullish news and an estimated US carryout over 2.1 billion bushels. The failure of the USDA’s January report to provide the bullish news necessary to turn prices higher was disappointing and the market remains at risk of remaining in the same pattern. With that being said, managed funds continue to hold a sizable net short position, which could trigger a short covering rally if a bullish catalyst enters the scene. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

  • No new action is recommended for 2024 corn. Following the January USDA Supply and Demand update, Dec ’24 broke through the bottom end of the 485 ¾ to 602 range that had been in place since February ’22. While this is a disappointing development, bear spreading has allowed Dec ’24 to maintain more of its value versus old crop, as traders attempt to price in a larger 2023 carryout with more uncertainty remaining for the 2024 crop. Grain Market Insider continues to watch for signs of a change in the current trend to look at recommending making additional sales and buying Dec ’24 call options.

  • No Action is currently recommended for 2025 corn. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next year. It will probably be late winter or early spring of 2024 before Grain Market Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following corn recommendations:

  • A disappointing day in the corn market as prices pushed to new contract lows during the session.  March corn lost 4 ½ cents and closed at a new contract low close of 434 ¼. March corn futures traded flat or lower for the past five trading sessions.

  • Corn prices were pressured by selling in the soybean market, and concerns regarding demand. The market was hearing rumors of China purchasing cheaper Ukrainian corn on the export market. The trending higher dollar has helped put pressure on US export prices.

  • The USDA will release the next WASDE report tomorrow at 11:00 CST. The focus of the market will be tied to any demand adjustments in the US corn balance sheet. Expectations are for US corn carryout to be decreased slightly to 2.134 billion bushels, down 30 mb from last month on some possible demand increases. A key emphasis in the report will be adjustments made to the Argentina and Brazil soybean and corn crops.

  • The USDA will release weekly export sales on Thursday morning, and expectations are for improved activity on corn export sales. Analysts feel sales will range from 600,000 – 1.3 mmt for sales last week.  On last week’s report, US exporters sold 1.206 mmt of corn.

  • Ethanol production improved last week as production reached 1.033 barrels/day, up 4.2% over last week and 3.3% over last year. Ethanol stocks were up 2.1% week over week. Corn used in ethanol production last week was estimated at 102.53 mb, just slightly under the target needed to meet USDA’s estimates of 5.375 billion bushels of corn used in the 23/24 marketing year.

Above: The breach of the previous low of 436 puts front month corn at risk of drifting lower without any new bullish input. For now, the next major level of support lies near 415. Should a bullish catalyst enter the scene to move prices higher, overhead resistance may be found between 450 and 460.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. In early January, front month soybeans broke through the bottom side of the 1290 – 1400 range that had been in place since mid-October. As South American weather forecasts improved, the potential for a reduction in the record large global carryout also lessened, bringing prices down toward the 1180 support level. For now, 1180 support appears to be holding, and though the weak price action has been disappointing, time remains in the South American growing season, and the old crop marketing year, for unforeseen changes to push prices back higher.  Given the potential of a downside breakout back in December, Grain Market Insider recommended adding to sales as prices remained historically good, and Grain Market Insider will continue to look at additional sales opportunities heading into spring.

  • No new action is recommended for the 2024 crop. After the Nov ’24 contract broke through the bottom side of the 1233 – 1320 range, prices continued to retreat as South American weather conditions improved. Even though Nov ’24 runs similar downside risks as the front month contracts, which could press new crop prices toward 1150 or possibly the May ’23 low near 1115, plenty of time remains to market this crop. Considering the amount of uncertainty that lies ahead with the 2024 soybean crop, Grain Market Insider 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. Additionally, the possibility remains that prices could retest the 2022 highs, at which point Grain Market Insider may consider recommending additional sales.

  • No Action is currently recommended for 2025 Soybeans. Grain Market Insider isn’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 lower after two consecutively higher closes on Monday and Tuesday. Better rain forecasts in South America, poor export demand, and concerns about Chinese purchases being cancelled. Soybean meal ended the day lower, while soybean oil was higher.

  • Rumors of China being a purchaser of Argentina soybeans on the export market weighed on Soybean prices. Market analysts feel that the Argentina purchases could be meet with cancellations of US origin soybeans by China of existing sales.

  • December exports of US soybeans were just 4.8 mmt and were 33% below the 5-year average for the month. The lack of Chinese purchases from the US has weighed on prices as China looks to Argentina and Brazil for their soy purchases. Weather in South America has improved lately, and the forecast looks friendly.

  • Tomorrow, the USDA will release the next WASDE report. Expectations are for US soybean carryout to increase slightly to 284 million bushels, up 4 mb from last month. A key emphasis in the report will be adjustments made to the Argentina and Brazil soybean and corn crops.

  • The USDA will release weekly export sales on Thursday morning. Expectations for new sales range from 400,000 – 1.4 mmt. Last week, sales were disappointing at just 164,000 mt, and below analysts’ expectations. The past two Thursday sessions, March soybeans have lost 17 cents and 19 cents respectively after the export sales report.

Above: Front month soybeans appear to have rejected the recent bullish reversal, but so far, support around 1180 remains intact and the market shows signs of being very oversold on the weekly charts. If this support level holds, the market’s oversold status should be supportive. Right now, overhead resistance comes in between 1205 and 1210, with additional resistance around 1225. Support below the 1180 area remains between 1140 and 1145.

Wheat

Market Notes: Wheat

  • Wheat closed higher across the board in the Chicago contract, but was mixed in KC, and just slightly higher in MPLS. Bull spreading was again noted in the Chicago futures, which may indicate more short covering by the funds ahead of tomorrow’s WASDE report. Additional short covering may be taking place due to the extended weather forecast, in which a polar vortex is expected to bring cold temperatures to US winter wheat areas in late February; the threat of winterkill is likely the main concern.

  • Ukraine grain exports have surpassed last year’s amounts for the second month in a row. January exports at 5.3 mmt are well above the nearly 4 mmt from a year ago. While 60% of this is said to be corn, the remaining percentage is largely wheat. However, perhaps more importantly, it should be noted that Ukraine is exporting these ag goods without the help or approval of Russia.

  • Tomorrow, the USDA will release its February WASDE report, and the average pre-report estimate for US 23/24 wheat ending stocks comes in at 649 mb, up 1 mb from January. In terms of global carryout, the average guess for wheat is pegged at 260.1 mmt versus 260.0 mmt in January. Not many changes are expected for wheat tomorrow, but it is possible that the USDA will lower exports due to strong global competition, especially out of the Black Sea.

  • Giving wheat a boost today, the US Dollar Index has faded off of Monday’s high and is back below the 100 day moving average. The bigger question, as it relates to the economy, may be regarding China. They are attempting to stimulate their equity markets and consumer confidence. If successful, this may positively impact their demand for ag goods.

  • In addition to tomorrow’s USDA report, Stats Canda will release their estimate of December 31 wheat stocks. All wheat is projected at 20.7 mmt, down from 22.3 mmt a year ago. As to whether the USDA will make a similar adjustment is up in the air. However, US ending stocks are the second tightest in a decade, and global stocks are tight as well, both of which may offer long term support to the market.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. The wheat market has continued to be dominated by lower world export prices that have stymied US export sales and depressed US prices. In early December, Grain Market Insider recommended taking advantage and making a sale on a short covering rally which was sparked by several Chinese purchases of US wheat. Since then, China has been silent in the US wheat export market, and prices remain somewhat elevated. Any remaining 2023 soft red winter wheat should be getting priced into market strength with the goal of having zero bushels unpriced by the end of January. 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 early December, the July ’24 contract has traded mostly sideways to slightly lower after its brief short covering runup on Chinese buying. Although China has since been absent from the US wheat export market, prices appear to have found support above 585, and managed funds continue to hold a sizeable, short position that could trigger another short covering rally if a bullish impetus enters the market. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. Although, if the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

  • No action is currently recommended for 2025 Chicago Wheat. Since early September, the July ’25 contract has been mostly rangebound with 632 at the low end and 685 at the top. Grain Market Insider’s strategy for the 2025 crop year up to this point has been to sit tight. Though if prices rally toward the upper end of this range, we will consider taking advantage of the rally’s historically good prices to make sales recommendations.

To date, Grain Market Insider has issued the following Chicago wheat recommendations:

Above: Chicago wheat has been in a congestion pattern bordered between 614-618 on the top and 584 on the bottom. A breakout through the top end could send prices toward the 640 – 650 resistance area, while a downside breakout may find initial support around 573 with more support around 556.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since last fall, front month KC wheat has been mostly rangebound between 678 up top and the 590 area down below. The latter has held as support for the past three months. Although fundamentals remain weak, considering support lies just below the market and managed funds continue to carry a sizable short position, these factors could trigger a return to higher prices if any unforeseen risks enter the market. Grain Market Insider’s strategy is to look for price appreciation as weather becomes a more prominent market mover and may consider suggesting additional sales if prices make a modest 20% retracement of the 2022 highs back toward 730.

  • No new action is recommended for 2024 KC wheat. At the end of August, the July ’24 contract broke out of roughly a one-year trading range and stepped down to a 609 ¼ low in late November, largely driven by managed fund selling in the front month on weak US export demand and lower world wheat prices. Since then, the funds covered part of their large short position which also rallied prices in the July ’24 contract. While bearish headwinds remain, managed funds continue to hold a sizable, short position, and price seasonals remain positive for adding weather risk premium. These are two factors that could fuel additional short covering and rally prices in the months ahead. Back in August, Grain Market Insider recommended buying Jul’24 KC wheat 660 puts to protect the downside following the range breakout. As the market recently got further extended into oversold territory and the July contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. Moving forward, Grain Market Insider is prepared to recommend exiting the last 25% on any further supportive market developments.

  • No action is currently recommended for 2025 KC Wheat. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next fall. It will probably be mid-winter before Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following KC recommendations:

Above: KC wheat continues to consolidate just below the 50-day moving average, which is acting as mild resistance to the upside. If the market does breakout to the upside, it may encounter additional resistance near the recent high of 641. To the downside, the next major support level remains between 595 and 575.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop. For the last six months, front month Minneapolis wheat has slowly stair-stepped lower with little bullish news to move markets higher. During this time, the 50-day moving average has acted as resistance, above which the market has not been able to hold for very long. Managed funds have also established and maintained a record (or near record) short position for much of the same time. Although bullish headwinds remain, support may be building in the 670 – 675 area, and the large fund net short position continues to leave the market susceptible to a short-covering rally at any time here. Grain Market Insider’s strategy is to look for a modest retracement of the July high and consider additional sales around 725 – 750.

  • No new action is recommended for 2024 Minneapolis wheat. Much like the front month contracts, Sept ’24 has been in a downward trend since last summer. And just as Sept ’24 has been influenced to the downside by the front months, it could be similarly influenced to the upside by the front months if a bullish impetus enters the scene and triggers a short covering rally due to the fund’s large short position. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside following a 1-year range breakout in KC wheat, and in November recommended exiting 75% of the originally recommended position as July ’24 KC wheat showed signs of support around 630. While in the same time frame, Grain Market Insider also recommended making an additional sale as the Sept ’24 Minneapolis contract broke long time 743 support. Grain Market Insider remains prepared to recommend exiting the last 25% of the open puts on any further supportive market developments and consider recommending additional sales if prices make a modest retracement of the 2022 highs.

  • No action is currently recommended for the 2025 Minneapolis wheat crop. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next year. It will probably be mid-winter before Grain Market Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following Minneapolis wheat recommendations:

Above: Front month Minneapolis wheat continues to consolidate with overhead resistance remaining between 710 and 720, and nearby support just under the market at 688. If prices break through nearby support, they may fade and test the January low of 678 ¾. Support below there may come in around 669.

Other Charts / Weather

Above: Brazil 1 week forecast total precipitation courtesy of the National Weather Service, Climate Prediction Center.

Above: Argentina 1 week forecast total precipitation courtesy of the National Weather Service, Climate Prediction Center.

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2-6 End of Day: Beans and Wheat Close Higher on Short Covering Ahead of this Week’s USDA Report

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • The lack of friendly news, weak export inspections, and increased grain movement pressed March corn to a new low close for the contract, as traders look toward Thursday’s USDA WASDE report.

  • Choppy, two-sided trade dominated the soybean market, as traders likely continued to cover shorts and square positions ahead of Thursday’s report. Carryover strength from strong exports, and a firming Brazilian basis on slow farmer selling likely added support.

  • Soybean meal and oil diverged in today’s trade, as oil gained on meal on follow through strength from yesterday’s reversal, with higher Malaysian palm and crude oil offering further support to bean oil. While meal tracked lower with a more negative outlook, as the South American harvest progresses.

  • There remains little fresh bullish news to hang one’s hat on, and with a sizable short fund position, the wheat complex likely experienced short covering in anticipation of Thursday’s USDA update, as all three classes closed mostly higher on the day with the front months gaining on the deferred months.

  • To see the updated US 6 – 10 day temperature and precipitation outlooks, and the 1-week GFS precipitation forecast as a percent of normal for South America, courtesy of the National Weather Service, 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

  • No new action is recommended for 2023 corn. Front month corn has languished in a sideways to lower trend since printing a high in October, with a general lack of bullish news and an estimated US carryout over 2.1 billion bushels. The failure of the USDA’s January report to provide the bullish news necessary to turn prices higher was disappointing and the market remains at risk of remaining in the same pattern. With that being said, managed funds continue to hold a sizable net short position, which could trigger a short covering rally if a bullish catalyst enters the scene. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

  • No new action is recommended for 2024 corn. Following the January USDA Supply and Demand update, Dec ’24 broke through the bottom end of the 485 ¾ to 602 range that had been in place since February ’22. While this is a disappointing development, bear spreading has allowed Dec ’24 to maintain more of its value versus old crop, as traders attempt to price in a larger 2023 carryout with more uncertainty remaining for the 2024 crop. Grain Market Insider continues to watch for signs of a change in the current trend to look at recommending making additional sales and buying Dec ’24 call options.

  • No Action is currently recommended for 2025 corn. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next year. It will probably be late winter or early spring of 2024 before Grain Market Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following corn recommendations:

  • Despite firmer trade in other grains, corn futures failed to find any footing on Tuesday. March corn closed 4 cents lower and posted a new contract low close at the end of the session.

  • The strongest selling pressure was in the front month contract, March. Monday’s weak export inspections, and the possible increase in grain movement with warm weather across the Midwest, is likely putting pressure on the front-end of the market.

  • Argentina weather is a market driver in the near term. Crop growing regions in Argentina are experiencing above-normal temperature, but weather models stay more friendly for key precipitation over the next couple weeks. The amounts and coverage will be closely monitored.

  • Brazil’s 2nd (safrinha) crop corn planting is off to a good start with the earlier soybean harvest. As of last Thursday, 27% of the expected corn area was planted, up from 11% the previous week. This represents the fastest pace for the second crop corn since 2013. The earlier planting window should help the corn crop target key weather windows throughout the growing season.

  • The USDA will release the next WASDE report on Thursday, February 8. The focus of the market will be tied to any demand adjustments in the US corn balance sheet, but a key emphasis will be adjustments made to the Argentina and Brazil soybean and corn crops. Prices may stay choppy into that report.

