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01-09 End of Day: Wheat Leads Markets Higher in Turnaround Tuesday Price Action

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Short covering and a stronger wheat market helped March corn post a key reversal to settle higher on the day after making a new contract low.

  • Position squaring, as traders cover some of their short positions ahead of Friday’s USDA update, likely contributed to the buying activity in soybeans which ended in a bullish reversal after posting a fresh 7-month low. 

  • Support from higher palm and crude oil contributed to the higher close in soybean oil which followed through from yesterday’s bullish reversal and added support to soybeans. While meal continues to see pressure from improved Argentine crop prospects, it too rallied significantly of its lows after posting a new low for the move.

  • Interest from Mexico, and freezing cold temperatures forecast to be 15 to 25 below zero lows that could impact winter wheat areas with less snow coverage, helped to rally the wheat complex with Chicago contracts leading the way higher.

  • To see the updated US 5-day precipitation forecast, 6-10 day temperature and precipitation outlooks, and Brazil’s 1-week forecast total precipitation, courtesy of NWS and NOAA, scroll down to 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. After posting a high in October, front month corn futures have steadily drifted sideways to lower with a general lack of bullish news and an estimated carryout around 2.1 billion bushels. If the January USDA report fails to provide a bullish catalyst to the market, it remains at risk of continuing to languish in the same pattern. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

  • No new action is recommended for 2024 corn. Since late February ’22, Dec ’24 has been bound by 485 ¾ on the bottom and 602 on the top. During this time, Dec ’24 has held up better as bear spreading has allowed Dec ’24 to maintain more of its value versus old crop prices as traders attempt to price in a larger 2023 carryout with more uncertainty remaining for the 2024 crop. Moving forward, the risk for 2024 prices is the same as for 2023 prices, which is a continuation of a sideways to lower trend without a bullish catalyst. Grain Market Insider is watching for signs of a change in the current trend to look at recommending making additional sales and buying Dec ’24 call options. This past spring, Grain Market Insider recommended buying Dec ‘23 560 and 610 call options ahead of the summer rally and having those in place helped provide confidence to pull the trigger on recommending 2023 sales into that sharp rally, knowing that if corn kept rallying and went to 700 or 800 that the call options would protect those sold bushels.

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

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

  • The buyers stepped back into the corn market as prices posted a key reversal off session lows, and the market likely saw some short covering and technical buying on the session as the market eased its oversold condition. March corn posted a new contract low early in the session, but prices rallied to finish 4 ¼ cents higher on the day.

  • The posted reversal on daily charts may likely bring some additional buying support going into Wednesday’s session. The key will be follow-through buying and pushing prices through Tuesday’s high on the March futures at 462 ½.

  • The key news event this week will be Friday’s USDA WASDE and Grain Stocks reports. Expectations are for corn carryout projections to be reduced slightly as the USDA adjusts harvested acres and yield. Demand and first quarter usage will be closely watched, as improved feed demand at the end of the year could tighten overall supplies.

  • Brazil Agriculture Agency, CONAB, will release their projections for both soybean and corn crops on Wednesday morning. The market will be closely watching if CONAB will make strong cuts to the soybean crop and the second (safrinha) crop corn due to early season weather issues.

  • South American weather is still the biggest factor pressuring the markets. For corn, Argentina weather is favorable, and production looks to return to normal levels after two years of drought. Brazil is seeing a wetter long-term forecast, which is pressuring the soybean market; that is putting pressure on corn futures.

Above: Since the end of December, the March corn contract has slid lower with only minor reversals. After breaking through 460, the market runs the risk of retreating toward the 415 support level without some bullish input. The market currently shows signs of being oversold, which can be supportive if a bullish catalyst arises to turn prices back higher. If one does enter the market, nearby upside resistance could be found around 470 and again near 481, with heavy resistance between 495-500.

Soybeans

Soybeans Action Plan Summary

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

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

  • No Action is currently recommended for 2025 Soybeans. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted two springs from now, and it may be some time before conditions are conducive to consider making any recommendations. Be patient as we monitor the markets for signs of improvement.

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

  • Soybeans ended the day higher after mixed trade throughout the day that saw prices on either side of unchanged. Soybean meal closed slightly lower while soybean oil moved higher with help from higher palm oil and crude oil.

  • Improved South American weather over the past few weeks has pressured soy products heavily, but with the WASDE report coming up on Friday, non-commercials are likely covering their newly made net short position by buying some contracts back. The report is expected to show a decrease in Brazilian soybean production, but a possible increase in Argentinian production.

  • Estimates for Friday’s WASDE report have Brazilian soybean production within a range of 152.7 mmt and 160.0 mmt, which would be down from the last guess of 161.0 mmt. Some private analysts expect a number closer to 150 mmt. Estimates for Argentinian soybean production are in a range between 48.0 mmt and 50 mmt with December’s estimate at 48 mmt. Argentina’s crop may get larger due to good weather.

  • Weekly export inspections for soybeans were a little bit soft for last week with a total of 24.8 mb for the week ending Thursday, January 4. And while total inspections are now at 880 mb for 23/24, which is down 21% from the previous year, actual cumulative census soybean exports through last November were above the pace of inspections, though still down 10% from last year.

Above: Soybeans have steadily retreated after leaving a 6-cent gap between 1290 ¾ and 1296 ¾. The market is showing signs of being extremely oversold, which can be supportive if bullish information enters the market to turn prices around. If prices do turn back higher, resistance rests around the price gap and again near the 50-day moving average. Otherwise, the next major support level comes in near the November ’21 low of 1181.

Wheat

Market Notes: Wheat

  • Wheat saw a nice rebound today but couldn’t quite regain all of yesterday’s losses. In any case, all three classes closed higher alongside Matif wheat futures. These gains were despite a higher US Dollar today. The rally may have been partly technical in nature with all three US wheats at or near oversold territory on daily stochastics.

  • Offering support today were rumors that Mexico may be interested in purchasing US wheat. This is in addition to talk that China may also be looking to buy. So far there have been no flash sales announced this week but that does not rule out the possibility of either country stepping up this over the next few days.

  • In addition to Friday’s supply and demand report, traders will also receive the winter wheat seedings report. Analyst estimates call for a reduction in acreage by 1.0 to 1.5 million. The average projection is 35.8 ma versus the previous USDA estimate of 36.7 ma.

  • Flooding in the Australian state of Victoria has caused crop damage and has stranded livestock. This is also delaying harvest of the barley and wheat crops. Typically, El Nino means a hot and dry forecast for Australia, so this is a bit out of the ordinary. Currently some climate scientists are predicting that 2024 will be the hottest year on record globally, beating out 2023.

  • The storm system moving over the Midwest is sure to bring moisture that will improve SRW crop conditions. But next week, the forecast calls for arctic cold conditions to move down from Canada and bring sub-zero temperatures. For areas without snow cover, this could mean crop damage.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. The wheat market has continued to be dominated by lower world export prices that have stymied US export sales and depressed US prices. In early December, Grain Market Insider recommended taking advantage and making a sale on a short covering rally which was sparked by several Chinese purchases of US wheat. Since then, China has been silent in the US wheat export market, and prices remain somewhat elevated. Any remaining 2023 soft red winter wheat should be getting priced into market strength with the goal of having zero bushels unpriced by the end of January. Grain Market Insider won’t have any “New Alerts” for 2023 Chicago wheat – either Cash, Calls, or Puts, as we have moved focus onto 2024 and 2025 Crop Year Opportunities.

  • No new action is recommended for 2024 Chicago wheat. From the end of July, the July ’24 contract has slowly stepped its way down to a low of 586 in sympathy with the front month contract where managed money established a large short position during that time. Since then, July ’24 rallied alongside the March ’24 contract, as the funds covered over 30k contracts of their nearly 130k short contract position. While bearish headwinds remain, the funds continue to carry a large short position and seasonals remain supportive for the addition of weather risk premium, which are two factors that could fuel further short covering and another leg up in prices. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. Back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: March Chicago wheat continues to challenge support around the 50 and 100-day moving averages. If more bullish influence enters the market, prices could push higher to test overhead resistance near 650. If not, and prices begin to retreat, the next level of major support comes in near 556.

KC Wheat Action Plan Summary

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

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

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

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

Above: March KC wheat rejected an attempt to move higher near 650 and turned lower to test the bottom end of the recent range around 619. If the market continues to retreat, the next area of support remains near 595 and 575. Overhead, nearby resistance comes in around 650 and again between 675 – 680.

Mpls Wheat Action Plan Summary

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

  • No new action is recommended for 2024 Minneapolis wheat. After trading to a peak of 871 ¾ last August, the Sept ’24 gradually retreated to a low in November in concert with the front month as managed funds built a record large net short position mostly on weak US export demand. And while Sept ’24 has failed to close above the 50-day moving average since late August, the 726 ¼ November low remains intact. Although bearish headwinds remain, the large fund net short position could fuel a short-covering rally if prices move higher and close above the 50-day moving average. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside following a 1-year range breakout in KC wheat, and in November recommended exiting 75% of the originally recommended position as July ’24 KC wheat showed signs of support around 630. While in the same time frame, Grain Market Insider also recommended making an additional sale as the Sept ’24 Minneapolis contract broke long time 743 support. For now, Grain Market Insider remains prepared to recommend exiting the last 25% of the open puts on any further supportive market developments.

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

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

Above: After making a new contract low on November 27, the March contract found buying interest from its oversold status and record fund short. Since then, the market posted a bearish reversal on December 6, showing significant resistance in the 750 area. If prices can break through upside resistance, they could run toward 790. If prices retreat, nearby support could be found around 718, with further support near the recent low of 697 ½.

Other Charts / Weather

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

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

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

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01-08 End of Day: Market Extracts Weather Premium with Beneficial Moisture Expected.

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Despite decent export inspections, the lack of fresh bullish news and favorable South American weather enabled traders to push front month corn to its lowest price since December 2020. Likely adding to an already large fund short position that now exceeds 200,000 contracts.

  • Weekly export inspection numbers that came in below expectations added to the negativity in the soybean market where the March contract printed a fresh 6-month low for the move.

  • Soybean meal and oil settled in opposite directions, with meal continuing its slide on slowing feed demand and an improved Argentina crop. Soybean oil reversed to close higher on the day after making fresh lows for the move. The reversal in bean oil added support to soybeans.

  • The prospect of beneficial moisture with this week’s winter storm and export inspections for wheat that remain behind the USDA’s forecasted pace, pressured all three wheat classes lower in today’s session, led by Chicago.

  • To see the updated US 5-day precipitation forecast, 6-10 day temperature and precipitation outlooks, and Brazil’s 1-week forecast total precipitation, courtesy of NWS, NOAA, and NDMC scroll down to 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. After posting a high in October, front month corn futures have steadily drifted sideways to lower with a general lack of bullish news and an estimated carryout around 2.1 billion bushels. If the January USDA report fails to provide a bullish catalyst to the market, it remains at risk of continuing to languish in the same pattern. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

  • No new action is recommended for 2024 corn. Since late February ’22, Dec ’24 has been bound by 485 ¾ on the bottom and 602 on the top. During this time, Dec ’24 has held up better as bear spreading has allowed Dec ’24 to maintain more of its value versus old crop prices as traders attempt to price in a larger 2023 carryout with more uncertainty remaining for the 2024 crop. Moving forward, the risk for 2024 prices is the same as for 2023 prices, which is a continuation of a sideways to lower trend without a bullish catalyst. Grain Market Insider is watching for signs of a change in the current trend to look at recommending making additional sales and buying Dec ’24 call options. This past spring, Grain Market Insider recommended buying Dec ‘23 560 and 610 call options ahead of the summer rally and having those in place helped provide confidence to pull the trigger on recommending 2023 sales into that sharp rally, knowing that if corn kept rallying and went to 700 or 800 that the call options would protect those sold bushels.

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

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

  • It was a disappointing day in the corn and grain markets in general as selling pressure continued to push March corn futures to new contract lows. March futures lost 5 ¾ cents on the session and is trading below the key 460 price level.

  • Managed and speculative funds have been building their short position in the corn market. As bullish news is lacking, funds in last week’s Commitment of Traders’ report pushed their net short position to over 200,000 short contracts, challenging the largest short position for the marketing year.

  • Weekly export inspections for corn were within expectations at 857,000 mt (33.7 mb). Total inspections for the marketing year have reached 504 mb, up 28% from the previous year and are running slightly ahead of the needed pace for the USDA target.

  • South American weather is still the biggest factor pressuring the markets. For corn, Argentina weather is favorable, and production looks to return to normal levels after two years of drought. Brazil is seeing a wetter long-term forecast, which is pressuring the soybean market; that is putting pressure on corn futures.

  • Friday, the market looks toward the key USDA Quarterly Grain Stocks and WASDE reports to be released on Friday, January 12. Quarterly Grain Stocks will look at the usage of corn for the first quarter of the marketing year. As demand has improved in exports, ethanol production, and feed usage, the number could be larger than market expectations.

Above: Since the end of December, the March corn contract has slid lower with only minor reversals. After breaking through 460, the market may retreat further toward the 415 support level without bullish influence. The market currently shows signs of being oversold, which can be supportive if a bullish catalyst arises to turn prices back higher. If one does enter the market, nearby upside resistance could be found around 470 and again near 481, with heavy resistance between 495-500.

