|

3-14 End of Day: Reports of More Chinese Cancellations Hit the Wheat Market

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Despite strong weekly export sales that came in near the top end of expectations and a flash corn sale to Mexico. The corn market came under pressure from improved rain chances in Brazil, lower wheat and a weakening soybean market.

  • The soybean complex ended the day mixed with relatively small net changes. Improved rain chances in Brazil and mediocre export sales contributed to the midday decline that brought all three legs of the complex toward the bottoms of their respective ranges into the close.

  • Reports of more Chinese wheat purchase cancellations weighed heavily on the wheat complex today as all three wheat classes closed in the red. US weekly export sales did little to help as they came in at the low end of expectations and included 3.9 mb of US cancellations by China.

  • To see the current corn and winter wheat areas in drought, the updated US 6 – 10 day temperature and precipitation outlooks, and the percent of normal 2-week precipitation forecast for South America, courtesy of the NWS, CPC, NOAA, and NDMC, scroll down to the other Charts/Weather section.

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

Corn

Corn Action Plan Summary

In late February, after languishing in a downtrend that began last October and managed funds posting a record net short position exceeding 340,000 contracts, corn posted a bullish key reversal. Since that time, the market has rallied as the funds covered some of their short positions, though they remain heavily short the market, which could fuel an extended rally as we head into the uncertainty of the spring planting window.

  • No new action is recommended for 2023 corn. The recommendation for now is to hold off on additional sales until May corn recovers back toward the 500 level. If you need to move bushels for cash or logistics reasons, consider re-owning any sold bushels with September call options.

  • No new action is recommended for 2024 corn. Given the amount of time and uncertainty that remains to market the 2024 crop, we will consider recommending additional sales on a retracement toward the low to mid 500 level.

  • No Action is currently recommended for 2025 corn. For now, we aren’t considering any recommendations at this time for the 2025 crop that will be planted next year. It will probably be spring or summer 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 and weak price action moved back into the corn market as May corn futures traded 7 ½ cents lower on the day. For the week, May corn futures are trading 6 cents lower going into Friday trade. March futures expired today with final trades at 422 ½.

  • Both US and Brazilian corn prices were pressured by improved forecasts for rain in the key production area of Brazil. Recent dry and hot temperature forecasts have pushed corn prices higher, adding some weather premium to the market.

  • The corn market was limited by strong selling pressure in the wheat market. A report that China cancelled or delayed shipment of nearly 1 mmt of Australian wheat pressured global wheat prices.

  • Weekly export sales have stayed supportive of the corn markets. The USDA announced new sales last week totaling 50.5 mb (1.283 mmt) in the weekly export sales report. This has total sales commitments at 1.595 billion bushels, up 27% from last year. Japan was the largest buyer of US corn last week.

  • The USDA announced a flash export sale of corn to Mexico this morning. Mexico purchased 3.8 mb (110,000 mt) of corn for the 23/24 marketing year as Mexico purchases remain strong and at record historical levels.

Above: On March 7th the corn market closed above the 20-day moving average for the first time since late December. If it can push through and close above the 435 – 445 resistance area it could test the January high of 452 ¼. If they fall back, and close below 421, the bottom of the recent range, then they may slide to test downside support between 400 and 410.

Soybeans

Soybeans Action Plan Summary

Since old crop soybeans broke out of the 1290 – 1400 range in January, prices appear to have made a near term low. Managed funds have also established a record net short position for this time of year, and world carryout has dropped according to the USDA. While new lows could still be made, US planting is not far off, and the funds current short position could fuel an extended short covering rally on a smaller South American crop, lower world soybean carryout, and potential US weather concerns.

  • No new action is recommended for 2023 soybeans. The current recommendation is to hold off on making additional sales until prices post a modest 30% retracement back toward the 2022 high of 1759.

  • No new action is recommended for the 2024 crop. Considering the amount of uncertainty that lies ahead with the 2024 soybean crop, we recommended back in December buying Nov ’24 1280 and 1360 calls to give you confidence to make sales against anticipated production and to protect any sales in an extended rally. Based on our research, the possibility remains that prices could retest the upper 1300 range near the 2022 highs going into spring/summer, at which point we would consider recommending additional sales.

  • No Action is currently recommended for 2025 Soybeans. We currently aren’t considering any recommendations at this time for the 2025 crop that will be planted next year, and it may be some time before conditions are conducive to consider making any recommendations. Be patient as we monitor the markets for signs of improvement.

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

  • The trade in soybeans was volatile today as May futures rallied sharply above the 50-day moving average and at one point were up as much as 21 cents. There has been some early support with CONAB’s production estimates far lower than the USDA’s, but exports today were soft. Soybean meal ended the day higher while soybean oil was lower.

  • For the week ending March 7, the USDA reported an increase of 13.8 mb of soybean sales for 23/24 and an increase of 3.5 mb for 24/25. This was on the lower end of trade expectations and puts soybean sales down 20% from the previous year. Although last week’s export shipments of 34.8 mb were well above the 16.5 mb needed each week to meet the USDA’s trade expectations. Primary destinations were to China, Germany, and Mexico.

  • In Brazil, farmers have taken advantage of the soybean rally and have been more active in their sales when previously, many were holding back due to low premiums. The increase in farmer selling partially stifled today’s rally, along with a forecast for southern Brazil which is expected to receive more rain as harvest continues.

  • The NOPA crush report for February is seen at 178.058 million bushels which would be a record high for the month of February. This number would be down 4.2% from January’s crush but up 7.6% from the previous year.

Above: After posting a low of 1128 ½ on February 29, soybeans have rallied higher on short covering. The market remains oversold on the weekly chart and continues to provide underlying support. For now, resistance remains between 1190 and 1205, with the next area of heavy resistance between 1225 and 1250 if prices continue higher. Underneath, initial support remains between 1130 and 1140.

Wheat

Market Notes: Wheat

  • The wheat complex finished the day lower across the board for the second day in a row, led by the KC and Chicago contracts. Reports of more Chinese cancellations rocked the wheat market and were likely the primary reason for the day’s decline.

  • It was reported that China cancelled an undisclosed amount of French wheat that was intended for replacement supplies versus new demand. Additionally, they either postponed or canceled upwards of 1 mmt of Australian wheat due to increasing world supplies and lower prices.

  • Adding to the woes of the wheat market, FranceAgriMer reported that French 23/24 ending stocks are expected to be 3.74 mmt. This is up from February’s estimate of 3.5 mmt, and the highest total since the 18/19 marketing year.

  • Moving over to Russia, IKAR, as reported by Interfax, sees Russian wheat exports near a record 50 mmt for the 24/25 season, with a wheat harvest near 93 mmt, marking a 1 mmt increase from IKAR’s November report.

  • The USDA issued its weekly export sales report this morning for the week ending March 7, that showed total net new wheat sales for the 23/24 marketing year at 3.1 mb. The total came in at the low end of expectations and included 3.9 mb of SRW cancellations that were reported previously. As for the 24/25 marketing year, the USDA reported 3.0 mb of new sales.

Chicago Wheat Action Plan Summary

Since the early December runup, Chicago wheat has suffered in a lower trend while going on to make new contract lows. Although the lack of any bullish information has been disappointing, the market is in a significantly oversold condition, and managed funds continue to hold a significant net short position. Either or both could fuel a short covering rally at any time as we head into the more active part of the growing season.

  • No new action is currently recommended for 2023 Chicago wheat. Any remaining 2023 soft red winter wheat should be getting priced into market strength. Grain Market Insider won’t have any “New Alerts” for 2023 Chicago wheat – either Cash, Calls, or Puts, as we have moved focus onto 2024 and 2025 Crop Year Opportunities.

  • No new action is recommended for 2024 Chicago wheat. At the end of August, we recommended purchasing July ‘24 590 puts to prepare for further price erosion, and recently recommended exiting half of those puts to lock in gains and get closer to a net neutral cost on the remaining position. For now, the current recommendation is to hold off on making any additional sales unless the market moves back toward last summer’s highs. At which point, we are prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the remaining July ‘24 590 put position will add a layer of protection if prices erode further.

  • No action is currently recommended for 2025 Chicago Wheat. The strategy for the 2025 crop year remains to hold off on making any sales. Though if prices rally toward the mid-600s, we will consider taking advantage of those better prices to make sales recommendations.

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

Above: After posting a bullish reversal on March 11, prices appear to have stalled around 555 and could retreat toward the support area near the recent low of 523 ½. Below there, further support may be found around 470 – 488. If prices regain their bullish footing, and close above 556, they then could challenge the 50 and 100-day moving averages that coincide with the 585 – 620 congestion area.

KC Wheat Action Plan Summary

Since December’s brief runup, prices have continued to erode as US exports continue to suffer from lower world export prices. Although fundamentals remain weak. Managed funds continue to hold a considerable net short position, and the market is at levels not seen since spring of 2021, which combined could trigger a return to higher prices if any unforeseen risks enter the market.

  • No new action is recommended for 2023 KC wheat crop. The current strategy is to look for price appreciation as weather becomes a more prominent market mover and consider suggesting additional sales if prices make a modest 20% retracement of the 2022 highs back toward the upper 600s

  • No new action is recommended for 2024 KC wheat. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside, and recommended exiting the original position in three separate tranches as the market got further extended into oversold territory to protect any gains that were made. Taking the equity gained from the closed July 660 put position into account, the current strategy for the 2024 crop is to wait for better opportunities and consider recommending additional sales if July ‘24 retraces back toward the January highs in the mid-630s.

  • No action is currently recommended for 2025 KC Wheat. We currently aren’t considering any recommendations at this time for the 2025 crop that will be planted next fall. It may be late spring or summer before Grain Market Insider starts considering the first sales targets.

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

Above: For now, it appears that May KC wheat has rejected the advances above the 50-day moving average and may retreat back toward support around the 551 ½ low with minor nearby support around 570. If prices can penetrate and close above the 50-day moving average, they could still make a run toward the 610 to 640 congestion area.

Mpls Wheat Action Plan Summary

Since last summer, Minneapolis wheat has slowly stair-stepped lower with weaker world prices and 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, the market has become very oversold, and the large fund net short position continues to leave the market susceptible to a short-covering rally at any time.

  • No new action is currently recommended for 2023 Minneapolis wheat. The current strategy is to look for a modest retracement of the July high and consider additional sales in the neighborhood of 675 – 700.

  • No new action is recommended for 2024 Minneapolis wheat. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts (due to their higher liquidity and correlation to Minneapolis), to protect the downside, and recommended exiting the original position in three separate tranches as the market got further extended into oversold territory to protect any gains that were made. From here, the strategy for the 2024 crop is to consider recommending additional sales if Sep ‘24 posts a modest 22% retracement back toward the 2022 highs of 1400.

  • No action is currently recommended for the 2025 Minneapolis wheat crop. We are currently not considering any recommendations at this time for the 2025 crop that will be planted in the spring of next year. It may be late spring or summer before Grain Market Insider starts considering the first sales targets.

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

Above: After breaking out of the consolidation range, there appears to be a rounded bottom formation in May Minneapolis wheat, which suggests that prices could test the 700 – 710 area if they can close above the 50-day moving average and nearby 675 – 680 resistance. If prices turn back lower, nearby support remains near 640, with major support near 600.

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.

|

3-13 End of Day: Markets Close Mixed; Soybeans Find Support from Higher Bean Oil

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • The corn market saw choppy two-sided trade in a tight 6 ¼ cent range and a mixed close with the deferred contracts gaining on the nearby. Weekly corn usage for ethanol remained supportive, though ethanol production slipped from the previous week’s totals.

  • Strength from soybean oil helped May soybeans claw their way to 3 ½ cents higher on the day before settling back to just above unchanged and just below the 50-day moving average.

  • Soybean oil gained on meal again as it closed higher for the third day in a row and challenged its 100-day moving average with support from higher world veg oil prices. Meal, on the other hand, slipped and closed lower in today’s session as the prospect of cheaper South American supplies continues to weigh on US prices.

  • The wheat complex did an about face as all three classes closed lower, giving up yesterday’s advances. A quiet news day, lower Matif wheat, and rumors of more possible Chinese SRW cancellations brought back the sellers and weighed on the market.

  • To see the updated US 7-day precipitation forecast, the US and Brazil NASA-Grace drought indicator maps, and the 2-week precipitation forecast for Brazil, courtesy of the NWS, CPC, NOAA, and NASA-Grace, 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. In late February, after languishing in a downtrend that began last October and managed funds posting a record net short position exceeding 340,000 contracts, front month corn posted a bullish key reversal. Since that time, the market has rallied as the funds covered some of their short positions, though they remain heavily short the market, which could fuel an extended rally as we head into the spring planting window. As planting nears and uncertainties increase, Grain Market Insider will consider recommending additional sales if prices recover back toward the 500 level.

  • No new action is recommended for 2024 corn. After posting a bullish key reversal in late February, Dec ’24 rallied along with front month corn as funds exited some of their record net short position. As we quickly approach the spring planting window, a lot of uncertainty remains, and the near record short position that the funds continue to carry is supportive and could fuel further short covering and higher prices for Dec ’24. Given the amount of time and uncertainty that remains for the 2024 crop, Grain Market Insider will consider recommending additional sales on a retracement toward the low to mid 500 level.

  • 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 springtime of 2024 before Grain Market Insider starts considering the first sales targets.

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

  • The Wednesday price action in corn futures matched Tuesday’s as prices consolidated with a relatively quiet 6 ¼ cent trading range. May corn slipped ½ cent on the session.

  • The weekly ethanol report saw production slip last week to 1.024 million barrels/day, down slightly from the week prior. There were 102.6 million bushels of corn used in last week’s ethanol grind which is still slightly ahead of the pace needed to reach USDA corn usage targets. Ethanol stocks slipped to 25.8 million barrels. 

  • With the recent price rally, the market will be watching if the higher prices impact export sales totals. The USDA will release weekly export sales on Thursday morning. Expectations for new sales to range from 800,000 mt – 1.4 mmt for the current marketing year. Last week, corn export sales reached 1.109 mmt.

  • Brazil’s weather will stay a focus in the corn market. Forecasts for Brazil corn growing regions trending warmer and drier into April help support Brazilian and US corn prices. If weather conditions become less favorable, additional weather premium may be added into the corn market.