Above: Front month corn continues to consolidate and drift lower since posting a bullish key reversal on January 30. The reversal itself indicates that significant support remains below the market around 436. If support continues to hold, prices may turn higher to test overhead resistance in the 460 area. If not, they may drift toward the next major support level near 415.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. In early January, front month soybeans broke through the bottom side of the 1290 – 1400 range that had been in place since mid-October. As South American weather forecasts improved, the potential for a reduction in the record large global carryout also lessened, bringing prices down toward the 1180 support level. For now, 1180 support appears to be holding, and though the weak price action has been disappointing, time remains in the South American growing season, and the old crop marketing year, for unforeseen changes to push prices back higher.  Given the potential of a downside breakout back in December, Grain Market Insider recommended adding to sales as prices remained historically good, and Grain Market Insider will continue to look at additional sales opportunities heading into spring.

  • No new action is recommended for the 2024 crop. After the Nov ’24 contract broke through the bottom side of the 1233 – 1320 range, prices continued to retreat as South American weather conditions improved. Even though Nov ’24 runs similar downside risks as the front month contracts, which could press new crop prices toward 1150 or possibly the May ’23 low near 1115, plenty of time remains to market this crop. Considering the amount of uncertainty that lies ahead with the 2024 soybean crop, Grain Market Insider 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. Additionally, the possibility remains that prices could retest the 2022 highs, at which point Grain Market Insider may consider recommending additional sales.

  • No Action is currently recommended for 2025 Soybeans. Grain Market Insider isn’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 second consecutive day as futures traded within a range of 1180 and 1220. Yesterday’s export inspections report was encouraging to traders with a significant amount of soybeans heading to China.

  • Soybean meal closed lower today and has been consolidating since the beginning of January after finding lows last week. Soybean oil closed higher today, but has been in an overall lower trend despite higher crude oil prices. Crush margins have improved recently incentivizing processors.

  • This Thursday, the USDA will release its February WASDE report and US ending stocks for soybeans are estimated to rise slightly by 5 mb to 285 mb, while exports are expected to fall by 13 mb to 1,742. Argentia’s production is expected to increase slightly to 50.8 mb and Brazil is expected to fall to 153.7 mb. World ending stocks are expected to decline slightly.

  • Total South American production is expected to be larger than last year, and the ongoing harvest and prospect of large supplies has weighed on prices. Argentinian weather has been dry, but is expected to turn around this week, while Brazil has been receiving scattered showers throughout the country.

Above: After resuming its downward trend, the soybean market found nearby support just below the November low of 1181 and reversed back higher. If the market follows through to the upside, nearby resistance remains just overhead near 1225, and again near 1250. If on the other hand nearby support fails, prices could erode further toward the 1140-45 support area.

Wheat

Market Notes: Wheat

  • Wheat finished mostly higher in all three futures classes. Bull spreading was a noted feature of both Chicago and KC contracts, in which the front months traded higher compared to the deferred. This may indicate that funds are covering some of their short position before the USDA report on Thursday.

  • Any significant rally in wheat is likely to be limited by the uptrend in the US Dollar Index, as well as lower EU and Russian prices. According to IKAR, Russian wheat FOB values are now said to be as low as $228 per mt. This is $7 per mt lower than last week’s high and is reportedly a result of higher production estimates. Additionally, with tensions increasing in the Black Sea and Middle East, freight costs may continue to be affected.

  • Texas reported their winter wheat crop ratings yesterday, and the good to excellent category increased by 4% to 46%. There was also a 2% increase in the fair category, and poor to very poor declined by 6% to 20%. This is indicative of the rains in the southern Plains easing drought conditions. By area planted, Texas is the second largest winter wheat producer in the US.

  • Wheat in Brazil has taken a backseat to the corn and soybean crops that producers are currently focused on. However, according to Secex (Brazil’s foreign trade secretariat), exports are still progressing well, with Brazil having shipped about 812,000 mt of wheat through the fourth week in January. For reference, January shipments last year were roughly 561,000 mt.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. The wheat market has continued to be dominated by lower world export prices that have stymied US export sales and depressed US prices. In early December, Grain Market Insider recommended taking advantage and making a sale on a short covering rally which was sparked by several Chinese purchases of US wheat. Since then, China has been silent in the US wheat export market, and prices remain somewhat elevated. Any remaining 2023 soft red winter wheat should be getting priced into market strength with the goal of having zero bushels unpriced by the end of January. 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 early December, the July ’24 contract has traded mostly sideways to slightly lower after its brief short covering runup on Chinese buying. Although China has since been absent from the US wheat export market, prices appear to have found support above 585, and managed funds continue to hold a sizeable, short position that could trigger another short covering rally if a bullish impetus enters the market. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. Although, if the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

  • No action is currently recommended for 2025 Chicago Wheat. Since early September, the July ’25 contract has been mostly rangebound with 632 at the low end and 685 at the top. Grain Market Insider’s strategy for the 2025 crop year up to this point has been to sit tight. Though if prices rally toward the upper end of this range, we will consider taking advantage of the rally’s historically good prices to make sales recommendations.

To date, Grain Market Insider has issued the following Chicago wheat recommendations:

Above: Chicago wheat has been in a congestion pattern bordered between 614-618 on the top and 584 on the bottom. A breakout through the top end could send prices toward the 640 – 650 resistance area, while a downside breakout may find initial support around 573 with more support around 556.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since last fall, front month KC wheat has been mostly rangebound between 678 up top and the 590 area down below. The latter has held as support for the past three months. Although fundamentals remain weak, considering support lies just below the market and managed funds continue to carry a sizable short position, these factors could trigger a return to higher prices if any unforeseen risks enter the market. Grain Market Insider’s strategy is to look for price appreciation as weather becomes a more prominent market mover and may consider suggesting additional sales if prices make a modest 20% retracement of the 2022 highs back toward 730.

  • No new action is recommended for 2024 KC wheat. At the end of August, the July ’24 contract broke out of roughly a one-year trading range and stepped down to a 609 ¼ low in late November, largely driven by managed fund selling in the front month on weak US export demand and lower world wheat prices. Since then, the funds covered part of their large short position which also rallied prices in the July ’24 contract. While bearish headwinds remain, managed funds continue to hold a sizable, short position, and price seasonals remain positive for adding weather risk premium. These are two factors that could fuel additional short covering and rally prices in the months ahead. Back in August, Grain Market Insider recommended buying Jul’24 KC wheat 660 puts to protect the downside following the range breakout. As the market recently got further extended into oversold territory and the July contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. Moving forward, Grain Market Insider is prepared to recommend exiting the last 25% on any further supportive market developments.

  • No action is currently recommended for 2025 KC Wheat. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next fall. It will probably be mid-winter before Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following KC recommendations:

Above: KC wheat continues to consolidate just below the 50-day moving average, which is acting as mild resistance to the upside. If the market does breakout to the upside, it may encounter additional resistance near the recent high of 641. To the downside, the next major support level remains between 595 and 575.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop. For the last six months, front month Minneapolis wheat has slowly stair-stepped lower with little bullish news to move markets higher. During this time, the 50-day moving average has acted as resistance, above which the market has not been able to hold for very long. Managed funds have also established and maintained a record (or near record) short position for much of the same time. Although bullish headwinds remain, support may be building in the 670 – 675 area, and the large fund net short position continues to leave the market susceptible to a short-covering rally at any time here. Grain Market Insider’s strategy is to look for a modest retracement of the July high and consider additional sales around 725 – 750.

  • No new action is recommended for 2024 Minneapolis wheat. Much like the front month contracts, Sept ’24 has been in a downward trend since last summer. And just as Sept ’24 has been influenced to the downside by the front months, it could be similarly influenced to the upside by the front months if a bullish impetus enters the scene and triggers a short covering rally due to the fund’s large short position. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside following a 1-year range breakout in KC wheat, and in November recommended exiting 75% of the originally recommended position as July ’24 KC wheat showed signs of support around 630. While in the same time frame, Grain Market Insider also recommended making an additional sale as the Sept ’24 Minneapolis contract broke long time 743 support. Grain Market Insider remains prepared to recommend exiting the last 25% of the open puts on any further supportive market developments and consider recommending additional sales if prices make a modest retracement of the 2022 highs.

  • No action is currently recommended for the 2025 Minneapolis wheat crop. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next year. It will probably be mid-winter before Grain Market Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following Minneapolis wheat recommendations:

Above: Front month Minneapolis wheat continues to consolidate with overhead resistance remaining between 710 and 720, and nearby support just under the market at 688. If prices break through nearby support, they may fade and test the January low of 678 ¾. Support below there may come in around 669.

Other Charts / Weather

Brazil 1 week forecast precipitation, percent of normal, courtesy of the National Weather Service, Climate Prediction Center.

Argentina 1 week forecast precipitation, percent of normal, courtesy of the National Weather Service, Climate Prediction Center.

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2-5 End of Day: Weekly Export Inspections Help Drive Grain Markets to a Mixed Close

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Weakness in the wheat complex and disappointing weekly export inspections, that were well below expectations, kept a lid on prices in the corn market. Strength from the soybean market provided underlying support for corn and helped it close mixed and mostly near unchanged.

  • A welcome increase in this week’s export inspections, that came in sharply above expectations, likely helped to spur some short covering in the soybean complex ahead of Thursday’s USDA report. Buyers surfaced shortly after the market printed a new low for the move on the open and rallied prices throughout the day.   

  • All three wheat classes closed in the red with KC contracts leading the way in choppy two-sided trade. Declining Russian export prices, disappointing export inspections, and a rising US Dollar all contributed to the day’s decline in prices.

  • The US Dollar broke out of the top end of a near 3-week congestion pattern as it continued its steep climb from last week’s lows, as the US economy shows impressive strength relative to its European counterparts. Today’s rally likely added a layer of resistance to the Ag markets as it makes US exports less competitive.

  • To see the updated US 5-day precipitation forecast, 6 – 10 day temperature and precipitation outlooks, and the 1-week GFS precipitation forecast for South America, courtesy of the National Weather Service, 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

  • No new action is recommended for 2023 corn. Front month corn has languished in a sideways to lower trend since printing a high in October, with a general lack of bullish news and an estimated US carryout over 2.1 billion bushels. The failure of the USDA’s January report to provide the bullish news necessary to turn prices higher was disappointing and the market remains at risk of remaining in the same pattern. With that being said, managed funds continue to hold a sizable net short position, which could trigger a short covering rally if a bullish catalyst enters the scene. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

  • No new action is recommended for 2024 corn. Following the January USDA Supply and Demand update, Dec ’24 broke through the bottom end of the 485 ¾ to 602 range that had been in place since February ’22. While this is a disappointing development, bear spreading has allowed Dec ’24 to maintain more of its value versus old crop, as traders attempt to price in a larger 2023 carryout with more uncertainty remaining for the 2024 crop. Grain Market Insider continues to watch for signs of a change in the current trend to look at recommending making additional sales and buying Dec ’24 call options.

  • No Action is currently recommended for 2025 corn. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next year. It will probably be late winter or early spring of 2024 before Grain Market Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following corn recommendations:

  • Corn futures finished mixed on the day as soft export inspections total and weakness in the wheat market limited gains. March corn was unchanged on the day as prices saw a two-sided trade.

  • The US Dollar Index traded at its highest levels since November on Monday, limiting gains in the commodity markets. The dollar has been trending higher since the start of the year and has been a limiting factor for both corn and wheat markets in global trade.

  • Weekly US export inspections were soft for corn on Monday. Last week, the US exported only 24.6 mb (624,000 Mt) of corn, and below market expectations for the report. For the marketing year, corn inspections are at 641 mb, up 30% from last year.

  • The USDA announced a flash export sale of corn to Mexico totaling 6.1 mb (155,000 mt) for the current marketing year. This was the first reported corn export sales since January 16.

  • Argentina weather is a market driver in the near term. Crop growing regions in Argentina are experiencing above-normal temperature, but weather models look to bring some relief going into the end of the week. The rain coverage and totals may be key to grain market prices.

Above: Front month corn posted a key bullish reversal on January 30. This indicates there is significant support below the market around 436, and that prices could retest the 460 resistance area. If the market were to reject the bullish reversal and turn lower, the next major level of support below 436 remains near 415.

Above: Corn Managed Money Funds net position as of Tuesday, January 30. Net position in Green versus price in Red. Managers net sold 14,866 contracts between January 24 – 30, bringing their total position to a net short 280,151 contracts.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. In early January, front month soybeans broke through the bottom side of the 1290 – 1400 range that had been in place since mid-October. As South American weather forecasts improved, the potential for a reduction in the record large global carryout also lessened, bringing prices down toward the 1180 support level. For now, 1180 support appears to be holding, and though the weak price action has been disappointing, time remains in the South American growing season, and the old crop marketing year, for unforeseen changes to push prices back higher.  Given the potential of a downside breakout back in December, Grain Market Insider recommended adding to sales as prices remained historically good, and Grain Market Insider will continue to look at additional sales opportunities heading into spring.

  • No new action is recommended for the 2024 crop. After the Nov ’24 contract broke through the bottom side of the 1233 – 1320 range, prices continued to retreat as South American weather conditions improved. Even though Nov ’24 runs similar downside risks as the front month contracts, which could press new crop prices toward 1150 or possibly the May ’23 low near 1115, plenty of time remains to market this crop. Considering the amount of uncertainty that lies ahead with the 2024 soybean crop, Grain Market Insider 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. Additionally, the possibility remains that prices could retest the 2022 highs, at which point Grain Market Insider may consider recommending additional sales.

  • No Action is currently recommended for 2025 Soybeans. Grain Market Insider isn’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, along with both soybean meal and oil, after a lower start. The release of the export inspections report was very friendly, and prices began to move higher after that. Improved weather in South America could be a bearish factor this week.

  • For the week ending February 1, the USDA reported total soybean inspections at 52.4 mb which was sharply higher than even the highest trade estimate. Total inspections for 23/24 are now at 1,070 mb, which is 24% lower than the previous year, but this was encouraging given last week’s abysmal export sales report.

  • Funds have been increasing their net short positions in grains at a rapid pace and now hold the largest net short position in four years totaling about 610,000 contracts. Last week in soybeans, they were sellers of 16,405 contracts which increased their net short position to 108,247 contracts.

  • This Thursday, the USDA will release its February WASDE report, but the extent of changes they will make is unknown considering their shocking jump in US yield estimates in the last report. US ending stocks for soybeans are estimated to rise slightly by 5 mb to 285 mb while exports are expected to fall by 13 mb to 1,742. Argentinian production is expected to increase slightly to 50.8 mb and Brazil is expected to fall to 153.7 mb. World ending stocks are expected to decline slightly.

Above: After resuming its downward trend, the soybean market found nearby support just below the November low of 1181 and reversed back higher. If the market follows through to the upside, nearby resistance remains just overhead near 1225, and again near 1250. If on the other hand nearby support fails, prices could erode further toward the 1140-45 support area.

Above: Soybean Managed Money Funds net position as of Tuesday, January 30. Net position in Green versus price in Red. Money Managers net sold 16,405 contracts between January 24 – 30, bringing their total position to a net short 108,247 contracts.