Soybeans

Soybeans Action Plan Summary

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

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

  • No Action is currently recommended for 2025 Soybeans. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted two springs from now, and it may be some time before conditions are conducive to consider making any recommendations. Be patient as we monitor the markets for signs of improvement.

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

  • Soybeans ended the day lower but rebounded off the lows earlier in the morning by about 9 cents. While both soybean meal and oil began the day lower, both recovered slightly with soybean oil ultimately posting a gain despite the selloff in crude oil.

  • Soybeans are extremely oversold at this point, and non-commercials hold a net short position of 11,629 contracts, which could trigger some short covering ahead of Friday’s WASDE report. It is expected that the USDA will decrease Brazilian soybean production, but the question will be by how much.

  • Weekly export inspections for soybeans were a little bit soft for last week with a total of 24.8 mb for the week ending Thursday, January 4. Total inspections are now at 880 mb for 23/24, which is down 21% from the previous year.

  • Private analysts are expecting Brazilian soybean production to come in closer to 150 mmt which is far lower than the USDA’s previous guess of 161 mmt, but the recent timely rains could be improving yields. Argentina’s crop has benefitted from good weather, and it should produce enough soybeans to make up for Brazil’s losses.

Above: Soybeans have steadily retreated after leaving a 6-cent gap between 1290 ¾ and 1296 ¾. The market is showing signs of being extremely oversold, which can be supportive if bullish information enters the market to turn prices around. If prices do turn back higher, resistance rests around the price gap and again near the 50-day moving average. Otherwise, the next major support level comes in near the November ’21 low of 1181.

Wheat

Market Notes: Wheat

  • Wheat closed lower in all three classes, with Chicago leading the way down. Bear spreading was noted in Chicago, with heavier selling pressure on the front months compared to the deferred. This may be related to the winter storm that is forecasted to bring good moisture to winter wheat areas over the next couple of days that may offer improved conditions.

  • Weekly wheat export inspections of 18 mb bring the total 23/24 inspections to 372 mb. That is below the USDA’s estimated pace, and the total is also down 16% from last year. Export sales last week were poor but are still running slightly above the USDA’s estimated pace, in part due to China’s purchases a few weeks ago. There continues to be talk that they are looking to purchase more US wheat, but so far those are just rumors.

  • Crude oil prices do not usually have a direct impact on the wheat market. However, they can affect the grain complex as a whole. And with crude at one point today down over 3.50 per barrel, it offered weakness to grain futures during today’s trade.

  • From the beginning of the season July 1 until January 8, Ukrainian grain exports at 19.4 mmt have fallen 18% year on year according to their agriculture ministry. Of that total, 7.8 mmt are wheat, which is down 9% year on year. The ministry added that Ukraine’s own Black Sea corridor has shipped about 15 mmt of goods since it opened, with about 10 mmt of that being ag products.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. Between late July and the end of November, front month Chicago wheat trended lower, driven mostly by weak US demand and lower world wheat prices. During that time, and as managed funds established most of their short position of nearly 120,000 contracts, the market became extremely oversold. Since then, as the market rallied to a high of 649 ½, China made several US SRW wheat purchases, and funds covered more than 23,000 short contracts. During that runup, Grain Market Insider recommended making an additional sale to take advantage of the elevated prices in case the rally was temporary since US wheat prices remain elevated relative to other world exporters, despite the increase in demand. If the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. From the end of July, the July ’24 contract has slowly stepped its way down to a low of 586 in sympathy with the front month contract where managed money established a large short position during that time. Since then, July ’24 rallied alongside the March ’24 contract, as the funds covered over 30k contracts of their nearly 130k short contract position. While bearish headwinds remain, the funds continue to carry a large short position and seasonals remain supportive for the addition of weather risk premium, which are two factors that could fuel further short covering and another leg up in prices. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. Back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: March Chicago wheat continues to challenge support around the 50 and 100-day moving averages. If more bullish influence enters the market, prices could push higher to test overhead resistance near 650. If not, and prices begin to retreat, the next level of major support comes in near 556.

KC Wheat Action Plan Summary

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

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

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

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

Above: March KC wheat rejected an attempt to move higher near 650 and turned lower to test the bottom end of the recent range around 619. If the market continues to retreat, the next area of support remains near 595 and 575. Overhead, nearby resistance comes in around 650 and again between 675 – 680.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop. For much of the 2nd half of last year, driven mostly by fund selling and slow US export demand, front month Minneapolis wheat slowly stair-stepped lower until hitting the November low. During this time, managed funds also established a record net short position.  Since then, with the market mostly sideways, the November low of 697 ½ has held, and prices have pierced the 50-day moving average just once.  Although bearish headwinds remain, the large fund net short position could fuel a short-covering rally if a bullish catalyst enters the scene to move prices to close above the 50-day moving average. Back in June, Grain Market Insider made a sales recommendation during the July rally near 820, and with that sale in place, Grain Market Insider’s strategy is to look for price appreciation this winter with an eye on considering additional sales around 725 – 775, and again north of 800. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices. 

  • No new action is recommended for 2024 Minneapolis wheat. After trading to a peak of 871 ¾ last August, the Sept ’24 gradually retreated to a low in November in concert with the front month as managed funds built a record large net short position mostly on weak US export demand. And while Sept ’24 has failed to close above the 50-day moving average since late August, the 726 ¼ November low remains intact. Although bearish headwinds remain, the large fund net short position could fuel a short-covering rally if prices move higher and close above the 50-day moving average. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside following a 1-year range breakout in KC wheat, and in November recommended exiting 75% of the originally recommended position as July ’24 KC wheat showed signs of support around 630. While in the same time frame, Grain Market Insider also recommended making an additional sale as the Sept ’24 Minneapolis contract broke long time 743 support. For now, Grain Market Insider remains prepared to recommend exiting the last 25% of the open puts on any further supportive market developments.

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

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

Above: After making a new contract low on November 27, the March contract found buying interest from its oversold status and record fund short. Since then, the market posted a bearish reversal on December 6, showing significant resistance in the 750 area. If prices can break through upside resistance, they could run toward 790. If prices retreat, nearby support could be found around 718, with further support near the recent low of 697 ½.

Other Charts / Weather

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

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

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

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01-05 End of Day: Poor Weekly Export Sales Weighs on Corn and Beans

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Sliding soybean prices and weekly corn export sales numbers that were below expectations and at a new marketing year low, pressured corn futures to print a fresh contract low for the March contract.   

  • Weakness in both soybean meal and oil added to the selling pressure in soybeans along with poor weekly export sales, as traders continue to sell soybeans on the improved SA weather outlook and poor export sales.

  • Slowing demand for soybean meal from both domestic users and exporters has pressured basis and futures as crushers continue to process beans and add to supplies. Even though falling product values have pressured crush margins, they remain profitable.

  • All three wheat classes saw both sides of unchanged and closed mostly higher on follow through strength from yesterday’s positive move, and on rumors of more Chinese interest in the US wheat market.

  • To see the updated US 7-day precipitation forecast, 8-14 day temperature and precipitation outlooks, and Brazil’s 2-week forecast total precipitation, courtesy of NWS, NOAA, and NDMC scroll down to 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. After posting a high in October, front month corn futures have steadily drifted sideways to lower with a general lack of bullish news and an estimated carryout around 2.1 billion bushels. If the January USDA report fails to provide a bullish catalyst to the market, it remains at risk of continuing to languish in the same pattern. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

  • No new action is recommended for 2024 corn. Since late February ’22, Dec ’24 has been bound by 485 ¾ on the bottom and 602 on the top. During this time, Dec ’24 has held up better as bear spreading has allowed Dec ’24 to maintain more of its value versus old crop prices as traders attempt to price in a larger 2023 carryout with more uncertainty remaining for the 2024 crop. Moving forward, the risk for 2024 prices is the same as for 2023 prices, which is a continuation of a sideways to lower trend without a bullish catalyst. Grain Market Insider is watching for signs of a change in the current trend to look at recommending making additional sales and buying Dec ’24 call options. This past spring, Grain Market Insider recommended buying Dec ‘23 560 and 610 call options ahead of the summer rally and having those in place helped provide confidence to pull the trigger on recommending 2023 sales into that sharp rally, knowing that if corn kept rallying and went to 700 or 800 that the call options would protect those sold bushels.

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

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

  • March corn futures saw additional selling pressure to end the week, closing the session down 5 ¾ cents and establishing a new life of contract low. Selling in the soybean complex and poor weekly export sales totals help pull corn lower. For the week, March corn futures were 10 ½ cents lower.

  • The USDA released this morning the weekly export sales for last week and corn sales were disappointing.  US exports registered new sales of 367,500 mt (14.5 mb) for the week ending December 28. This was a marketing year low, and down 70% from last week. Currently, total sales are trending 37% ahead of last year’s pace and in line with USDA marketing year expectations.

  • Corn demand was a concern with yesterday’s ethanol production report. Ethanol production slipped to 1,049,000 barrels/day last week. Ethanol stocks jumped to 23.6 million barrels. Stocks likely grew due to weak gasoline demand during the holiday window. Last week, 105 million bushels of corn were used for ethanol production, and that pace is currently slightly ahead of USDA forecasts.

  • Managed Money continues to push their short position in the grain markets. On last week’s Commitment of Traders report, managed funds were short 177,626 net corn contracts, and with the price weakness this week, likely only added to the position as bullish news is still lacking in the corn market.

  • Next week will likely bring choppy trade and the market looks toward the key USDA Quarterly Grain Stocks and WASDE reports to be released on Friday, January 12.

Above: To start the year, March corn broke through 470 at the bottom end of the range that was held since the middle of November and is showing signs of being oversold, which can be supportive if prices turn higher. Currently, major support rests around 460 with the next major support area near 415. Above the market, resistance remains near the 50-day moving average and again between 495-500.

Soybeans

Soybeans Action Plan Summary

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

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

  • No Action is currently recommended for 2025 Soybeans. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted two springs from now, and it may be some time before conditions are conducive to consider making any recommendations. Be patient as we monitor the markets for signs of improvement.

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

  • Soybeans closed lower to end the first week of the year along with losses in both soybean meal and oil. Rains that began to fall in Brazil last weekend, and that continue to fall, have pressured prices despite the upcoming likely event that the country’s production will be lowered.

  • For the week, January soybeans lost 41 ¾ cents, March soybean meal lost $16.60, and March soybean oil lost 55 cents. As of last week’s CFTC report, non-commercials still held a net long position of 4,767 contracts in soybeans, but after this week’s losses they have likely flipped to a net short position.

  • Today’s export sales report was a poor show with increases of just 7.4 mb of soybean exports reported for 23/24. This was down 80% from the previous week and 85% from the prior 4-week average. Export shipments of 36.8 mb were above the 26.4 mb needed each week to achieve the USDA’s export estimates, and primary destinations were to China, Spain, and the Netherlands.

  • As eyes begin to turn towards next week’s WASDE report, private analysts have continued to lower their estimates for Brazilian production. The US ag attaché in Brazil cut their estimate by 3.5 mmt to 158.5 mmt, but many analysts are closer to 150 mmt. When taking Argentina’s improved production estimates into account, Brazilian production would likely need to fall below 135 mmt before this year’s South American crop became smaller than last year’s.

Above: March soybeans opened the year with breaking through 1292 support, leaving a gap on the daily chart between 1290 ¾ and 1296 ¾ that the market may try to fill. If prices turn back higher to fill the gap, resistance may come in near the 50 and 100-day moving averages, while support rests below the market around 1250.

Wheat

Market Notes: Wheat

  • After trading on both sides of unchanged, wheat posted a positive close in all three US futures classes, though Minneapolis futures were only up less than a penny in the front months and slightly negative July onward. The generally higher trade today may be tied to rumors that China is again interested in purchasing US wheat, but so far there has been no confirmation of that. Yesterday’s reversal is also a bullish technical signal which offered some support to today’s trade.

  • The USDA reported an increase of only 4.8 mb in wheat export sales for 23/24 and an increase of 0.2 mb for 24/25. Additionally, shipments last week at 10.5 mb were below the 17 mb pace needed per week to reach the USDA’s goal of 725 mb for 23/24.

  • Russian wheat export values have risen about $20 per ton since the November low. However, now at $245 per mt FOB, their offers are still very cheap compared to other origins. This is keeping pressure on US exports and therefore, the futures market.

  • US wheat futures were also able to post today’s gains in the face of a lower close for Paris Milling wheat. Also, the US Dollar Index has had a wide trading range today, breaking both above the 103 level and below the 102 level. As of this writing, it is closer to the middle of the range but still slightly negative. The direction of the dollar will be key to wheat prices as it directly affects the export market.

  • Next week, traders will receive the monthly WASDE report, but will also get the winter wheat seedings report. Expectations are for a reduction in winter wheat by 1.5 to 3.0 million acres. If realized, this could offer a boost to the market and may be the catalyst needed to start a short covering rally by the funds.