  • Managed funds are still holding a large short position in the corn market. The recent price strength has funds covering some of those short positions to take risk off the table with questionable weather forecasts for Brazil and in anticipation of the US planting of this year’s crop.

Above: On March 7th the corn market closed above the 20-day moving average for the first time since late December. If it can push through and close above the 435 – 445 resistance area it could test the January high of 452 ¼. If they fall back, and close below 421, the bottom of the recent range, then they may slide to test downside support between 400 and 410.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Since old crop soybeans broke out of the 1290 – 1400 range in January, prices appear to have made a near term low. Managed funds have also established a record net short position for this time of year, and world carryout has dropped according to the USDA. While new lows could still be made, US planting is not far off, and the funds current short position could fuel an extended short covering rally on a smaller South American crop, lower world soybean carryout, and potential US weather concerns. Should that happen, Grain Market Insider will look at making additional sales if prices post an historically modest 30% retracement back toward the 2022 high of 1759.

  • No new action is recommended for the 2024 crop. Since the beginning of the year, Nov ’24 has tracked alongside the 2023 old crop contracts as South American weather stabilized and the market dealt with bourgeoning domestic supplies and slowing demand. While the decline in prices was disappointing, a near-term low may be in place. With planting season just ahead and plenty of time remaining to market this crop, many unknowns remain that can bring higher prices. 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. Based on our research, the possibility remains that prices could retest the upper 1300 range near the 2022 highs going into spring/summer, at which point Grain Market Insider would 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 finished the day mixed with the May and July contracts closing slightly higher while the deferred months were lower. Soybeans were significantly lower earlier in the day and rallied thanks to gains in soybean oil. Soybean meal closed lower.

  • The rally off today’s lows in soybeans can be mainly attributed to the support in soybean oil which is a result of reduced palm oil production in recent forecasts. Stats Canada has also cut its estimates for canola production which has been bullish for all edible oils.

  • As the Brazilian harvest presses on, soybean premiums have trended higher since January due to a lack of farmer selling at those low prices. Higher Brazilian premiums have been bullish for US prices, but they could also spark farmer selling which may bring prices back down.

  • Brazil’s soybean harvest is over 55% completed but in the main growing area of Mato Grasso, harvest is 84% complete. The nearby forecast is calling for little rain in Brazil which should see harvest continuing without issue.

Above: After posting a low of 1128 ½ on February 29, soybeans have rallied higher on short covering. The market remains oversold on the weekly chart and continues to provide underlying support. For now, resistance remains between 1190 and 1205, with the next area of heavy resistance between 1225 and 1250 if prices continue higher. Underneath, initial support remains between 1130 and 1140.

Wheat

Market Notes: Wheat

  • All three US wheat classes closed with losses in tandem with Paris milling wheat futures. A lack of fresh fundamental news, along with rumors that there may be more Chinese cancellations led to a weaker trade. So far, China has cancelled 18.5 mb of US SRW wheat purchases, but some analysts think there could be an additional 10-15 mb cancelled soon.  

  • According to the USDA as of March 5, about 14% of the US winter wheat area is experiencing drought. Additionally, 30% of the spring wheat crop is in drought. As spring approaches in the northern hemisphere, dry pockets in the US may become more of an issue that, if they persist, may lead to higher commodity prices. However, cheap Russian wheat exports may limit upside potential for now.

  • On a bullish note, Indian wheat stocks have hit a seven-year low, which may make them a net importer. They are the world’s third largest wheat producer behind China and the EU. But due to weather problems and increased domestic demand they may no longer be a net exporter.

  • House democrats are attempting to circumvent the house speaker’s control to vote on a $95.3 billion aid package for Ukraine and Israel. Of that total, $60 billion is said to be allocated for Ukraine’s military defense. As both wars rage on, the impact on the wheat market appears to be minimal at this time; Ukraine has been very successful at exporting ag goods even without the approval of Russia.

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. Grain Market Insider won’t have any “New Alerts” for 2023 Chicago wheat – either Cash, Calls, or Puts, as we have moved focus onto 2024 and 2025 Crop Year Opportunities.

  • Grain Market Insider sees a continuing opportunity to sell half of your July ‘24 590 Chicago Wheat puts. Last August Grain Market Insider recommended buying July ’24 590 Chicago wheat puts for approximately 31 cents in premium plus commission and fees to protect the downside from potential price erosion. At the time, US export demand was very weak with lower world export prices, and July Chicago wheat had just broken through support near 610. The breaking of 610 support increased the risk of the market retreating further. Since that time July ’24 Chicago wheat has dropped about 110 cents, with the July ’24 590 Chicago wheat puts gaining about 200% in value. Though world export prices remain low, plenty of time remains to market the ’24 crop, and following this market drop, any increase in demand or threat of yield loss could rally prices. Grain Market Insider recommends selling half of the previously recommended July ’24 590 Chicago wheat puts to lock in gains and move toward a net neutral cost on the remaining position, which will continue to protect any unsold bushels if prices erode further.

  • No action is currently recommended for 2025 Chicago Wheat. In mid-February, July ’25 Chicago wheat broke through the bottom of the long established 632 – 685 trading range to a new low just below 600. For now, that new low is holding, and the market is correcting its oversold condition. So far, Grain Market Insider’s strategy for the 2025 crop year has been to sit tight. However, if prices rally toward the mid-600s, we will consider taking advantage of the still historically good prices to make sales recommendations.

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

Above: After posting a bullish reversal on March 11, prices appear to have stalled around 555 and could retreat toward the support area near the recent low of 523 ½. Below there, further support may be found around 470 – 488. If prices regain their bullish footing, and close above 556, they then could challenge the 50 and 100-day moving averages that coincide with the 585 – 620 congestion area.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since December’s brief runup, prices have continued to erode as US exports continue to suffer from lower world export prices. Although fundamentals remain weak, considering the market is at levels not seen since spring of 2021, and funds continue to hold a considerable net 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 700.

  • No new action is recommended for 2024 KC wheat. Since the beginning of the year, the July ’24 contract has been in a downtrend alongside the front month contracts, while also setting new contract lows and becoming very oversold. During this time, managed funds have maintained a net short position in the front month of around 35,000 contracts. While this net short position is about 15,000 contracts smaller than it was at the end of November, it is still large enough to trigger a short covering rally, much like the one that began in late November, and could easily translate to higher prices for July ’24 as well as the front months. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside, and as the market got further extended into oversold territory, Grain Market Insider recommended exiting 75% of the originally recommended position. Recently, Grain Market Insider also recommended exiting the remaining 660 puts to protect any gains that have been made. Considering bullish headwinds remain, and the equity gained from the closed July 660 put position, Grain Market Insider is prepared to consider recommending additional sales for the 2024 crop if July ‘24 retraces back toward the January highs in the mid-640s.

  • 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 may be late spring or summer before Grain Market Insider starts considering the first sales targets.

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

Above: For now, it appears that May KC wheat has rejected the advances above the 50-day moving average and may retreat back toward support around the 551 ½ low with minor nearby support around 570. If prices can penetrate and close above the 50-day moving average, they could still make a run toward the 610 to 640 congestion area.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Minneapolis wheat. Since last summer, front month Minneapolis wheat has slowly stair-stepped lower with weaker world prices and 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, the market has become very oversold, 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 in the neighborhood of 675 – 700.

  • No new action is recommended for 2024 Minneapolis wheat. Much like the front month contracts, Sep ’24 has been in a downward trend since last summer. And just as Sep ’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 an extended 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 (due to their higher liquidity and correlation to Minneapolis), and as the market got further extended into oversold territory, Grain Market Insider recommended exiting 75% of the originally recommended position. Recently, Grain Market Insider recommended exiting the remaining 660 puts to protect the gains that have been made. From here, Grain Market Insider is prepared to consider recommending additional sales for the 2024 crop if Sep ‘24 posts a modest 22% retracement back toward the 2022 highs of 1400.

  • 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 in the spring of next year. It may be late spring or summer before Grain Market Insider starts considering the first sales targets.

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

Above: After breaking out of the consolidation range, there appears to be a rounded bottom formation in May Minneapolis wheat, which suggests that prices could test the 700 – 710 area if they can close above the 50-day moving average and nearby 675 – 680 resistance. If prices turn back lower, nearby support remains near 640, with major support near 600.

Other Charts / Weather

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

|

3-12 End of Day: Soybeans Close Higher on Friendly CONAB Numbers; Corn Sharply Unchanged, Wheat Mixed

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Two-sided trade in the corn market balanced a friendly CONAB forecast of Brazil’s corn production and a bearish US supply situation with little fresh market news as corn futures settled mostly unchanged across the board.

  • CONAB’s lower forecast for Brazil’s soybean crop of 146.9 mmt, compared to the USDA’s 155 mmt estimate, gave May soybeans a bullish shot in the arm to rally within 3 ½ cents of the 50-day moving average and its highest close since early February.

  • Soybean oil closed sharply higher and lent additional support to soybeans, with support coming from higher palm oil and reports that Ukraine’s sunflower crop is down 5.5% from last year. Soybean meal regained some ground from yesterday’s losses, posting a modest $2.0 gain.

  • The wheat complex settled the day mixed following yesterday’s strong closes across the board. Lower production and stocks estimates for Brazil, Ukraine, and India gave the markets an initial boost to start the day, but prices drifted off the highs in choppy trade to close mid-range in all three classes.  

  • To see the updated US 6 – 10 day temperature and precipitation outlooks, and the 2-week precipitation forecast for Brazil, courtesy of the NWS, CPC, and NOAA, 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. In late February, after languishing in a downtrend that began last October and managed funds posting a record net short position exceeding 340,000 contracts, front month corn posted a bullish key reversal. Since that time, the market has rallied as the funds covered some of their short positions, though they remain heavily short the market, which could fuel an extended rally as we head into the spring planting window. As planting nears and uncertainties increase, Grain Market Insider will consider recommending additional sales if prices recover back toward the 500 level.

  • No new action is recommended for 2024 corn. After posting a bullish key reversal in late February, Dec ’24 rallied along with front month corn as funds exited some of their record net short position. As we quickly approach the spring planting window, a lot of uncertainty remains, and the near record short position that the funds continue to carry is supportive and could fuel further short covering and higher prices for Dec ’24. Given the amount of time and uncertainty that remains for the 2024 crop, Grain Market Insider will consider recommending additional sales on a retracement toward the low to mid 500 level.

  • 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 springtime of 2024 before Grain Market Insider starts considering the first sales targets.

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

  • Today was a consolidation day in the corn market as overall news remained quiet for the session. Corn futures saw two-sided trade with a 7-cent trading range as the May futures finished unchanged on the session.

  • Corn futures have traded higher and near the top of the daily trading range for the past three sessions, but today buying strength faltered. This may be an indicator that upward momentum has slowed, or farmer selling limited the market upside.

  • The bearish fundamental picture of front-end corn supplies is still a major limiting factor in the corn market rally. With today’s close, corn futures are still trading at a 4-week high, and 33 cents off the most recent low on the May futures.

  • The Brazilian Agriculture Agency, CONAB, released their March corn crop projections this morning.  CONAB lowered the expected Brazilian corn production estimate to 112.75 mmt, down nearly 1 mmt from last month and just over 19 mmt under last year on reduced planted area and dry weather in the early growing season. Total corn exports from Brazil where left unchanged from last month’s report at 32 mmt.

  • Brazil’s weather will stay a focus in the corn market. Forecasts for a ridge of heat building over central Brazil later in the week help support Brazilian and US corn prices. If weather conditions become less favorable, additional weather premium may be added into the corn market.

Above: On March 7th the corn market closed above the 20-day moving average for the first time since late December. If it can push through and close above the 435 – 445 resistance area it could test the January high of 452 ¼. If they fall back, and close below 421, the bottom of the recent range, then they may slide to test downside support between 400 and 410.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Since old crop soybeans broke out of the 1290 – 1400 range in January, prices appear to have made a near term low. Managed funds have also established a record net short position for this time of year, and world carryout has dropped according to the USDA. While new lows could still be made, US planting is not far off, and the funds current short position could fuel an extended short covering rally on a smaller South American crop, lower world soybean carryout, and potential US weather concerns. Should that happen, Grain Market Insider will look at making additional sales if prices post an historically modest 30% retracement back toward the 2022 high of 1759.

  • No new action is recommended for the 2024 crop. Since the beginning of the year, Nov ’24 has tracked alongside the 2023 old crop contracts as South American weather stabilized and the market dealt with bourgeoning domestic supplies and slowing demand. While the decline in prices was disappointing, a near-term low may be in place. With planting season just ahead and plenty of time remaining to market this crop, many unknowns remain that can bring higher prices. 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. Based on our research, the possibility remains that prices could retest the upper 1300 range near the 2022 highs going into spring/summer, at which point Grain Market Insider would 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 with support from a rally in soybean oil and the release of CONAB numbers showing lower expected soybean production in Brazil. May soybeans have now rallied over 67 cents from the low at the end of February. Soybean meal closed higher as well.

  • Earlier today, CONAB released its estimate for the 2024 Brazilian soybean crop at 146.8 mmt. This was below the average analyst trade guess of 149 mmt and well off the estimate of 155 mmt that was just released by the USDA. The discrepancy between CONAB and the USDA has seemed to widen as harvest progresses.

  • As the Brazilian harvest presses on, soybean premiums have trended higher since January due to a lack of farmer selling at those low prices. Higher Brazilian premiums have been bullish for US prices, but they could also spark farmer selling which could bring prices back down.

  • Yesterday’s soybean inspections for the US of 26 mb brought inspections to a 23-week low with shipments down 19% from last year. Export demand will likely worsen as Brazil completes its harvest and Argentina continues its growing season.

Above: After posting a low of 1128 ½ on February 29, soybeans have rallied higher on short covering. The market remains oversold on the weekly chart and continues to provide underlying support. For now, resistance remains between 1190 and 1205, with the next area of heavy resistance between 1225 and 1250 if prices continue higher. Underneath, initial support remains between 1130 and 1140.

Wheat

Market Notes: Wheat

  • Wheat was mixed to mostly lower today, though it did close within a penny or two of unchanged. By comparison, both May and September Matif wheat futures closed unchanged. After yesterday’s bullish key reversal in May Chicago wheat futures, it was somewhat disappointing that there wasn’t any strong follow through today. On a positive note though, there were no further announced cancelations of US wheat to China this morning.