Wheat

Market Notes: Wheat

  • Wheat closed lower in all three US classes today. The sharp rise in the US Dollar after the jobs report last week continued during today’s session. The index broke above the 100-day moving average to levels not seen since mid-November. Along with a lower close in Paris Milling wheat futures, this is adding weight onto the shoulders of the wheat market.

  • Weekly wheat inspections at 9.8 mb were disappointing but brought the 23/24 total to 414 mb. Inspections are running below the USDA’s estimated pace, which adds to negativity in the market. In addition, the fact that Russian wheat FOB values are said to have declined again to $229-$231 per ton is pressuring exports and limiting any upside rallies.

  • Flooding rains in California are expected to move into the central part of the US this week. This will bring more moisture to the winter wheat growing regions, benefiting soil moisture levels and crop conditions at a time when the wheat in that area is already in much better shape compared to last year.

  • Alongside the USDA report this Thursday, Stats Canada will also release estimates of their crop stocks as of December 31. The average estimate for all Canadian wheat comes in at 20.7 mmt, with a range of 19.5 to 21.9. For reference, December 2022 stocks came in at 23.037 mmt.

  • China will reportedly increase the minimum purchasing price for wheat, to entice farmers to grow a larger amount and to increase their national food security. As China works toward becoming less dependent on grain imports, they are also said to be focused on improving yields to increase their overall grain production.

  • Agriculture exports out of the Odesa region in Ukraine are said to have reached 14.3 mmt since they opened their own shipping corridor in August. The 6.3 mmt of goods shipped in January are said to be almost at prewar levels. This is impressive given the hostility in the region, and news that tensions are on the rise after Ukraine targeted an oil refinery deep within the Russian border.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. The wheat market has continued to be dominated by lower world export prices that have stymied US export sales and depressed US prices. In early December, Grain Market Insider recommended taking advantage and making a sale on a short covering rally which was sparked by several Chinese purchases of US wheat. Since then, China has been silent in the US wheat export market, and prices remain somewhat elevated. Any remaining 2023 soft red winter wheat should be getting priced into market strength with the goal of having zero bushels unpriced by the end of January. 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 early December, the July ’24 contract has traded mostly sideways to slightly lower after its brief short covering runup on Chinese buying. Although China has since been absent from the US wheat export market, prices appear to have found support above 585, and managed funds continue to hold a sizeable, short position that could trigger another short covering rally if a bullish impetus enters the market. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. Although, if the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

  • No action is currently recommended for 2025 Chicago Wheat. Since early September, the July ’25 contract has been mostly rangebound with 632 at the low end and 685 at the top. Grain Market Insider’s strategy for the 2025 crop year up to this point has been to sit tight. Though if prices rally toward the upper end of this range, we will consider taking advantage of the rally’s historically good prices to make sales recommendations.

To date, Grain Market Insider has issued the following Chicago wheat recommendations:

Above: Chicago wheat has been in a congestion pattern bordered between 614-618 on the top and 584 on the bottom. A breakout through the top end could send prices toward the 640 – 650 resistance area, while a downside breakout may find initial support around 573 with more support around 556.

Above: Chicago Wheat Managed Money Funds net position as of Tuesday, January 30. Net position in Green versus price in Red. Money Managers net sold 277 contracts between January 24 – 30, bringing their total position to a net short 64,818 contracts.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since last fall, front month KC wheat has been mostly rangebound between 678 up top and the 590 area down below. The latter has held as support for the past three months. Although fundamentals remain weak, considering support lies just below the market and managed funds continue to carry a sizable short position, these factors could trigger a return to higher prices if any unforeseen risks enter the market. Grain Market Insider’s strategy is to look for price appreciation as weather becomes a more prominent market mover and may consider suggesting additional sales if prices make a modest 20% retracement of the 2022 highs back toward 730.

  • No new action is recommended for 2024 KC wheat. At the end of August, the July ’24 contract broke out of roughly a one-year trading range and stepped down to a 609 ¼ low in late November, largely driven by managed fund selling in the front month on weak US export demand and lower world wheat prices. Since then, the funds covered part of their large short position which also rallied prices in the July ’24 contract. While bearish headwinds remain, managed funds continue to hold a sizable, short position, and price seasonals remain positive for adding weather risk premium. These are two factors that could fuel additional short covering and rally prices in the months ahead. Back in August, Grain Market Insider recommended buying Jul’24 KC wheat 660 puts to protect the downside following the range breakout. As the market recently got further extended into oversold territory and the July contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. Moving forward, Grain Market Insider is prepared to recommend exiting the last 25% on any further supportive market developments.

  • No action is currently recommended for 2025 KC Wheat. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next fall. It will probably be mid-winter before Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following KC recommendations:

Above: KC wheat continues to consolidate just below the 50-day moving average, which is acting as mild resistance to the upside. If the market does breakout to the upside, it may encounter additional resistance near the recent high of 641. To the downside, the next major support level remains between 595 and 575.

Above: KC Wheat Managed Money Funds net position as of Tuesday, January 30. Net position in Green versus price in Red. Money Managers net bought 4,985 contracts between January 24 – 30, bringing their total position to a net short 33,355 contracts.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop. For the last six months, front month Minneapolis wheat has slowly stair-stepped lower with little bullish news to move markets higher. During this time, the 50-day moving average has acted as resistance, above which the market has not been able to hold for very long. Managed funds have also established and maintained a record (or near record) short position for much of the same time. Although bullish headwinds remain, support may be building in the 670 – 675 area, and the large fund net short position continues to leave the market susceptible to a short-covering rally at any time here. Grain Market Insider’s strategy is to look for a modest retracement of the July high and consider additional sales around 725 – 750.

  • No new action is recommended for 2024 Minneapolis wheat. Much like the front month contracts, Sept ’24 has been in a downward trend since last summer. And just as Sept ’24 has been influenced to the downside by the front months, it could be similarly influenced to the upside by the front months if a bullish impetus enters the scene and triggers a short covering rally due to the fund’s large short position. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside following a 1-year range breakout in KC wheat, and in November recommended exiting 75% of the originally recommended position as July ’24 KC wheat showed signs of support around 630. While in the same time frame, Grain Market Insider also recommended making an additional sale as the Sept ’24 Minneapolis contract broke long time 743 support. Grain Market Insider remains prepared to recommend exiting the last 25% of the open puts on any further supportive market developments and consider recommending additional sales if prices make a modest retracement of the 2022 highs.

  • No action is currently recommended for the 2025 Minneapolis wheat crop. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next year. It will probably be mid-winter before Grain Market Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following Minneapolis wheat recommendations:

Above: Front month Minneapolis wheat is correcting from becoming overbought on the recent rally. If prices continue to slide, the next level of support comes in around the January low of 678 ¾. While upside resistance remains between 710 and 720.

Above: Minneapolis Wheat Managed Money Funds net position as of Tuesday, January 30. Net position in Green versus price in Red. Money Managers net bought 3,210 contracts between January 24 – 30, bringing their total position to a net short 27,080 contracts.

Other Charts / Weather

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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2-2 End of Day: Strong Jobs Report Adds Pressure to Markets

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Despite the amount of corn used for ethanol last month being the highest in 5 ½ years and above expectations, the corn market came under pressure from neighboring soybeans and a higher US dollar and closed lower on the day following a mostly firmer overnight trade.

  • While the soybean market entered the early morning hours in the green and near session highs, the market quickly faded upon the release of this morning’s unemployment report that showed job creation well above expectations. This drowned out the positive influence of yesterday’s Fats and Oils report showing record crush numbers.

  • The wheat complex fared the best in today’s trade and closed mixed as strong overnight gains faded through the early part of the day session into choppy trade in all three classes. Chicago closed mixed with the fronts losing to the deferreds, KC was firm across the board, while Minneapolis closed mixed as well, but with the nearby contracts gaining on the deferreds.

  • Today’s January jobs report showed more than double the number of jobs were added to the economy than expected in the month of January and the unemployment rate came in at 3.7% versus 3.8% expected. The positive economic news rallied the US dollar 0.9% at the time of writing and likely added to the negativity in the Ag space.

  • To see the updated US 7 day precipitation forecast, 6 – 10 day temperature and precipitation outlooks, and the 2-week GFS precipitation forecast as a percent of normal for South America, courtesy of the National Weather Service, 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

  • No new action is recommended for 2023 corn. Front month corn has languished in a sideways to lower trend since printing a high in October, with a general lack of bullish news and an estimated US carryout over 2.1 billion bushels. The failure of the USDA’s January report to provide the bullish news necessary to turn prices higher was disappointing and the market remains at risk of remaining in the same pattern. With that being said, managed funds continue to hold a sizable net short position, which could trigger a short covering rally if a bullish catalyst enters the scene. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

  • No new action is recommended for 2024 corn. Following the January USDA Supply and Demand update, Dec ’24 broke through the bottom end of the 485 ¾ to 602 range that had been in place since February ’22. While this is a disappointing development, bear spreading has allowed Dec ’24 to maintain more of its value versus old crop, as traders attempt to price in a larger 2023 carryout with more uncertainty remaining for the 2024 crop. Grain Market Insider continues to watch for signs of a change in the current trend to look at recommending making additional sales and buying Dec ’24 call options.

  • No Action is currently recommended for 2025 corn. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next year. It will probably be late winter or early spring of 2024 before Grain Market Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following corn recommendations:

  • Overnight strength from Thursday’s positive ethanol grind data quickly faded on the open of today’s session as US jobs data came in far above expectations and rallied the US dollar, which likely weighed on Ag futures across the board. March corn closed the day 4 ½ cents lower, with a 3 ½ cent loss for the week.

  • Thursday afternoon, the USDA released its Grain Crushing’s report that showed 482 mb of corn were used in December 2023 for the production of ethanol. Usage came in above expectations and at the highest level in 5 ½ years. It also represented a 5% increase from November and was 13% higher than a year ago.

  • The Buenos Aires Grain Exchange reported that 98% of Argentina’s corn crop is planted, and as a testament to the hot and dry conditions, 11% of the crop is rated poor to very poor, a 5% increase from last week.

  • On the flip side, the US Ag attaché in Argentina raised its estimate of Argentina’s corn crop by 2 mmt to 57 mmt. By comparison, the USDA is currently forecasting a 55 mmt crop.

  • The US drought monitor continues to show significant improvement over this time last year. As of yesterday’s update, the drought monitor shows 28% of the corn areas in drought versus last year when it showed 45%.

Above: Front month corn posted a key bullish reversal on January 30. This indicates there is significant support below the market around 436, and that prices could retest the 460 resistance area. If the market were to reject the bullish reversal and turn lower, the next major level of support below 436 remains near 415.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. In early January, front month soybeans broke through the bottom side of the 1290 – 1400 range that had been in place since mid-October. As South American weather forecasts improved, the potential for a reduction in the record large global carryout also lessened, bringing prices down toward the 1180 support level. For now, 1180 support appears to be holding, and though the weak price action has been disappointing, time remains in the South American growing season, and the old crop marketing year, for unforeseen changes to push prices back higher.  Given the potential of a downside breakout back in December, Grain Market Insider recommended adding to sales as prices remained historically good, and Grain Market Insider will continue to look at additional sales opportunities heading into spring.

  • No new action is recommended for the 2024 crop. After the Nov ’24 contract broke through the bottom side of the 1233 – 1320 range, prices continued to retreat as South American weather conditions improved. Even though Nov ’24 runs similar downside risks as the front month contracts, which could press new crop prices toward 1150 or possibly the May ’23 low near 1115, plenty of time remains to market this crop. Considering the amount of uncertainty that lies ahead with the 2024 soybean crop, Grain Market Insider 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. Additionally, the possibility remains that prices could retest the 2022 highs, at which point Grain Market Insider may consider recommending additional sales.

  • No Action is currently recommended for 2025 Soybeans. Grain Market Insider isn’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 significantly lower again to end the week with pressure from Brazil’s advancing harvest, lower soy products, and poor export sales. Soybean meal has been rangebound for the past few weeks, while soybean oil has trended lower on increased supply and demand concerns.

  • For the week, March soybeans lost 20-3/4 cents, March soybean meal gained $7.80, and March soybean oil lost 2.20 cents. Today, nearly all of the grains fell sharply after unemployment numbers were released. This caused the dollar to rise as traders feel that the Fed will further delay dropping rates.

  • Soybeans would likely be trading even lower if not for the good domestic crush demand. Yesterday’s Fats and Oils report from the USDA showed that total soybean crush for December was 204 mb, 17 mb above this time a year ago and a new monthly record. Better export demand would be needed for prices to move higher.

  • Scattered showers continue to fall throughout Brazil, but the northern region would benefit from drier weather at this point to progress with harvest. Argentina is expected to remain hot and dry throughout the weekend before rains begin to fall again, and it is unknown if the recent hot and dry spell will reduce production estimates.

Above: The soybean market appears to be consolidating within the range of the January 30 bullish key reversal where nearby support remains just below the market around 1188, with nearby resistance just overhead near 1225. Depending on which direction the market breaks out, it could retest 1250 up top, or the November low of 1181.

Wheat

Market Notes: Wheat

  • With the US Dollar up sharply after the jobs report, wheat struggled to hold onto earlier gains and closed mixed amongst the three classes. The report showed that 353,000 jobs were added, but perhaps more importantly, unemployment was steady at 3.7% compared to the expectation for an increase to 3.8%.

  • Paris milling wheat futures also faded off of earlier highs, which may have also offered weakness to the US market by the close. The March Matif contract posted small gains, while May was down a bit. This is somewhat disappointing given yesterday’s strong bullish reversal off contract lows.

  • According to FAO-AMIS, the estimate of global 23/24 wheat stockpiles was increased from 319.3 mmt to 319.7 mmt. Corn production and stockpile estimates were also raised, but soybean stocks were reduced.

  • Compared to last year, Russia is estimated to have increased grain exports by 23% in the period of July 1 through January 31. Data suggests that during that period, they exported 38.5 mmt of grain. Turkey was the leading wheat importer at 4.349 mmt with Egypt next in line at 3.577 mmt.

  • New Zealand’s National Institute for Water and Atmospheric Research has said that there is a 100% chance of El Nino lasting through April. Additionally, there is a 65% chance that the weather pattern will return to neutral conditions in the May – July timeframe.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. The wheat market has continued to be dominated by lower world export prices that have stymied US export sales and depressed US prices. In early December, Grain Market Insider recommended taking advantage and making a sale on a short covering rally which was sparked by several Chinese purchases of US wheat. Since then, China has been silent in the US wheat export market, and prices remain somewhat elevated. Any remaining 2023 soft red winter wheat should be getting priced into market strength with the goal of having zero bushels unpriced by the end of January. 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 early December, the July ’24 contract has traded mostly sideways to slightly lower after its brief short covering runup on Chinese buying. Although China has since been absent from the US wheat export market, prices appear to have found support above 585, and managed funds continue to hold a sizeable, short position that could trigger another short covering rally if a bullish impetus enters the market. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. Although, if the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

  • No action is currently recommended for 2025 Chicago Wheat. Since early September, the July ’25 contract has been mostly rangebound with 632 at the low end and 685 at the top. Grain Market Insider’s strategy for the 2025 crop year up to this point has been to sit tight. Though if prices rally toward the upper end of this range, we will consider taking advantage of the rally’s historically good prices to make sales recommendations.