  • The Buenos Aires Grain Exchange increased their estimate of the 23/24 wheat crop production to 15.1 mmt versus 14.7 mmt last week. For reference, last year’s production was 12.2 mmt. Additionally, they said that 83.7% of the crop is harvested versus 70.9% a week ago.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. Between late July and the end of November, front month Chicago wheat trended lower, driven mostly by weak US demand and lower world wheat prices. During that time, and as managed funds established most of their short position of nearly 120,000 contracts, the market became extremely oversold. Since then, as the market rallied to a high of 649 ½, China made several US SRW wheat purchases, and funds covered more than 23,000 short contracts. During that runup, Grain Market Insider recommended making an additional sale to take advantage of the elevated prices in case the rally was temporary since US wheat prices remain elevated relative to other world exporters, despite the increase in demand. If the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. From the end of July, the July ’24 contract has slowly stepped its way down to a low of 586 in sympathy with the front month contract where managed money established a large short position during that time. Since then, July ’24 rallied alongside the March ’24 contract, as the funds covered over 30k contracts of their nearly 130k short contract position. While bearish headwinds remain, the funds continue to carry a large short position and seasonals remain supportive for the addition of weather risk premium, which are two factors that could fuel further short covering and another leg up in prices. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. Back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: On January 4, March Chicago wheat challenged the 600 support level and posted a bullish reversal, further strengthening the support area. If more bullish influence enters the market, prices could push higher to test overhead resistance near 650. If not, and prices begin to retreat, the next level of major support comes in near 556.

KC Wheat Action Plan Summary

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

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

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

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

Above: March KC wheat rejected an attempt to move higher near 650 and turned lower to test the bottom end of the recent range around 619. If the market continues to retreat, the next area of support remains near 595 and 575. Overhead, nearby resistance comes in around 650 and again between 675 – 680.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop. For much of the 2nd half of last year, driven mostly by fund selling and slow US export demand, front month Minneapolis wheat slowly stair-stepped lower until hitting the November low. During this time, managed funds also established a record net short position.  Since then, with the market mostly sideways, the November low of 697 ½ has held, and prices have pierced the 50-day moving average just once.  Although bearish headwinds remain, the large fund net short position could fuel a short-covering rally if a bullish catalyst enters the scene to move prices to close above the 50-day moving average. Back in June, Grain Market Insider made a sales recommendation during the July rally near 820, and with that sale in place, Grain Market Insider’s strategy is to look for price appreciation this winter with an eye on considering additional sales around 725 – 775, and again north of 800. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices. 

  • No new action is recommended for 2024 Minneapolis wheat. After trading to a peak of 871 ¾ last August, the Sept ’24 gradually retreated to a low in November in concert with the front month as managed funds built a record large net short position mostly on weak US export demand. And while Sept ’24 has failed to close above the 50-day moving average since late August, the 726 ¼ November low remains intact. Although bearish headwinds remain, the large fund net short position could fuel a short-covering rally if prices move higher and close above the 50-day moving average. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside following a 1-year range breakout in KC wheat, and in November recommended exiting 75% of the originally recommended position as July ’24 KC wheat showed signs of support around 630. While in the same time frame, Grain Market Insider also recommended making an additional sale as the Sept ’24 Minneapolis contract broke long time 743 support. For now, Grain Market Insider remains prepared to recommend exiting the last 25% of the open puts on any further supportive market developments.

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

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

Above: After making a new contract low on November 27, the March contract found buying interest from its oversold status and record fund short. Since then, the market posted a bearish reversal on December 6, showing significant resistance in the 750 area. If prices can break through upside resistance, they could run toward 790. If prices retreat, nearby support could be found around 718, with further support near the recent low of 697 ½.

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.

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01-04 End of Day: Wheat Posts Bullish Reversals Across the Board, Supporting Corn; Beans Retreat

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • The surging wheat market lent positive support to corn which closed higher after uncovering buying interest two days in a row in quiet trade with little bullish news.

  • Favorable weather in Brazil and weakness in both soybean meal and oil weighed on soybeans which reversed yesterday’s gains and posted a new low for the move.

  • Brazil’s export offers for soybeans and meal for February forward are below US offers, which is also adding to the downward pressure on futures prices

  • A firm close in Paris milling wheat and a steady US dollar helped spur short covering in the wheat market, as the March contract in all three classes rejected fresh one-month lows to close higher on the day.

  • To see the updated US Drought Monitor, and Brazil’s 1-week forecast total precipitation, courtesy of NWS, NOAA, and NDMC scroll down to 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. After posting a high in October, front month corn futures have steadily drifted sideways to lower with a general lack of bullish news and an estimated carryout around 2.1 billion bushels. If the January USDA report fails to provide a bullish catalyst to the market, it remains at risk of continuing to languish in the same pattern. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

  • No new action is recommended for 2024 corn. Since late February ’22, Dec ’24 has been bound by 485 ¾ on the bottom and 602 on the top. During this time, Dec ’24 has held up better as bear spreading has allowed Dec ’24 to maintain more of its value versus old crop prices as traders attempt to price in a larger 2023 carryout with more uncertainty remaining for the 2024 crop. Moving forward, the risk for 2024 prices is the same as for 2023 prices, which is a continuation of a sideways to lower trend without a bullish catalyst. Grain Market Insider is watching for signs of a change in the current trend to look at recommending making additional sales and buying Dec ’24 call options. This past spring, Grain Market Insider recommended buying Dec ‘23 560 and 610 call options ahead of the summer rally and having those in place helped provide confidence to pull the trigger on recommending 2023 sales into that sharp rally, knowing that if corn kept rallying and went to 700 or 800 that the call options would protect those sold bushels.

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

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

  • Buying in the wheat market helped pull corn futures higher on the session Thursday. March corn added 1 ¼ cents in an overall quiet trading session in the corn market with only a 5 ½ cent trading range for the day.

  • Technically, corn futures are trying to turn higher with two consecutive high trading sessions, and trading over yesterday’s low. Large supplies keep the rally limited and bullish news remains quiet for the corn market.

  • The USDA will release weekly export sales on Friday morning. Expectations are for new sales to range from 500,000 mt – 1.20 mmt for last week. The previous week saw reported new sales of 1.24 mmt for US corn.

  • South American weather looks to stay favorable for crops and is a limiting factor to grain prices. Some of the driest areas of Brazil saw recent beneficial rains, and near-term forecasts keep the weather pattern more active.

  • Since March futures have become the lead month, the National corn basis has risen around 10 cents and been trending slightly higher. The tight basis may be reflective of slow producer selling into the end of the year, and the cash market may need to firm in order to trigger grain movement out of producers’ hands at these price levels.

Above: To start the year, March corn broke through 470 at the bottom end of the range that was held since the middle of November and is showing signs of being oversold, which can be supportive if prices turn higher. Currently, major support rests around 460 with the next major support area near 415. Above the market, resistance remains near the 50-day moving average and again between 495-500.

Soybeans

Soybeans Action Plan Summary

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

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

  • No Action is currently recommended for 2025 Soybeans. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted two springs from now, and it may be some time before conditions are conducive to consider making any recommendations. Be patient as we monitor the markets for signs of improvement.

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

  • Soybeans ended the day lower after a slight recovery yesterday, but ultimately posted the lowest close since May of last year. Both soybean oil and meal were lower as well as rains continue to fall in Brazil and the forecast remains favorable.

  • While rain has fallen in the driest areas of central and northern Brazil over this past week with more rain in the forecast, some of the soybeans planted earlier in the season were too far gone and have started being harvested early but, in some cases, torn up completely so that safrinha corn could be planted.

  • Trade has been mainly focused on South American weather, but the upcoming WASDE report could cause focus to shift. The USDA’s last estimate for Brazilian soybean production was 161 mmt, but estimates from private analysts have been in the range of 151 to 158 mmt.

  • China is reportedly planning to ramp up its farm technology and innovation so that farming productivity can be accelerated, and it can become more sustainable domestically. China has invested heavily in agriculture in Brazil but continues to work towards increased self-reliance regarding food security.

Above: March soybeans opened the year with breaking through 1292 support, leaving a gap on the daily chart between 1290 ¾ and 1296 ¾ that the market may try to fill. If prices turn back higher to fill the gap, resistance may come in near the 50 and 100-day moving averages, while support rests below the market around 1250.

Wheat

Market Notes: Wheat

  • The wheat market put some green back on the board, led by double-digit gains in the front months of the Chicago class. Part of the strength in wheat today may be a result of the US Dollar Index finally taking a breather from its recent rally. From a big picture perspective, it is still in an uptrend but has traded lower in today’s session.

  • Helping US wheat was a higher close in Paris milling wheat futures. With a reversal today off the contract low in the March contract of 218.00 Euros per mt, that contract gained 2.00 for the day to close at 221.25. Along with being very technically oversold, the reversal may indicate more upside that could offer support to US wheat as well.

  • Ukraine said that they have removed mines and explosives on 208,000 hectares of land, the equivalent of about 800 square miles. This land is now available to farmers and if their yields remain consistent with this harvest, they will reportedly be able to grow about 1 mmt of grain on the returned land.

  • Russia and Ukraine will experience an arctic storm that brings extreme cold to both countries. While some areas have snow cover, there are some regions without any snow, bringing the threat of winterkill to those parts of the wheat crop. It is difficult to determine the exact impact this is having on trader sentiment; it may take time to see if any real damage is done before the market has any reaction.

  • Though it broke below the six-dollar level again today, the March Chicago contract did manage a close above both the 40 and 50-day moving averages which are converged near 605, and also just above the 100-day moving average of 612 ½. This makes the technical picture look a little more friendly and may trigger further buying interest.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. Between late July and the end of November, front month Chicago wheat trended lower, driven mostly by weak US demand and lower world wheat prices. During that time, and as managed funds established most of their short position of nearly 120,000 contracts, the market became extremely oversold. Since then, as the market rallied to a high of 649 ½, China made several US SRW wheat purchases, and funds covered more than 23,000 short contracts. During that runup, Grain Market Insider recommended making an additional sale to take advantage of the elevated prices in case the rally was temporary since US wheat prices remain elevated relative to other world exporters, despite the increase in demand. If the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. From the end of July, the July ’24 contract has slowly stepped its way down to a low of 586 in sympathy with the front month contract where managed money established a large short position during that time. Since then, July ’24 rallied alongside the March ’24 contract, as the funds covered over 30k contracts of their nearly 130k short contract position. While bearish headwinds remain, the funds continue to carry a large short position and seasonals remain supportive for the addition of weather risk premium, which are two factors that could fuel further short covering and another leg up in prices. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. Back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: March Chicago wheat is challenging support near 600, and the 50 and 100-day moving averages. If support holds, resistance overhead remains near 650. If not and the market breaks further, the next level of major support comes in near 556.

KC Wheat Action Plan Summary

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

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

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

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

Above: March KC wheat rejected an attempt to move higher near 650 and turned lower to test the bottom end of the recent range around 619. If the market continues to retreat, the next area of support remains near 595 and 575. Overhead, nearby resistance comes in around 650 and again between 675 – 680.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop. Following last July’s rally, the market has slowly stair-stepped lower, primarily due to low world wheat prices, weak US export demand, and managed fund selling, with the funds building a record large short position as the market sold off. Since weak US export demand remains the main impediment to higher prices, the market continues to be at risk of further downside erosion. The record large fund short position could fuel a rally back higher if a bullish catalyst enters the scene. Earlier this year, Grain Market Insider made a sales recommendation during the July rally near 820, and with that sale in place, Grain Market Insider’s strategy is to look for price appreciation this winter with an eye on considering additional sales around 725 – 775, and again north of 800. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Minneapolis wheat. At the end of August, the Sept ’24 contract traded to a peak of 871 ¾ and has continued to slowly stair-step lower, largely driven by lower world wheat prices, weak US export demand, and managed fund selling, and as the selloff progressed, the funds built up a record large short position. While bearish headwinds remain, the significant oversold condition of the market and the large fund net short position are two factors that could fuel a short-covering rally in the months ahead. Price seasonals are also supportive as prices tend to build in some risk premium going into the winter months. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside following a 1-year range breakout in KC wheat. Though recently, as the KC market extended further into oversold territory and the July ‘24 KC wheat contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. While in the same time frame, Grain Market Insider also recommended making an additional sale as the Sept ’24 Minneapolis contract broke long time 743 support. For now, moving forward, Grain Market Insider is prepared to recommend exiting the last 25% of the open puts on any further supportive market developments.

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

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

Above: After making a new contract low on November 27, the March contract found buying interest from its oversold status and record fund short. Since then, the market posted a bearish reversal on December 6, showing significant resistance in the 750 area. If prices can break through upside resistance, they could run toward 790. If prices retreat, nearby support could be found around 718, with further support near the recent low of 697 ½.

Other Charts / Weather

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

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01-03 End of Day: Wheat Continues its New Year’s Slide as Corn and Beans Rebound Slightly

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • March corn saw two-sided trade and a fresh contract low before recovering and closing near the top of the range. A general lack of friendly news is adding resistance to corn prices.

  • This past weekend’s rain in Brazil and the forecast for more continued to weigh on the soybean market earlier in the day before prices recovered as traders began looking toward next week’s USDA update.

  • Rallies in soybean meal and oil lent additional support to the soybean market and raised Board crush margins by 2 cents. Both products saw both sides of unchanged before settling in the upper end of their respective ranges.

  • Despite renewed Russian attacks on the port of Odesa, and expectations of a winter storm and cold temperatures in Russia and Ukraine, all three classes of wheat continued their slide lower, closing toward the lower end of their respective ranges, with a rising US dollar contributing additional pressure to prices.

