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12-22 End of Day: Markets Consolidate as Quiet Holiday Trade Dominates.

ByGrain Market Insider

The CME and Total Farm Marketing offices will be closed
Monday, December 25, in observance of Christmas

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • A lack of fresh news and consolidation ahead of the extended holiday weekend drove the corn market in choppy, two-sided trade and a tight 2 ½ cent range to close the day fractionally higher.

  • Expectations of beneficial rains in the parched areas of Brazil continue to keep a lid on the soybean market even as traders square positions ahead of the long weekend.

  • Soybean meal and oil traded in opposite directions through the day, but with 61% of the Board crush value, meal continues to be the dominant product of the two. Today’s higher meal prices carried over and supported soybeans to a higher close and Board crush, which gained 2 ½ cents in the March contracts.

  • Expectations of additional beneficial rain in the southern plains and much of the Midwest added overhead resistance to the wheat market which ended the day mixed, with KC and Minneapolis mostly lower, while Chicago settled mostly higher following two-sided trade.

  • To see the updated US 7-day precipitation forecast, 8 – 14 day temperature and precipitation outlooks, and Brazil’s 2-week precipitation forecast, courtesy of the National Weather Service, 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:

  • It was a very quiet day in the corn market as prices finished the week slightly higher. March futures had a 2 ½ cent trading range on the day and closed ½ cent higher. For the week, March corn still finished 10 cent lower and posted a contract low weekly close.

  • The corn market was lacking little fresh news as trade consolidated before the Christmas holiday break.

  • Going into 2024, the corn export program will be a key to prices. Total corn commitments are running at 52.8% of the total USDA export sales projections. This totals 1.109 billion bushels, which is up 1.2% ahead of the average pace for this point in the marketing year. The corn export window is looking to be more aggressive in the early part of 2024.

  • The closure of two major rail crossings into Mexico, caused by the migrant crises at the southern border, limited corn shipments into Mexico and pressured the corn market. This afternoon, the American Rail Association announced that the US-Mexico rail border was reopened.

  • Argentina weather has been favorable for planting this season’s corn crop. Buenos Aires Grain Exchange estimates that corn planting is nearly 59% complete and overall conditions are good/excellent. Despite weather concerns in Brazil, a return of strong Argentina corn production will limit the upside potential in the corn market.

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 to close out the week but remain near the bottom of their trading range as wetter Brazilian weather pressures the soy complex. For the week, March soybeans lost 25 ¼ cents, March soybean meal lost $5.50, and March soybean oil lost 1.13 cents.

  • While last week featured at least one soybean flash sale each day of the week, there was only one flash sale reported this week of 132,000 mt on Tuesday which was to unknown destinations. There is still a window for US exports, but it will close soon as Brazil begins their soybean harvest within the next few months.

  • This week’s export sales report showed decent numbers for soybeans at 78 mb with 5 mb of that amount for delivery in the 24/25 marketing year. Shipments were down 17%, but China and unknown destinations were buyers of 54 mb, a large portion of total export sales.

  • Estimates for Brazilian production have fallen slightly, and private analysts are forecasting a range between 150 mmt and 160 mmt. The USDA still have their estimate at 161 mmt, but that may be revised lower in the next WASDE report. Argentina’s crop has been planted in good conditions and the planting progress is now 69% complete. Some of Brazil’s losses in production could be made up by Argentina.

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 had a mixed close today with small gains in Chicago but losses in KC and a relatively neutral close for MPLS. The KC futures in particular had heavier selling in the front months versus the deferred. This bear spreading may be a result of the southern Plains forecast that has more rain on the way this Saturday which should offer improved conditions to the HRW crop.

  • Offering support to the wheat complex is the fact that the US Dollar Index continues to fall. As of this writing it is well above the daily low but still trading below the 102 level. If it continues to retreat, it should make US grain exports more attractive to world importers, offering a boost to the market.

  • This morning, no resolution to the closed railway crossings between the US and Mexico (due to the migrant crisis) had been reached. As of this afternoon, it is being reported that border patrol will re-open the crossings today, a full five days after they were initially closed. According to the Union Pacific railway, up to $200 million per day of freight, including grain, was not able to be transported during the closure.