To date, Grain Market Insider has issued the following Chicago wheat recommendations:

Above: The recent rally came within earshot of the 620 – 625 resistance area and was rejected. For now, minor nearby support may be found near the 100-day moving average. If that breaks, the market runs the risk of receding further with the next downside support near 573 and again around 556.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since last fall, front month KC wheat has been mostly rangebound between 678 up top and the 590 area down below. The latter has held as support for the past three months. Although fundamentals remain weak, considering support lies just below the market and managed funds continue to carry a sizable short position, these factors could trigger a return to higher prices if any unforeseen risks enter the market. Grain Market Insider’s strategy is to look for price appreciation as weather becomes a more prominent market mover and may consider suggesting additional sales if prices make a modest 20% retracement of the 2022 highs back toward 730.

  • No new action is recommended for 2024 KC wheat. At the end of August, the July ’24 contract broke out of roughly a one-year trading range and stepped down to a 609 ¼ low in late November, largely driven by managed fund selling in the front month on weak US export demand and lower world wheat prices. Since then, the funds covered part of their large short position which also rallied prices in the July ’24 contract. While bearish headwinds remain, managed funds continue to hold a sizable, short position, and price seasonals remain positive for adding weather risk premium. These are two factors that could fuel additional short covering and rally prices in the months ahead. Back in August, Grain Market Insider recommended buying Jul’24 KC wheat 660 puts to protect the downside following the range breakout. As the market recently got further extended into oversold territory and the July contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. Moving forward, Grain Market Insider is prepared to recommend exiting the last 25% on any further supportive market developments.

  • No action is currently recommended for 2025 KC Wheat. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next fall. It will probably be mid-winter before Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following KC recommendations:

Above: KC wheat continues to consolidate just below the 50-day moving average, which is acting as mild resistance to the upside. If the market does breakout to the upside, it may encounter additional resistance near the recent high of 641. To the downside, the next major support level remains between 595 and 575.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop. For the last six months, front month Minneapolis wheat has slowly stair-stepped lower with little bullish news to move markets higher. During this time, the 50-day moving average has acted as resistance, above which the market has not been able to hold for very long. Managed funds have also established and maintained a record (or near record) short position for much of the same time. Although bullish headwinds remain, support may be building in the 670 – 675 area, and the large fund net short position continues to leave the market susceptible to a short-covering rally at any time here. Grain Market Insider’s strategy is to look for a modest retracement of the July high and consider additional sales around 725 – 750.

  • No new action is recommended for 2024 Minneapolis wheat. Much like the front month contracts, Sept ’24 has been in a downward trend since last summer. And just as Sept ’24 has been influenced to the downside by the front months, it could be similarly influenced to the upside by the front months if a bullish impetus enters the scene and triggers a short covering rally due to the fund’s large short position. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside following a 1-year range breakout in KC wheat, and in November recommended exiting 75% of the originally recommended position as July ’24 KC wheat showed signs of support around 630. While in the same time frame, Grain Market Insider also recommended making an additional sale as the Sept ’24 Minneapolis contract broke long time 743 support. Grain Market Insider remains prepared to recommend exiting the last 25% of the open puts on any further supportive market developments and consider recommending additional sales if prices make a modest retracement of the 2022 highs.

  • No action is currently recommended for the 2025 Minneapolis wheat crop. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next year. It will probably be mid-winter before Grain Market Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following Minneapolis wheat recommendations:

Above: Front month Minneapolis wheat is correcting from becoming overbought on the recent rally. If prices continue to slide, the next level of support comes in around the January low of 678 ¾. While upside resistance remains between 710 and 720.

Other Charts / Weather

Brazil 2-week forecast precipitation, percent of normal, courtesy of the National Weather Service, Climate Prediction Center.

Argentina 2-week forecast precipitation, percent of normal, courtesy of the National Weather Service, Climate Prediction Center.

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2-1 End of Day: Poor Export Sales Press Soybeans Lower

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • A firm wheat trade and weekly corn export sales that came in at the upper end of expectations lent support to the corn market. Corn saw two-sided trade in a tight 4 ½ cent range but came under pressure from neighboring soybeans to close with minor losses.

  • Despite the encouraging private sale of 7.6 mb of soybeans to Mexico, disappointing weekly export sales that included large cancellations from unknown destinations weighed heavily on the soybean market, which settled within 4 cents of the low following two-sided trade in a 22-cent range.

  • Lower soybean meal and oil also added to the negativity in the soybean pit. Talk of improved rain chances in Argentina likely pressed soybean meal lower, which gave up all of yesterday’s gains. While soybean oil traded up to 0.36 cents higher early on, it followed crude oil lower to close 0.42 cents in the red.

  • With little fresh news to move prices significantly, the wheat complex consolidated again for the third consecutive day, with Chicago and KC both higher and Minneapolis lower. While the complex settled mixed, all three classes did close in the upper end of their respective ranges.

  • To see the updated US Drought Monitor, and the 2-week GFS precipitation forecast for South America, courtesy of the NDMC, National Weather Service, 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

  • No new action is recommended for 2023 corn. Front month corn has languished in a sideways to lower trend since printing a high in October, with a general lack of bullish news and an estimated US carryout over 2.1 billion bushels. The failure of the USDA’s January report to provide the bullish news necessary to turn prices higher was disappointing and the market remains at risk of remaining in the same pattern. With that being said, managed funds continue to hold a sizable net short position, which could trigger a short covering rally if a bullish catalyst enters the scene. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

  • No new action is recommended for 2024 corn. Following the January USDA Supply and Demand update, Dec ’24 broke through the bottom end of the 485 ¾ to 602 range that had been in place since February ’22. While this is a disappointing development, bear spreading has allowed Dec ’24 to maintain more of its value versus old crop, as traders attempt to price in a larger 2023 carryout with more uncertainty remaining for the 2024 crop. Grain Market Insider continues to watch for signs of a change in the current trend to look at recommending making additional sales and buying Dec ’24 call options.

  • No Action is currently recommended for 2025 corn. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next year. It will probably be late winter or early spring of 2024 before Grain Market Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following corn recommendations:

  • Selling pressure in the soybean market limited gains in corn as prices finished slightly lower. March corn lost 1 cent on the day. Corn prices are still consolidating, closing around the 447 level for the 3rd consecutive day.

  • Weekly Export sales for corn were towards the top end of expectations. The USDA reported new sales for the current marketing year at 47.5 mb (1.207 mmt). Japan was the top buyer of US corn last week. Total commitments are at 1.326 bb, which is up 31% from last year.

  • The National Corn index is trading 23 cents under the March futures, and declining, reflecting the large front-end supply of corn. Cash basis levels should remain steady to softer in the near term and the weather has improved, allowing for better movement of the corn supply. 

  • Despite ethanol production rebounding, slower production over the past two weeks, due to weather, has tightened ethanol stocks. The ethanol grind and corn usage may have to tick up in the next couple weeks to rebuild the ethanol stockpile.

  • Argentina weather has been a focus in recent sessions. Afternoon weather models will likely dictate overnight trade. Models moved some moisture chances back into the weekend, which limited strength in the corn and soybean markets.

Above: Front month corn posted a key bullish reversal on January 30. This indicates there is significant support below the market around 436, and that prices could retest the 460 resistance area. If the market were to reject the bullish reversal and turn lower, the next major level of support below 436 remains near 415.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. In early January, front month soybeans broke through the bottom side of the 1290 – 1400 range that had been in place since mid-October. As South American weather forecasts improved, the potential for a reduction in the record large global carryout also lessened, bringing prices down toward the 1180 support level. For now, 1180 support appears to be holding, and though the weak price action has been disappointing, time remains in the South American growing season, and the old crop marketing year, for unforeseen changes to push prices back higher.  Given the potential of a downside breakout back in December, Grain Market Insider recommended adding to sales as prices remained historically good, and Grain Market Insider will continue to look at additional sales opportunities heading into spring.

  • No new action is recommended for the 2024 crop. After the Nov ’24 contract broke through the bottom side of the 1233 – 1320 range, prices continued to retreat as South American weather conditions improved. Even though Nov ’24 runs similar downside risks as the front month contracts, which could press new crop prices toward 1150 or possibly the May ’23 low near 1115, plenty of time remains to market this crop. Considering the amount of uncertainty that lies ahead with the 2024 soybean crop, Grain Market Insider 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. Additionally, the possibility remains that prices could retest the 2022 highs, at which point Grain Market Insider may consider recommending additional sales.

  • No Action is currently recommended for 2025 Soybeans. Grain Market Insider isn’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 significantly lower today following two consecutive days of higher prices. Today’s export sales report was very poor, and both soybean meal and oil moved lower and pressured soybeans. There was a flash sale reported, but it was overshadowed by the low export number.

  • For the week ending January 25, the USDA reported an increase of 6.0 mb of soybean export sales for 23/24. This was a marketing year low, below the lowest trade guess, and down 19% from the previous year. Export shipments of soybeans last week were 34.9 mb and were above the 23.3 mb needed each week to meet the USDA’s estimates. Primary destinations were to China, Egypt, and Mexico.

  • This morning, private exporters reported a flash sale of 206,834 metric tons of soybeans to Mexico which was a bit unusual as Mexico primarily buys US corn. The poor export sales were a result of net cancellations of 407,400 metric tons of soybeans by unknown destinations. China and other countries are likely canceling US purchases to seek out cheaper Brazilian offers.

  • South American weather is currently mixed with Brazil receiving scattered showers while Argentina is still dry with its forecast not set to turn more favorable for another five days or so. Estimates for Brazilian production have slipped to around 145 mmt while Argentinian estimates have risen to 42 mmt.

Above: After printing a new low for the move and closing higher in a classic bullish key reversal, soybean may be on track to retest overhead resistance around 1250. If the market rejects the key reversal, initial support should be found near 1188 with further support near the November ’21 low of 1181.

Wheat

Market Notes: Wheat

  • The wheat complex ended the day mixed with both Chicago and Minneapolis in the green, while KC closed lower. Today marked the third day in row of back-and-forth consolidation with little fresh market moving news to trade, while the market attempts to balance reduced 2024 US acres with solid HRW crop ratings.

  • Today’s weekly export sales report released by the USDA showed net sales for the week ending January 25, at 11.84 mb (322.5k mt). Bringing total 23/24 sales to 620 mb versus the USDA’s forecast of 725 mb.  Last week’s sales represent a 29% drop from the previous week and a 9% drop from the 4-week average.

  • In international trade, Taiwan issued a tender to purchase an estimated 89,650 mt of milling wheat from the US to the Taiwan Flour Millers’ Association. Jordan’s state buyer issued an international tender to purchase up to 120k mt of optional origin milling wheat, and Bangladesh also issued an international tender for 50k mt of milling wheat.

  • India is predicted to have a warmer than normal February, which may be detrimental to the country’s wheat crop as it enters its filling stage. A significant drop in yield may force the country to continue its export restrictions for a longer period of time.

  • One private group raised its estimate of Russia’s wheat crop by 2.2 mmt to 90.2 mmt, 0.8 mmt under the USDA’s 91 mmt forecast. The group also increased its estimate of Australia’s wheat crop 1.5 mmt to 27 mmt versus the USDA’s 25.5 mmt. but lowered the EU crop by 3.1 mmt to 133.7, just under the USDA’s current 134.3 mmt estimate.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. The wheat market has continued to be dominated by lower world export prices that have stymied US export sales and depressed US prices. In early December, Grain Market Insider recommended taking advantage and making a sale on a short covering rally which was sparked by several Chinese purchases of US wheat. Since then, China has been silent in the US wheat export market, and prices remain somewhat elevated. Any remaining 2023 soft red winter wheat should be getting priced into market strength with the goal of having zero bushels unpriced by the end of January. 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 early December, the July ’24 contract has traded mostly sideways to slightly lower after its brief short covering runup on Chinese buying. Although China has since been absent from the US wheat export market, prices appear to have found support above 585, and managed funds continue to hold a sizeable, short position that could trigger another short covering rally if a bullish impetus enters the market. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. Although, if the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

  • No action is currently recommended for 2025 Chicago Wheat. Since early September, the July ’25 contract has been mostly rangebound with 632 at the low end and 685 at the top. Grain Market Insider’s strategy for the 2025 crop year up to this point has been to sit tight. Though if prices rally toward the upper end of this range, we will consider taking advantage of the rally’s historically good prices to make sales recommendations.

To date, Grain Market Insider has issued the following Chicago wheat recommendations:

Above: The recent rally came within earshot of the 620 – 625 resistance area and was rejected. For now, minor nearby support may be found near the 100-day moving average. If that breaks, the market runs the risk of receding further with the next downside support near 573 and again around 556.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since last fall, front month KC wheat has been mostly rangebound between 678 up top and the 590 area down below. The latter has held as support for the past three months. Although fundamentals remain weak, considering support lies just below the market and managed funds continue to carry a sizable short position, these factors could trigger a return to higher prices if any unforeseen risks enter the market. Grain Market Insider’s strategy is to look for price appreciation as weather becomes a more prominent market mover and may consider suggesting additional sales if prices make a modest 20% retracement of the 2022 highs back toward 730.

  • No new action is recommended for 2024 KC wheat. At the end of August, the July ’24 contract broke out of roughly a one-year trading range and stepped down to a 609 ¼ low in late November, largely driven by managed fund selling in the front month on weak US export demand and lower world wheat prices. Since then, the funds covered part of their large short position which also rallied prices in the July ’24 contract. While bearish headwinds remain, managed funds continue to hold a sizable, short position, and price seasonals remain positive for adding weather risk premium. These are two factors that could fuel additional short covering and rally prices in the months ahead. Back in August, Grain Market Insider recommended buying Jul’24 KC wheat 660 puts to protect the downside following the range breakout. As the market recently got further extended into oversold territory and the July contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. Moving forward, Grain Market Insider is prepared to recommend exiting the last 25% on any further supportive market developments.

  • No action is currently recommended for 2025 KC Wheat. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next fall. It will probably be mid-winter before Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following KC recommendations:

Above: KC wheat appears to be consolidating around the 50-day moving average following its rally, and it continues to show signs of being overbought. Currently, upside resistance sits near the recent high of 641, with the next major support level remaining between 595 and 575.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop. For the last six months, front month Minneapolis wheat has slowly stair-stepped lower with little bullish news to move markets higher. During this time, the 50-day moving average has acted as resistance, above which the market has not been able to hold for very long. Managed funds have also established and maintained a record (or near record) short position for much of the same time. Although bullish headwinds remain, support may be building in the 670 – 675 area, and the large fund net short position continues to leave the market susceptible to a short-covering rally at any time here. Grain Market Insider’s strategy is to look for a modest retracement of the July high and consider additional sales around 725 – 750.