  • To see the updated US 6-10 day temperature and precipitation outlooks, and GRACE-Based drought indicators for North and South America courtesy of NWS, NOAA, NDMC, and NASA scroll down to 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. Since the beginning of August, the corn market has traded sideways largely between 470 and 500. October’s brief breakout to 509 ½ and the subsequent failure to stay above the 50-day moving average indicates there is significant resistance in that price range. The failure of December’s USDA report to provide a bullish influence on the market puts the market at risk of drifting sideways to lower without a bullish catalyst. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

  • No new action is recommended for 2024 corn. Since late February ’22, Dec ’24 has been bound by 485 ¾ on the bottom and 602 on the top. During this time, Dec ’24 has held up better as bear spreading has allowed Dec ’24 to maintain more of its value versus old crop prices as traders attempt to price in a larger 2023 carryout with more uncertainty remaining for the 2024 crop. Moving forward, the risk for 2024 prices is the same as for 2023 prices, which is a continuation of a sideways to lower trend without a bullish catalyst. Grain Market Insider is watching for signs of a change in the current trend to look at recommending making additional sales and buying Dec ’24 call options. This past spring, Grain Market Insider recommended buying Dec ‘23 560 and 610 call options ahead of the summer rally and having those in place helped provide confidence to pull the trigger on recommending 2023 sales into that sharp rally, knowing that if corn kept rallying and went to 700 or 800 that the call options would protect those sold bushels.

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

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

  • Corn futures set a new contract low for the March contract before seeing some positive price action to finish with slim gains. March corn gained 1 ½ cents on the session.

  • Despite the light price strength on Wednesday, the technical weakness in the charts after Tuesday’s session will keep sellers active as prices consolidated at the bottom of yesterday’s lows. The corn market is just lacking friendly news to push prices higher.

  • South American weather looks to stay favorable for crops and is a limiting factor to grain prices. Some of the driest areas of Brazil saw beneficial rains over the weekend, and near-term forecasts keep the weather pattern more active.

  • The impacts of recent weather and economic concerns have the market anticipating a reduced second corn crop this summer based on reduced acres. Some analysts feel the crop could be 10-12 mmt below last year. 

  • Favorable weather in Argentina is supporting the corn crop, which market analysts feel could double last year’s drought reduced production. Argentina corn is rated 38% good to excellent versus 15% last year. Harvest of these supplies will limit the potential for the corn market to rally in late spring into summer with competing bushels in the market.

Above: To start the year, March corn broke through 470 at the bottom end of the range that was held since the middle of November and is showing signs of being oversold, which can be supportive if prices turn higher. Currently, major support rests around 460 with the next major support area near 415. Above the market, resistance remains near the 50-day moving average and again between 495-500.

Soybeans

Soybeans Action Plan Summary

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

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

  • No Action is currently recommended for 2025 Soybeans. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted two springs from now, and it may be some time before conditions are conducive to consider making any recommendations. Be patient as we monitor the markets for signs of improvement.

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

  • Soybeans began the day lower but recovered later in the day with only the January contract (which is in deliveries) ending lower. Both soybean meal and oil ended the day higher with soybean oil getting support from higher crude oil.

  • While yesterday’s selloff can likely be attributed to heavy rains over northern and central Brazil last weekend and an improved forecast, trade may now be focused on the upcoming WASDE report next Friday, which could feature cuts in South American production as well as a reduction in US ending stocks.

  • The USDA’s most recent estimate for Brazilian soybean production was 161 mmt, which now seems very high as many analysts are projecting a number between 150 and 155 mmt. At the same time, Argentina is expected to produce at least double the amount of soybeans from last year which would offset the loss in Brazil and then some.

  • The soybean harvest has already begun in Mato Grosso, Brazil, which is the primary growing state in the country. So far, the crops have been called very poor in certain areas, but yields have ranged from 27 to 49 bpa. It is worth noting that these soybeans are being harvested early due to the poor conditions and so second crop corn can be planted in a timely fashion.

Above: March soybeans opened the year with breaking through 1292 support, leaving a gap on the daily chart between 1290 ¾ and 1296 ¾ that the market may try to fill. If prices turn back higher to fill the gap, resistance may come in near the 50 and 100-day moving averages, while support rests below the market around 1250.

Wheat

Market Notes: Wheat

  • Wheat traded lower again today with losses across the board in all three US classes. This is despite new Russian attacks on the port of Odesa in Ukraine on Tuesday and an arctic storm that will bring very cold temperatures to wheat growing areas of both countries.

  • Adding to pressure in the wheat market is the continued recovery of the US Dollar Index which is higher again today. It may have currently run into some resistance around the 21-day moving average of 102.63, but if the uptrend continues it is sure to keep pressure on US exports. Additionally, Russian wheat FOB values are said to be around $245 per mt, keeping them the main global exporter.

  • To point to a silver lining, though March Chicago wheat broke below the six dollar level today, it did close above that important psychological support level. But to be realistic, it may be difficult for wheat to rally significantly without the support of corn or soybeans. And with more rain in the forecast for the drier areas of Brazil, this could keep a lid on the grain complex as a whole.

  • Winter wheat conditions in select states are improving. As of December 31, Kansas’ good to excellent rating came in at 43%, versus 39% for the week ending December 10. During a similar time period, conditions in Oklahoma were at 67% G/E versus 53%, and Texas was at 49% G/E versus 46%.

  • Despite a larger planted wheat area for 2023 in Brazil, production was lower due to weather issues. According to CONAB, Brazilian wheat production may reach 8.14 mmt in 23/24, down 22.8% compared to the record of 10.55 mmt. However, this would still be the second biggest crop on the books.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. Between late July and the end of November, front month Chicago wheat trended lower, driven mostly by weak US demand and lower world wheat prices. During that time, and as managed funds established most of their short position of nearly 120,000 contracts, the market became extremely oversold. Since then, as the market rallied to a high of 649 ½, China made several US SRW wheat purchases, and funds covered more than 23,000 short contracts. During that runup, Grain Market Insider recommended making an additional sale to take advantage of the elevated prices in case the rally was temporary since US wheat prices remain elevated relative to other world exporters, despite the increase in demand. If the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. From the end of July, the July ’24 contract has slowly stepped its way down to a low of 586 in sympathy with the front month contract where managed money established a large short position during that time. Since then, July ’24 rallied alongside the March ’24 contract, as the funds covered over 30k contracts of their nearly 130k short contract position. While bearish headwinds remain, the funds continue to carry a large short position and seasonals remain supportive for the addition of weather risk premium, which are two factors that could fuel further short covering and another leg up in prices. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. Back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: March Chicago wheat is challenging support near 600, and the 50 and 100-day moving averages. If support holds, resistance overhead remains near 650. If not and the market breaks further, the next level of major support comes in near 556.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since late July old crop KC wheat has been in a downtrend that has largely been driven by managed fund selling on low world wheat prices and weak US export demand. As the selloff progressed, the market became oversold, and the funds established the largest short position in three years. Even though bullish headwinds remain, these two factors have fueled the recent short-covering rally, which could extend much further if a bullish catalyst enters the market. This would also line up with the historical tendency for price appreciation as the market builds risk premium going into wintertime. Grain Market Insider’s strategy is to look for price appreciation going into this winter, as weather becomes a more prominent market mover and may consider suggesting additional sales if prices become over extended.

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

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

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

Above: March KC wheat rejected an attempt to move higher near 650 and turned lower to test the bottom end of the recent range around 619. If the market continues to retreat, the next area of support remains near 595 and 575. Overhead, nearby resistance comes in around 650 and again between 675 – 680.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop. Following last July’s rally, the market has slowly stair-stepped lower, primarily due to low world wheat prices, weak US export demand, and managed fund selling. With the funds building a record large short position as the market sold off. Since weak US export demand remains the main impediment to higher prices, the market continues to be at risk of further downside erosion. The record large fund short position could fuel a rally back higher if a bullish catalyst enters the scene, and if that happens, it may signal that a near-term low is in place. Earlier this year, Grain Market Insider made a sales recommendation during the July rally near 820, and with that sale in place, Grain Market Insider’s strategy is to look for price appreciation this winter with an eye on considering additional sales around 725 – 775, and again north of 800. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Minneapolis wheat. At the end of August, the Sept ’24 contract traded to a peak of 871 ¾ and has continued to slowly stair-step lower, largely driven by lower world wheat prices, weak US export demand, and managed fund selling, and as the selloff progressed, the funds built up a record large short position. While bearish headwinds remain, the significant oversold condition of the market and the large fund net short position are two factors that could fuel a short-covering rally in the months ahead. Price seasonals are also supportive as prices tend to build in some risk premium going into the winter months. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside following a 1-year range breakout in KC wheat. Though recently, as the KC market extended further into oversold territory and the July ‘24 KC wheat contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. While in the same time frame, Grain Market Insider also recommended making an additional sale as the Sept ’24 Minneapolis contract broke long time 743 support. For now, moving forward, Grain Market Insider is prepared to recommend exiting the last 25% of the open puts on any further supportive market developments.

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

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

Above: After making a new contract low on November 27, the March contract found buying interest from its oversold status and record fund short. Since then, the market posted a bearish reversal on December 6, showing significant resistance in the 750 area. If prices can break through upside resistance, they could run toward 790. If prices retreat, nearby support could be found around 718, with further support near the recent low of 697 ½.

Other Charts / Weather

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01-02 End of Day: Grains Red to Start 2024

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Corn futures followed soybean prices sharply lower to start the holiday-shortened trading week. Weaker oil prices and a stronger US Dollar also added pressure to corn today.

  • Soybean prices fell sharply to start 2024 after weekend rains fell in the driest areas of northern Brazil. Those same areas and greater portions of Brazil are forecast for more beneficial rains into mid-January.

  • All three wheat classes suffered losses to start the New Year. A stronger US Dollar paired with falling corn and soybean prices are the main culprits to today’s losses.

  • To see the updated US 6-10 day temperature and precipitation outlooks, and 1-week precipitation forecasts for both Brazil and Argentina, courtesy of NWS and NOAA, scroll down to 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. Since the beginning of August, the corn market has traded sideways largely between 470 and 500. October’s brief breakout to 509 ½ and the subsequent failure to stay above the 50-day moving average indicates there is significant resistance in that price range. The failure of December’s USDA report to provide a bullish influence on the market puts the market at risk of drifting sideways to lower without a bullish catalyst. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

  • No new action is recommended for 2024 corn. Since late February ’22, Dec ’24 has been bound by 485 ¾ on the bottom and 602 on the top. After testing 491 to 547 last July, it has mostly traded between 500 and 525. During this time, Dec ’24 has held up better as bear spreading has allowed Dec ’24 to maintain more of its value versus old crop prices as traders attempt to price in a larger 2023 carryout with more uncertainty remaining for the 2024 crop. Moving forward, the risk for 2024 prices is the same as for 2023 prices, which is a continuation of a sideways to lower trend without a bullish catalyst. Grain Market Insider is watching for signs of a change in the current trend to look at recommending buying Dec ’24 call options. This past spring, Grain Market Insider recommended buying Dec ‘23 560 and 610 call options ahead of the summer rally and having those in place helped provide confidence to pull the trigger on recommending 2023 sales into that sharp rally, knowing that if corn kept rallying and went to 700 or 800 that the call options would protect those sold bushels.

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

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

  • Strong selling pressure across the grain markets helped push corn futures lower to start the 2024 calendar year. March corn closed 7 ½ cents lower on the session, establishing a new contract low close.

  • An improved weather forecast and rainfall in areas of Brazil triggered the selling in the grain markets. Soybean futures finished with strong double-digit losses. Wheat futures posted double-digit losses as well, pressured by cheaper global wheat prices and a stronger US Dollar.

  • Weekly corn export inspections were impacted by the Christmas holiday. Last week, U.S. exporters shipped 569.7 MT (22.4 mb). Total inspections are now at 470 mb, up 24%.

  • Ethanol margins are seeing pressure as gasoline demand during the holiday window was weaker than anticipated. Softer crude oil and gasoline prices helped pressure the corn market.

  • Corn cash basis is holding firm and may see some improvement as low prices are halting producer selling. The cash market may have to make adjustments to trigger bushels out of producer’s hands.

Above: Since the middle of November, the March corn contract has been rangebound mostly between 495 up top and 470 on the bottom. Overhead resistance lies between 490 and 497, with heavier resistance near 510, and without fresh bullish input, the market runs the risk testing major support near 460.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Front month soybeans continue to be rangebound, largely between 1290 and 1400. At some point, the front month will eventually break out of that range, and if it breaks out to the downside, then the first risk would be 1180. If the breakout occurs to the topside, then the first opportunity would be 1510. The biggest looming catalyst behind a potential downside breakout is the projected record global carryout of soybeans, while the biggest looming catalyst for a potential upside breakout is continued adverse South American weather. Given the uncertainty of which direction the market will go, Grain Market Insider recently recommended adding to sales as the current price level is still historically good. It’s been disappointing how the market has been unable to push higher despite the South American planting disruptions. Because of that, Grain Market Insider’s concern is that, if the weather pattern doesn’t remain adverse, the path of least resistance could be lower. Grain Market Insider will continue to look at additional sales opportunities, as well as potential re-ownership strategies.