  • Wheat prices in Brazil continue to weaken, despite indications that their 23/24 wheat crop supply will be below demand. It is said that in Brazil, end users are looking for high quality wheat, but supply remains low. Internationally, prices have recently moved lower as well. Russia’s cheap exports are one of the main contributing factors. Their April FOB values have fallen to $198/mt, according to Sov Econ – this keeps the US uncompetitive on exports.

  • CPI (Consumer Price Index) data this morning showed that inflation increased, with February higher than last year at 3.2% – the trade was looking for a 3.1% increase. In addition, the CPI was up 0.4% in the month of February alone, which was 0.1% higher than expectations. This indicates that the Federal Reserve may be slow to lower interest rates, affecting the US Dollar, and potentially wheat prices.

  • Due to lower planted acreage, higher costs, and labor shortages, Ukraine’s 2024 grain and oilseed harvest could be down 8% versus last year, to 76 mmt. According to Ukrainian officials, wheat specifically may be down 14.5% to 20 mmt of production.

  • CONAB released their estimates of Brazilian wheat production this morning, in which they projected a decline of 0.6 mmt to 9.6 mmt. For reference, the USDA is forecasting Brazil’s wheat production at 8.1 mmt. On a bullish note, India’s wheat stocks are said to have fallen to 9.7 mmt versus 11.7 mmt last year, which is the lowest March number in seven years.

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. 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 the early December runup, the July ’24 contract has suffered in a lower trend while going on to make new contract lows. Although the lack of any bullish information has been disappointing, the market is in a significantly oversold condition, and managed funds continue to hold a significant net short position. Either or both could fuel a short covering rally at any time as we head into the more active part of the growing season. At the end of August, Grain Market Insider recommended purchasing July ‘24 590 puts to prepare for further price erosion, and recently recommended exiting half of those puts to lock in gains and get closer to a net neutral cost on the remaining position. If the market receives the needed input 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 remaining July ‘24 590 put position will add a layer of protection if prices erode further.

  • No action is currently recommended for 2025 Chicago Wheat. In mid-February, July ’25 Chicago wheat broke through the bottom of the long established 632 – 685 trading range to a new low just below 600. For now, that new low is holding, and the market is correcting its oversold condition. So far, Grain Market Insider’s strategy for the 2025 crop year has been to sit tight. However, if prices rally toward the mid-600s, we will consider taking advantage of the still historically good prices to make sales recommendations.

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

Above: With the market posting a bullish key reversal on March 11, the market may challenge the 50-day and the 100-day moving averages that coincide with the congestion area between 585 and 620. Down below the market nearby support comes in near the March 11 low of 523 ½, with further support around 470 – 488.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since December’s brief runup, prices have continued to erode as US exports continue to suffer from lower world export prices. Although fundamentals remain weak, considering the market is at levels not seen since spring of 2021, and funds continue to hold a considerable net 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 700.

  • No new action is recommended for 2024 KC wheat. Since the beginning of the year, the July ’24 contract has been in a downtrend alongside the front month contracts, while also setting new contract lows and becoming very oversold. During this time, managed funds have maintained a net short position in the front month of around 35,000 contracts. While this net short position is about 15,000 contracts smaller than it was at the end of November, it is still large enough to trigger a short covering rally, much like the one that began in late November, and could easily translate to higher prices for July ’24 as well as the front months. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside, and as the market got further extended into oversold territory, Grain Market Insider recommended exiting 75% of the originally recommended position. Recently, Grain Market Insider also recommended exiting the remaining 660 puts to protect any gains that have been made. Considering bullish headwinds remain, and the equity gained from the closed July 660 put position, Grain Market Insider is prepared to consider recommending additional sales for the 2024 crop if July ‘24 retraces back toward the January highs in the mid-640s.

  • 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 may be late spring or summer before Grain Market Insider starts considering the first sales targets.

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

Above: The March 6th low of 551 ½ has held so far with the market testing the 50-day moving average. If the market can close above there, it could then make a run toward the congestion range between 610 and 640. If the market does turn lower, the next major level of support below 551 ½ may come in near 530.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Minneapolis wheat. Since last summer, front month Minneapolis wheat has slowly stair-stepped lower with weaker world prices and 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, the market has become very oversold, 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 in the neighborhood of 675 – 700.

  • No new action is recommended for 2024 Minneapolis wheat. Much like the front month contracts, Sep ’24 has been in a downward trend since last summer. And just as Sep ’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 an extended 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 (due to their higher liquidity and correlation to Minneapolis), and as the market got further extended into oversold territory, Grain Market Insider recommended exiting 75% of the originally recommended position. Recently, Grain Market Insider recommended exiting the remaining 660 puts to protect the gains that have been made. From here, Grain Market Insider is prepared to consider recommending additional sales for the 2024 crop if Sep ‘24 posts a modest 22% retracement back toward the 2022 highs of 1400.

  • 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 in the spring of next year. It may be late spring or summer before Grain Market Insider starts considering the first sales targets.

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

Above: After breaking out of the consolidation range, there appears to be a rounded bottom formation in May Minneapolis wheat, which suggests that prices could test the 700 – 710 area if they can close above the 50-day moving average and nearby 675 – 680 resistance. If prices turn back lower, nearby support remains near 640, with major support near 600.

Other Charts / Weather

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

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

|

3-11 End of Day: Strength in Wheat Supports Corn Following a Weak Overnight Trade

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Carryover strength from the wheat complex and a shot of hot, dry air in Brazil helped the corn market recover from overnight losses and close above the 20-day moving average for third consecutive day.

  • Soybeans were unable to gain from the strength in the wheat and corn markets. Instead, they chopped in two-sided trade that only briefly traded in the green, weighed down by the weakness from lower soybean meal.

  • A drop in Malaysia’s palm oil inventories and exports gave support to the soybean oil market which was the strong leg of the soybean complex with a higher close in today’s trade. Soybean meal on the other hand gave back more than half of yesterday’s gains and weighed on soybeans.

  • Despite another round of Chinese cancellations of SRW wheat totaling 9.7 mb. May Chicago wheat posted a bullish key reversal after printing a fresh contract low. KC and Minneapolis both also rallied back off their respective lows to settle higher for the third day in a row.

  • To see the updated US 5-day forecast precipitation, the 6 – 10 day temperature and precipitation outlooks, and the 1 week percent of normal precipitation forecast for South America, courtesy of the NWS, CPC, and NOAA, 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. In late February, after languishing in a downtrend that began last October and managed funds posting a record net short position exceeding 340,000 contracts, front month corn posted a bullish key reversal. Since that time, the market has rallied as the funds covered some of their short positions, though they remain heavily short the market, which could fuel an extended rally as we head into the spring planting window. As planting nears and uncertainties increase, Grain Market Insider will consider recommending additional sales if prices recover back toward the 500 level.

  • No new action is recommended for 2024 corn. After posting a bullish key reversal in late February, Dec ’24 rallied along with front month corn as funds exited some of their record net short position. As we quickly approach the spring planting window, a lot of uncertainty remains, and the near record short position that the funds continue to carry is supportive and could fuel further short covering and higher prices for Dec ’24. Given the amount of time and uncertainty that remains for the 2024 crop, Grain Market Insider will consider recommending additional sales on a retracement toward the low to mid 500 level.

  • 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 springtime of 2024 before Grain Market Insider starts considering the first sales targets.

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

  • The corn market used the strength in the wheat market and South American weather concerns to finish higher on the session. May corn gained 2 cents and closed higher for the third consecutive day.

  • Technical indicators are showing some upward momentum building in the corn market. Short-term moving averages are looking to cross over, which could add additional short covering. May futures are challenging a key level of resistance around 440. 

  • Weekly export inspection for corn have remained strong in this window. Last week, US exporters shipped 44.2 mb (1.122 mmt) of corn. Corn inspections are running ahead of the pace needed to reach USDA export targets, and up 33% over last year for this time.

  • Brazilian second crop (safrinha) corn planting is progressing quickly. Ag consultant group, AgRural, estimates that 93% of the second crop corn is planted, up 6% over last week. This is well ahead of last year’s pace of 82% for this time.

  • Brazil’s weather will stay a focus in the corn market. Forecasts for a ridge of heat building over central Brazil later in the week help support Brazilian and US corn prices. If weather conditions become less favorable, additional weather premium may be added into the corn market.

Above: On March 7th the corn market closed above the 20-day moving average for the first time since late December. If it can push through and close above the 435 – 445 resistance area it could test the January high of 452 ¼. If they fall back, and close below 421, the bottom of the recent range, then they may slide to test downside support between 400 and 410.

Corn Managed Money Funds net position as of Tuesday, Mar. 5. Net position in Green versus price in Red. Managers net sold 1,537 contracts between Feb. 28 – Mar. 5, bringing their total position to a net short 295,528 contracts.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Old crop soybeans continue to be in a downtrend that began with the early January breakout of the 1290 – 1400 range that had been in place since last fall. While South American weather has improved, questions remain regarding the crop size, and US planting season is now not that far off with its own potential concerns that could turn 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. Since the beginning of the year, Nov ’24 has continued to recede alongside the 2023 old crop contracts as South American weather stabilized and the market deals with bourgeoning domestic supplies and slow demand. While this decline in prices is disappointing, planting season is not far off, and plenty of time remains to market this crop, with many unknowns that can rally prices yet ahead. 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. Based on our research, the possibility remains that prices could retest the 2022 highs in the upper 1300s going into spring/summer, at which point Grain Market Insider would 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 following impressive gains from Friday’s WASDE report despite the lack of much change from last month’s report. Soybean meal ended the day lower which was the main factor that brought soybeans lower, but soybean oil closed higher.

  • The USDA refused to lower its estimate for Brazilian soybean production much on Friday and only dropped it by 1 mmt to 155 mmt despite many private analysts expecting a number closer to 149 mmt. US ending stocks were lowered by 4 mb and export sales were kept unchanged despite slow export sales recently.

  • The Brazilian soybean harvest is now estimated at 55% complete, and the country has been receiving steady scattered showers. Argentine weather has been good as well, but on Friday, the USDA reduced its estimates for total production by 1 mmt for the two countries combined.

  • As of March 5, funds sold an additional 11,346 contracts of soybeans which increased their net short position to 171,999 contracts as of Tuesday March 5. As in corn, this position is now likely much lower thanks to the higher move.

Above: After posting a low of 1128 ½ on February 29, soybeans rallied back higher on short covering. The market remains oversold on the weekly chart and continues to provide underlying support. For now, resistance above the market remains between 1190 and 1205, with initial support still just below 1130. If prices were to decline further, major support below the market may enter in around 1040 – 1050.

Soybean Managed Money Funds net position as of Tuesday, Mar. 5. Net position in Green versus price in Red. Money Managers net sold 11,346 contracts between Feb. 28 – Mar. 5, bringing their total position to a net short 171,999 contracts.

Wheat

Market Notes: Wheat

  • All three US wheat futures classes closed higher today, with double digit gains in both Chicago and Kansas City contracts. This comes despite another cancellation announced this morning of US SRW wheat to China for 23/24 in the amount of 264,000 mt.

  • Weekly wheat inspections at 14.8 mb bring the total 23/24 inspections number to 491 mb. On last week’s USDA report, they lowered their estimate of 23/24 wheat exports by 15 mb to 710 mb. This may be due to increased Russian competition as well as the recent Chinese cancellations.

  • Wheat was also higher today, despite a higher US Dollar Index, and appeared to form a near term bottom on the chart. This is potentially the result of short covering by the funds, who were short as of last Tuesday about 105,000 contracts of Chicago and KC wheat combined. With a relatively neutral report last week, traders may be feeling more confident about buying into the market.

  • Also aiding wheat today was a higher close for Paris milling wheat futures. The Matif wheat contracts were able to rally above resistance at the 21-day moving average and were also able to close above it in September contracts forward. Chicago wheat futures remain below their respective 21-day moving averages, which may act as the next level of resistance.

  • The US plains states will see temporary warming before turning cooler again. Some snow will be possible next week in Colorado and the Dakotas. Looking at similar patterns in past years when March had colder than normal temperatures, it led to a dry summer. Although it is still too early to make a call on the weather, this is worth noting.

  • Stats Canada released data today in which they estimated all wheat acreage at 27.05 million. This is just above last year at 27.03 million, and above the average trade guess where the market was actually expecting a slight drop. Analyst estimates ranged from 26.00 to 27.40 ma. As an aside, all wheat acreage includes spring, winter, and durum 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. 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 the early December runup, the July ’24 contract has suffered in a lower trend while going on to make new contract lows. Although the lack of any bullish information has been disappointing, the market is in a significantly oversold condition, and managed funds continue to hold a significant net short position. Either or both could fuel a short covering rally at any time as we head into the more active part of the growing season. At the end of August, Grain Market Insider recommended purchasing July ‘24 590 puts to prepare for further price erosion, and recently recommended exiting half of those puts to lock in gains and get closer to a net neutral cost on the remaining position. If the market receives the needed input 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 remaining July ‘24 590 put position will add a layer of protection if prices erode further.

  • No action is currently recommended for 2025 Chicago Wheat. In mid-February, July ’25 Chicago wheat broke through the bottom of the long established 632 – 685 trading range to a new low just below 600. For now, that new low is holding, and the market is correcting its oversold condition. So far, Grain Market Insider’s strategy for the 2025 crop year has been to sit tight. However, if prices rally toward the mid-600s, we will consider taking advantage of the still historically good prices to make sales recommendations.

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

Above: With the market posting a bullish key reversal on March 11, the market may challenge the 50-day and the 100-day moving averages that coincide with the congestion area between 585 and 620. Down below the market nearby support comes in near the March 11 low of 523 ½, with further support around 470 – 488.

Chicago Wheat Managed Money Funds net position as of Tuesday, Mar. 5. Net position in Green versus price in Red. Money Managers net sold 9,213 contracts between Feb. 28 – Mar. 5, bringing their total position to a net short 65,539 contracts.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since December’s brief runup, prices have continued to erode as US exports continue to suffer from lower world export prices. Although fundamentals remain weak, considering the market is at levels not seen since spring of 2021, and funds continue to hold a considerable net 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 700.