  • No new action is recommended for 2024 Minneapolis wheat. Much like the front month contracts, Sept ’24 has been in a downward trend since last summer. And just as Sept ’24 has been influenced to the downside by the front months, it could be similarly influenced to the upside by the front months if a bullish impetus enters the scene and triggers a short covering rally due to the fund’s large short position. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside following a 1-year range breakout in KC wheat, and in November recommended exiting 75% of the originally recommended position as July ’24 KC wheat showed signs of support around 630. While in the same time frame, Grain Market Insider also recommended making an additional sale as the Sept ’24 Minneapolis contract broke long time 743 support. Grain Market Insider remains prepared to recommend exiting the last 25% of the open puts on any further supportive market developments and consider recommending additional sales if prices make a modest retracement of the 2022 highs.

  • No action is currently recommended for the 2025 Minneapolis wheat crop. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next year. It will probably be mid-winter before Grain Market Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following Minneapolis wheat recommendations:

Above: Front month Minneapolis wheat is correcting from becoming overbought on the recent rally. If prices continue to slide, the next level of support comes in around the January low of 678 ¾. While upside resistance remains between 710 and 720.

Other Charts / Weather

Brazil 2-week forecast total precipitation courtesy of the National Weather Service, Climate Prediction Center.

Argentina 2-week forecast total precipitation courtesy of the National Weather Service, Climate Prediction Center.

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1-31 End of Day: Continued Hot and Dry Argentine Weather Supports Beans and Corn

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Support from soybeans and an extended hot and dry Argentine forecast helped rally the corn market to close near the day’s highs following choppy two-sided trade.

  • Strength from soybean meal carried over to pull soybeans off their midday lows to settle in the green, as the trade grapples with hot/dry Argentine weather and anticipates record crush numbers in tomorrow’s census crush report.

  • Soybean oil settled near unchanged but saw continued pressure from lower world veg oils and crude oil as Chinese import demand remains a concern. Soybean meal recovered from midday weakness and extended yesterday’s rally to settle $5.30 higher on the day, as buyers re-entered the market with possible short covering.

  • All three wheat classes closed lower on the day as anticipation of additional rain moving into Kansas and western Nebraska weighed on the wheat complex along with a new low close in France’s Matif March wheat futures.

  • To see the updated US 7-day precipitation forecast, 8 – 14 day temperature and precipitation outlooks, and the 2-week GFS precipitation forecast for South America, courtesy of the National Weather Service, 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

  • No new action is recommended for 2023 corn. Front month corn has languished in a sideways to lower trend since printing a high in October, with a general lack of bullish news and an estimated US carryout over 2.1 billion bushels. The failure of the USDA’s January report to provide the bullish news necessary to turn prices higher was disappointing and the market remains at risk of remaining in the same pattern. With that being said, managed funds continue to hold a sizable net short position, which could trigger a short covering rally if a bullish catalyst enters the scene. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

  • No new action is recommended for 2024 corn. Following the January USDA Supply and Demand update, Dec ’24 broke through the bottom end of the 485 ¾ to 602 range that had been in place since February ’22. While this is a disappointing development, bear spreading has allowed Dec ’24 to maintain more of its value versus old crop, as traders attempt to price in a larger 2023 carryout with more uncertainty remaining for the 2024 crop. Grain Market Insider continues to watch for signs of a change in the current trend to look at recommending making additional sales and buying Dec ’24 call options.

  • No Action is currently recommended for 2025 corn. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next year. It will probably be late winter or early spring of 2024 before Grain Market Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following corn recommendations:

  • Trade was quiet in the corn market as prices consolidated at the top of yesterday’s range. March corn futures finished ½ cent higher in a narrow trading range of only 5 ½ cents.

  • The corn market was lacking news overall and was likely a follower of other grains. Weakness in the wheat market limited gains, but a late push higher by soybeans helped pull corn futures off the lows for the day.

  • Argentina weather has been a focus in recent session. Afternoon weather models pushed some moisture chances until later in the weekend, which help support the corn and soybean markets into the close.

  • Weekly ethanol production rebounded but was still a disappointment. Last week, ethanol production was 991k bd, up from 818k bd last week, but was still 5% below last year’s level. Production has dropped below the pace to hit USDA market year corn usage target. Last week, only 99 million bushels of corn were used in the ethanol grind.

  • The USDA will release weekly corn export sales on Thursday morning. This is a key export window for US corn against global suppliers. Expectations for new sales to range from 800,000 – 1.3 mmt. Last week corn sales were 954,796 mt.

  • With Managed Money holding an extremely large short position in the corn market, the recent price strength could lead to additional short covering going into tomorrow’s session, but export demand will be a key as the market works through a perceived heavy front end corn supply.

Above: Front month corn posted a key bullish reversal on January 30. This indicates there is significant support below the market around 436, and that prices could retest the 460 resistance area. If the market were to reject the bullish reversal and turn lower, the next major level of support below 436 remains near 415.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. In early January, front month soybeans broke through the bottom side of the 1290 – 1400 range that had been in place since mid-October. As South American weather forecasts improved, the potential for a reduction in the record large global carryout also lessened, bringing prices down toward the 1180 support level. For now, 1180 support appears to be holding, and though the weak price action has been disappointing, time remains in the South American growing season, and the old crop marketing year, for unforeseen changes to push prices back higher.  Given the potential of a downside breakout back in December, Grain Market Insider recommended adding to sales as prices remained historically good, and Grain Market Insider will continue to look at additional sales opportunities heading into spring.

  • No new action is recommended for the 2024 crop. After the Nov ’24 contract broke through the bottom side of the 1233 – 1320 range, prices continued to retreat as South American weather conditions improved. Even though Nov ’24 runs similar downside risks as the front month contracts, which could press new crop prices toward 1150 or possibly the May ’23 low near 1115, plenty of time remains to market this crop. Considering the amount of uncertainty that lies ahead with the 2024 soybean crop, Grain Market Insider 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. Additionally, the possibility remains that prices could retest the 2022 highs, at which point Grain Market Insider may consider recommending additional sales.

  • No Action is currently recommended for 2025 Soybeans. Grain Market Insider isn’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 for the second consecutive day with support from higher soybean meal. Prices were lower for the majority of the day but rebounded into the close. Soybean oil was mixed and near unchanged with the front month ending higher but deferred months slightly lower.

  • There has been little fresh news for the markets to trade on, but it is the last day of the month and non-commercials may be covering a portion of their short position. Yesterday, funds were estimated to have bought back 10,000 contracts of soybeans and likely bought more back today. They still hold a large net short position.

  • The Brazilian soybean crop is now above 11% harvested, but production estimates are being dialed back again with Ag Resource pegging the total at 145.50 mmt which compares to 150.7 mmt in the previous forecast. The country’s soybean exports are expected to reach 2.49 mmt in January, well over the exports at this time a year ago.

  • In Singapore, demand for biodiesel has more than tripled since 2022 for marine use in the Port of Singapore. Imports of seed oils from China rose by 30% in 2023, and this points to the growing use of soybean oil and other seed oils as biofuel globally.

  • On tomorrow’s USDA census crush report, trade is expecting a record December US soybean crush at 206 mb. If true, that would be up from 200 mb in November, and compares to 187 mb last year.

Above: After printing a new low for the move and closing higher in a classic bullish key reversal, soybean may be on track to retest overhead resistance around 1250. If the market rejects the key reversal, initial support should be found near 1188 with further support near the November ’21 low of 1181.

Wheat

Market Notes: Wheat

  • Despite corn and soybeans coming back at the close, wheat could not do the same and posted losses in all three classes. No support came from Matif futures, in which the front month March lost three Euros per mt and had a new contract low close.

  • There has been talk that since China will allow imports of Argentinian wheat for the first time, Brazil may purchase their wheat needs from the US, compared to what they normally get from Argentina.

  • According to Anec, January wheat exports in Brazil are anticipated to increased 5.2% when compared to last year, at 685,171 mt. Overall Brazil is a net importer of wheat but exports the lower quality portions of grain with 90% of it going to animal feed.

  • A group of flour mills in South Korea has issued a tender for 100,000 mt of wheat to be sourced from the US and Australia. Taiwan is also tendering for US wheat, and Jordan has issued an international tender for 120,000 mt. At any rate, Russia remains the dominant exporter without much sign of slowing down. Their crops are also reportedly rated 96% good to satisfactory.

  • This afternoon the Fed announced that they will hold rates steady, marking the fourth time in a row that there was no change. The US Dollar Index is not showing much response as of as of writing, with it right around the neutral level, although it has been on both sides of that today. According to the committee, rates will not see any cuts until there is greater certainty that inflation is approaching two percent.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. The wheat market has continued to be dominated by lower world export prices that have stymied US export sales and depressed US prices. In early December, Grain Market Insider recommended taking advantage and making a sale on a short covering rally which was sparked by several Chinese purchases of US wheat. Since then, China has been silent in the US wheat export market, and prices remain somewhat elevated. Any remaining 2023 soft red winter wheat should be getting priced into market strength with the goal of having zero bushels unpriced by the end of January. 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 early December, the July ’24 contract has traded mostly sideways to slightly lower after its brief short covering runup on Chinese buying. Although China has since been absent from the US wheat export market, prices appear to have found support above 585, and managed funds continue to hold a sizeable, short position that could trigger another short covering rally if a bullish impetus enters the market. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. Although, if the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

  • No action is currently recommended for 2025 Chicago Wheat. Since early September, the July ’25 contract has been mostly rangebound with 632 at the low end and 685 at the top. Grain Market Insider’s strategy for the 2025 crop year up to this point has been to sit tight. Though if prices rally toward the upper end of this range, we will consider taking advantage of the rally’s historically good prices to make sales recommendations.

To date, Grain Market Insider has issued the following Chicago wheat recommendations:

Above: The recent rally came within earshot of the 620 – 625 resistance area and was rejected. For now, minor nearby support may be found near the 100-day moving average. If that breaks, the market runs the risk of receding further with the next downside support near 573 and again around 556.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since last fall, front month KC wheat has been mostly rangebound between 678 up top and the 590 area down below. The latter has held as support for the past three months. Although fundamentals remain weak, considering support lies just below the market and managed funds continue to carry a sizable short position, these factors could trigger a return to higher prices if any unforeseen risks enter the market. Grain Market Insider’s strategy is to look for price appreciation as weather becomes a more prominent market mover and may consider suggesting additional sales if prices make a modest 20% retracement of the 2022 highs back toward 730.

  • No new action is recommended for 2024 KC wheat. At the end of August, the July ’24 contract broke out of roughly a one-year trading range and stepped down to a 609 ¼ low in late November, largely driven by managed fund selling in the front month on weak US export demand and lower world wheat prices. Since then, the funds covered part of their large short position which also rallied prices in the July ’24 contract. While bearish headwinds remain, managed funds continue to hold a sizable, short position, and price seasonals remain positive for adding weather risk premium. These are two factors that could fuel additional short covering and rally prices in the months ahead. Back in August, Grain Market Insider recommended buying Jul’24 KC wheat 660 puts to protect the downside following the range breakout. As the market recently got further extended into oversold territory and the July contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. Moving forward, Grain Market Insider is prepared to recommend exiting the last 25% on any further supportive market developments.

  • No action is currently recommended for 2025 KC Wheat. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next fall. It will probably be mid-winter before Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following KC recommendations:

Above: KC wheat appears to be consolidating around the 50-day moving average following its rally, and it continues to show signs of being overbought. Currently, upside resistance sits near the recent high of 641, with the next major support level remaining between 595 and 575.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop. For the last six months, front month Minneapolis wheat has slowly stair-stepped lower with little bullish news to move markets higher. During this time, the 50-day moving average has acted as resistance, above which the market has not been able to hold for very long. Managed funds have also established and maintained a record (or near record) short position for much of the same time. Although bullish headwinds remain, support may be building in the 670 – 675 area, and the large fund net short position continues to leave the market susceptible to a short-covering rally at any time here. Grain Market Insider’s strategy is to look for a modest retracement of the July high and consider additional sales around 725 – 750.

  • No new action is recommended for 2024 Minneapolis wheat. Much like the front month contracts, Sept ’24 has been in a downward trend since last summer. And just as Sept ’24 has been influenced to the downside by the front months, it could be similarly influenced to the upside by the front months if a bullish impetus enters the scene and triggers a short covering rally due to the fund’s large short position. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside following a 1-year range breakout in KC wheat, and in November recommended exiting 75% of the originally recommended position as July ’24 KC wheat showed signs of support around 630. While in the same time frame, Grain Market Insider also recommended making an additional sale as the Sept ’24 Minneapolis contract broke long time 743 support. Grain Market Insider remains prepared to recommend exiting the last 25% of the open puts on any further supportive market developments and consider recommending additional sales if prices make a modest retracement of the 2022 highs.

  • No action is currently recommended for the 2025 Minneapolis wheat crop. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next year. It will probably be mid-winter before Grain Market Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following Minneapolis wheat recommendations:

Above: Front month Minneapolis wheat is correcting from becoming overbought on the recent rally. If prices continue to slide, the next level of support comes in around the January low of 678 ¾. While upside resistance remains between 710 and 720.

Other Charts / Weather

Brazil 2-week forecast total precipitation courtesy of the National Weather Service, Climate Prediction Center.

Argentina 2-week forecast total precipitation courtesy of the National Weather Service, Climate Prediction Center.

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1-30 End of Day: Corn, Beans, and Chicago Wheat Post Key Reversals on Turnaround Tuesday

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Carryover strength from neighboring soybeans helped support the corn market which saw strong buying and possible short covering from early in the session. After printing a fresh contract low in the overnight, March corn closed just off its high of the day in a bullish key reversal.

  • Buying activity in the soybean complex built up steam throughout the day as confidence waned in the forecasted rain amounts for Argentina. March soybeans posted a key bullish reversal and closed within 2 ½ cents of the day’s high.

  • Soybean meal also likely saw additional support on tight supplies from the extreme cold earlier this month that reduced crushing capacity. Soybean oil posted a bullish reversal in concert with soybeans, though the market continues to see resistance from Chinese demand concerns and lower biodiesel RIN values.

  • Chicago and KC led the wheat complex to a strong finish, with all three classes closing within 2 cents of their respective highs and Chicago posting a key bullish reversal.

  • To see the updated US 5-day precipitation forecast, the updated NASA-Grace based Drought Indicator for South America, and the 1-week GFS Precipitation Forecast for South America, courtesy of the National Weather Service, NOAA, the Climate Prediction Center, and NASA Grace with the 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

  • No new action is recommended for 2023 corn. Front month corn has languished in a sideways to lower trend since printing a high in October, with a general lack of bullish news and an estimated US carryout over 2.1 billion bushels. The failure of the USDA’s January report to provide the bullish news necessary to turn prices higher was disappointing and the market remains at risk of remaining in the same pattern. With that being said, managed funds continue to hold a sizable net short position, which could trigger a short covering rally if a bullish catalyst enters the scene. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

  • No new action is recommended for 2024 corn. Following the January USDA Supply and Demand update, Dec ’24 broke through the bottom end of the 485 ¾ to 602 range that had been in place since February ’22. While this is a disappointing development, bear spreading has allowed Dec ’24 to maintain more of its value versus old crop, as traders attempt to price in a larger 2023 carryout with more uncertainty remaining for the 2024 crop. Grain Market Insider continues to watch for signs of a change in the current trend to look at recommending making additional sales and buying Dec ’24 call options.