  • Grain Market Insider sees a continued opportunity to buy November ’24 1280 soybean calls and November ‘24 1360 soybean calls in equal quantities with a total net spend of approximately 111 cents plus commission and fees. Since the middle of last July, the Nov ’24 contract has been largely rangebound between 1250 and 1320. Today’s settlement of 1265 ¼ is the fourth day in a row with a close above 1250 support and the third day in a row with a stronger closing price. Grain Market Insider wants to take advantage of this value area and recommend purchasing call options. Purchasing call options now will give you confidence to make sales against anticipated production for the 2024 crop, which is yet to be planted, and they will also help to protect those future sales in the event prices continue to rally further.

  • No Action is currently recommended for 2025 Soybeans. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted two springs from now, and it may be some time before conditions are conducive to consider making any recommendations. Be patient as we monitor the markets for signs of improvement.

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

  • Soybeans had a rough start to the new year as they gapped lower on the open and continued to work lower throughout the day. Soybean meal closed lower, but soybean oil managed a higher close despite a loss in crude oil. Improved Brazilian weather has been a bearish factor.

  • Today’s export inspections report showed inspections for soybeans at 35 mb, which was in line with expectations but a bit soft compared to previous weeks. Total inspections for 23/24 are now at 855 mb, which is down 18% from the previous year, and the USDA is estimating soybean exports for 23/24 at 1.755 bb.

  • The latest forecast for Brazil features significant rains in the northern region of the country where the majority of the crop is grown and is also the area in greatest need of rains. There have been reports of farmers in the central region harvesting the poor soybeans early so that their second crop corn can be planted in time.

  • Estimates for South American crop sizes are beginning to fall by private analysts due to the dry and hot weather. StoneX is now pegging the Brazilian soybean crop at 152.8 mmt which is down from 161.9 mmt last month. Some of these losses may be made up by the good conditions in Argentina. The USDA will update their estimates in the WASDE report next Friday.

Above: After posting a high of 1398 ½ in November, soybeans found support around 1292. Overhead, nearby resistance remains near 1350 and again around 1400. If the market breaks support at 1292, it runs the risk of testing 1250.

Wheat

Market Notes: Wheat

  • All three US wheat futures classes posted losses with the heaviest being double-digits lower in the Chicago contracts. Weakness stemmed from corn and soybeans, but also from the US Dollar Index, which continued to rise throughout the session. At the time of this writing, it is up 0.85 at 102.18. To add to pressure, Matif wheat futures lost 1.50 to 1.75 Euros per mt, keeping it in a sideways to lower pattern.

  • US wheat inspections at 10.1 mb bring the total 23/24 inspections to 354 mb. That is down 19% from last year, and inspections are behind the pace needed to meet the USDA’s goal. This may have also factored into today’s weakness.

  • According to Ukraine officials, their nation has exported 13 mmt of cargo via their own Black Sea corridor since the export deal with Russia ended in July. In the face of danger and attacks on infrastructure, 430 vessels are reported to have been accepted for loading in ports since that time.

  • In the Red Sea the US Navy sank three Houthi ships due to their attacks on the US. Iran subsequently sent a war ship into that region. A further increase in tensions could affect wheat (and the grain markets as a whole), but so far it seems to be largely old news to traders that has already been priced in.

  • As a reminder, on Friday, January 12, the winter wheat seedings report will be released alongside the USDA’s Supply and Demand report. The former will offer the first estimate of 2024 US wheat acreage.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. Between late July and the end of November, front month Chicago wheat trended lower, driven mostly by weak US demand and lower world wheat prices. During that time, and as managed funds established most of their short position of nearly 120,000 contracts, the market became extremely oversold. Since then, as the market rallied to a high of 649 ½, China made several US SRW wheat purchases, and funds covered more than 23,000 short contracts. During that runup, Grain Market Insider recommended making an additional sale to take advantage of the elevated prices in case the rally was temporary since US wheat prices remain elevated relative to other world exporters, despite the increase in demand. If the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. From the end of July, the July ’24 contract has slowly stepped its way down to a low of 586 in sympathy with the front month contract where managed money established a large short position during that time. Since then, July ’24 rallied alongside the March ’24 contract, as the funds covered over 30k contracts of their nearly 130k short contract position. While bearish headwinds remain, the funds continue to carry a large short position and seasonals remain supportive for the addition of weather risk premium, which are two factors that could fuel further short covering and another leg up in prices. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. Back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: After rallying to 649 ½, Chicago wheat became overbought and turned lower after the December 8 USDA report. Since then, the market has found nearby support near 600. Nearby resistance remains overhead near 650, with additional resistance between 660 and 665. If the market breaks nearby support, it may test the 50-day moving average, and then support near 556.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since late July old crop KC wheat has been in a downtrend that has largely been driven by managed fund selling on low world wheat prices and weak US export demand. As the selloff progressed, the market became oversold, and the funds established the largest short position in three years. Even though bullish headwinds remain, these two factors have fueled the recent short-covering rally, which could extend much further if a bullish catalyst enters the market. This would also line up with the historical tendency for price appreciation as the market builds risk premium going into wintertime. Grain Market Insider’s strategy is to look for price appreciation going into this winter, as weather becomes a more prominent market mover and may consider suggesting additional sales if prices become over extended.

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

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

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

Above: March KC wheat has been consolidating since early December and closing over the 50-moving average signals that the market may be moving higher. If so, overhead resistance remains between 675 – 680, around the December high. To the downside, initial support remains near 625, with the next area of support around 595 and 575.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop. Following last July’s rally, the market has slowly stair-stepped lower, primarily due to low world wheat prices, weak US export demand, and managed fund selling. With the funds building a record large short position as the market sold off. Since weak US export demand remains the main impediment to higher prices, the market continues to be at risk of further downside erosion. The record large fund short position could fuel a rally back higher if a bullish catalyst enters the scene, and if that happens, it may signal that a near-term low is in place. Earlier this year, Grain Market Insider made a sales recommendation during the July rally near 820, and with that sale in place, Grain Market Insider’s strategy is to look for price appreciation this winter with an eye on considering additional sales around 725 – 775, and again north of 800. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Minneapolis wheat. At the end of August, the Sept ’24 contract traded to a peak of 871 ¾ and has continued to slowly stair-step lower, largely driven by lower world wheat prices, weak US export demand, and managed fund selling, and as the selloff progressed, the funds built up a record large short position. While bearish headwinds remain, the significant oversold condition of the market and the large fund net short position are two factors that could fuel a short-covering rally in the months ahead. Price seasonals are also supportive as prices tend to build in some risk premium going into the winter months. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside following a 1-year range breakout in KC wheat. Though recently, as the KC market extended further into oversold territory and the July ‘24 KC wheat contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. While in the same time frame, Grain Market Insider also recommended making an additional sale as the Sept ’24 Minneapolis contract broke long time 743 support. For now, moving forward, Grain Market Insider is prepared to recommend exiting the last 25% of the open puts on any further supportive market developments.

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

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

Above: After making a new contract low on November 27, the March contract found buying interest from its oversold status and record fund short. Since then, the market posted a bearish reversal on December 6, showing significant resistance in the 750 area. If prices can break through upside resistance, they could run toward 790. If prices retreat, nearby support could be found around 718, with further support near the recent low of 697 ½.

Other Charts / Weather

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12-29 End of Day: Year End Trade Sees Markets Pressed Lower to Close out the Year

ByGrain Market Insider

FROM ALL OF US AT TOTAL FARM MARKETING, HAVE A HAPPY AND PROSPEROUS NEW YEAR!
The CME and Total Farm Marketing offices will be closed Monday, January 1, in observance of New Year’s Day.

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • The lack of fresh bullish news and beneficial rain falling in the driest areas of Brazil this weekend, and into the new year, gave traders fuel to press existing short positions and corn prices lower on relatively light volume.  

  • Soft weekly export sales and more favorable Brazilian weather, with rain currently falling with more expected this weekend and into the new year, weighed heavily on soybeans as funds likely pared long positions to close the year.

  • Soybean meal and oil closed in opposite directions, with meal lower on continued pressure from higher anticipated Argentine production, and bean oil higher on a rise in palm oil prices due to lower production and Malaysian flooding.

  • Weak weekly export sales and the cancellation of an Egyptian purchase pressed the wheat markets lower into mid-morning before they recovered most of their losses going into the close.

  • To see the updated US 6-10 day temperature and precipitation outlooks, and 1 week precipitation forecasts for both Brazil and Argentina, courtesy of NWS and NOAA, scroll down to 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. Since the beginning of August, the corn market has traded sideways largely between 470 and 500. October’s brief breakout to 509 ½ and the subsequent failure to stay above the 50-day moving average indicates there is significant resistance in that price range. The failure of December’s USDA report to provide a bullish influence on the market puts the market at risk of drifting sideways to lower without a bullish catalyst. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

  • No new action is recommended for 2024 corn. Since late February ’22, Dec ’24 has been bound by 485 ¾ on the bottom and 602 on the top. After testing 491 to 547 last July, it has mostly traded between 500 and 525. During this time, Dec ’24 has held up better as bear spreading has allowed Dec ’24 to maintain more of its value versus old crop prices as traders attempt to price in a larger 2023 carryout with more uncertainty remaining for the 2024 crop. Moving forward, the risk for 2024 prices is the same as for 2023 prices, which is a continuation of a sideways to lower trend without a bullish catalyst. Grain Market Insider is watching for signs of a change in the current trend to look at recommending buying Dec ’24 call options. This past spring, Grain Market Insider recommended buying Dec ‘23 560 and 610 call options ahead of the summer rally and having those in place helped provide confidence to pull the trigger on recommending 2023 sales into that sharp rally, knowing that if corn kept rallying and went to 700 or 800 that the call options would protect those sold bushels.

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

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

  • Corn futures ended the year with selling pressure as funds pushed their short position with the lack of overall bullish news, and friendlier weather forecasts for Brazil on a light volume trading day. March corn closed 3 cents lower on the session and was 1 ¾ cents lower on the week.

  • Friday was the last trading session for the year. The March ‘24 corn contract traded 146 ¾ cents lower on the year from closing on 12/30/22 at 618. Prices have been impacted over the year by a growing corn supply, overall demand concerns with competition from global exporters, and a better-than-expected harvest this past fall.

  • Weekly corn export sales were within expectations for last week. Exporters sold 1.242 MMT (48.9 mb) of corn last week with Mexico again the top buyer of U.S. corn. Total corn sales commitments now total 1.158 billion bushels, up 375 from a year ago.

  • Grain markets saw selling pressure as the prospects of beneficial rainfall looks to hit key areas of Brazil over the weekend. The trend is looking to keep a more active weather pattern into January.

  • Longer-term prospects in the corn market are concerned about an early start to the second crop Brazil corn.  A Bloomberg sourced article published today was detailing that due to dry weather, some areas are seeing earlier soybean harvest than expected, which is allowing producers to shift to planting the summer second crop corn.

Above: Since the middle of November, the March corn contract has been rangebound mostly between 495 up top and 470 on the bottom. Overhead resistance lies between 490 and 497, with heavier resistance near 510, and without fresh bullish input, the market runs the risk testing major support near 460.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Front month soybeans continue to be rangebound, largely between 1290 and 1400. At some point, the front month will eventually break out of that range, and if it breaks out to the downside, then the first risk would be 1180. If the breakout occurs to the topside, then the first opportunity would be 1510. The biggest looming catalyst behind a potential downside breakout is the projected record global carryout of soybeans, while the biggest looming catalyst for a potential upside breakout is continued adverse South American weather. Given the uncertainty of which direction the market will go, Grain Market Insider recently recommended adding to sales as the current price level is still historically good. It’s been disappointing how the market has been unable to push higher despite the South American planting disruptions. Because of that, Grain Market Insider’s concern is that, if the weather pattern doesn’t remain adverse, the path of least resistance could be lower. Grain Market Insider will continue to look at additional sales opportunities, as well as potential re-ownership strategies.

  • Grain Market Insider sees a continued opportunity to buy November ’24 1280 soybean calls and November ‘24 1360 soybean calls in equal quantities with a total net spend of approximately 111 cents plus commission and fees. Since the middle of last July, the Nov ’24 contract has been largely rangebound between 1250 and 1320. Today’s settlement of 1265 ¼ is the fourth day in a row with a close above 1250 support and the third day in a row with a stronger closing price. Grain Market Insider wants to take advantage of this value area and recommend purchasing call options. Purchasing call options now will give you confidence to make sales against anticipated production for the 2024 crop, which is yet to be planted, and they will also help to protect those future sales in the event prices continue to rally further.

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

  • Soybeans closed significantly lower to end the year, and while thin holiday trade may have caused a larger sell-off than markets would normally see, improved weather conditions for the majority of Brazil has been a bearish factor. Heavy scattered rains are falling over the country this afternoon in some of the driest areas.

  • At the end of last year, March soybeans closed at 1399 ¾ and today they finished out the year at 1298, marking a loss of over a dollar, but soybeans have still held up better than corn and wheat have. For the month, March soybeans lost 64 ¼ cents, March soybean meal lost $28.20, and March soybean oil lost 3.87 cents.

  • While weather is turning wetter for Brazil, some soybeans that were planted early in the central region were not able to withstand the early drought and heat, and some are being either ripped up or harvested early so that corn or cotton can be planted on time. This could bring some support to prices moving into the new year.

  • Export sales for soybeans were on the soft side at 36.2 mb for 23/24, which was down 51% from the previous week and 38% from the prior 4-week average. Export shipments of 44.7 mb were well above the 26.9 mb needed each week to achieve the USDA’s export estimate. Primary destinations were to China, Japan, and Mexico.