  • No new action is recommended for 2024 KC wheat. Since the beginning of the year, the July ’24 contract has been in a downtrend alongside the front month contracts, while also setting new contract lows and becoming very oversold. During this time, managed funds have maintained a net short position in the front month of around 35,000 contracts. While this net short position is about 15,000 contracts smaller than it was at the end of November, it is still large enough to trigger a short covering rally, much like the one that began in late November, and could easily translate to higher prices for July ’24 as well as the front months. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside, and as the market got further extended into oversold territory, Grain Market Insider recommended exiting 75% of the originally recommended position. Recently, Grain Market Insider also recommended exiting the remaining 660 puts to protect any gains that have been made. Considering bullish headwinds remain, and the equity gained from the closed July 660 put position, Grain Market Insider is prepared to consider recommending additional sales for the 2024 crop if July ‘24 retraces back toward the January highs in the mid-640s.

  • 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 may be late spring or summer before Grain Market Insider starts considering the first sales targets.

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

Above: The March 6th low of 551 ½ has held so far with the market testing the 50-day moving average. If the market can close above there, it could then make a run toward the congestion range between 610 and 640. If the market does turn lower, the next major level of support below 551 ½ may come in near 530.

KC Wheat Managed Money Funds net position as of Tuesday, Mar. 5. Net position in Green versus price in Red. Money Managers net bought 1,236 contracts between Feb. 28 – Mar. 5, bringing their total position to a net short 40,886 contracts.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Minneapolis wheat. Since last summer, front month Minneapolis wheat has slowly stair-stepped lower with weaker world prices and 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, the market has become very oversold, 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 in the neighborhood of 675 – 700.

  • No new action is recommended for 2024 Minneapolis wheat. Much like the front month contracts, Sep ’24 has been in a downward trend since last summer. And just as Sep ’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 an extended 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 (due to their higher liquidity and correlation to Minneapolis), and as the market got further extended into oversold territory, Grain Market Insider recommended exiting 75% of the originally recommended position. Recently, Grain Market Insider recommended exiting the remaining 660 puts to protect the gains that have been made. From here, Grain Market Insider is prepared to consider recommending additional sales for the 2024 crop if Sep ‘24 posts a modest 22% retracement back toward the 2022 highs of 1400.

  • 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 in the spring of next year. It may be late spring or summer before Grain Market Insider starts considering the first sales targets.

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

Above: May Minneapolis wheat appears to be consolidating after posting a bullish reversal on February 26. If prices continue higher, they may run into resistance around 675 – 680. If prices turn back lower, the next major support level below 640 may come in near 600.  

Minneapolis Wheat Managed Money Funds net position as of Tuesday, Feb. 27. Net position in Green versus price in Red. Money Managers net bought 1,830 contracts between Feb. 28 – Mar. 5, bringing their total position to a net short 24,138 contracts.

Other Charts / Weather

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

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

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

|

3-8 End of Day: Markets End the Week on a Positive Note Following a Benign USDA Report

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Carryover strength from higher soybeans and wheat lent support to the corn market that settled just off the day’s high in an 8 ½ cent range, following a rather uneventful USDA report. Additional short covering from what was reported in last week’s COT report, likely added to this week’s strength.

  • Upon the USDA’s WASDE release, the soybean market was met with no changes to US ending stocks where a 4 mb rise was expected, and only a minor reduction to Brazil’s soybean production. All three markets in the soybean complex rallied after the report’s release with solid gains for both soybeans and meal. Soybean oil encountered overhead resistance near the 50-day moving average, and with weakness in the crude and heating oil markets, still settled lower on the day, but higher for the week along with soybean meal.

  • Despite another round of Chinese cancellations of US SRW and an increase to US ending stocks in today’s USDA report, the wheat complex closed the day on a positive note, and for the week, both KC and Minneapolis settled in the green, with 9 ¾ cent and 18 ¼ cent gains respectively. The strong gains on relatively neutral data could indicate a near-term bottom may be in.

  • To see the updated US 7-day forecast precipitation, the 8 – 14 day temperature and precipitation outlooks, and the 2-week precipitation forecast for South America, courtesy of the NWS, CPC, and NOAA, 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. With a general lack of bullish news and an estimated US carryout nearing 2.2 billion bushels, front month corn has languished in a sideways to lower trend since printing a high last October. While the lack of a bullish catalyst has been disappointing, the market is in a significantly oversold condition, and managed funds continue to hold a substantial net short position. Either or both could trigger a short covering rally at any time heading into the spring planting window. As planting nears, and uncertainties increase, Grain Market Insider will consider recommending additional sales if prices recover back toward the 500 level. 

  • No new action is recommended for 2024 corn. In January, Dec ’24 broke through the bottom end of the 485 ¾ to 602 range that had been in place since February ’22. While this was 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 ahead for the 2024 crop. Additionally, Dec ’24 is significantly oversold on the weekly chart, which is supportive for a technical rally to begin at any time as the spring planting window quickly approaches. Given the amount of time and uncertainty that remains for the 2024 crop, Grain Market Insider will consider recommending additional sales on a retracement toward the low to mid 500 level.

  • 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 a very quiet USDA March report, buying strength in wheat and soybean markets helped lift corn futures higher to end the week. May corn gained 1 ¾ cents on the session, posting its highest close since February 14. For the week, May corn futures gained 15 cents.

  • Additional fund short cover helped trigger the rally in corn futures this week. Last week on the Commitment of Trader’s Report, funds exited over 45,000 short contracts, and that path was likely again this week.

  • On the March USDA WASDE report, the USDA left the US corn balance sheet unchanged from February. The only changes were to the Argentina corn crop, raised by 1 mmt to 56 mmt, and an overall reduction in the world ending stocks to 319.63 mmt, lower than market expectations.

  • Corn charts have improved technically, and with follow through buying on the weekly chart, may help bring additional buying strength next week. May is challenging a key resistance point at 440 on the charts.

  • Brazil weather will stay a focus in the corn market. With production estimates already lowered for this season due to lower planted areas, late season dry weather could limit production further, supporting corn prices. Currently, Brazil’s second (safrinha) crop corn is being planted early and weather is supportive of good production.

Above: On March 7th the corn market closed above the 20-day moving average for the first time since late December. If it can push through and close above the 435 – 445 resistance area it could test the January high of 452 ¼. If they fall back, and close below 421, the bottom of the recent range, then they may slide to test downside support between 400 and 410.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Old crop soybeans continue to be in a downtrend that began with the early January breakout of the 1290 – 1400 range that had been in place since last fall. While South American weather has improved, questions remain regarding the crop size, and US planting season is now not that far off with its own potential concerns that could turn 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. Since the beginning of the year, Nov ’24 has continued to recede alongside the 2023 old crop contracts as South American weather stabilized and the market deals with bourgeoning domestic supplies and slow demand. While this decline in prices is disappointing, planting season is not far off, and plenty of time remains to market this crop, with many unknowns that can rally prices yet ahead. 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. Based on our research, the possibility remains that prices could retest the 2022 highs in the upper 1300s going into spring/summer, at which point Grain Market Insider would 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:

  • The soybeans began the day on the negative side of unchanged but reversed course along with soybean meal on the release of the USDA WASDE report. May soybeans rallied into the close to post its second consecutive close above the 20-day moving average with a 33 ½ cent gain on the week. Soybean meal closed $7.0 higher on the day, while bean oil also clawed its way of the low, but still closed 0.18 cents lower on the day, with weakness from the energy sector.

  • Today the USDA released its updated WASDE report for March, and it made no changes to US soybean ending stocks. When looking at South America, they did reduce Brazil’s soybean production by only 1 mmt, where a 4 mmt drop was expected, to 155 mmt and left Argentina’s production unchanged at 50 mmt, where a minor 0.3 mmt increase was expected. The overall lack of significant changes by the USDA and the market closing higher, could indicate that a near-term low is in place.

  • Argentina’s soybean crop conditions grew from 82% “normal to excellent” to 83% for the week ending March 4th. The Buenos Aires Grain Exchange cited recent rainfall in the northern areas of the country for the gain.

  • Brazil’s Trade Ministry published updated export information for the month of February that showed soybean exports for the month were up 27% from last year, with total shipments to China showing a 42.2% increase.

Above: After posting a low of 1128 ½ on February 29, soybeans rallied back higher on short covering. The market remains oversold on the weekly chart and continues to provide underlying support. For now, resistance above the market remains between 1190 and 1205, with initial support still just below 1130. If prices were to decline further, major support below the market may enter in around 1040 – 1050.

Wheat

Market Notes: Wheat

  • Today’s USDA report was the focus of traders’ attention but there was not much to write home about. In general, the report was very neutral. As for wheat specifically, US ending stocks were raised to 673 mb from 658 mb in February. The world carryout was revised slightly lower to 258.8 mmt, compared to 259.4 mmt previously. The USDA did also cut US exports from 725 to 710 mb for the 23/24 season. Production estimates for Australia and Russia were both increased by 0.5 mmt apiece. Despite the relatively impartial data, wheat ended with decent session gains, potentially indicating that the market has found a bottom for the time being.

  • This morning another confirmed cancellation of US SRW wheat to China was announced. This time 110,000 mt were taken off the books. Interestingly the market didn’t seem to pay much attention to this news, possibly meaning that it was already baked into the market after the cancellation rumors and sharply lower trade on Wednesday.

  • Adding some support to the wheat market is the recent drop in the US Dollar Index. Having started the week around the 104.00 level, the past few sessions have seen it decline to a low around 102.35 today. This afternoon it is trending back towards neutral, but since it usually shares an inverse relationship with wheat prices, a continued fall may lead to some bullish sentiment for wheat.

  • Argentina announced plans to construct a new port near the Rosario area on the Parana River. Reportedly, the government will invest about $550 million into the project. The region where it will be built is already a major ag center and accounts for over 80% of their ag exports; construction is set to begin this month. Argentina is a major exporter of soybean oil & meal, along with corn, and wheat.

  • According to FranceAgriMer, the French soft wheat crop was rated 68% good to very good as of March 4. This is unchanged from last week but is well below the 95% rating at the same time last year. In addition, Paris milling wheat futures closed higher today and appear to have also put in a near-term bottom. This may have also lent some support to the US market today.

  • According to the UN’s Food and Agriculture Organization, global ’24 wheat production is expected to increase 1% year on year to 797 mmt. If true, this would still be below the record high in 2022. The FAO says that the US wheat crop could top 51.5 mmt, beating last year. However, production in the EU may fall slightly to 133 mmt due to the heavy rain and snow that affected planting in France and parts of Germany.

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. Grain Market Insider won’t have any “New Alerts” for 2023 Chicago wheat – either Cash, Calls, or Puts, as we have moved focus onto 2024 and 2025 Crop Year Opportunities.

  • Grain Market Insider sees a continuing opportunity to sell half of your July ‘24 590 Chicago Wheat puts at approximately 67 cents in premium minus fees and commission. Last August Grain Market Insider recommended buying July ’24 590 Chicago wheat puts for approximately 31 cents in premium plus commission and fees to protect the downside from potential price erosion. At the time, US export demand was very weak with lower world export prices, and July Chicago wheat had just broken through support near 610.  The breaking of 610 support increased the risk of the market retreating further. Since that time July ’24 Chicago wheat has dropped about 110 cents, with the July ’24 590 Chicago wheat puts gaining about 200% in value. Though world export prices remain low, plenty of time remains to market the ’24 crop, and following this market drop, any increase in demand or threat of yield loss could rally prices.  Grain Market Insider recommends selling half of the previously recommended July ’24 590 Chicago wheat puts to lock in gains and move toward a net neutral cost on the remaining position, which will continue to protect any unsold bushels if prices erode further.

  • No action is currently recommended for 2025 Chicago Wheat. In mid-February, July ’25 Chicago wheat broke through the bottom of the long established 632 – 685 trading range to a new low just below 600. For now, that new low is holding, and the market is correcting its oversold condition. So far, Grain Market Insider’s strategy for the 2025 crop year has been to sit tight. However, if prices rally toward the mid-600s, we will consider taking advantage of the still historically good prices to make sales recommendations.

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

Above: With falling Russian and Black Sea export prices still pressuring the wheat market, May Chicago wheat remains in a downtrend, which is showing signs of being oversold. Assuming the current trend remains, the next major support level below the market may come in around 470 – 488. If the market does turn back higher, initial resistance may come in near 555, with heavy resistance up above around 590 – 600.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since December’s brief runup, prices have continued to erode as US exports continue to suffer from lower world export prices. Although fundamentals remain weak, considering the market is at levels not seen since spring of 2021, and funds continue to hold a considerable net 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 700.

  • No new action is recommended for 2024 KC wheat. Since the beginning of the year, the July ’24 contract has been in a downtrend alongside the front month contracts, while also setting new contract lows and becoming very oversold. During this time, managed funds have maintained a net short position in the front month of around 35,000 contracts. While this net short position is about 15,000 contracts smaller than it was at the end of November, it is still large enough to trigger a short covering rally, much like the one that began in late November, and could easily translate to higher prices for July ’24 as well as the front months. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside, and as the market got further extended into oversold territory, Grain Market Insider recommended exiting 75% of the originally recommended position. Recently, Grain Market Insider also recommended exiting the remaining 660 puts to protect any gains that have been made. Considering bullish headwinds remain, and the equity gained from the closed July 660 put position, Grain Market Insider is prepared to consider recommending additional sales for the 2024 crop if July ‘24 retraces back toward the January highs in the mid-640s.

  • 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 may be late spring or summer before Grain Market Insider starts considering the first sales targets.

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

Above: The March 6th low of 551 ½ has held so far with the market testing the upper end of the congestion area near 590. If the market can close above there, it could then make a run toward the 50-day moving average, and then the congestion range between 610 and 640. If the market does turn lower, the next major level of support below 551 ½ may come in near 530.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Minneapolis wheat. Since last summer, front month Minneapolis wheat has slowly stair-stepped lower with weaker world prices and 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, the market has become very oversold, 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 in the neighborhood of 675 – 700.

  • No new action is recommended for 2024 Minneapolis wheat. Much like the front month contracts, Sep ’24 has been in a downward trend since last summer. And just as Sep ’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 an extended 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 (due to their higher liquidity and correlation to Minneapolis), and as the market got further extended into oversold territory, Grain Market Insider recommended exiting 75% of the originally recommended position. Recently, Grain Market Insider recommended exiting the remaining 660 puts to protect the gains that have been made. From here, Grain Market Insider is prepared to consider recommending additional sales for the 2024 crop if Sep ‘24 posts a modest 22% retracement back toward the 2022 highs of 1400.