  • The damage from the recent heavy storm in Argentina that affected infrastructure and left many without power is still being assessed. However, according to the Buenos Aires Grain Exchange, the wheat crop was not materially damaged based on initial reports. They also did not make any adjustments to the wheat production estimate of 14.7 mmt, and harvest is said to be 65% complete versus 55% last week.

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

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

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

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12-21 End of Day: Markets Close Mixed on Expectations of Favorable Weather

ByGrain Market Insider

The CME and Total Farm Marketing offices will be closed
Monday, December 25, in observance of Christmas

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Solid export sales and consolidation ahead of the upcoming extended weekend supported the corn market, which shook off most of yesterday’s losses in a tight 4 ¾ cent range.

  • The soybean market traded mostly lower throughout the day, with two sided trade with pressure coming from improved rain expectations for Brazil, and weaker soybean meal and oil.

  • Soybean oil and meal both closed lower on the day, with soybean oil sharply lower, down 1.43 cents, as it continues to trade sideways, and meal at a fresh 2-month low. Today’s losses in the products contributed to the slide in the soybean market as January and March Board crush margins gave up another 15 ¾ and 6 ¾ cents respectively.

  • Two sided trade dominated the wheat complex, which settled mixed on the day, with Chicago the strongest, Minneapolis the weakest, and nearby KC firmer versus the deferred. Disappointing export sales and expectations of favorable weather for the southern Plains added pressure, while a lower US dollar lent support.

  • To see the updated US Drought Monitor, 5-day precipitation forecast, and Brazil’s 2-week precipitation forecast, courtesy of the NDMC, National Weather Service, 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:

  • The corn market held above the new recent low of 468 ¼ and reversed yesterday’s losses in two sided trade as it begins to consolidate ahead of the extended Christmas weekend.

  • This morning, the USDA released weekly export sales as of December 14, and corn sales came in as expected, totaling 1.013 mmt (39.9 mb). Corn sales commitments now total 1.109 bb for 23/24 and are up 37% from a year ago. The current pace is ahead of USDA projections, but the market still needs to see consistent export sales totals.

  • The closure of two major rail crossings into Mexico, caused by the migrant crises at the southern border, is limiting corn shipments into Mexico. It is currently estimated that about 1 mb of grain is being held up each day and that Mexico has about a 2 – 3 week supply. The closures may be adding resistance to prices with Mexico being the largest importer of US corn, and that they may need to look for other sources if the issue isn’t resolved soon.

  • The recent price drop in corn has given the US an edge in the world export market, with US prices currently cheaper than Argentina and Brazil out of the market for now.  

  • The latest release of the US Drought Monitor shows that 46% of the US corn area is currently in drought areas, an increase of 2% from last week. Though with the forecast calling for good rains through the Midwest over the weekend, conditions are likely to improve.

  • South American weather forecasts are staying supportive for the crop going into the end of the year with improved precipitation. The improved weather forecast is limiting buying strength in the corn and soybean markets.

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 lower for the fourth consecutive day, as improved Brazilian weather forecasts heavily impact the soy complex. Both soybean meal and oil were lower today, but bean oil posted the largest losses due to lower palm and crude oil.

  • Global shipping problems have contributed to the pressure on soybeans, along with the rest of the grain complex, as the lack of movement and rising costs affect margins. Two main railways leading into Mexico are currently closed at Eagle Pass and El Paso, many shipping routes in the Red Sea are suspended due to rebel attacks, and shipping through the Panama Canal is also restricted due to low water levels.

  • In Argentina, violent protests have broken out as citizens voice their frustration with the new government policies, especially those related to increased export taxes. Producers were anticipating friendly export policy from the new president, but instead were met with increased taxes on their grains.

  • Today’s export sales report showed 73 mb of soybeans exported last week for 23/24 and 5 mb for 24/25, which was in line with analyst expectations. China and unknown destinations accounted for 54 mb of those exports. Sales for soybean meal were 148k tons and below analyst expectations.

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 had a mixed close, with Chicago contracts staying just above water, but a lower close in Kansas City and Minneapolis futures. Some support is stemming from a lower US Dollar Index today, which is forming a bearish pennant chart pattern. The formation of this pattern would signal more downside for the dollar, which, in theory, should make US exports more attractive and boost global business.