Above: After posting a high of 1398 ½ in November, soybeans found support around 1292. Overhead, nearby resistance remains near 1350 and again around 1400. If the market breaks support at 1292, it runs the risk of testing 1250.

Wheat

Market Notes: Wheat

  • Wheat ended the week on the softer side, with a mostly lower close across the board. However, for the week, March Chicago wheat did gain 11-3/4 cents, and its KC counterpart ended up 19 cents. With markets closed next Monday for the New Year’s holiday, the shortened trading week may bring some added volatility.

  • The USDA reported an increase of 10.2 mb of wheat export sales for 23/24 and an increase of 1.5 mb for 24/25. Shipments last week at 12.6 mb were below the 16.8 mb pace needed per week to reach the USDA export goal of 725 mb for 23/24.

  • Egypt cancelled an international wheat tender according to GASC (their state grain buyer). No purchase was made, but the reasoning for the cancelation was not given. However, it is believed that the offers may have been too high priced.

  • Despite news of one of the worst Russian strikes against Ukraine so far, it did not seem to affect the wheat market. At this point, it is likely that only a disruption to actual vessels or trade routes would factor in war premium. In the face of the risks, President Zelensky of Ukraine said that they have exported 12 million tons of cargo via their own corridor since Russia withdrew from the Black Sea Grain Initiative.

  • According to the Buenos Aires Grain Exchange, Argentina’s wheat crop is now 70.9% harvested, compared with 65.2% last week. The production estimate was unchanged at 14.7 mmt. For reference, last year 12.2 mmt of wheat was collected.

  • The USDA reported that as of December 26, about 30% of the US winter wheat production area is experiencing drought conditions. This compares to last year when 69% of the crop was experiencing drought.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. Between late July and the end of November, front month Chicago wheat trended lower, driven mostly by weak US demand and lower world wheat prices. During that time, and as managed funds established most of their short position of nearly 120,000 contracts, the market became extremely oversold. Since then, as the market rallied to a high of 649 ½, China made several US SRW wheat purchases, and funds covered more than 23,000 short contracts. During that runup, Grain Market Insider recommended making an additional sale to take advantage of the elevated prices in case the rally was temporary since US wheat prices remain elevated relative to other world exporters, despite the increase in demand. If the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. From the end of July, the July ’24 contract has slowly stepped its way down to a low of 586 in sympathy with the front month contract where managed money established a large short position during that time. Since then, July ’24 rallied alongside the March ’24 contract, as the funds covered over 30k contracts of their nearly 130k short contract position. While bearish headwinds remain, the funds continue to carry a large short position and seasonals remain supportive for the addition of weather risk premium, which are two factors that could fuel further short covering and another leg up in prices. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. Back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: After rallying to 649 ½, Chicago wheat became overbought and turned lower after the December 8 USDA report. Since then, the market has found nearby support near 600. Nearby resistance remains overhead near 650, with additional resistance between 660 and 665. If the market breaks nearby support, it may test the 50-day moving average, and then support near 556.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since late July old crop KC wheat has been in a downtrend that has largely been driven by managed fund selling on low world wheat prices and weak US export demand. As the selloff progressed, the market became oversold, and the funds established the largest short position in three years. Even though bullish headwinds remain, these two factors have fueled the recent short-covering rally, which could extend much further if a bullish catalyst enters the market. This would also line up with the historical tendency for price appreciation as the market builds risk premium going into wintertime. Grain Market Insider’s strategy is to look for price appreciation going into this winter, as weather becomes a more prominent market mover and may consider suggesting additional sales if prices become over extended.

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

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

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

Above: March KC wheat has been consolidating since early December and closing over the 50-moving average signals that the market may be moving higher. If so, overhead resistance remains between 675 – 680, around the December high. To the downside, initial support remains near 625, with the next area of support around 595 and 575.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop. Following last July’s rally, the market has slowly stair-stepped lower, primarily due to low world wheat prices, weak US export demand, and managed fund selling. With the funds building a record large short position as the market sold off. Since weak US export demand remains the main impediment to higher prices, the market continues to be at risk of further downside erosion. The record large fund short position could fuel a rally back higher if a bullish catalyst enters the scene, and if that happens, it may signal that a near-term low is in place. Earlier this year, Grain Market Insider made a sales recommendation during the July rally near 820, and with that sale in place, Grain Market Insider’s strategy is to look for price appreciation this winter with an eye on considering additional sales around 725 – 775, and again north of 800. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Minneapolis wheat. At the end of August, the Sept ’24 contract traded to a peak of 871 ¾ and has continued to slowly stair-step lower, largely driven by lower world wheat prices, weak US export demand, and managed fund selling, and as the selloff progressed, the funds built up a record large short position. While bearish headwinds remain, the significant oversold condition of the market and the large fund net short position are two factors that could fuel a short-covering rally in the months ahead. Price seasonals are also supportive as prices tend to build in some risk premium going into the winter months. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside following a 1-year range breakout in KC wheat. Though recently, as the KC market extended further into oversold territory and the July ‘24 KC wheat contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. While in the same time frame, Grain Market Insider also recommended making an additional sale as the Sept ’24 Minneapolis contract broke long time 743 support. For now, moving forward, Grain Market Insider is prepared to recommend exiting the last 25% of the open puts on any further supportive market developments.

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

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

Above: After making a new contract low on November 27, the March contract found buying interest from its oversold status and record fund short. Since then, the market posted a bearish reversal on December 6, showing significant resistance in the 750 area. If prices can break through upside resistance, they could run toward 790. If prices retreat, nearby support could be found around 718, with further support near the recent low of 697 ½.

Other Charts / Weather

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

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

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12-28 End of Day: Corn and Beans Lower; Wheat Higher on Thin Volume

ByGrain Market Insider

FROM ALL OF US AT TOTAL FARM MARKETING, HAVE A HAPPY AND PROSPEROUS NEW YEAR!
The CME and Total Farm Marketing offices will be closed Monday, January 1, in observance of New Year’s Day.

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Despite strong ethanol production numbers, the corn market continued to drift lower following Tuesday’s runup, as it settled just above the session lows on light holiday volume and two sided trade.

  • Forecasts for additional rainfall in the driest areas of Brazil weighed on the soybean complex that experienced choppy two sided trade, with thin volume on both sides of unchanged.

  • Both soybean meal and oil closed lower, along with soybeans. The prospect of normal crops in Argentina continue to weigh on meal, while weaker crude and veg oils add resistance to bean oil. The combination has pressured soybeans and reduced March Board crush margins nearly 40 cents since the start of December.

  • Reports of a Panama-flagged ship striking a Russian mine as it traveled to a Ukrainian Danube River grain terminal may have sparked the rally in the wheat complex. All three classes settled in the upper third of their respective ranges, regaining most, if not all, of yesterday’s losses.

  • The US dollar traded to a fresh 5 month low before reversing to settle higher on the day. Market expectations that the Federal Reserve will begin reducing rates before other central banks is the driving force behind the lower trend. A lower dollar typically makes US exports more competitive and could provide a level of underlying support.

  • To see the updated US Drought Monitor and the 1 week total precipitation forecasts for Brazil and Argentina, courtesy of NWS and NOAA, scroll down to 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. Since the beginning of August, the corn market has traded sideways largely between 470 and 500. October’s brief breakout to 509 ½ and the subsequent failure to stay above the 50-day moving average indicates there is significant resistance in that price range. The failure of December’s USDA report to provide a bullish influence on the market puts the market at risk of drifting sideways to lower without a bullish catalyst. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

  • No new action is recommended for 2024 corn. Since late February ’22, Dec ’24 has been bound by 485 ¾ on the bottom and 602 on the top. After testing 491 to 547 last July, it has mostly traded between 500 and 525. During this time, Dec ’24 has held up better as bear spreading has allowed Dec ’24 to maintain more of its value versus old crop prices as traders attempt to price in a larger 2023 carryout with more uncertainty remaining for the 2024 crop. Moving forward, the risk for 2024 prices is the same as for 2023 prices, which is a continuation of a sideways to lower trend without a bullish catalyst. Grain Market Insider is watching for signs of a change in the current trend to look at recommending buying Dec ’24 call options. This past spring, Grain Market Insider recommended buying Dec ‘23 560 and 610 call options ahead of the summer rally and having those in place helped provide confidence to pull the trigger on recommending 2023 sales into that sharp rally, knowing that if corn kept rallying and went to 700 or 800 that the call options would protect those sold bushels.

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

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

  • March corn futures saw both sides of unchanged on relatively light volume in today’s session before settling near the day’s lows, as traders continue to square positions ahead of the year-end. With Brazilian weather forecasts turning more favorable, the corn market may need a boost in export demand or some other supply concern to turn prices back higher.

  • Ethanol average daily production for the week ending December 22 averaged 1.107 million barrels. This was above trade estimates and the highest since 2017. Ethanol stocks also rose to 23.517 million barrels, an increase of 611,000 from last week and the highest since 2021.

  • Refinitiv Commodities Research (RCR) released its latest estimate of the 23/24 Brazilian corn crop at 118 mmt, which is down about 1% from its last estimate and from the USDA’s current 129 mmt estimate. They cite planting delays of the first corn crop and soybean crop and unfavorable weather conditions. These delays will ultimately delay planting and hurt yields of the safrinha crop, which accounts for 75% of Brazil’s production.

  • There were reports of a Panama-flagged ship hitting a Russian mine in the Black Sea as it was heading to a Danube River port to load grain. According to the Reuters article, two individuals were injured in the attack.

  • The USDA will release weekly export sales on Friday morning. Expectations for new sales last week to range from 600,000 to 1,400,000 mt for the week.

Above: Since the middle of November, the March corn contract has been rangebound mostly between 495 up top and 470 on the bottom. Overhead resistance lies between 490 and 497, with heavier resistance near 510, and without fresh bullish input, the market runs the risk testing major support near 460.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Front month soybeans continue to be rangebound, largely between 1290 and 1400. At some point, the front month will eventually break out of that range, and if it breaks out to the downside, then the first risk would be 1180. If the breakout occurs to the topside, then the first opportunity would be 1510. The biggest looming catalyst behind a potential downside breakout is the projected record global carryout of soybeans, while the biggest looming catalyst for a potential upside breakout is continued adverse South American weather. Given the uncertainty of which direction the market will go, Grain Market Insider recently recommended adding to sales as the current price level is still historically good. It’s been disappointing how the market has been unable to push higher despite the South American planting disruptions. Because of that, Grain Market Insider’s concern is that, if the weather pattern doesn’t remain adverse, the path of least resistance could be lower. Grain Market Insider will continue to look at additional sales opportunities, as well as potential re-ownership strategies.

  • Grain Market Insider sees a continued opportunity to buy November ’24 1280 soybean calls and November ‘24 1360 soybean calls in equal quantities with a total net spend of approximately 111 cents plus commission and fees. Since the middle of last July, the Nov ’24 contract has been largely rangebound between 1250 and 1320. Today’s settlement of 1265 ¼ is the fourth day in a row with a close above 1250 support and the third day in a row with a stronger closing price. Grain Market Insider wants to take advantage of this value area and recommend purchasing call options. Purchasing call options now will give you confidence to make sales against anticipated production for the 2024 crop, which is yet to be planted, and they will also help to protect those future sales in the event prices continue to rally further.

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

  • Soybeans ended the day lower in a day of mixed trade that was caused by volatility from thinly traded markets. While prices were higher earlier this morning, soybeans and both soybean meal and oil slipped later in the day on news of rainfall in Brazil, along with a more favorable forecast.

  • The last regular trading day for January soybeans was today, as the delivery period will begin tomorrow. For the month, January beans are set to lose around 37 cents depending on tomorrow’s close. Both January meal and oil are set to have losses on the month as well.

  • Central and northern Brazil received heavy scattered showers throughout the day, but temperatures are forecast to be warmer in the short term. January is expected to be wet for the driest parts of central and northern Brazil, and the forecast for Argentina remains favorable.

  • Next month on the 12th, the USDA will release its January WASDE report, and changes will very likely be made to South American production. Their latest guess for Brazil was at 161 mmt, but many analysts are expecting closer to 155 mmt. The last guess for Argentina was 48 mmt, but that number may rise. For changes in the US, many analysts are expecting the USDA to decrease the export sales number, which would increase the carryout.

Above: After posting a high of 1398 ½ in November, soybeans found support around 1292. Overhead, nearby resistance remains near 1350 and again around 1400. If the market breaks support at 1292, it runs the risk of testing 1250.

Wheat

Market Notes: Wheat

  • Breaking news indicated that a vessel in the Black Sea struck a Russian mine. Two people were reported to be injured. The civilian ship was headed to the Danube River to be loaded with grain and this may have factored some more premium into wheat today, with a higher close in all three futures classes.

  • The US dollar made a new near-term low today at 100.61, before finding some support and heading back into positive territory. From a big picture perspective, the trend is still down, but should be watched closely as today’s reversal may be a signal that a bottom is forming. If it begins to rally, it could offer resistance to the wheat market.

  • The increase in freight costs is not only affecting the US. Russia, despite their cheap wheat export prices, is seeing weaker shipments as well.  According to SovEcon, Russian 23/24 wheat exports are now estimated to be 48.6 mmt versus 48.8 mmt previously. Their November wheat exports at 3.5 mmt, down from last year’s 4.3 mmt.