  • 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 in the spring of next year. It may be late spring or summer before Grain Market Insider starts considering the first sales targets.

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

Above: May Minneapolis wheat appears to be consolidating after posting a bullish reversal on February 26. If prices continue higher, they may run into resistance around 675 – 680. If prices turn back lower, the next major support level below 640 may come in near 600.  

Other Charts / Weather

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

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

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

|

3-7 End of Day: Corn and Beans Surge Higher, Wheat Mixed Ahead of USDA WASDE on Friday

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Corn futures surged higher on Thursday on likely continued short covering by the funds ahead of tomorrow’s USDA March WASDE report.

  • Stronger than expected weekly soybean export sales gave soybean futures enough momentum to close above their 20-day moving average today, something they have been unable to do since mid-December.

  • Wheat futures were mixed on Thursday with KC and Minneapolis prices surging higher while Chicago futures closed slightly lower after this morning’s confirmation that China had indeed cancelled 113,000 mt of US SRW recently.

  • To see the updated US 3 to 7-day mean max temperature anomaly forecast courtesy of NOAA as well as the 4-week class changed of the US Drought Monitor for the North Central States as of February 6, 2024, courtesy of NOAA and the UNL 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. With a general lack of bullish news and an estimated US carryout nearing 2.2 billion bushels, front month corn has languished in a sideways to lower trend since printing a high last October. While the lack of a bullish catalyst has been disappointing, the market is in a significantly oversold condition, and managed funds continue to hold a substantial net short position. Either or both could trigger a short covering rally at any time heading into the spring planting window. As planting nears, and uncertainties increase, Grain Market Insider will consider recommending additional sales if prices recover back toward the 500 level. 

  • No new action is recommended for 2024 corn. In January, Dec ’24 broke through the bottom end of the 485 ¾ to 602 range that had been in place since February ’22. While this was 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 ahead for the 2024 crop. Additionally, Dec ’24 is significantly oversold on the weekly chart, which is supportive for a technical rally to begin at any time as the spring planting window quickly approaches. Given the amount of time and uncertainty that remains for the 2024 crop, Grain Market Insider will consider recommending additional sales on a retracement toward the low to mid 500 level.

  • 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:

  • The corn market broke out of the most recent consolidation range with strong price action and gains on the session. May corn gained 9 ¼ cents to finish with its highest close since February 14. On the week, May corn has added 13 ¼ cents going into Friday and the March WASDE report.

  • The market could see additional short covering before tomorrow’s USDA WASDE report. The report expects to see slight changes in US carryout projections. Analysts feel US corn carryout could drop by 15 – 20 mb to 2.159 mb with slight demand adjustments for ethanol usage or a slight bump in export totals. The report will be released at 11:00 CST.

  • Weekly export sales remain supportive of the corn market. The USDA announced new sales for the marketing year totaling 1.110 MMT (43.7 mb) accumulated last week. Total corn sales commitments are now at 1.544 billion bushels, up 28% from last year. Japan was the top buyer of US corn last week.

  • Brazil weather will stay a focus in the corn market. With production estimates already lowered for this season due to lower planted areas, late season dry weather could limit production further, supporting corn prices. Currently, the second crop Brazil corn is being planted early and weather is supportive of good production.

Above: The corn market continues to consolidate following the bullish key reversal on February 26. Overhead resistance remains between 435 and 445. If the prices close below 421, the bottom of the recent range, then they may slide to test downside support between 400 and 410 unless a positive input enters the scene to turn prices back higher.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Old crop soybeans continue to be in a downtrend that began with the early January breakout of the 1290 – 1400 range that had been in place since last fall. While South American weather has improved, questions remain regarding the crop size, and US planting season is now not that far off with its own potential concerns that could turn 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. Since the beginning of the year, Nov ’24 has continued to recede alongside the 2023 old crop contracts as South American weather stabilized and the market deals with bourgeoning domestic supplies and slow demand. While this decline in prices is disappointing, planting season is not far off, and plenty of time remains to market this crop, with many unknowns that can rally prices yet ahead. 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. Based on our research, the possibility remains that prices could retest the 2022 highs in the upper 1300s going into spring/summer, at which point Grain Market Insider would 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 began the trading day strong out of the gate on last night’s open, and steadily climbed into the day session that was met with back-and-forth two-sided trade, with some likely short covering ahead of tomorrow’s March USDA WASDE update. May soybeans ended the day just above the 20-day moving average for the first time since mid-December. Both soybean meal and oil traded higher on the day and lent support to soybeans, with oil gaining on meal. May Board crush margins also gained on the day to close at 79-1/4 up two cents.

  • The USDA released its weekly export sales for the week ending February 29, which showed stronger than expected soybean sales at 22.5 mb for the 23/24 season and 2.4 mb for 24/25. With sales of old crop beans marking a 7-week high. To date, old crop soybean sales remain behind last year’s commitments by 19% where the USDA is currently forecasting a 14% drop. Current outstanding sales to China/unknown of 116 mb are down from 149 mb this time last year.

  • China’s soybean imports for the Jan-Feb time frame dropped to a 5-year low of just 13.04 mmt according to the General Administration of Customs. The drop represents an 8.8% decline from the same time last year. Poor crushing margins and delayed shipments were among the reasons given.

  • Soybean prices and export sales continue to run into resistance with Brazil’s ongoing soybean harvest which has filled their export pipeline with much cheaper supplies. Brazil’s export offers have caught a bid in the last day or so and risen about 30 cents on increasing demand, though they remain about 80 cents cheaper than US offers.

  • Tomorrow’s WASDE report isn’t expected to include any major surprises, but analysts expect that the US soybean carryout will see a slight increase of about 5 mb possibly by a decrease in exports. The trade will still focus on the USDA’s estimates on South American production, where the Argentine soybean crop is expected to increase slightly to 50.3 mmt, while Brazil’s is expected to decrease to 152.8 mmt, from last month’s 156 mmt forecast.

Above: After posting a low of 1128 ½ on February 29, soybeans rallied back higher on short covering. The market remains oversold on the weekly chart and continues to provide underlying support. For now, resistance above the market remains between 1190 and 1205, with initial support still just below 1130. If prices were to decline further, major support below the market may enter in around 1040 – 1050.

Wheat

Market Notes: Wheat

  • Wheat closed sharply higher in the Kansas City contracts, and moderately higher in Minneapolis, but was mixed in Chicago futures. The likely culprit for the pressure was confirmation this morning (of yesterday’s rumor) that China did indeed cancel 130,000 mt of SRW wheat for 23/24. With about 49 mb of sales to China beforehand, the number is now reduced to about 44 mb on the books. This morning the USDA also reported an increase of 10.0 mb of wheat export sales for the 23/24 season, along with an increase of 2.4 mb for 24/25.

  • Tomorrow’s focus by traders will be on the monthly WASDE report. The USDA is not expected to change much in terms of the wheat numbers, however. US 23/24 wheat carryout is expected to remain unchanged from last month at 658 mb, while world ending stocks are anticipated to decrease slightly, from 259.4 mmt in February to 259.1 mmt this month.

  • According to StoneX, Brazil’s 24/25 wheat crop is expected to increase 14% year on year to 9.2 mmt of production. The estimate for the previous year came in at 8.1 mmt. This is also despite planting area anticipated to decrease by 11%. Therefore, the increase in the production estimate is attributable to expectations of higher yield.

  • India’s wheat crop experienced heavy rain and hail last weekend in the northwest growing region. An estimated 150,000 hectares were affected by the storm, and while damage is still being assessed, this may lower the chance that they harvest a record crop. In February, it was forecast by their farm ministry that the country would collect 112 mmt. But the potential for hotter than normal weather this month may also limit this figure before harvest begins in April.

  • Weather in South America remains mostly favorable for now. But according to the Rosario Grain Exchange, there is about a 77% chance that a La Nina weather pattern will develop by October. This is a concern for Argentinian farmers as this is closely associated with drought conditions for them. This would affect the growth of the wheat crop but may also affect corn and soybean plantings next season.

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. Grain Market Insider won’t have any “New Alerts” for 2023 Chicago wheat – either Cash, Calls, or Puts, as we have moved focus onto 2024 and 2025 Crop Year Opportunities.

  • Grain Market Insider sees a continuing opportunity to sell half of your July ‘24 590 Chicago Wheat puts at approximately 67 cents in premium minus fees and commission. Last August Grain Market Insider recommended buying July ’24 590 Chicago wheat puts for approximately 31 cents in premium plus commission and fees to protect the downside from potential price erosion. At the time, US export demand was very weak with lower world export prices, and July Chicago wheat had just broken through support near 610.  The breaking of 610 support increased the risk of the market retreating further. Since that time July ’24 Chicago wheat has dropped about 110 cents, with the July ’24 590 Chicago wheat puts gaining about 200% in value. Though world export prices remain low, plenty of time remains to market the ’24 crop, and following this market drop, any increase in demand or threat of yield loss could rally prices.  Grain Market Insider recommends selling half of the previously recommended July ’24 590 Chicago wheat puts to lock in gains in case prices rally back, and holding the remaining puts, which will continue to protect any unsold bushels if prices erode further.

  • No action is currently recommended for 2025 Chicago Wheat. In mid-February, July ’25 Chicago wheat broke through the bottom of the long established 632 – 685 trading range to a new low just below 600. For now, that new low is holding, and the market is correcting its oversold condition. So far, Grain Market Insider’s strategy for the 2025 crop year has been to sit tight. However, if prices rally toward the mid-600s, we will consider taking advantage of the still historically good prices to make sales recommendations.

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

Above: With falling Russian and Black Sea export prices still pressuring the wheat market, May Chicago wheat remains in a downtrend, which is showing signs of being oversold. Assuming the current trend remains, the next major support level below the market may come in around 470 – 488. If the market does turn back higher, initial resistance may come in near 555, with heavy resistance up above around 590 – 600.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since December’s brief runup, prices have continued to erode as US exports continue to suffer from lower world export prices. Although fundamentals remain weak, considering the market is at levels not seen since spring of 2021, and funds continue to hold a considerable net 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 700.

  • No new action is recommended for 2024 KC wheat. Since the beginning of the year, the July ’24 contract has been in a downtrend alongside the front month contracts, while also setting new contract lows and becoming very oversold. During this time, managed funds have maintained a net short position in the front month of around 35,000 contracts. While this net short position is about 15,000 contracts smaller than it was at the end of November, it is still large enough to trigger a short covering rally, much like the one that began in late November, and could easily translate to higher prices for July ’24 as well as the front months. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside, and as the market got further extended into oversold territory, Grain Market Insider recommended exiting 75% of the originally recommended position. Recently, Grain Market Insider also recommended exiting the remaining 660 puts to protect any gains that have been made. Considering bullish headwinds remain, and the equity gained from the closed July 660 put position, Grain Market Insider is prepared to consider recommending additional sales for the 2024 crop if July ‘24 retraces back toward the January highs in the mid-640s.

  • 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 may be late spring or summer before Grain Market Insider starts considering the first sales targets.

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

Above: Having May KC wheat trade below 556 ¾ puts the market at risk of declining further unless some bullish input triggers a market turnaround. Should that happen, prices could test overhead resistance near 590 before challenging more resistance around 605. Otherwise, if prices decline further, support down below could be found near 530.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Minneapolis wheat. Since last summer, front month Minneapolis wheat has slowly stair-stepped lower with weaker world prices and 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, the market has become very oversold, 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 in the neighborhood of 675 – 700.

  • No new action is recommended for 2024 Minneapolis wheat. Much like the front month contracts, Sep ’24 has been in a downward trend since last summer. And just as Sep ’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 an extended 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 (due to their higher liquidity and correlation to Minneapolis), and as the market got further extended into oversold territory, Grain Market Insider recommended exiting 75% of the originally recommended position. Recently, Grain Market Insider recommended exiting the remaining 660 puts to protect the gains that have been made. From here, Grain Market Insider is prepared to consider recommending additional sales for the 2024 crop if Sep ‘24 posts a modest 22% retracement back toward the 2022 highs of 1400.

  • 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 in the spring of next year. It may be late spring or summer before Grain Market Insider starts considering the first sales targets.

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

Above: May Minneapolis wheat appears to be consolidating after posting a bullish reversal on February 26. If prices continue higher, they may run into resistance around 675 – 680. If prices turn back lower, the next major support level below 640 may come in near 600.  

Other Charts / Weather

|

3-6 End of Day: Corn Settles Near Session Highs as Wheat Makes New Lows

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • The corn market experienced choppy trade on both sides of unchanged as it continues to consolidate ahead of Friday’s USDA WASDE report in search of direction. A surge of buying from strong corn usage for ethanol overcame the weakness of the wheat complex to allow May corn to close just ¾ of a cent off its high.

  • The soybean complex settled the day mixed and well off the session’s lows. Late-day strength in soybean meal along with higher soybean oil, with help from higher palm oil, gave support to the soybean market as buyers returned.

  • Declining FOB offers out of the Black Sea at about $190/mt, and Russian offers just under $200, along with rumors of Chinese US SRW cancellations, broke Chicago and KC wheat to new lows, while Minneapolis tested the bottom of its recent range. This recent round of negativity has given managed funds little reason to hold off on their selling as suggested by the rise in open interest for both Chicago and KC.

  • To see the updated US 6 – 10 day temperature and precipitation outlooks, and the NASA-Grace drought indicator maps of the US and South America, courtesy of the NWS, CPC, NOAA, NASA Grace, and 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. With a general lack of bullish news and an estimated US carryout nearing 2.2 billion bushels, front month corn has languished in a sideways to lower trend since printing a high last October. While the lack of a bullish catalyst has been disappointing, the market is in a significantly oversold condition, and managed funds continue to hold a substantial net short position. Either or both could trigger a short covering rally at any time heading into the spring planting window. As planting nears, and uncertainties increase, Grain Market Insider will consider recommending additional sales if prices recover back toward the 500 level. 

  • No new action is recommended for 2024 corn. In January, Dec ’24 broke through the bottom end of the 485 ¾ to 602 range that had been in place since February ’22. While this was 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 ahead for the 2024 crop. Additionally, Dec ’24 is significantly oversold on the weekly chart, which is supportive for a technical rally to begin at any time as the spring planting window quickly approaches. Given the amount of time and uncertainty that remains for the 2024 crop, Grain Market Insider will consider recommending additional sales on a retracement toward the low to mid 500 level.