  • No Action is currently recommended for 2025 corn. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next year. It will probably be late winter or early spring of 2024 before Grain Market Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following corn recommendations:

  • After posting a new contract low, March corn futures turned higher with moderate gains on the day. March corn gained 7 ½ cents and posted a bullish turn on the chart. Strong buying in the soybean and wheat markets helped support the corn market.

  • With Managed Money holding an extremely large short position in the corn market, today’s price turn posted a key bullish reversal on the charts. The strong price action could lead to additional short covering going into tomorrow’s session.

  • Argentina weather has been a focus. Weather forecasts are looking at decent rainfall potential going into February, but temperatures are above normal in the near-term. The excess heat could limit some grain production overall, which helped support the market.

  • Despite today’s price move, demand remains a limiting factor in the market. US corn is in a key export window compared to more expensive sources. Corn export sales need to reflect improved business over the next few weeks.

Above: Front month corn posted a key bullish reversal on January 30. This indicates there is significant support below the market around 436, and that prices could retest the 460 resistance area. If the market were to reject the bullish reversal and turn lower, the next major level of support below 436 remains near 415.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Front month soybeans recent downside breakout of the 1290 – 1400 range indicates that there is risk that prices may continue to retreat toward 1180, as forecasts for improved South American weather lessen the potential for the record large global carryout to be reduced. Given the potential of a downside breakout, Grain Market Insider recommended adding to sales as the current price level is still historically good. It’s been disappointing how the market has been unable to push higher despite the South American production concerns. Because of that, Grain Market Insider’s concern is that, if the weather pattern doesn’t remain adverse, the path of least resistance could be lower. Grain Market Insider will continue to look at additional sales opportunities, as well as potential re-ownership strategies.

  • No new action is recommended for the 2024 crop. The Nov ’24 contract recently broke through the downside of the 1233 – 1320 range that has been in place since the end of July. Given this downside breakout and considering South American weather appears to be improving, Nov ’24 runs the risk of retreating towards 1150 unless another bullish catalyst enters the market. If prices find support and turn back higher, Grain Market Insider recently recommended buying Nov ’24 1280 and 1360 calls to give you confidence to make sales against anticipated 2024 production and to protect any sales in an extended rally. Grain Market Insider will also continue to watch for any sales opportunities.

  • No Action is currently recommended for 2025 Soybeans. Grain Market Insider isn’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 taking back all of yesterday’s losses and then some. Yesterday, trade reacted strongly to news of potential weakness in China’s economy, but the selloff may have been an overreaction. Both soybean meal and oil closed higher with larger gains in meal.

  • Lower soybean meal has put a significant amount of pressure on soybeans as it reached its lowest price since 2022 in the March contract yesterday. With freight costs falling, some cargoes of South American soybeans have been imported into the Southeast US for crushing. Crush margins have fallen recently but remain profitable.

  • In Soybean oil, prices have been steadily falling as well. Both palm oil and soybean oil on the Dalian exchange sold off sharply on worries about Chinese demand, and some analysts are lowering estimates for Chinese imports of soybeans below 98 mmt.

  • Argentinian weather is still mostly hot and dry but is expected to become more friendly in the coming days, though confidence may be waning. While the whole of Brazil is receiving scattered showers today. The northern region of Brazil has gotten too much rain while today’s showers are beneficial to the southern regions. Harvest is estimated at 11% complete which is above the average pace for this time of year.

Above: After printing a new low for the move and closing higher in a classic bullish key reversal, soybean may be on track to retest overhead resistance around 1250. If the market rejects the key reversal, initial support should be found near 1188 with further support near the November ’21 low of 1181.

Wheat

Market Notes: Wheat

  • Wheat reversed off of the lows in all three US futures classes, with Chicago and KC both posting double digit gains at the close. There wasn’t much in the way of fundamental news to drive this rally, but the grain complex as a whole had a positive session. This may indicate that today was a technical bounce that resulted in short covering by the managed funds.

  • Winter wheat conditions in the US are looking much better than a year ago. Select states released their crop condition data yesterday afternoon. Kansas, the biggest wheat producing state, rated their crop at 54% good to excellent versus 21% at this time last year. In fact, every reporting state except for North Carolina had better ratings than a year ago.

  • US wheat exports have not been stellar, and with only 9.7 mb inspected last week, total inspections are down 17% from last year. One of the limiting factors is exports out of Russia, which continue to dominate the market. According to IKAR, Russian FOB values fell by three dollars to just $235 per mt. This may limit further upside movement in the market.

  • Russia exported 4.26 mmt of wheat in January of last year. This year there is an estimated reduction of about 13% to 3.7 mmt; it is believed this is to help maintain reserves and also increase exports in the spring months. Additionally, as of January 26, Russia has purchased 473,000 mt of wheat for their state fund, with plans to buy up to two million metric tons of grain in total.

  • The US Dollar Index continues to consolidate, but its direction will be critical for wheat pricing. It was down slightly during today’s session, which may have offered some support to wheat. Tomorrow afternoon, traders will receive the results of the FOMC meeting; the Fed is expected to keep rates steady, but any surprise could affect the direction of the Dollar.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. The wheat market has continued to be dominated by lower world export prices that have stymied US export sales and depressed US prices. In early December, Grain Market Insider recommended taking advantage and making a sale on a short covering rally which was sparked by several Chinese purchases of US wheat. Since then, China has been silent in the US wheat export market, and prices remain somewhat elevated. Any remaining 2023 soft red winter wheat should be getting priced into market strength with the goal of having zero bushels unpriced by the end of January. 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 early December, the July ’24 contract has traded mostly sideways to slightly lower after its brief short covering runup on Chinese buying. Although China has since been absent from the US wheat export market, prices appear to have found support above 585, and managed funds continue to hold a sizeable, short position that could trigger another short covering rally if a bullish impetus enters the market. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. Although, if the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

  • No action is currently recommended for 2025 Chicago Wheat. Since early September, the July ’25 contract has been mostly rangebound with 632 at the low end and 685 at the top. Grain Market Insider’s strategy for the 2025 crop year up to this point has been to sit tight. Though if prices rally toward the upper end of this range, we will consider taking advantage of the rally’s historically good prices to make sales recommendations.

To date, Grain Market Insider has issued the following Chicago wheat recommendations:

Above: The recent rally came within earshot of the 620 – 625 resistance area and was rejected. For now, minor nearby support may be found near the 100-day moving average. If that breaks, the market runs the risk of receding further with the next downside support near 573 and again around 556.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since last fall, front month KC wheat has been mostly rangebound between 678 up top and the 590 area down below. The latter has held as support for the past three months. Although fundamentals remain weak, considering support lies just below the market and managed funds continue to carry a sizable short position, these factors could trigger a return to higher prices if any unforeseen risks enter the market. Grain Market Insider’s strategy is to look for price appreciation as weather becomes a more prominent market mover and may consider suggesting additional sales if prices make a modest 20% retracement of the 2022 highs back toward 730.

  • No new action is recommended for 2024 KC wheat. At the end of August, the July ’24 contract broke out of roughly a one-year trading range and stepped down to a 609 ¼ low in late November, largely driven by managed fund selling in the front month on weak US export demand and lower world wheat prices. Since then, the funds covered part of their large short position which also rallied prices in the July ’24 contract. While bearish headwinds remain, managed funds continue to hold a sizable, short position, and price seasonals remain positive for adding weather risk premium. These are two factors that could fuel additional short covering and rally prices in the months ahead. Back in August, Grain Market Insider recommended buying Jul’24 KC wheat 660 puts to protect the downside following the range breakout. As the market recently got further extended into oversold territory and the July contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. Moving forward, Grain Market Insider is prepared to recommend exiting the last 25% on any further supportive market developments.

  • No action is currently recommended for 2025 KC Wheat. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next fall. It will probably be mid-winter before Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following KC recommendations:

Above: KC wheat appears to be consolidating around the 50-day moving average following its rally, and it continues to show signs of being overbought. Currently, upside resistance sits near the recent high of 641, with the next major support level remaining between 595 and 575.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop. For the last six months, front month Minneapolis wheat has slowly stair-stepped lower with little bullish news to move markets higher. During this time, the 50-day moving average has acted as resistance, above which the market has not been able to hold for very long. Managed funds have also established and maintained a record (or near record) short position for much of the same time. Although bullish headwinds remain, support may be building in the 670 – 675 area, and the large fund net short position continues to leave the market susceptible to a short-covering rally at any time here. Grain Market Insider’s strategy is to look for a modest retracement of the July high and consider additional sales around 725 – 750.

  • No new action is recommended for 2024 Minneapolis wheat. Much like the front month contracts, Sept ’24 has been in a downward trend since last summer. And just as Sept ’24 has been influenced to the downside by the front months, it could be similarly influenced to the upside by the front months if a bullish impetus enters the scene and triggers a short covering rally due to the fund’s large short position. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside following a 1-year range breakout in KC wheat, and in November recommended exiting 75% of the originally recommended position as July ’24 KC wheat showed signs of support around 630. While in the same time frame, Grain Market Insider also recommended making an additional sale as the Sept ’24 Minneapolis contract broke long time 743 support. Grain Market Insider remains prepared to recommend exiting the last 25% of the open puts on any further supportive market developments and consider recommending additional sales if prices make a modest retracement of the 2022 highs.

  • No action is currently recommended for the 2025 Minneapolis wheat crop. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next year. It will probably be mid-winter 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 in the March contract appears to be stalling, with the market consolidating between the upper 690s and low 700s. Initial resistance now sits just above the market between 710 and 720, with heavier resistance around 735. Below the market support remains near 669.

Other Charts / Weather

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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1-29 End of Day: Grains Follow Through on Friday’s Weakness to Close Lower.

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • The lack of fresh bullish news and carryover weakness from wheat and soybeans pressured the corn market, which followed through on Friday’s instability to close lower on the day.

  • The soybean market failed to hold early strength from rebounding soybean meal and closed lower on more bearish Chinese economic news and sharply lower bean oil.

  • Soybean meal rebounded early in the session as traders likely covered shorts after posting fresh 2-year lows last Friday. Bean oil followed lower crude and world veg oil to resume its downtrend and post a fresh nearly 8-month low.

  • All three wheat classes closed in the red, but late-day buying strength came in to rally them off their respective lows. Word that Egypt may only import 7 mmt of wheat and weakness in China’s business sector likely contributed to the declines.

  • To see the updated US 5-day precipitation forecast, 6 – 10 day temperature and precipitation outlooks, and the 1-week GFS Precipitation Forecast for South America courtesy of the National Weather Service, 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

  • No new action is recommended for 2023 corn. Front month corn has languished in a sideways to lower trend since printing a high in October, with a general lack of bullish news and an estimated US carryout over 2.1 billion bushels. The failure of the USDA’s January report to provide the bullish news necessary to turn prices higher was disappointing and the market remains at risk of remaining in the same pattern. With that being said, managed funds continue to hold a sizable net short position, which could trigger a short covering rally if a bullish catalyst enters the scene. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

  • No new action is recommended for 2024 corn. Following the January USDA Supply and Demand update, Dec ’24 broke through the bottom end of the 485 ¾ to 602 range that had been in place since February ’22. While this is a disappointing development, bear spreading has allowed Dec ’24 to maintain more of its value versus old crop, as traders attempt to price in a larger 2023 carryout with more uncertainty remaining for the 2024 crop. Grain Market Insider continues to watch for signs of a change in the current trend to look at recommending making additional sales and buying Dec ’24 call options.

  • No Action is currently recommended for 2025 corn. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next year. It will probably be late winter or early spring of 2024 before Grain Market Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following corn recommendations:

  • Selling across the grain markets helped pressure corn futures lower to start the week as bullish news is hard to find. March corn lost 6 cents on the session. Charts stay weak technically, and the March contract established a new contract low daily close of 440 ¼. Prices look poised to test the recent contract trading low of 436 ¾.

  • The USDA released weekly corn inspections during the session. Last week, US exporters shipped 35.5 mb (900,000 mt) of corn. This was up from last week’s total. Total inspections for the 23/24 marketing year are at 616 mb, up 30% year over year.

  • Argentina weather was a focus last week helping support prices, but weather forecasts are looking at decent rainfall potential going into February. This helped pressure both the corn and soybean markets.

  • Brazilian soybean harvest is trending 9-11% complete, which is nearly double the 5-year average. The earlier harvest date should allow Brazil’s key second crop (safrinha) corn to get planted in a timely fashion and a have a full growing season available.

  • Hedge funds continue to grow their large short positions in the corn market. On last week’s Commitment of Trader’s Report, hedge funds held a net short position of 265,285 contracts. This is approaching all-time highs with the corn market in general looking over-supplied and lacking true bullish news.

Above: Since posting a low on January 18, March corn has traded higher from being oversold. The advance appears to have been met with resistance just below 460. If prices turn back lower, initial support on the downside remains near the recent low of 436 ¾, with the next major support level around 415.

Corn Managed Money Funds net position as of Tuesday, Jan 23. Net position in Green versus price in Red. Managers net sold 4,743 contracts between Jan. 17 – 23, bringing their total position to a net short 265,285 contracts.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Front month soybeans recent downside breakout of the 1290 – 1400 range indicates that there is risk that prices may continue to retreat toward 1180, as forecasts for improved South American weather lessen the potential for the record large global carryout to be reduced. Given the potential of a downside breakout, Grain Market Insider recommended adding to sales as the current price level is still historically good. It’s been disappointing how the market has been unable to push higher despite the South American production concerns. Because of that, Grain Market Insider’s concern is that, if the weather pattern doesn’t remain adverse, the path of least resistance could be lower. Grain Market Insider will continue to look at additional sales opportunities, as well as potential re-ownership strategies.

  • No new action is recommended for the 2024 crop. The Nov ’24 contract recently broke through the downside of the 1233 – 1320 range that has been in place since the end of July. Given this downside breakout and considering South American weather appears to be improving, Nov ’24 runs the risk of retreating towards 1150 unless another bullish catalyst enters the market. If prices find support and turn back higher, Grain Market Insider recently recommended buying Nov ’24 1280 and 1360 calls to give you confidence to make sales against anticipated 2024 production and to protect any sales in an extended rally. Grain Market Insider will also continue to watch for any sales opportunities.

  • No Action is currently recommended for 2025 Soybeans. Grain Market Insider isn’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 lower in the front months but only 5 cents lower in the November contract with pressure coming from lower soybean oil and the news of Chinese real estate developer, Evergrande, being court-ordered to liquidate the company. This news adds to the concern regarding the Chinese economy and their demand.

  • Export inspections for soybeans were within trade expectations at 32.7 mb for the week ending January 25 which is down 24% year over year. Total inspections for 23/24 are at 1,017 mb, with the USDA estimating total exports at 1,755 mb, a decrease of 12%.

  • Weather in Argentina has been hot and dry but is expected to turn around in a few days with increased moisture and cooler temperatures. Brazil has received too much rain in the northern region but has recently dried up opening the door for harvest. Brazil is now 9% done with harvest which is above last year’s 4.4%.

  • Friday’s CFTC report showed funds as sellers of 15,045 contracts of soybeans which increased their net short position to 91,842 contracts last week. Funds currently hold the second largest net short position in history with corn, soybeans, and wheat combined. The last time they were this short was May of 2019.