  • It is possible that with funds still net short a hefty number of wheat contracts, a short covering rally could be triggered by the recent buying interest in the wheat market. The holidays tend to be a choppy time for the markets with lower trade volume. While Chicago wheat is technically neither overbought nor oversold, momentum indicators are pointing higher for the time being.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. Between late July and the end of November, front month Chicago wheat trended lower, driven mostly by weak US demand and lower world wheat prices. During that time, and as managed funds established most of their short position of nearly 120,000 contracts, the market became extremely oversold. Since then, as the market rallied to a high of 649 ½, China made several US SRW wheat purchases, and funds covered more than 23,000 short contracts. During that runup, Grain Market Insider recommended making an additional sale to take advantage of the elevated prices in case the rally was temporary since US wheat prices remain elevated relative to other world exporters, despite the increase in demand. If the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. From the end of July, the July ’24 contract has slowly stepped its way down to a low of 586 in sympathy with the front month contract where managed money established a large short position during that time. Since then, July ’24 rallied alongside the March ’24 contract, as the funds covered over 30k contracts of their nearly 130k short contract position. While bearish headwinds remain, the funds continue to carry a large short position and seasonals remain supportive for the addition of weather risk premium, which are two factors that could fuel further short covering and another leg up in prices. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. Back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: After rallying to 649 ½, Chicago wheat became overbought and turned lower after the December 8 USDA report. Since then, the market has found nearby support near 600. Nearby resistance remains overhead near 650, with additional resistance between 660 and 665. If the market breaks nearby support, it may test the 50-day moving average, and then support near 556.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since late July old crop KC wheat has been in a downtrend that has largely been driven by managed fund selling on low world wheat prices and weak US export demand. As the selloff progressed, the market became oversold, and the funds established the largest short position in three years. Even though bullish headwinds remain, these two factors have fueled the recent short-covering rally, which could extend much further if a bullish catalyst enters the market. This would also line up with the historical tendency for price appreciation as the market builds risk premium going into wintertime. Grain Market Insider’s strategy is to look for price appreciation going into this winter, as weather becomes a more prominent market mover and may consider suggesting additional sales if prices become over extended.

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

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

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

Above: Since posting bearish reversals on December 6 and 8, the market has been consolidating while holding support around 625, with close in resistance just overhead at the 50-day moving average. If the market breaks lower, the next area of support may come in around 595 and 575. Resistance above the 50-day moving average remains around 675 – 680.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop. Following last July’s rally, the market has slowly stair-stepped lower, primarily due to low world wheat prices, weak US export demand, and managed fund selling. With the funds building a record large short position as the market sold off. Since weak US export demand remains the main impediment to higher prices, the market continues to be at risk of further downside erosion. The record large fund short position could fuel a rally back higher if a bullish catalyst enters the scene, and if that happens, it may signal that a near-term low is in place. Earlier this year, Grain Market Insider made a sales recommendation during the July rally near 820, and with that sale in place, Grain Market Insider’s strategy is to look for price appreciation this winter with an eye on considering additional sales around 725 – 775, and again north of 800. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Minneapolis wheat. At the end of August, the Sept ’24 contract traded to a peak of 871 ¾ and has continued to slowly stair-step lower, largely driven by lower world wheat prices, weak US export demand, and managed fund selling, and as the selloff progressed, the funds built up a record large short position. While bearish headwinds remain, the significant oversold condition of the market and the large fund net short position are two factors that could fuel a short-covering rally in the months ahead. Price seasonals are also supportive as prices tend to build in some risk premium going into the winter months. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside following a 1-year range breakout in KC wheat. Though recently, as the KC market extended further into oversold territory and the July ‘24 KC wheat contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. While in the same time frame, Grain Market Insider also recommended making an additional sale as the Sept ’24 Minneapolis contract broke long time 743 support. For now, moving forward, Grain Market Insider is prepared to recommend exiting the last 25% of the open puts on any further supportive market developments.

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

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

Above: After making a new contract low on November 27, the March contract found buying interest from its oversold status and record fund short. Since then, the market posted a bearish reversal on December 6, showing significant resistance in the 750 area. If prices can break through upside resistance, they could run toward 790. If prices retreat, nearby support could be found around 718, with further support near the recent low of 697 ½.

Other Charts / Weather

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

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

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12-27 End of Day: Grains Settle Mixed on Light Holiday Volume

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • A more favorable outlook for Brazilian weather, a lower wheat market, and a lack of fresh bullish news led the corn market to end the day lower on light holiday volume, breaking its three day run of higher closes.

  • With support coming from a bullish reversal in soybean oil, soybeans closed mostly higher on the day after trading below unchanged for much of the session on low year-end holiday volume.

  • Soybean meal and oil closed in opposite directions with meal lower on the day and oil higher, though both products rallied off the day’s lows. Position squaring appears to have dominated the product’s trade, as traders look to even up their respective long meal or short oil positions before the year’s end.

  • The falling US dollar failed to ignite any follow through buying in the wheat complex, as all three wheat classes gave up a portion of yesterday’s gains. Chicago, being the weakest of the three, led the way with double digit losses across the board, while old crop KC gained on new crop, likely on improved conditions.

  • The US dollar continued its downtrend and traded to its lowest level since July 27, 2023, on expectations that the Federal Reserve will begin reducing rates before other central banks. The downtrend in the dollar makes US exports more competitive and may provide some level of underlying support.

  • To see the updated GRACE-Based Root Zone Soil Moisture Drought Indicator maps of the US and South America, courtesy of NASA GRACE and the NDMC, scroll down to 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. Since the beginning of August, the corn market has traded sideways largely between 470 and 500. October’s brief breakout to 509 ½ and the subsequent failure to stay above the 50-day moving average indicates there is significant resistance in that price range. The failure of December’s USDA report to provide a bullish influence on the market puts the market at risk of drifting sideways to lower without a bullish catalyst. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

  • No new action is recommended for 2024 corn. Since late February ’22, Dec ’24 has been bound by 485 ¾ on the bottom and 602 on the top. After testing 491 to 547 last July, it has mostly traded between 500 and 525. During this time, Dec ’24 has held up better as bear spreading has allowed Dec ’24 to maintain more of its value versus old crop prices as traders attempt to price in a larger 2023 carryout with more uncertainty remaining for the 2024 crop. Moving forward, the risk for 2024 prices is the same as for 2023 prices, which is a continuation of a sideways to lower trend without a bullish catalyst. Grain Market Insider is watching for signs of a change in the current trend to look at recommending buying Dec ’24 call options. This past spring, Grain Market Insider recommended buying Dec ‘23 560 and 610 call options ahead of the summer rally and having those in place helped provide confidence to pull the trigger on recommending 2023 sales into that sharp rally, knowing that if corn kept rallying and went to 700 or 800 that the call options would protect those sold bushels.

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

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

  • Today’s lower close in corn marks the end of a three-session rally for the March contract. Without much fresh news to drive the market and a more favorable outlook for Brazil, corn did not find much footing today. Additionally, shortened holiday weeks tend to be a bit choppy with lighter trade volume.

  • Private estimates of the Brazil corn crop are as low as 117 mmt, whereas the USDA is using a figure of 129 mmt. There may be some delays to safrinha planting due to weather issues, but without the crop in the ground, it may be too early to determine if that will significantly impact the crop.

  • According to the CFTC, as of December 19, managed funds added nearly 30,000 short corn contracts to bring their total short position to 180,724. This may be adding some pressure to the market, but also primes it for a short covering rally, provided there is a catalyst to trigger it.

  • China has approved 26 seed companies to sell GMO corn and soybean seed in certain provinces. As China works to become more self-sufficient, it may mean that they import fewer goods and commodities from the US. However, this will be bearish in the long term, and is not necessarily a major concern now. With that said, it has been reported that Chinese corn producers are planning to more than double their GMO corn planting next year versus 670,000 hectares in 2023.

Above: Since the middle of November, the March corn contract has been rangebound mostly between 495 up top and 470 on the bottom. Overhead resistance lies between 490 and 497, with heavier resistance near 510, and without fresh bullish input, the market runs the risk testing major support near 460.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Front month soybeans continue to be rangebound, largely between 1290 and 1400. At some point, the front month will eventually break out of that range, and if it breaks out to the downside, then the first risk would be 1180. If the breakout occurs to the topside, then the first opportunity would be 1510. The biggest looming catalyst behind a potential downside breakout is the projected record global carryout of soybeans, while the biggest looming catalyst for a potential upside breakout is continued adverse South American weather. Given the uncertainty of which direction the market will go, Grain Market Insider recently recommended adding to sales as the current price level is still historically good. It’s been disappointing how the market has been unable to push higher despite the South American planting disruptions. Because of that, Grain Market Insider’s concern is that, if the weather pattern doesn’t remain adverse, the path of least resistance could be lower. Grain Market Insider will continue to look at additional sales opportunities, as well as potential re-ownership strategies.

  • Grain Market Insider recommends buying November ’24 1280 soybean calls and November ‘24 1360 calls in equal quantities with a total net spend of approximately 111 cents plus commission and fees. Since the middle of last July, the Nov ’24 contract has been largely rangebound between 1250 and 1320.  Today’s settlement of 1265 ¼ is the fourth day in a row with a close above 1250 support and the third day in a row with a stronger closing price. Grain Market Insider wants to take advantage of this value area and recommend purchasing call options. Purchasing call options now will give you confidence to make sales against anticipated production for the 2024 crop, which is yet to be planted, and they will also help to protect those future sales in the event prices continue to rally further.

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

  • Year end trade added to the volatility in the soybean complex, which saw two sided trade on relatively low holiday volume. Soybeans reversed course, ending the day higher after trading lower in the overnight session. Soybean oil lent support to soybeans as it posted a bullish reversal and also closed higher on the day, while meal closed lower, but well off its lows.

  • Overall, Brazilian weather is improving with showers throughout central and northern Brazil and a wet forecast with shower activity set to favor the northeastern areas, though the forecasts have improved, they still need to verify into actual rainfall, which at times has been less than expected.

  • The situation in Argentina has improved considerably from last year, with favorable weather overall and expectations of a normal to possibly above normal crop. The potential increase in Argentina’s production could more than offset the potential losses in Brazil, which is adding resistance to prices.

  • Brazilian crop watcher, Dr. Michael Cordonnier, lowered his estimate of Brazil’s soybean production to 153 mmt, and cited the variable rain amounts and coverage over the past week for his conclusions.

  • In other news, according to China’s Ministry and Agricultural and Rural Affairs, China approved 26 seed companies to produce, distribute, and sell GMO corn and soybean seeds. The move comes as the country attempts to become more self-sufficient in securing its own food supply.

Above: After posting a high of 1398 ½ in November, soybeans found support around 1292. Overhead, nearby resistance remains near 1350 and again around 1400. If the market breaks support at 1292, it runs the risk of testing 1250.

Wheat

Market Notes: Wheat

  • Most of yesterday’s gains in wheat were erased today with lower closes in all three US futures classes. In addition, the spread between the March contracts of Chicago and Kansas City wheat has been narrowing as the conditions in the US southern Plains improve with more moisture.

  • Wheat also saw weakness today, even though the US Dollar Index continues to drop. At the time of this writing, it has broken below the 101 level and is the lowest it has been since July 27. This should make US wheat more attractive to global importers. But Russia continues to be the cheapest origin with FOB values around $240 to $243 per mt.

  • Coceral, a grain trade association, has estimated that EU soft wheat production next year will be 139.4 mmt, up just 0.1 mmt from 2023. This is practically no change and comes even though France may have reduced production due to weather issues that delayed planting; Spain is expected to make up the difference.

  • According to Russia, their 2023 grain harvest is the second largest on record at 142.6 mmt. Of that total, wheat accounted for about 93 mmt. That is down from 104.2 mmt of wheat in 2022, but is still a large amount that is sure to keep Russian prices low and a dominance in terms of the export market.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. Between late July and the end of November, front month Chicago wheat trended lower, driven mostly by weak US demand and lower world wheat prices. During that time, and as managed funds established most of their short position of nearly 120,000 contracts, the market became extremely oversold. Since then, as the market rallied to a high of 649 ½, China made several US SRW wheat purchases, and funds covered more than 23,000 short contracts. During that runup, Grain Market Insider recommended making an additional sale to take advantage of the elevated prices in case the rally was temporary since US wheat prices remain elevated relative to other world exporters, despite the increase in demand. If the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. From the end of July, the July ’24 contract has slowly stepped its way down to a low of 586 in sympathy with the front month contract where managed money established a large short position during that time. Since then, July ’24 rallied alongside the March ’24 contract, as the funds covered over 30k contracts of their nearly 130k short contract position. While bearish headwinds remain, the funds continue to carry a large short position and seasonals remain supportive for the addition of weather risk premium, which are two factors that could fuel further short covering and another leg up in prices. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. Back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: After rallying to 649 ½, Chicago wheat became overbought and turned lower after the December 8 USDA report. Since then, the market has found nearby support near 600. Nearby resistance remains overhead near 650, with additional resistance between 660 and 665. If the market breaks nearby support, it may test the 50-day moving average, and then support near 556.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since late July old crop KC wheat has been in a downtrend that has largely been driven by managed fund selling on low world wheat prices and weak US export demand. As the selloff progressed, the market became oversold, and the funds established the largest short position in three years. Even though bullish headwinds remain, these two factors have fueled the recent short-covering rally, which could extend much further if a bullish catalyst enters the market. This would also line up with the historical tendency for price appreciation as the market builds risk premium going into wintertime. Grain Market Insider’s strategy is to look for price appreciation going into this winter, as weather becomes a more prominent market mover and may consider suggesting additional sales if prices become over extended.