  • 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 traded slightly higher on the session, fighting off another day of selling pressure from the wheat market. May corn gained 2 ½ cents during the session while wheat futures pushed to new contract lows. The recent price action in corn has been friendly despite the overall lack of price movement.

  • The corn market consolidated for the seventh consecutive day with a trading range from 420 – 430 on the May futures. Today’s session saw a narrow trading range of 6 ¼ cents from high to low as the corn market is looking for some near-term direction.

  • The USDA will announce weekly export sales on tomorrow morning. The expectations for new corn sales last week are to range from 800,000 mt – 1.4 mmt for the 23/24 marketing year. Export sales last week were at 1.082 mmt for corn.

  • The weekly ethanol report saw average daily production for the week ending March 1 at 1.057 million barrels. This was down 1.9% from last week, but up 4.7% from last year. Ethanol stocks rose to a new record for the week of 26.051 million barrels, pushing past last year’s old record high. Corn used during the week was 104.91 million bushels, which is trending ahead of the USDA ethanol grind targets for the marketing year.

  • Price moves in the corn market are likely to stay choppy the remainder of the week until Friday’s USDA WASDE report. The market could see additional short covering. The report expects to see slight changes in US carryout projections. Analysts feel US corn carryout could drop by 15 – 20 mb to 2.159 mb with slight demand adjustments for ethanol usage or a slight bump in export totals.

Above: The corn market continues to consolidate following the bullish key reversal on February 26. Overhead resistance remains between 435 and 445. If the prices close below 421, the bottom of the recent range, then they may slide to test downside support between 400 and 410 unless a positive input enters the scene to turn prices back higher.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Old crop soybeans continue to be in a downtrend that began with the early January breakout of the 1290 – 1400 range that had been in place since last fall. While South American weather has improved, questions remain regarding the crop size, and US planting season is now not that far off with its own potential concerns that could turn 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. Since the beginning of the year, Nov ’24 has continued to recede alongside the 2023 old crop contracts as South American weather stabilized and the market deals with bourgeoning domestic supplies and slow demand. While this decline in prices is disappointing, planting season is not far off, and plenty of time remains to market this crop, with many unknowns that can rally prices yet ahead. 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. Based on our research, the possibility remains that prices could retest the 2022 highs in the upper 1300s going into spring/summer, at which point Grain Market Insider would 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:

  • The soybean complex closed the day mixed with soybeans still lower from yesterday’s weakness, while soybean oil gained on meal as it garnered strength from higher palm oil. While soybeans closed lower on the day, late day strength in soybean meal lent support to the bean market enabling it to claw back most of its losses.

  • As the Brazilian harvest continues, US soybean prices and export sales continue to struggle with US offers 113 cents over Brazil for April delivery, and while US soybean meal premiums aren’t as extreme, they are $22/mt over Argentina’s $372/mt.

  • Analyst Dorab Mistry stated that he expects 2024 palm oil production in the world’s two largest producers, Indonesia and Malaysia, to drop by 1 million metric tons collectively, just as 23/24 world demand is expected to increase by 6 mmt with supplies increasing just 3.1 mmt. Additionally, Indonesia’s palm oil exports are anticipated to fall to 29.5 mmt from last year’s 32.2 mmt, as they are expected to increase their biofuel blending rate to 40% from 35%. This could press prices higher for the world’s most widely used veg oil and support bean oil prices.

  • There continues to be a wide range of estimates for South American soybean production. This Friday the USDA will release its updated March WASDE report, and while only minor changes are expected to US carryout, the market will likely keep a close eye on where the USDA lands with its upcoming South American production forecasts, mainly Brazil. The current average estimate are for a slight increase to Argentina’s crop, and 3.2 mmt decrease to Brazil’s.

Above: After posting a low of 1128 ½ on February 29, soybeans rallied back higher on short covering. The market remains oversold on the weekly chart and continues to provide underlying support. For now, resistance above the market remains between 1190 and 1205, with initial support still just below 1130. If prices were to decline further, major support below the market may enter in around 1040 – 1050.

Wheat

Market Notes: Wheat

  • All three US wheat classes closed sharply lower. Rumors that China might cancel some open US wheat sales allowed the floodgates to open. Additionally, dirt cheap FOB values out of the Black Sea, around $190/mt are not helping the situation. For comparison, US wheat offers are said to be about forty to fifty dollars above that level.

  • Paris milling wheat futures also closed lower today, with new contract lows being made in the May through December 2024 futures. This is despite the French wheat crop being in much poorer condition compared to last year but indicates that their exports are also struggling against competition out of the Black Sea.

  • Algeria may have purchased up to 900,000 mt of milling wheat on an international tender. It is also believed that they may have done so at $38/mt cheaper than their previous tender. While the origin is unknown, there is a good chance that the Black Sea is involved. To add to the bearishness, Vladimir Putin recently stated that Russia may export 65 mmt of grain in the 23/24 season. For reference, they exported 60 mmt in 22/23.

  • According to the Buenos Aires Grain Exchange, rainfall in Argentina is expected to decline as El Nino gives way to a more neutral pattern, and this may bring a drier fall for the South American nation. Wheat planting for the 24/25 season is set to begin in May, and if a La Nina pattern does develop, as some are predicting, it could once again bring drought to Argentina. For comparison, Argentina had their worst drought on record during La Nina in the 22/23 season. 

  • Stats Canada will release Canadian planting intention estimates on Monday. Based on farmer surveys, the average pre-report estimate of all wheat acreage comes in at 26.7 million. This is in the middle of the range of estimates, with 26.0 ma on the low end and 27.4 ma on the high side. For reference, all wheat acreage in 2023 came in at 27.03 ma.

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. Grain Market Insider won’t have any “New Alerts” for 2023 Chicago wheat – either Cash, Calls, or Puts, as we have moved focus onto 2024 and 2025 Crop Year Opportunities.

  • Grain Market Insider recommends selling half of your July ‘24 590 Chicago Wheat puts at approximately 67 cents in premium minus fees and commission. Last August Grain Market Insider recommended buying July ’24 590 Chicago wheat puts for approximately 31 cents in premium plus commission and fees to protect the downside from potential price erosion. At the time, US export demand was very weak with lower world export prices, and July Chicago wheat had just broken through support near 610.  The breaking of 610 support increased the risk of the market retreating further. Since that time July ’24 Chicago wheat has dropped about 110 cents, with the July ’24 590 Chicago wheat puts gaining about 200% in value. Though world export prices remain low, plenty of time remains to market the ’24 crop, and following this market drop, any increase in demand or threat of yield loss could rally prices.  Grain Market Insider recommends selling half of the previously recommended July ’24 590 Chicago wheat puts to lock in gains in case prices rally back, and holding the remaining puts, which will continue to protect any unsold bushels if prices erode further.

  • No action is currently recommended for 2025 Chicago Wheat. In mid-February, July ’25 Chicago wheat broke through the bottom of the long established 632 – 685 trading range to a new low just below 600. For now, that new low is holding, and the market is correcting its oversold condition. So far, Grain Market Insider’s strategy for the 2025 crop year has been to sit tight. However, if prices rally toward the mid-600s, we will consider taking advantage of the still historically good prices to make sales recommendations.

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

Above: With falling Russian and Black Sea export prices still pressuring the wheat market, May Chicago wheat remains in a downtrend, which is showing signs of being oversold. Assuming the current trend remains, the next major support level below the market may come in around 470 – 488. If the market does turn back higher, initial resistance may come in near 555, with heavy resistance up above around 590 – 600.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since December’s brief runup, prices have continued to erode as US exports continue to suffer from lower world export prices. Although fundamentals remain weak, considering the market is at levels not seen since spring of 2021, and funds continue to hold a considerable net 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 700.

  • No new action is recommended for 2024 KC wheat. Since the beginning of the year, the July ’24 contract has been in a downtrend alongside the front month contracts, while also setting new contract lows and becoming very oversold. During this time, managed funds have maintained a net short position in the front month of around 35,000 contracts. While this net short position is about 15,000 contracts smaller than it was at the end of November, it is still large enough to trigger a short covering rally, much like the one that began in late November, and could easily translate to higher prices for July ’24 as well as the front months. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside, and as the market got further extended into oversold territory, Grain Market Insider recommended exiting 75% of the originally recommended position. Recently, Grain Market Insider also recommended exiting the remaining 660 puts to protect any gains that have been made. Considering bullish headwinds remain, and the equity gained from the closed July 660 put position, Grain Market Insider is prepared to consider recommending additional sales for the 2024 crop if July ‘24 retraces back toward the January highs in the mid-640s.

  • 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 may be late spring or summer before Grain Market Insider starts considering the first sales targets.

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

Above: Having May KC wheat trade below 556 ¾ puts the market at risk of declining further unless some bullish input triggers a market turnaround. Should that happen, prices could test overhead resistance near 590 before challenging more resistance around 605. Otherwise, if prices decline further, support down below could be found near 530.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Minneapolis wheat. Since last summer, front month Minneapolis wheat has slowly stair-stepped lower with weaker world prices and 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, the market has become very oversold, 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 in the neighborhood of 675 – 700.

  • No new action is recommended for 2024 Minneapolis wheat. Much like the front month contracts, Sep ’24 has been in a downward trend since last summer. And just as Sep ’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 an extended 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 (due to their higher liquidity and correlation to Minneapolis), and as the market got further extended into oversold territory, Grain Market Insider recommended exiting 75% of the originally recommended position. Recently, Grain Market Insider recommended exiting the remaining 660 puts to protect the gains that have been made. From here, Grain Market Insider is prepared to consider recommending additional sales for the 2024 crop if Sep ‘24 posts a modest 22% retracement back toward the 2022 highs of 1400.

  • 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 in the spring of next year. It may be late spring or summer before Grain Market Insider starts considering the first sales targets.

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

Above: May Minneapolis wheat appears to be consolidating after posting a bullish reversal on February 26. If prices continue higher, they may run into resistance around 675 – 680. If prices turn back lower, the next major support level below 640 may come in near 600.  

Other Charts / Weather

|

3-5 End of Day: Markets Reverse Some of Monday’s Gains

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • A quick planting pace for Brazil’s safrinha corn crop, and weakness in the wheat complex with May Chicago wheat hitting a new contract low added negativity to the corn market which continued to consolidate for the 6th day in a row.

  • After a lower opening to the day session, soybeans rallied briefly to a 3 ¾ cent gain on strength from soybean oil, but that strength quickly faded amid weaker soybean meal and fading soybean oil. With Brazil’s ongoing harvest, their export prices are running about 100 cents cheaper than the US offers, hindering US exports and prices.

  • Technical selling resumed in the soybean meal after it failed to hold midday gains, and choppy two-sided trade dominated soybean oil in today’s trade as it continues to consolidate. Meal importing countries remain largely hand to mouth in anticipation of cheaper Argentine supplies, while palm and bean oil demand in India slowed considerably last month in favor of less expensive alternatives like sunflower oil.

  • Declining export offers out of the Black Sea region and Russia continue to weigh on the wheat complex, which saw closing prices in the red for all three classes. Open interest in the complex has also risen over the past few days, suggesting that managed funds may be adding to their net short positions.

  • To see the updated US 5-day precipitation forecast, and the 1-week precipitation forecast and 7-day total accumulated precipitation for Brazil, courtesy of the NWS, CPC, and NOAA, 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. With a general lack of bullish news and an estimated US carryout nearing 2.2 billion bushels, front month corn has languished in a sideways to lower trend since printing a high last October. While the lack of a bullish catalyst has been disappointing, the market is in a significantly oversold condition, and managed funds continue to hold a substantial net short position. Either or both could trigger a short covering rally at any time heading into the spring planting window. As planting nears, and uncertainties increase, Grain Market Insider will consider recommending additional sales if prices recover back toward the 500 level. 

  • No new action is recommended for 2024 corn. In January, Dec ’24 broke through the bottom end of the 485 ¾ to 602 range that had been in place since February ’22. While this was 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 ahead for the 2024 crop. Additionally, Dec ’24 is significantly oversold on the weekly chart, which is supportive for a technical rally to begin at any time as the spring planting window quickly approaches. Given the amount of time and uncertainty that remains for the 2024 crop, Grain Market Insider will consider recommending additional sales on a retracement toward the low to mid 500 level.

  • 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 lower on the session, pressured by selling pressure in the wheat market as Chicago wheat prices broke to new lows in the May contract. May corn futures lost 3 ¾ cents during the session.

  • The corn market consolidated for the sixth consecutive day with a trading range from 420 – 430 on the May futures. Today’s session saw a narrow trading range of six cents from high to low, and prices traded within yesterday’s trading range as the corn market is looking for some near-term direction.

  • Brazil’s second crop corn planting is running well ahead of schedule, promoted by a rapid soybean harvest. Brazil consulting group AgRural estimates that 86% of the corn planting is complete versus 70% last year.

  • Demand remains the focus of the US corn market. Demand news has been improved in recent weeks for US corn as export sales and inspections have trended well above last year’s disappointing total. Export sales are looking to approach the 5-year average, as the corn export window for US corn is open and prices are competitive. Both sales and shipments will need to stay consistently strong in the weeks ahead to reach USDA export targets.

  • Price moves in the corn market are likely to stay choppy the remainder of the week until Friday’s USDA WASDE report. The market could see additional short covering. The report is expecting to see slight changes on US carryout projections, but the market may focus more on the USDA’s path with the Argentina and Brazil production estimates.

Above: The corn market continues to consolidate following the bullish key reversal on February 26. Overhead resistance remains between 435 and 445. If the prices close below 421, the bottom of the recent range, then they may slide to test downside support between 400 and 410 unless a positive input enters the scene to turn prices back higher.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Old crop soybeans continue to be in a downtrend that began with the early January breakout of the 1290 – 1400 range that had been in place since last fall. While South American weather has improved, questions remain regarding the crop size, and US planting season is now not that far off with its own potential concerns that could turn 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. Since the beginning of the year, Nov ’24 has continued to recede alongside the 2023 old crop contracts as South American weather stabilized and the market deals with bourgeoning domestic supplies and slow demand. While this decline in prices is disappointing, planting season is not far off, and plenty of time remains to market this crop, with many unknowns that can rally prices yet ahead. 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. Based on our research, the possibility remains that prices could retest the 2022 highs in the upper 1300s going into spring/summer, at which point Grain Market Insider would 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 and though they managed to remain off the contract lows, they have also been met with selling pressure following any rallies. Export demand has been sluggish, and the US has a greater disadvantage with the ongoing Brazilian harvest. Both soybean meal and oil ended the day lower as well.