Above: The recent rally from oversold conditions was rejected by overhead resistance around 1250. The turn lower has the market on track to test the recent 1201 low. If the market breaks that support, it may run the risk of testing the November ’21 low of 1181.

Soybean Managed Money Funds net position as of Tuesday, Jan. 23. Net position in Green versus price in Red. Money Managers net sold 15,045 contracts between Jan. 17 – 23, bringing their total position to a net short 91,842 contracts.

Wheat

Market Notes: Wheat

  • News that a major Chinese real-estate firm, Evergrande, was forced by the courts to liquidate may have played a role in today’s weakness in the commodity complex. This corporation was said to owe $300 billion in debt, and with the existing concerns about China’s economy, this collapse just adds fuel to the fire.

  • According to the Egyptian supply minister, Egypt may only import 7 mmt of wheat this year, and that their reserves are sufficient for over four months. Historically they import about 12 mmt of wheat per year. What makes this statement a bit puzzling is the fact that drought is said to be expanding in north African countries, including Egypt. In any case, his statements may have offered some weakness to the futures market.

  • Over the weekend it was reported that three US military service members were killed in drone attacks in Jordan. President Biden was quoted as saying “we shall respond”. What exactly this entails is unclear. However, there is concern that this will increase the tension in the Middle East and bring the US into the war. This may lend some support to the crude oil and wheat markets but could also continue to raise freight costs if ships continue to avoid the Suez Canal.

  • Farmers unions in France have reportedly threatened to blockade highways surrounding Paris. There have also been alleged calls for a siege of the capital. French farmers have been protesting higher production costs, fewer subsidies, as well as strict European regulations. According to interior minister Gerald Darmanin, about 15,000 police officers will be positioned to prevent tractors from entering Paris and other cities.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. The wheat market has continued to be dominated by lower world export prices that have stymied US export sales and depressed US prices. In early December, Grain Market Insider recommended taking advantage and making a sale on a short covering rally which was sparked by several Chinese purchases of US wheat. Since then, China has been silent in the US wheat export market, and prices remain somewhat elevated. Any remaining 2023 soft red winter wheat should be getting priced into market strength with the goal of having zero bushels unpriced by the end of January. 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 early December, the July ’24 contract has traded mostly sideways to slightly lower after its brief short covering runup on Chinese buying. Although China has since been absent from the US wheat export market, managed funds continue to hold a sizeable, short position that could trigger another short covering rally if a bullish impetus enters the market. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. Back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

  • No action is currently recommended for 2025 Chicago Wheat. Since early September, the July ’25 contract has been rangebound, largely between 650 on the bottom and 675 on the top. Grain Market Insider’s strategy for the 2025 crop year up to this point has been to sit tight. Though if prices break out of the topside of this range toward the 690 – 705 area, we will consider taking advantage of the rally and making sales recommendations.

To date, Grain Market Insider has issued the following Chicago wheat recommendations:

Above: The recent rally came within earshot of the 620 – 625 resistance area and was rejected. For now, minor nearby support may be found near the 100-day moving average. If that breaks, the market runs the risk of receding further with the next downside support near 573 and again around 556.

Chicago Wheat Managed Money Funds net position as of Tuesday, Jan. 23. Net position in Green versus price in Red. Money Managers net bought 4,034 contracts between Jan. 17 – 23, bringing their total position to a net short 64,541 contracts.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop.  After posting an 80-cent rally in late November and early December, front month KC wheat has languished and drifted lower. Managed funds continue to carry a significant short position, and even though bullish headwinds like weak US demand and low world wheat prices remain, this could fuel a return to higher prices as winter weather risks add volatility to the market. Grain Market Insider’s strategy is to look for price appreciation this winter, as weather becomes a more prominent market mover, and may consider suggesting additional sales if prices become over-extended.

  • No new action is recommended for 2024 KC wheat. At the end of August, the July ’24 contract broke out of roughly a one-year trading range and stepped down to a 609 ¼ low in late November, largely driven by managed fund selling in the front month on weak US export demand and lower world wheat prices. Since then, the funds covered part of their large short position which also rallied prices in the July ’24 contract. While bearish headwinds remain, managed funds continue to hold a sizable, short position, and price seasonals remain positive for adding weather risk premium. These are two factors that could fuel additional short covering and rally prices in the months ahead. Back in August, Grain Market Insider recommended buying Jul’24 KC wheat 660 puts to protect the downside following the range breakout. As the market recently got further extended into oversold territory and the July contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. Moving forward, Grain Market Insider is prepared to recommend exiting the last 25% on any further supportive market developments.

  • No action is currently recommended for 2025 KC Wheat. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next fall. It will probably be mid-winter before Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following KC recommendations:

Above: March KC wheat is showing signs of being overbought, and the recent rally appears to have culminated in a bearish reversal right around the 50-day moving average. Currently, upside resistance sits near the recent high of 641, and if prices follow through and trade lower, the next major support level remains between 595 and 575.

KC Wheat Managed Money Funds net position as of Tuesday, Jan. 23. Net position in Green versus price in Red. Money Managers net bought 312 contracts between Jan. 17 – 23, bringing their total position to a net short 38,340 contracts.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop. For the last six months, front month Minneapolis wheat has slowly stair-stepped lower with little bullish news to move markets higher. During this time, prices have pierced the 50-day moving average just once, and managed funds have established and maintained a record (or near record) short position. Although bullish headwinds remain, support may be building in the 670 – 675 area, and the large fund net short position could fuel a short-covering rally if a bullish catalyst enters the scene to move prices to close above the 50-day moving average. Grain Market Insider’s strategy is to look for a modest retracement of the July high and consider additional sales around 725 – 750.

  • No new action is recommended for 2024 Minneapolis wheat. Much like the front month contracts, Sept ’24 has been in a downward trend since last summer. And just as Sept ’24 has been influenced to the downside by the front months, it could be similarly influenced to the upside by the front months if a bullish impetus enters the scene and triggers a short covering rally due to the fund’s large short position. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside following a 1-year range breakout in KC wheat, and in November recommended exiting 75% of the originally recommended position as July ’24 KC wheat showed signs of support around 630. While in the same time frame, Grain Market Insider also recommended making an additional sale as the Sept ’24 Minneapolis contract broke long time 743 support. For now, Grain Market Insider remains prepared to recommend exiting the last 25% of the open puts on any further supportive market developments.

  • No action is currently recommended for the 2025 Minneapolis wheat crop. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next year. It will probably be mid-winter 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 in the March contract appears to be stalling, with the market consolidating between the upper 690s and low 700s. Initial resistance now sits just above the market between 710 and 720, with heavier resistance around 735. Below the market support remains near 669.

Minneapolis Wheat Managed Money Funds net position as of Tuesday, Jan. 23. Net position in Green versus price in Red. Money Managers net sold 579 contracts between Jan. 17 – 23, bringing their total position to a net short 30,290 contracts.

Other Charts / Weather

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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1-26 End of Day: Improved South American Outlooks Pull Markets Lower

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Weakness in neighboring wheat and soybeans spilled over to the corn market and added negativity to the market that closed lower in reaction to higher-than-expected estimates of Argentina’s corn crop.

  • The Buenos Aires Grain Exchange also raised its estimate of Argentina’s soybean crop. That news, plus a wetter Argentine forecast, weighed heavily on March soybeans and meal. March meal closed at its lowest level in almost two years.

  • Soybean oil was the strong leg of the soybean complex and closed with a 0.40 cent gain on the day and well off its lows. Gains in bean oil weren’t enough to support Board crush margins though, which fell for the fourth day in a row.

  • All three wheat classes closed in negative territory today on a lack of bullish news. Both Chicago and KC saw the largest losses, though buying entered the market at midday and helped all three classes settle well off their lows.

  • To see the US 8-14 day temperature and precipitation outlooks, and the 2-week GFS Precipitation Forecast for South America courtesy of the National Weather Service, 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

  • No new action is recommended for 2023 corn. Front month corn has languished in a sideways to lower trend since printing a high in October, with a general lack of bullish news and an estimated US carryout over 2.1 billion bushels. The failure of the USDA’s January report to provide the bullish news necessary to turn prices higher is disappointing and the market remains at risk of remaining in the same pattern. With that being said, the market does show signs of being oversold, and managed funds hold a sizable net short position, which could trigger a short covering rally if a bullish catalyst enters the scene. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

  • No new action is recommended for 2024 corn. Following the January USDA Supply and Demand update, Dec ’24 broke through the bottom end of the 485 ¾ to 602 range that had been in place since February ’22. While this is a disappointing development, bear spreading has allowed Dec ’24 to maintain more of its value versus old crop, as traders attempt to price in a larger 2023 carryout with more uncertainty remaining for the 2024 crop. Additionally, Dec ’24 does show signs of being oversold, which is supportive if a bullish catalyst enters the scene. Grain Market Insider continues to watch for signs of a change in the current trend to look at recommending making additional sales and buying Dec ’24 call options.

  • No Action is currently recommended for 2025 corn. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted two springs from now. It will probably be late winter or early spring of 2024 before Grain Market Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following corn recommendations:

  • Corn futures traded lower for the second consecutive session as selling pressure in the wheat and soybean market spilled over into the corn market on Friday. March lost 5 ½ cents on the day but did finish ¾ cent higher on the week.

  • Argentina weather became a focus this week with a hotter, drier forecast, but early season weather allowed the Buenos Aires Grain exchange to raise their corn crop outlook for the season by 1.5 mmt to 56.5 mmt, which would reflect record production.

  • Corn export shipments through January 18 totaled 605 mb, up 28% from last year. Shipments last week were 36.7 mb, below the required 45.4 mb needed to reach the USDA target of 2.100 bb. Overall, the corn shipment pace is still ahead of schedule to reach the USDA target.

  • Corn basis may flatten out in the days ahead as producer selling did pick up on the recent corn rally. The warmer weather and snow melt across the Midwest likely aided corn movement into the cash market.

  • Hedge funds were holding a large short position in the corn market, over 260,000 net short contracts as of last week Tuesday. With the strength in the market this week, funds have likely begun working out of some of these short positions. The corn market in general looks over-supplied and lacking true bullish news.

Above: Since posting a low on January 18, March corn has traded higher from being oversold. The advance appears to have been met with resistance just below 460. If prices turn back lower, initial support on the downside remains near the recent low of 436 ¾, with the next major support level around 415.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Front month soybeans recent downside breakout of the 1290 – 1400 range indicates that there is risk that prices may continue to retreat toward 1180, as forecasts for improved South American weather lessen the potential for the record large global carryout to be reduced. Given the potential of a downside breakout, Grain Market Insider recently recommended adding to sales as the current price level is still historically good. It’s been disappointing how the market has been unable to push higher despite the South American production concerns. Because of that, Grain Market Insider’s concern is that, if the weather pattern doesn’t remain adverse, the path of least resistance could be lower. Grain Market Insider will continue to look at additional sales opportunities, as well as potential re-ownership strategies.

  • No new action is recommended for the 2024 crop. The Nov ’24 contract recently broke through the downside of the 1233 – 1320 range that has been in place since the end of July. With this downside breakout, and considering the bullish influence of adverse South American weather, which appears to be improving, Nov ’24 runs the risk of retreating towards 1150 unless another bullish catalyst enters the market.  If prices find support and turn back higher, Grain Market Insider recently recommended buying Nov ’24 1280 and 1360 calls to give you confidence to make sales against anticipated 2024 production and to protect any sales in an extended rally. Grain Market Insider will also continue to watch for any sales opportunities.

  • No Action is currently recommended for 2025 Soybeans. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted two springs from now, 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 lower to finish the week as South American weather improves and the lower production estimates begin to come into question. Some analysts are raising their earlier predictions for Brazilian estimates, while Argentina raises theirs as well.

  • For the week, March soybeans ended up losing 4 cents, March soybean meal lost $7.50, and March soybean oil gained 0.03 cents. Soybeans trended higher for the beginning of the week on thoughts that South America would be drier over the following 10 days, but prices turned around on Thursday following disappointing export sales and an Argentinian forecast that turned wetter.

  • With Argentina’s good growing season so far, the Buenos Aires Grain Exchange updated its estimate for the soybean crop to 52.5 mmt from 52 mmt previously, but they are taking into consideration the risk of drier weather through the rest of the month. Brazil’s production may not be as short as some had anticipated as now that harvest is moving along, cash prices have fallen significantly and are now cheaper than US offers.

  • This morning, the USDA reported a flash sale of 100,000 tons of soybean meal to unknown destinations for the 23/24 marketing year. Last week’s export sales for soybeans were on the lower end of expectations with an increase of 20.6 mb for 23/24. This was down 28% from the previous week but up 6% from the prior 4-week average.

Above: The recent rally from oversold conditions was rejected by overhead resistance around 1250. The turn lower has the market on track to test the recent 1201 low. If the market breaks that support, it may run the risk of testing the November ’21 low of 1181.

Wheat

Market Notes: Wheat

  • The wheat market, along with the rest of the grain complex closed with losses for the day. All three US wheat classes traded lower, with Chicago and KC leading the way with double digit losses. Matif wheat futures also settled sharply lower, offering no support. This price action may have been primarily driven by headlines that Chinese authorities have, for the first time, approved imports of wheat from Argentina.

  • In other global news, there are reports that China is talking with Iran and encouraging them to reduce attacks on vessels in the Red Sea. If more ships begin utilizing the Suez Canal again, it could reduce global freight and shipping costs.

  • Argentina’s Buenos Aires Grain Exchange increased their corn and soybean production estimates; wheat production was left unchanged at 15.1 mmt, but harvest is now reported to be 100% complete. This year’s 15.1 mmt crop represents about a 24% increase from last year’s 12.2 mmt crop when drought was a much bigger issue.

  • One factor that may have added pressure today is the forecast for more rain and snow in the central and southern plains states expected next week. This should help soil moisture levels, may lead to much better growing conditions this spring compared to last year. On the other side of the coin, drought is said to be increasing in northern Africa, meaning that those nations may need to import more wheat.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. The wheat market has continued to be dominated by lower world export prices that have stymied US export sales and depressed US prices. In early December, Grain Market Insider recommended taking advantage and making a sale on a short covering rally which was sparked by several Chinese purchases of US wheat. Since then, China has been silent in the US wheat export market, and prices remain somewhat elevated. Any remaining 2023 soft red winter wheat should be getting priced into market strength with the goal of having zero bushels unpriced by the end of January. 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 early December, the July ’24 contract has traded mostly sideways to slightly lower after its brief short covering runup on Chinese buying. Although China has since been absent from the US wheat export market, managed funds continue to hold a sizeable, short position that could trigger another short covering rally if a bullish impetus enters the market. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. Back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

  • No action is currently recommended for 2025 Chicago Wheat. Since early September, the July ’25 contract has been rangebound, largely between 650 on the bottom and 675 on the top. Grain Market Insider’s strategy for the 2025 crop year up to this point has been to sit tight. Though if prices break out of the topside of this range toward the 690 – 705 area, we will consider taking advantage of the rally and making sales recommendations.