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

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

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

Above: Since posting bearish reversals on December 6 and 8, the market has been consolidating while holding support around 625, with close in resistance just overhead at the 50-day moving average. If the market breaks lower, the next area of support may come in around 595 and 575. Resistance above the 50-day moving average remains around 675 – 680.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop. Following last July’s rally, the market has slowly stair-stepped lower, primarily due to low world wheat prices, weak US export demand, and managed fund selling. With the funds building a record large short position as the market sold off. Since weak US export demand remains the main impediment to higher prices, the market continues to be at risk of further downside erosion. The record large fund short position could fuel a rally back higher if a bullish catalyst enters the scene, and if that happens, it may signal that a near-term low is in place. Earlier this year, Grain Market Insider made a sales recommendation during the July rally near 820, and with that sale in place, Grain Market Insider’s strategy is to look for price appreciation this winter with an eye on considering additional sales around 725 – 775, and again north of 800. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Minneapolis wheat. At the end of August, the Sept ’24 contract traded to a peak of 871 ¾ and has continued to slowly stair-step lower, largely driven by lower world wheat prices, weak US export demand, and managed fund selling, and as the selloff progressed, the funds built up a record large short position. While bearish headwinds remain, the significant oversold condition of the market and the large fund net short position are two factors that could fuel a short-covering rally in the months ahead. Price seasonals are also supportive as prices tend to build in some risk premium going into the winter months. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside following a 1-year range breakout in KC wheat. Though recently, as the KC market extended further into oversold territory and the July ‘24 KC wheat contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. While in the same time frame, Grain Market Insider also recommended making an additional sale as the Sept ’24 Minneapolis contract broke long time 743 support. For now, moving forward, Grain Market Insider is prepared to recommend exiting the last 25% of the open puts on any further supportive market developments.

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

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

Above: After making a new contract low on November 27, the March contract found buying interest from its oversold status and record fund short. Since then, the market posted a bearish reversal on December 6, showing significant resistance in the 750 area. If prices can break through upside resistance, they could run toward 790. If prices retreat, nearby support could be found around 718, with further support near the recent low of 697 ½.

Other Charts / Weather

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12-26 End of Day: Grains Higher to Start Shortened Holiday Week

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Corn futures followed gains in wheat today as traders returned from the Christmas break. Support also likely came from news of the reopening of two US rail crossings into Mexico, a major buyer of US corn.

  • Soybeans joined corn and wheat futures trading higher today. Traders continue to weigh what damage may have already been done to Brazilian soybeans due to recent dryness with the likely coming benefit from forecast rains over the next two weeks.

  • Wheat futures posted strong gains today as the US dollar continued its recent trend lower, support may have also come from increased tensions in the Black Sea region.

  • To see the updated US 7-day precipitation forecast, and Brazil 1 week forecast total precipitation courtesy of the National Weather Service, Climate Prediction Center., and NOAA, scroll down to 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. Since the beginning of August, the corn market has traded sideways largely between 470 and 500. October’s brief breakout to 509 ½ and the subsequent failure to stay above the 50-day moving average indicates there is significant resistance in that price range. The failure of December’s USDA report to provide a bullish influence on the market puts the market at risk of drifting sideways to lower without a bullish catalyst. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

  • No new action is recommended for 2024 corn. Since late February ’22, Dec ’24 has been bound by 485 ¾ on the bottom and 602 on the top. After testing 491 to 547 last July, it has mostly traded between 500 and 525. During this time, Dec ’24 has held up better as bear spreading has allowed Dec ’24 to maintain more of its value versus old crop prices as traders attempt to price in a larger 2023 carryout with more uncertainty remaining for the 2024 crop. Moving forward, the risk for 2024 prices is the same as for 2023 prices, which is a continuation of a sideways to lower trend without a bullish catalyst. Grain Market Insider is watching for signs of a change in the current trend to look at recommending buying Dec ’24 call options. This past spring, Grain Market Insider recommended buying Dec ‘23 560 and 610 call options ahead of the summer rally and having those in place helped provide confidence to pull the trigger on recommending 2023 sales into that sharp rally, knowing that if corn kept rallying and went to 700 or 800 that the call options would protect those sold bushels.

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

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

  • Strong money flow into the grain markets, and commodity markets in general, helped push corn futures higher on the session. March corn gained 7 ¼ cents on the day, led by buying in the wheat and soybean markets.

  • Wheat futures posted strong gains as tensions escalated in the Black Sea region with an attack on a Russian warship at its port in Crimea by the Ukraine military. Typically, Ukraine war news has been brushed off by the markets in general, but with the end of the year approaching, this event triggered short covering in the wheat markets.

  • Managed Money were strong sellers of corn positions in last week’s Commitment of Traders report. Funds added 29,000+ short positions back into the corn market. With the end of the year coming soon, position squaring of some of those short positions could help support corn prices this week.

  • The USDA released weekly export inspection on Tuesday morning. Last week, the U.S. inspected 1.082 MMT (42.6 MB) for corn. Total inspections are running 26% ahead of the previous year and in line with current USDA targets.

  • South American weather is turning more friendly for first crop Brazil corn and Argentina corn production. Argentina corn is returning from two years of drought-stressed crops. The Buenos Aires Grain Exchange stated that only 1% of this year’s Argentina corn crop is rated in poor condition.

Above: After posting bearish reversals on December 6 and 8, the market slowly eroded and traded through 470 support. Without fresh bullish input, the market runs the risk testing major support near 460. If a bullish catalyst does enter the market, overhead resistance comes in between 490 and 497, and again near 510.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Front month soybeans continue to be rangebound, largely between 1290 and 1400. At some point, the front month will eventually break out of that range, and if it breaks out to the downside, then the first risk would be 1180. If the breakout occurs to the topside, then the first opportunity would be 1510. The biggest looming catalyst behind a potential downside breakout is the projected record global carryout of soybeans, while the biggest looming catalyst for a potential upside breakout is continued adverse South American weather. Given the uncertainty of which direction the market will go, Grain Market Insider recently recommended adding to sales as the current price level is still historically good. It’s been disappointing how the market has been unable to push higher despite the South American planting disruptions. Because of that, Grain Market Insider’s concern is that, if the weather pattern doesn’t remain adverse, the path of least resistance could be lower. Grain Market Insider will continue to look at additional sales opportunities, as well as potential re-ownership strategies.

  • No action is recommended for the 2024 crop. Since the inception of the Nov ’24 contract, it has traded at a discount to the 2023 crop from as much as 142 back in July, to as little as 17 ¾ in early October during harvest. While the spread difference between the two crops has seen a good amount of volatility, Nov ’24 has been largely rangebound between 1250 and 1320 since it rallied off its 1116 ¼ low last May. To date, Grain Market Insider has not recommended any sales for next year’s soybean crop. First sales targets will probably be early winter at the earliest. Currently, Grain Market Insider’s focus is also on watching for any opportunities to recommend buying call options.

  • No Action is currently recommended for 2025 Soybeans. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted two springs from now, and it may be some time before conditions are conducive to consider making any recommendations. Be patient as we monitor the markets for signs of improvement.

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

  • Soybeans ended the day higher after volatile trade due to thin holiday markets that saw prices on either side of unchanged. Support came from soybean meal, as well as higher crude oil.

  • Overall, Brazilian weather is improving with showers throughout central and northern Brazil and a wet forecast, but in the central soybean growing state of Mato Grosso, the drought hit hard and the Governor of Rondônia, which is directly North of Mato Grosso, decreed on Sunday a state of emergency due to “the worst drought the state has ever seen”. This will very likely impact production.

  • On the other hand, Argentina has been dealt a favorable hand in terms of weather, and 69% of the crop is planted with just 3% rated poor to very poor. Last season, the country only produced half of its usual production, and this year will likely be above average.

  • Export inspections were strong for soybeans today at 39.3 mb and were on the higher end of analyst expectations. Total inspections for 23/24 are now at 818 mb, which is down 18% from last year, but have been improving.

Above: After posting a high of 1398 ½ in November, soybeans found support around 1292. Overhead, nearby resistance remains near 1350 and again around 1400. If the market breaks support at 1292, it runs the risk of testing 1250.

Wheat

Market Notes: Wheat

  • Wheat was the star of the grain complex today, with solid gains in all three classes and was likely a big reason why corn was higher. March Chicago wheat appears to have broken out of its bull pennant formation to the upside, and the next target would be the 200-day moving average at $6.60.

  • Support for wheat today came from a decline in the US dollar, as well as the re-opening of some major shipping lanes. The two rail lines into Mexico at Eagle Pass and El Paso were re-opened, and shipping issues in the Black Sea region may drive more business to the US.

  • Wheat export inspections were still on the soft side, but improved from recent numbers at 15.8 mb and were on the higher side of analyst expectations. Total wheat inspections for 23/24 are now at 343 mb, which is down 21% from the previous year.

  • Last Friday’s CFTC report saw non-commercials buying back another portion of their short position by 4,497 contracts, which reduced the net short position to 65,032 contracts. With the funds so heavily short, the recent rally could cause more short covering and potentially a squeeze.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. Between late July and the end of November, front month Chicago wheat trended lower, driven mostly by weak US demand and lower world wheat prices. During that time, and as managed funds established most of their short position of nearly 120,000 contracts, the market became extremely oversold. Since then, as the market rallied to a high of 649 ½, China made several US SRW wheat purchases, and funds covered more than 23,000 short contracts. During that runup, Grain Market Insider recommended making an additional sale to take advantage of the elevated prices in case the rally was temporary since US wheat prices remain elevated relative to other world exporters, despite the increase in demand. If the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. From the end of July, the July ’24 contract has slowly stepped its way down to a low of 586 in sympathy with the front month contract where managed money established a large short position during that time. Since then, July ’24 rallied alongside the March ’24 contract, as the funds covered over 30k contracts of their nearly 130k short contract position. While bearish headwinds remain, the funds continue to carry a large short position and seasonals remain supportive for the addition of weather risk premium, which are two factors that could fuel further short covering and another leg up in prices. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. Back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: After rallying to 649 ½, Chicago wheat became overbought and turned lower after the December 8 USDA report. Since then, the market has found nearby support near 600. Nearby resistance remains overhead near 650, with additional resistance between 660 and 665. If the market breaks nearby support, it may test the 50-day moving average, and then support near 556.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since late July old crop KC wheat has been in a downtrend that has largely been driven by managed fund selling on low world wheat prices and weak US export demand. As the selloff progressed, the market became oversold, and the funds established the largest short position in three years. Even though bullish headwinds remain, these two factors have fueled the recent short-covering rally, which could extend much further if a bullish catalyst enters the market. This would also line up with the historical tendency for price appreciation as the market builds risk premium going into wintertime. Grain Market Insider’s strategy is to look for price appreciation going into this winter, as weather becomes a more prominent market mover and may consider suggesting additional sales if prices become over extended.

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

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

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

Above: Since posting bearish reversals on December 6 and 8, the market has been consolidating while holding support around 625, with close in resistance just overhead at the 50-day moving average. If the market breaks lower, the next area of support may come in around 595 and 575. Resistance above the 50-day moving average remains around 675 – 680.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop. Following last July’s rally, the market has slowly stair-stepped lower, primarily due to low world wheat prices, weak US export demand, and managed fund selling. With the funds building a record large short position as the market sold off. Since weak US export demand remains the main impediment to higher prices, the market continues to be at risk of further downside erosion. The record large fund short position could fuel a rally back higher if a bullish catalyst enters the scene, and if that happens, it may signal that a near-term low is in place. Earlier this year, Grain Market Insider made a sales recommendation during the July rally near 820, and with that sale in place, Grain Market Insider’s strategy is to look for price appreciation this winter with an eye on considering additional sales around 725 – 775, and again north of 800. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Minneapolis wheat. At the end of August, the Sept ’24 contract traded to a peak of 871 ¾ and has continued to slowly stair-step lower, largely driven by lower world wheat prices, weak US export demand, and managed fund selling, and as the selloff progressed, the funds built up a record large short position. While bearish headwinds remain, the significant oversold condition of the market and the large fund net short position are two factors that could fuel a short-covering rally in the months ahead. Price seasonals are also supportive as prices tend to build in some risk premium going into the winter months. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside following a 1-year range breakout in KC wheat. Though recently, as the KC market extended further into oversold territory and the July ‘24 KC wheat contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. While in the same time frame, Grain Market Insider also recommended making an additional sale as the Sept ’24 Minneapolis contract broke long time 743 support. For now, moving forward, Grain Market Insider is prepared to recommend exiting the last 25% of the open puts on any further supportive market developments.

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

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

Above: After making a new contract low on November 27, the March contract found buying interest from its oversold status and record fund short. Since then, the market posted a bearish reversal on December 6, showing significant resistance in the 750 area. If prices can break through upside resistance, they could run toward 790. If prices retreat, nearby support could be found around 718, with further support near the recent low of 697 ½.

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