  • Friday’s WASDE report isn’t expected to include any major surprises, but analysts expect that the US soybean carryout will be slightly increased due to a decrease in exports. The world carryout is expected to fall, and estimated Argentine soybean production is expected to increase slightly to 50.3 mmt, while Brazil’s is expected to decrease to 152.8 mmt, from last month’s 156 mmt forecast.

  • The Brazilian soybean harvest is now 48% complete, which compares to 40% a week earlier and 43% the previous year. Cash prices in the country have recently begun to rise, which has brought about more farmer selling, although export prices remain about 100 cents/bu. below US offers.

  • In China, soybeans on the Dalian Exchange rose by 0.6% and are trading at the equivalent of $13.68. China has bought US soybeans but will likely lean more heavily on Brazil’s cheaper beans as harvest progresses. There continue to be concerns that China and other countries will cancel previous US purchases in favor of Brazil.

Above: After posting a low of 1128 ½ on February 29, soybeans rallied back higher on short covering. The market remains oversold on the weekly chart and continues to provide underlying support. For now, resistance above the market remains between 1190 and 1205, with initial support still just below 1130. If prices were to decline further, major support below the market may enter in around 1040 – 1050.

Wheat

Market Notes: Wheat

  • In a reversal from yesterday’s trend, all three US wheats posted losses, led by Chicago futures. This comes despite winter wheat crop good to excellent conditions declining in Texas by 3%, Kansas by 4%, and Oklahoma by 5%. Offering pressure to the wheat trade today are reports that Black Sea wheat FOB values dropped below $200 per mt, with Russia just above that level; this keeps the US uncompetitive in terms of exports.

  • On Friday’s USDA report, not much change is expected for wheat in terms of the US numbers. The average pre-report estimate of US wheat carryout is pegged at 658 mb, which would be unchanged from last month. The world ending stocks estimate comes in at 259.2 mmt versus 259.4 last month. There is a chance that the USDA could lower US wheat exports from the current 725 mb.

  • In Brazil, wheat imports are on the rise due to low supply from last season. According to Secex, Brazil imported about 439,000 mt of wheat up to the fourth week in February. For reference, February of last year saw just over 291,000 mt of wheat imported. In addition, Brazil’s wheat exports of roughly 131,000 mt were well below the 533,000 mt exported last year.

  • According to China’s Minister of Agricultural and Rural Affairs, Chinese grain output was a record 695.4 mmt in 2023. This marks the ninth year in a row that they have recorded a harvest of over 650 mmt. As they work to become less reliant on other nations for their food security, there is also news that China has pledged to protect farmland. The government will work towards developing high quality land as well as restoring degraded land.

  • The north African country of Morocco will reportedly need to increase their wheat imports. They struggled with a lack of rain in the fall and officials have stated that the wheat crop could be substantially below the 4mm crop last year. They are said to have their hands tied, in that they have no choice but to increase their imports.

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. 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 the early December runup on Chinese buying, the July ’24 contract has gradually stair stepped its way lower and erased those gains. In the meantime, 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. In mid-February, July ’25 Chicago wheat broke through the bottom of the long established 632 – 685 trading range to a new low just below 600. For now, that new low is holding, and the market is correcting its oversold condition. So far, Grain Market Insider’s strategy for the 2025 crop year has been to sit tight. However, if prices rally toward the mid-600s, we will consider taking advantage of the still historically good prices to make sales recommendations.

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

Above: With falling Russian and Black Sea export prices still pressuring the wheat market, it appears that May Chicago wheat has fallen below 555 support. Managed funds continue to hold a significant short position which is supportive and could move prices toward the 584 – 618 resistance area if they choose to cover. For now, if prices continue to retreat, the next support level below the market remains between 533 and 540.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since December’s brief runup, prices have continued to erode as US exports continue to suffer from lower world export prices. Although fundamentals remain weak, considering the market is at levels not seen since spring of 2021, and funds continue to hold a considerable net 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 700.

  • No new action is recommended for 2024 KC wheat. Since the beginning of the year, the July ’24 contract has been in a downtrend alongside the front month contracts, while also setting new contract lows and becoming very oversold. During this time, managed funds have maintained a net short position in the front month of around 35,000 contracts. While this net short position is about 15,000 contracts smaller than it was at the end of November, it is still large enough to trigger a short covering rally, much like the one that began in late November, and could easily translate to higher prices for July ’24 as well as the front months. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside, and as the market got further extended into oversold territory, Grain Market Insider recommended exiting 75% of the originally recommended position. Recently, Grain Market Insider also recommended exiting the remaining 660 puts to protect any gains that have been made. Considering bullish headwinds remain, and the equity gained from the closed July 660 put position, Grain Market Insider is prepared to consider recommending additional sales for the 2024 crop if July ‘24 retraces back toward the January highs in the mid-640s.

  • 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 may be late spring or summer before Grain Market Insider starts considering the first sales targets.

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

Above: May KC wheat is correcting from being oversold as it consolidates after making a 556 ¾ low on Feb. 16, with nearby resistance just overhead between 590 and 600. So far, this support level is holding, and if prices break out to the upside, further resistance may come in around 610. If they break out to the downside, then the next major support area may be found around 530.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Minneapolis wheat. Since last summer, front month Minneapolis wheat has slowly stair-stepped lower with weaker world prices and 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, the market has become very oversold, 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 in the neighborhood of 675 – 700.

  • No new action is recommended for 2024 Minneapolis wheat. Much like the front month contracts, Sep ’24 has been in a downward trend since last summer. And just as Sep ’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 an extended 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 (due to their higher liquidity and correlation to Minneapolis), and as the market got further extended into oversold territory, Grain Market Insider recommended exiting 75% of the originally recommended position. Recently, Grain Market Insider recommended exiting the remaining 660 puts to protect the gains that have been made. From here, Grain Market Insider is prepared to consider recommending additional sales for the 2024 crop if Sep ‘24 posts a modest 22% retracement back toward the 2022 highs of 1400.

  • 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 in the spring of next year. It may be late spring or summer before Grain Market Insider starts considering the first sales targets.

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

Above: May Minneapolis wheat appears to be consolidating after posting a bullish reversal on February 26. If prices continue higher, they may run into resistance around 675 – 680. If prices turn back lower, the next major support level below 640 may come in near 600.  

Other Charts / Weather

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

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

Above: Brazil 7-day total accumulated precipitation courtesy of the National Weather Service, Climate Prediction Center.

|

3-4 End of Day: Markets Settle Firm Across the Board to Begin the Week

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • A flash sale totaling 110,000 mt of corn to Taiwan along with solid weekly export inspections helped to support the corn market which saw mostly firmer trade and a close at the upper end of its 9 ½ cent range which followed through on last week’s gains.

  • Weekly soybean export inspections that came in toward the upper end of expectations and support from higher soybean meal helped keep soybeans in the green after seeing choppy trade and a selloff from the day’s highs. A higher estimate of Brazil’s soybean crop by StoneX may have added resistance.

  • A flash sale totaling 126,000 tonnes of soybean meal and cake to unknown destinations lent support to soybean meal, which like soybeans ran into resistance as prices neared the 20-day moving average and settled near the lower end of the day’s range. Soybean oil traded similarly with two-sided trade to settle marginally better.  

  • Despite reports of falling Russian export prices from IKAR, all three wheat classes settled in the green, with KC and Minneapolis being the strong legs of the complex. Australia’s ABARE, which forecast the country’s wheat crop 36% lower than last year, at 26 mmt likely added to the bullish tone.

  • To see the updated US 5-day precipitation forecast, 6 – 10 day temperature and precipitation outlooks, and the 1-week precipitation forecast for South America, courtesy of the NWS, CPC, and NOAA, 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. With a general lack of bullish news and an estimated US carryout nearing 2.2 billion bushels, front month corn has languished in a sideways to lower trend since printing a high last October. While the lack of a bullish catalyst has been disappointing, the market is in a significantly oversold condition, and managed funds continue to hold a substantial net short position. Either or both could trigger a short covering rally at any time heading into the spring planting window. As planting nears, and uncertainties increase, Grain Market Insider will consider recommending additional sales if prices recover back toward the 500 level. 

  • No new action is recommended for 2024 corn. In January, Dec ’24 broke through the bottom end of the 485 ¾ to 602 range that had been in place since February ’22. While this was 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 ahead for the 2024 crop. Additionally, Dec ’24 is significantly oversold on the weekly chart, which is supportive for a technical rally to begin at any time as the spring planting window quickly approaches. Given the amount of time and uncertainty that remains for the 2024 crop, Grain Market Insider will consider recommending additional sales on a retracement toward the low to mid 500 level.

  • 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 used the improved technical picture and announced export sales to help push higher during the session. May corn futures gained 5 ¼ cents and posted its highest close in nearly two weeks.

  • The corn market saw follow-through buying after weekly charts posted reversals with Friday’s close. The higher close in May corn last week was the market’s first positive weekly close in 11 weeks.

  • The USDA announced a flash sale of corn to Taiwan this morning. The sales totaled 4.3 mb (110,000 mt) for the current marketing year. This was the first announced sale of corn to Tiawan since January 2017.

  • The USDA released weekly export inspections totals for last week during the session. Last week, US exporter shipped 42.7 mb (1.084 mmt) of corn. Total export shipments are at 812 mb, up 35% from last year.

  • On this week’s Commitment of Traders report, managed money exited 45,474 net short positions, moving their net short position to 295,258 contracts. Historically, this is still an extremely large short position and could see addition short covering before Friday’s USDA WASDE report.

Above: To begin the new month, the corn market reversed lower after hitting resistance just below 435, and it appears at this point that it may test downside support between 400 and 410 unless a positive input enters the scene to turn prices back higher.

Above: Corn Managed Money Funds net position as of Tuesday, February 27. Net position in Green versus price in Red. Managers net bought 45,474 contracts between February 21 – 27, bringing their total position to a net short 295,258 contracts.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Old crop soybeans continue to be in a downtrend that began with the early January breakout of the 1290 – 1400 range that had been in place since last fall. While South American weather has improved, questions remain regarding the crop size, and US planting season is now not that far off with its own potential concerns that could turn 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. Since the beginning of the year, Nov ’24 has continued to recede alongside the 2023 old crop contracts as South American weather stabilized and the market deals with bourgeoning domestic supplies and slow demand. While this decline in prices is disappointing, planting season is not far off, and plenty of time remains to market this crop, with many unknowns that can rally prices yet ahead. 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. Based on our research, the possibility remains that prices could retest the 2022 highs in the upper 1300s going into spring/summer, at which point Grain Market Insider would 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 but backed significantly off their earlier morning highs which saw May futures as high as 1165 ¾. Early support came from the report of a sale of soybean cake and meal to unknown, and decent export inspections. Both soybean meal and oil closed slightly higher.

  • Export inspections for the week ending February 29 showed soybean inspections at 1.021 mmt, which was toward the higher end of the estimated trade range. Export inspections are down 20% year over year as the world relies further on cheaper South American soybeans.

  • This morning, private exporters reported a flash sale of 126,000 metric tons of soybean cake and meal for delivery to unknown destinations. 30,000 mt of that total is for delivery during the 23/24 marketing year while the other 96,000 mt is for delivery during the 24/25 marketing year. This was encouraging since flash sales have been few and far between with Brazil harvesting its crop.

  • With weather in South America improving, StoneX has increased their estimate for Brazilian production to 151.6 mmt which is up 0.8% from their last guess. Many analysts are closer to 149 mmt despite the USDA keeping its estimate at 156 mmt. The March WASDE report will be released this Friday and the trade will look to see if that number is lowered.

Above: After posting a low of 1128 ½ on February 29, soybeans rallied back higher on short covering. The market remains oversold on the weekly chart and continues to provide underlying support. For now, resistance above the market remains between 1190 and 1205, with initial support still just below 1130. If prices were to decline further, major support below the market may enter in around 1040 – 1050.

Above: Soybean Managed Money Funds net position as of Tuesday, February 27. Net position in Green versus price in Red. Money Managers net sold 23,976 contracts between February 21 – 27, bringing their total position to a net short 160,653 contracts.

Wheat

Market Notes: Wheat

  • All three US wheat classes posted gains in tandem with Paris milling wheat futures. May Chicago wheat did make a new contract low before reversing with strength into the close. Some upside may have come from reports that ABARE, part of Australia’s federal agricultural department, has projected their 23/24 wheat crop at 26 mmt. That is down 36% from last year, and for reference, the USDA is projecting a 25.5 mmt crop.

  • Weekly wheat export inspections at 12.98 mb bring the total 23/24 inspections number to 476 mb. This keeps inspections in line with recent averages and in line with expectations; the USDA is estimating 725 mb of exports for 23/24.

  • According to IKAR, last week Russian wheat export values hit a low of $203 per metric ton FOB. That is down from $215 the week before and the continued fall of Russian prices is a big obstacle for the US market to overcome. In addition, this Friday will feature the monthly WASDE report, where some are anticipating that the USDA may raise the Russian wheat crop. US numbers are not expected to show major changes, however.

  • India is projecting warmer-than-normal temperatures for the next few months. This may affect their wheat crops in the major growing regions. According to their director general of the Meteorological Department, maximum temperatures are likely to be above normal in many areas of the country. India is already restricting exports of wheat, among other products, to keep food prices down, so this poses another threat. With that said, India is also estimating a 112 mmt crop, which would be up 1.3% from a year ago.

  • Aside from Friday’s upcoming USDA report, there are also several outside influences this week that may affect wheat and the commodity markets in general. First off is Super Tuesday, in which many US states will hold primary elections. Also on Tuesday is the annual Chinese parliament gathering at which they are expected to announce a stimulus package to help their economy. And finally, the Fed chairman is also expected to speak in front of congress this week regarding interest rates.

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. 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 the early December runup on Chinese buying, the July ’24 contract has gradually stair stepped its way lower and erased those gains. In the meantime, 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. In mid-February, July ’25 Chicago wheat broke through the bottom of the long established 632 – 685 trading range to a new low just below 600. For now, that new low is holding, and the market is correcting its oversold condition. So far, Grain Market Insider’s strategy for the 2025 crop year has been to sit tight. However, if prices rally toward the mid-600s, we will consider taking advantage of the still historically good prices to make sales recommendations.