To date, Grain Market Insider has issued the following Chicago wheat recommendations:

Above: The recent rally came within earshot of the 620 – 625 resistance area and was rejected. For now, minor nearby support may be found near the 100-day moving average. If that breaks, the market runs the risk of receding further with the next downside support near 573 and again around 556.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop.  After posting an 80-cent rally in late November and early December, front month KC wheat has languished and drifted lower while retracing about 50% of the upward move. Managed funds continue to carry a significant short position, and even though bullish headwinds like weak US demand and low world wheat prices remain, this could fuel a return to higher prices as winter weather risks add volatility to the market. Grain Market Insider’s strategy is to look for price appreciation this winter, as weather becomes a more prominent market mover, and may consider suggesting additional sales if prices become over-extended.

  • No new action is recommended for 2024 KC wheat. At the end of August, the July ’24 contract broke out of roughly a one-year trading range and stepped down to a 609 ¼ low in late November, largely driven by managed fund selling in the front month on weak US export demand and lower world wheat prices. Since then, the funds covered part of their large short position which also rallied prices in the July ’24 contract. While bearish headwinds remain, managed funds continue to hold a sizable, short position, and price seasonals remain positive for adding weather risk premium. These are two factors that could fuel additional short covering and rally prices in the months ahead. Back in August, Grain Market Insider recommended buying Jul’24 KC wheat 660 puts to protect the downside following the range breakout. As the market recently got further extended into oversold territory and the July contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. Moving forward, Grain Market Insider is prepared to recommend exiting the last 25% on any further supportive market developments.

  • No action is currently recommended for 2025 KC Wheat. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next fall. It will probably be mid-winter before Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following KC recommendations:

Above: March KC wheat is showing signs of being overbought, and the recent rally appears to have culminated in a bearish reversal right around the 50-day moving average. Currently, upside resistance sits near the recent high of 641, and if prices follow through and trade lower, the next major support level remains between 595 and 575.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop. For much of the second half of last year, driven mostly by fund selling and slow US export demand, front month Minneapolis wheat slowly stair-stepped lower until hitting the November low. During this time, managed funds also established a record net short position. Since then, with the market mostly sideways, the November low of 697 ½ has held, and prices have pierced the 50-day moving average just once. Although bearish headwinds remain, the large fund net short position could fuel a short-covering rally if a bullish catalyst enters the scene to move prices to close above the 50-day moving average. Back in June, Grain Market Insider made a sales recommendation during the July rally near 820, and with that sale in place, Grain Market Insider’s strategy is to look for price appreciation this winter with an eye on considering additional sales around 725 – 775, and again north of 800.

  • No new action is recommended for 2024 KC wheat. In early December the July ’24 contract posted a 70-cent rally mostly on short covering activity in the front month contracts. Since then, July ’24 has drifted lower as growing conditions have seen improvement. Still, much of the growing season remains, and managed funds continue to carry a significant short position in old crop. Even though bullish headwinds remain, this could fuel another short covering rally if any production concerns come to the forefront. Back in August, Grain Market Insider recommended buying Jul ’24 KC wheat 660 puts to protect the downside. As the market got further extended into oversold territory and July ’24 showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. Grain Market Insider remains prepared to recommend exiting the last 25% on any further supportive market developments.

  • No action is currently recommended for the 2025 Minneapolis wheat crop. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted two springs from now. It will probably be mid-winter 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 in the March contract appears to be stalling, with the market consolidating between the upper 690s and low 700s. Initial resistance now sits just above the market between 710 and 720, with heavier resistance around 735. Below the market support remains near 669.

Other Charts / Weather

Brazil 2-week forecast total precipitation courtesy of the National Weather Service, Climate Prediction Center.

Argentina 2-week forecast total precipitation courtesy of the National Weather Service, Climate Prediction Center.

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1-25 End of Day: Wheat Continues Higher, Row Crops Lower on Thursday

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Corn futures were lower today for the first time this week. Late day strength in the wheat market helped corn to close well off its daily low.

  • Soybeans fell on the day after softer than expected export sales this morning. Brazilian cash market weakness added pressure as harvest is just getting underway.

  • Soybean meal and soybean oil futures both were lower on the day as crush margins continue to narrow.

  • All three wheat classes closed in the green once again on Thursday. KC wheat led the gains today as continuous KC wheat futures closed above the 50-day moving average for the first time in 2024.

  • To see the US Corn Areas in Drought Map as of January 23, 2024, and the 1-week GFS Ensemble Precipitation Forecast for South America courtesy of the USDA Office of the Chief Economist, the World Agricultural Outlook Borad 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

  • No new action is recommended for 2023 corn. Front month corn has languished in a sideways to lower trend since printing a high in October, with a general lack of bullish news and an estimated US carryout over 2.1 billion bushels. The failure of the USDA’s January report to provide the bullish news necessary to turn prices higher is disappointing and the market remains at risk of remaining in the same pattern. With that being said, the market does show signs of being oversold, and managed funds hold a sizable net short position, which could trigger a short covering rally if a bullish catalyst enters the scene. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

  • No new action is recommended for 2024 corn. Following the January USDA Supply and Demand update, Dec ’24 broke through the bottom end of the 485 ¾ to 602 range that had been in place since February ’22. While this is a disappointing development, bear spreading has allowed Dec ’24 to maintain more of its value versus old crop, as traders attempt to price in a larger 2023 carryout with more uncertainty remaining for the 2024 crop. Additionally, Dec ’24 does show signs of being oversold, which is supportive if a bullish catalyst enters the scene. Grain Market Insider continues to watch for signs of a change in the current trend to look at recommending making additional sales and buying Dec ’24 call options.

  • No Action is currently recommended for 2025 corn. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted two springs from now. It will probably be late winter or early spring of 2024 before Grain Market Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following corn recommendations:

  • Weekly corn export sales were within expectations at 954,800 MT (37.6 mb) for the 2023-24 marketing year. This is the key export window for US corn exports over the next couple months, and the market is looking for sales numbers to grow. Current total sales commitments are up 29% over last year.

  • China stays absent from the US corn export market, but Mexico has been buying corn at a record pace.  As of January 18th, Mexico has bought 15.3 MMT (602 mb), well above previous high from 2022. Mexico is responsible for 47% of all US corn sales for the current 2023/24 marketing year.

  • Weather forecasts in Argentina have turned hotter and drier going into February. The change in weather has been enough to trigger some short covering, supporting the market this week. Argentina is forecasted to produce a record corn crop this season after two years of drought.

  • Hedge funds were holding a large short position in the corn market, over 260,000 net short contracts as of last week Tuesday. Funds have likely begun working out of some of these short positions with the strength in the market this week. The corn market in general looks over-supplied and lacking true bullish news.

Above: Since posting a low on January 18, March corn has traded higher from being oversold and appears on track to test nearby resistance around 460. If prices turn back lower, initial support on the downside remains near the recent low of 436 ¾, with the next major support level around 415.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Front month soybeans recent downside breakout of the 1290 – 1400 range indicates that there is risk that prices may continue to retreat toward 1180, as forecasts for improved South American weather lessen the potential for the record large global carryout to be reduced. Given the potential of a downside breakout, Grain Market Insider recently recommended adding to sales as the current price level is still historically good. It’s been disappointing how the market has been unable to push higher despite the South American production concerns. Because of that, Grain Market Insider’s concern is that, if the weather pattern doesn’t remain adverse, the path of least resistance could be lower. Grain Market Insider will continue to look at additional sales opportunities, as well as potential re-ownership strategies.

  • No new action is recommended for the 2024 crop. The Nov ’24 contract recently broke through the downside of the 1233 – 1320 range that has been in place since the end of July. With this downside breakout, and considering the bullish influence of adverse South American weather, which appears to be improving, Nov ’24 runs the risk of retreating towards 1150 unless another bullish catalyst enters the market.  If prices find support and turn back higher, Grain Market Insider recently recommended buying Nov ’24 1280 and 1360 calls to give you confidence to make sales against anticipated 2024 production and to protect any sales in an extended rally. Grain Market Insider will also continue to watch for any sales opportunities.

  • No Action is currently recommended for 2025 Soybeans. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted two springs from now, 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 significantly lower as a result of softer than expected weekly export sales, scattered showers in Brazil, and a Brazilian cash market that could be pointing to a larger crop than many analysts have been predicting.

  • To start the day, soybean meal was higher and had been trending higher since last Thursday, but reversed lower after export sales were released. Soybean oil was lower as well despite a very strong palm oil market, but it did not help that palm oil was not trading today due to a holiday. With the value of soy products falling, crush margins are narrowing which could slow the record crush numbers that have been recently reported.

  • In Brazil, weather has improved, and even Mato Grosso and Parana are beginning to receive scattered showers again. There has been a lot of talk among analysts of a shrinking Brazilian soy crop, but recent rains and a steep decline in basis today as harvest ramps up may be indicating that total production will be closer to the USDA’s estimate of 157 mmt than the lower estimates by analysts of 145 mmt or below.

  • Export sales for soybeans were on the lower end of expectations with an increase of 20.6 mb for 23/24. This was down 28% from the previous week but up 6% from the prior 4-week average. Last week’s export shipments for soybeans of 41.1 mb were well above the 23.9 mb needed each week to achieve the USDA’s estimates. Primary destinations were to the Philippines, Japan, and South Korea.

Above: After posting the 1201 low, short covering from oversold conditions has enabled March soybeans to rebound. Overhead resistance remains in the 1250 area and again near 1290. If prices turn lower, support comes in around 1200 and then near the November ’21 low of 1181.

Wheat

Market Notes: Wheat

  • After trading both sides of neutral, all three US wheats closed higher. This marks six higher closes out of the past seven sessions for March Chicago wheat. The exception was on Tuesday when prices settled unchanged. This continued recovery for wheat comes despite today’s rebound in the US dollar, as well as lower corn and sharply soybean futures.

  • The USDA reported an increase of 16.6 mb of wheat export sales for 23/24 as well as an increase of 2.2 mb for 24/25. Shipments last week at 11.9 mb were below the 17.0 mb pace needed per week to reach the USDA’s goal of 725 mb. However, commitments are now at 608 mb which is slightly above the USDA’s pace.

  • One of the factors that may have supported the wheat market today is talk that drought in northern Africa could expand, requiring them to import more wheat. A neutral to mostly higher close for Paris milling wheat futures also offered some support.

  • SovEcon has estimated the Russian 2024 wheat crop at 92.2 mmt. For reference the 2023 crop totaled 92.8 mmt. Though this is a decline, it is only a 0.6% drop and is unlikely to have a major impact if true. In addition, SovEcon’s projection for 2024 was actually an increase from their previous estimate by 0.9 mmt. For the time being, Russia is likely to remain aggressive on exports, which may limit upside potential for futures.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. The wheat market has continued to be dominated by lower world export prices that have stymied US export sales and depressed US prices. In early December, Grain Market Insider recommended taking advantage and making a sale on a short covering rally which was sparked by several Chinese purchases of US wheat. Since then, China has been silent in the US wheat export market, and prices remain somewhat elevated. Any remaining 2023 soft red winter wheat should be getting priced into market strength with the goal of having zero bushels unpriced by the end of January. 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 early December, the July ’24 contract has traded mostly sideways to slightly lower after its brief short covering runup on Chinese buying. Although China has since been absent from the US wheat export market, managed funds continue to hold a sizeable, short position that could trigger another short covering rally if a bullish impetus enters the market. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. Back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

  • No action is currently recommended for 2025 Chicago Wheat. Since early September, the July ’25 contract has been rangebound, largely between 650 on the bottom and 675 on the top. Grain Market Insider’s strategy for the 2025 crop year up to this point has been to sit tight. Though if prices break out of the topside of this range toward the 690 – 705 area, we will consider taking advantage of the rally and making sales recommendations.

To date, Grain Market Insider has issued the following Chicago wheat recommendations:

Above: Since uncovering support around 573, March Chicago wheat has rallied through both the 100 and 50-day moving averages and is on track to test the 620 – 625 resistance area. If prices turn back lower, initial support remains near 573, with the next major support level around 556.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop.  After posting an 80-cent rally in late November and early December, front month KC wheat has languished and drifted lower while retracing about 50% of the upward move. Managed funds continue to carry a significant short position, and even though bullish headwinds like weak US demand and low world wheat prices remain, this could fuel a return to higher prices as winter weather risks add volatility to the market. Grain Market Insider’s strategy is to look for price appreciation this winter, as weather becomes a more prominent market mover, and may consider suggesting additional sales if prices become over-extended.

  • No new action is recommended for 2024 KC wheat. At the end of August, the July ’24 contract broke out of roughly a one-year trading range and stepped down to a 609 ¼ low in late November, largely driven by managed fund selling in the front month on weak US export demand and lower world wheat prices. Since then, the funds covered part of their large short position which also rallied prices in the July ’24 contract. While bearish headwinds remain, managed funds continue to hold a sizable, short position, and price seasonals remain positive for adding weather risk premium. These are two factors that could fuel additional short covering and rally prices in the months ahead. Back in August, Grain Market Insider recommended buying Jul’24 KC wheat 660 puts to protect the downside following the range breakout. As the market recently got further extended into oversold territory and the July contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. Moving forward, Grain Market Insider is prepared to recommend exiting the last 25% on any further supportive market developments.

  • No action is currently recommended for 2025 KC Wheat. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next fall. It will probably be mid-winter before Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following KC recommendations:

Above: With little bullish news in the market, KC wheat has been drifting sideways to lower since the middle of December with the 50-day moving average acting as nearby resistance.  If bullish news does enter the scene to move prices higher, major resistance beyond the 50-day moving average lies between 650 and 678. Otherwise, major support below the market remains between 595 and 575.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop. For much of the second half of last year, driven mostly by fund selling and slow US export demand, front month Minneapolis wheat slowly stair-stepped lower until hitting the November low. During this time, managed funds also established a record net short position. Since then, with the market mostly sideways, the November low of 697 ½ has held, and prices have pierced the 50-day moving average just once. Although bearish headwinds remain, the large fund net short position could fuel a short-covering rally if a bullish catalyst enters the scene to move prices to close above the 50-day moving average. Back in June, Grain Market Insider made a sales recommendation during the July rally near 820, and with that sale in place, Grain Market Insider’s strategy is to look for price appreciation this winter with an eye on considering additional sales around 725 – 775, and again north of 800.

  • No new action is recommended for 2024 KC wheat. In early December the July ’24 contract posted a 70-cent rally mostly on short covering activity in the front month contracts. Since then, July ’24 has drifted lower as growing conditions have seen improvement. Still, much of the growing season remains, and managed funds continue to carry a significant short position in old crop. Even though bullish headwinds remain, this could fuel another short covering rally if any production concerns come to the forefront. Back in August, Grain Market Insider recommended buying Jul ’24 KC wheat 660 puts to protect the downside. As the market got further extended into oversold territory and July ’24 showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. Grain Market Insider remains prepared to recommend exiting the last 25% on any further supportive market developments.

  • No action is currently recommended for the 2025 Minneapolis wheat crop. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted two springs from now. It will probably be mid-winter before Grain Market Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following Minneapolis wheat recommendations:

Above: Since the March contract closed below 700 support in early January, the 700 area has acted as resistance for the recent rally. If prices close above that area, the next areas of resistance may come in between 721 and 734. Otherwise, below the market support remains near 669.

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