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

Above: So far, downside support near 555 continues to hold. Funds also continue to hold a significant net short position in Chicago wheat, that could press prices higher into the 584 – 618 resistance area if they choose to cover. If prices continue above that, the next major resistance level may come in around 635 – 650. Otherwise, if they turn back lower, major support below 555 may come in around 540.

Above: Chicago Wheat Managed Money Funds net position as of Tuesday, February 27. Net position in Green versus price in Red. Money Managers net bought 12,198 contracts between February 21 – 27, bringing their total position to a net short 56,326 contracts.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since December’s brief runup, prices have continued to erode as US exports continue to suffer from lower world export prices. Although fundamentals remain weak, considering the market is at levels not seen since spring of 2021, and funds continue to hold a considerable net 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 700.

  • No new action is recommended for 2024 KC wheat. Since the beginning of the year, the July ’24 contract has been in a downtrend alongside the front month contracts, while also setting new contract lows and becoming very oversold. During this time, managed funds have maintained a net short position in the front month of around 35,000 contracts. While this net short position is about 15,000 contracts smaller than it was at the end of November, it is still large enough to trigger a short covering rally, much like the one that began in late November, and could easily translate to higher prices for July ’24 as well as the front months. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside, and as the market got further extended into oversold territory, Grain Market Insider recommended exiting 75% of the originally recommended position. Recently, Grain Market Insider also recommended exiting the remaining 660 puts to protect any gains that have been made. Considering bullish headwinds remain, and the equity gained from the closed July 660 put position, Grain Market Insider is prepared to consider recommending additional sales for the 2024 crop if July ‘24 retraces back toward the January highs in the mid-640s.

  • 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 may be late spring or summer before Grain Market Insider starts considering the first sales targets.

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

Above: May KC wheat is correcting from being oversold as it consolidates after making a 556 ¾ low on Feb. 16, with nearby resistance just overhead between 590 and 600. So far, this support level is holding, and if prices break out to the upside, further resistance may come in around 610. If they break out to the downside, then the next major support area may be found around 530.

Above: KC Wheat Managed Money Funds net position as of Tuesday, February 27. Net position in Green versus price in Red. Money Managers net sold 215 contracts between February 21 – 27, bringing their total position to a net short 42,122 contracts.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Minneapolis wheat. Since last summer, front month Minneapolis wheat has slowly stair-stepped lower with weaker world prices and 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, the market has become very oversold, 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 in the neighborhood of 675 – 700.

  • No new action is recommended for 2024 Minneapolis wheat. Much like the front month contracts, Sep ’24 has been in a downward trend since last summer. And just as Sep ’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 an extended 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 (due to their higher liquidity and correlation to Minneapolis), and as the market got further extended into oversold territory, Grain Market Insider recommended exiting 75% of the originally recommended position. Recently, Grain Market Insider recommended exiting the remaining 660 puts to protect the gains that have been made. From here, Grain Market Insider is prepared to consider recommending additional sales for the 2024 crop if Sep ‘24 posts a modest 22% retracement back toward the 2022 highs of 1400.

  • 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 in the spring of next year. It may be late spring or summer before Grain Market Insider starts considering the first sales targets.

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

Above: May Minneapolis wheat appears to be consolidating after posting a bullish reversal on February 26. If prices continue higher, they may run into resistance around 675 – 680. If prices turn back lower, the next major support level below 640 may come in near 600.  

Above: Minneapolis Wheat Managed Money Funds net position as of Tuesday, February 27. Net position in Green versus price in Red. Money Managers net sold 1,136 contracts between February 21 – 27, bringing their total position to a net short 25,968 contracts.

Other Charts / Weather

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

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.

|

3-1 End of Day: Selling Resumes in Corn and Wheat to Start the Month

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • The corn market was caught in the crosshairs again between sharply lower wheat and strong soybeans. After failing to follow through above the 20-day moving average, prices reversed lower in today’s trade in sympathy with the wheat complex.

  • Soybeans closed higher on the day following two-sided trade that was mostly higher with support coming from higher meal. Soybeans continued to consolidate following last week’s break in prices with support still holding below the market around Thursday’s contract low of 1128 ¼.

  • Soybean meal gained on oil again as the week came to a close. Strong weekly exports for meal kept support under the market as it followed through from posting a new contract low in yesterday’s trade. May soybean oil saw both sides of unchanged and mostly lower prices throughout the day before surging back to close with just a 0.05 cent loss.

  • As the calendar rolled over to the month of March the sellers came out in mass in the wheat complex as it failed to close over the 20-day moving average in any of the three classes in recent days. Russian FOB offers as low as $209/mt continue to offer resistance to US prices and encourage sellers.

  • To see the updated US 7-day precipitation forecast, 8 – 14 day temperature and precipitation outlooks, and the 2-week precipitation forecast for South America, courtesy of the NWS, CPC, NOAA, and 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. With a general lack of bullish news and an estimated US carryout nearing 2.2 billion bushels, front month corn has languished in a sideways to lower trend since printing a high last October. While the lack of a bullish catalyst has been disappointing, the market is in a significantly oversold condition, and managed funds continue to hold a substantial net short position. Either or both could trigger a short covering rally at any time heading into the spring planting window. As planting nears, and uncertainties increase, Grain Market Insider will consider recommending additional sales if prices recover back toward the 500 level. 

  • No new action is recommended for 2024 corn. In January, Dec ’24 broke through the bottom end of the 485 ¾ to 602 range that had been in place since February ’22. While this was 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 ahead for the 2024 crop. Additionally, Dec ’24 is significantly oversold on the weekly chart, which is supportive for a technical rally to begin at any time as the spring planting window quickly approaches. Given the amount of time and uncertainty that remains for the 2024 crop, Grain Market Insider will consider recommending additional sales on a retracement toward the low to mid 500 level.

  • 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:

  • Strong selling in the wheat market pressured corn futures lower on the session. May corn futures lost 4 ¾ cents on the session. Despite the weakness to end the week, May corn futures gained 12 ½ cents for the week, posting a bullish hook reversal off weekly lows. This was the first time in 4 weeks corn traded higher, and only the 3rd time in the past 11 weeks.

  • December corn has an improved technical picture as prices held support at the key 450 level this week.  Weekly charts posted a bullish key reversal as December corn futures traded 9 ¾ cents higher on the week.  Follow through strength next week will be key.

  • The March contract is in delivery, but deliveries against the futures have been very small.  Zero contracts on Thursday, and only 3 on Friday. The lack of deliveries is helping support the front end of the corn market. The past two sessions have seen some light bull spreading.

  • China rumors have been a factor in the corn market this week. Talk of Chinese purchases of Ukrainian corn at lower prices has limited the corn market, but later in the week, whispers that China was looking for some corn exports out of the Pacific Northwest (PNW) has helped support prices. No flash sales have been announced and the market may have to wait until next week’s exports sales report. Regardless, those sales will likely be light and not move the demand needle much.

  • Managed funds have been likely covering the record short position they hold in the corn market. Last week’s Commitment of Traders report had funds holding a net short position over 340,000 contracts. The updated Commitment of Traders report will be released on Friday afternoon.

Above: To begin the new month, the corn market reversed lower after hitting resistance just below 435, and it appears at this point that it may test downside support between 400 and 410 unless a positive input enters the scene to turn prices back higher.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Old crop soybeans continue to be in a downtrend that began with the early January breakout of the 1290 – 1400 range that had been in place since last fall. While South American weather has improved, questions remain regarding the crop size, and US planting season is now not that far off with its own potential concerns that could turn 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. Since the beginning of the year, Nov ’24 has continued to recede alongside the 2023 old crop contracts as South American weather stabilized and the market deals with bourgeoning domestic supplies and slow demand. While this decline in prices is disappointing, planting season is not far off, and plenty of time remains to market this crop, with many unknowns that can rally prices yet ahead. 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. Based on our research, the possibility remains that prices could retest the 2022 highs in the upper 1300s going into spring/summer, at which point Grain Market Insider would 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 in another day of two-sided trade that saw prices lower earlier in the day before rebounding higher. Soybean meal closed higher, while soybean oil was lower despite a sharp gain in crude oil. Despite today’s rally, soybeans have been relatively rangebound for the past week.

  • The CME reported a large number of deliveries against the March contract yesterday and reported more today with 502 against March soybeans, just 1 in soybean meal, and 37 against soybean oil. Today’s deliveries did not pressure prices lower like they did yesterday.

  • For the week, May soybeans gained 9-1/2 cents but lost 92 cents during the month of February. May soybean meal gained $4.30 on the week while losing $34.90 in February, and May soybean oil gained 0.56 cents for the week while losing 1.33 cents last month. Over the past week, funds likely exited a portion of their net short position ahead of first notice day, and a temporary bottom could be in.

  • Next week the USDA will release its WASDE report and trade will look to see if adjustments are made to South America’s expected production. Argentina is expected to produce double what was produced in the drought last year, and Brazil was estimated to produce 156 mmt of soybeans in the USDA’s February update despite most other analysts estimating the number closer to 149 mmt.

Above: Front month soybeans appear to have rejected the bullish reversal from February 26. However, for now, initial support between 1133 and 1140 still holds. If prices can rally back and recover from being oversold, they may hit resistance between 1190 and 1205. Otherwise, if they decline further, major support below the market may enter in around 1040 – 1050.

Wheat

Market Notes: Wheat

  • Wheat posted double-digit losses across all three futures classes today. Weakness originated from Paris milling wheat futures closing sharply lower, with losses of 3.75 to 8.00 euros per mt. This is the lowest it has traded since August 2020 and comes even though their crop ratings are relatively poor. As of February 26, just 68% of the French wheat crop was rated good to very good. This is a large decline from the 95% rating at the same time last year.

  • To add to pressure today, Russian FOB values are said to be remaining steady at $209 per mt, keeping pressure on exports, and thus, futures. SovEcon has also said that Russian February wheat exports could be a record due to their very competitive prices. The exports are estimated at 3.8 mmt, which compares to 3.0 mmt last year and the 2.6 mmt average. As an aside, they are projecting 23/24 wheat exports at 48.6 mmt versus the USDA at 51 mmt.

  • According to the European Commission, the EU 2023 wheat production was slightly trimmed. Harvest is estimated at 125.6 mmt compared to 125.9 mmt previously. Additionally, the wheat import forecast was increased by 0.5 mmt to 17.5 mmt. On a bearish note, though, India’s ag ministry has stated that their wheat production may exceed last year’s 110.6 mmt, with estimates of 112 mmt of production for the 23/24 season.

  • Ukraine is said to have exported 8 mmt of cargo in February, with 5.2 mmt of that being ag goods. Reportedly, 113 vessels are now in Odesa, Pivdennyi, and Chornomorsk ports and are waiting to be loaded with about 3 mmt more cargo.

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. 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 the early December runup on Chinese buying, the July ’24 contract has gradually stair stepped its way lower and erased those gains. In the meantime, 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. In mid-February, July ’25 Chicago wheat broke through the bottom of the long established 632 – 685 trading range to a new low just below 600. For now, that new low is holding, and the market is correcting its oversold condition. So far, Grain Market Insider’s strategy for the 2025 crop year has been to sit tight. However, if prices rally toward the mid-600s, we will consider taking advantage of the still historically good prices to make sales recommendations.

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

Above: So far, downside support near 555 continues to hold. Funds also continue to hold a significant net short position in Chicago wheat, that could press prices higher into the 584 – 618 resistance area if they choose to cover. If prices continue above that, the next major resistance level may come in around 635 – 650. Otherwise, if they turn back lower, major support below 555 may come in around 540.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since December’s brief runup, prices have continued to erode as US exports continue to suffer from lower world export prices. Although fundamentals remain weak, considering the market is at levels not seen since spring of 2021, and funds continue to hold a considerable net 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 700.

  • No new action is recommended for 2024 KC wheat. Since the beginning of the year, the July ’24 contract has been in a downtrend alongside the front month contracts, while also setting new contract lows and becoming very oversold. During this time, managed funds have maintained a net short position in the front month of around 35,000 contracts. While this net short position is about 15,000 contracts smaller than it was at the end of November, it is still large enough to trigger a short covering rally, much like the one that began in late November, and could easily translate to higher prices for July ’24 as well as the front months. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside, and as the market got further extended into oversold territory, Grain Market Insider recommended exiting 75% of the originally recommended position. Recently, Grain Market Insider also recommended exiting the remaining 660 puts to protect any gains that have been made. Considering bullish headwinds remain, and the equity gained from the closed July 660 put position, Grain Market Insider is prepared to consider recommending additional sales for the 2024 crop if July ‘24 retraces back toward the January highs in the mid-640s.

  • 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 may be late spring or summer before Grain Market Insider starts considering the first sales targets.

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

Above: May KC wheat is correcting from being oversold as it consolidates after making a 556 ¾ low on Feb. 16, with nearby resistance just overhead between 590 and 600. So far, this support level is holding, and if prices break out to the upside, further resistance may come in around 610. If they break out to the downside, then the next major support area may be found around 530.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Minneapolis wheat. Since last summer, front month Minneapolis wheat has slowly stair-stepped lower with weaker world prices and 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, the market has become very oversold, 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 in the neighborhood of 675 – 700.

  • No new action is recommended for 2024 Minneapolis wheat. Much like the front month contracts, Sep ’24 has been in a downward trend since last summer. And just as Sep ’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 an extended 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 (due to their higher liquidity and correlation to Minneapolis), and as the market got further extended into oversold territory, Grain Market Insider recommended exiting 75% of the originally recommended position. Recently, Grain Market Insider recommended exiting the remaining 660 puts to protect the gains that have been made. From here, Grain Market Insider is prepared to consider recommending additional sales for the 2024 crop if Sep ‘24 posts a modest 22% retracement back toward the 2022 highs of 1400.

  • 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 in the spring of next year. It may be late spring or summer before Grain Market Insider starts considering the first sales targets.

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

Above: May Minneapolis wheat appears to be consolidating after posting a bullish reversal on February 26. If prices continue higher, they may run into resistance around 675 – 680. If prices turn back lower, the next major support level below 640 may come in near 600.  

Other Charts / Weather

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

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

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