  • On a bearish note, Russia continues to be the world’s wheat export leader, with FOB values cheaper than other origins, around $260 to $265 per mt. They recently fulfilled tenders by Egypt and Saudi Arabia and are likely to continue to get much of the world export business.

  • Weekly US wheat export sales at 11.9 mb for 23/24 were a bit disappointing, and shipments last week at 12.4 mb are behind the weekly pace of 16.7 mb needed to reach the USDA’s export goal of 725 mb. Currently, wheat commitments are down 3% from last year at 546 mb.

  • Over the holiday weekend, the US Plains should see mostly warmer temperatures. Additionally, the southern Plains have more chances for rain over the next seven days or so. This rain may add pressure to the market, with soil moisture conditions looking a lot more optimal than last year.

  • SovEcon has increased their estimate of the Russian 2024 wheat harvest to 91.3 mmt, which is up 1.5 mmt from the previous projection. Favorable weather was cited as the reason for the increase, with conditions looking promising in winter wheat regions.

  • According to Argus Media, the French soft wheat area for the 2024 harvest will hit the lowest level since the year 2000 at 4.238 million hectares. This comes after several weeks of heavy rain and is said to be based on feedback from over 1,200 farmers. Many areas of France are said to have received nearly 14 inches of rain from mid-October to mid-December, with higher totals in some regions.

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

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

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

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12-20 End of Day: The Prospect of Improved Conditions Presses Markets Lower.

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Weakness from wheat and neighboring soybeans weighed on the corn market as it closed lower for the third day in a row and below 470 support as it continues to drift lower into year’s end.

  • The prospect of additional rainfall in the parched areas of Brazil and weakness from lower soybean meal and oil spilled over to the soybean market and siphoned off the gains from the overnight session.

  • Abiove made a statement that Brazil’s soybean oil demand for biodiesel is set to rise, citing expected increases in Brazil’s biodiesel mix. The announcement likely added pressure to meal, as added crush for bean oil could easily produce excess meal, depressing prices.

  • Forecasts for additional rainfall in the HRW growing areas added pressure to the wheat complex as all three classes reversed course and gave up yesterday’s gains.

  • To see the updated US 6 – 10 day temperature and precipitation outlooks, and the GRACE-Based Root Zone Drought Indicators for the US, Brazil, and Argentina, courtesy of the National Weather Service, and NASAGRACE in partnership with 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:

  • Pressure from the wheat market on the prospects of better conditions in the southern Plains spilled over into the corn market on the session. March corn futures 3 cents as traded lower for the third consecutive day and established a new low for the March contract at 468 ¼.

  • US Customs and Border Protection has maintained the closure of the Eagle Pass and El Paso rail gateways to Mexico to handle migrant surges. The closures are causing disruptions in supply movements and remain despite calls for the gateways to reopen from the Association of American Railroads and various Ag commodity groups.

  • South American weather forecasts are staying supportive for the crop going into the end of the year with improved precipitation. The improved weather forecast is limiting buying strength in the corn and soybean markets.

  • Ethanol average daily production for the week ending December 15 averaged 1.071 million barrels. This was down 0.3% from last week and up 4.1% from last year. The amount of corn used for the week is estimated at 106.30 million bushels. This pace is slightly ahead of the USDA target for the marketing year.

  • USDA will release weekly export sales on Thursday morning. Expectations are for new sales last week to range from 800,000 to 1,500,000 mt for the week.

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 lower for the second consecutive trading session with pressure from an improving Brazilian weather forecast and widespread showers over the central region of the country today. Both soy products were lower, but the majority of losses were in soybean meal.

  • Although weather forecasts are improved for Brazil, production for the main soybean growing state of Mato Grosso is now forecast to produce 20% fewer soybeans this season. The lowest estimates for the entire country are around 155 mmt which is what was produced last season, and this year, Argentina is also expecting a normal soybean crop. The combined production of both countries could put pressure on US soybean prices.

  • Argentinian weather has been very favorable, and the country can likely expect normal to above normal production. This would lead to increased crush numbers and increased exports of both soybean meal and oil. If Argentina regains its status as the largest exporter of meal, US soybean meal prices could fall further and pressure soybeans. Soybean oil could be buoyed by strong demand for bean oil as biofuel in the US.

  • Two main rail bridges to Mexico have been closed by US customs at Eagle Pass and El Paso due to large congregations of migrants. This has made shipments to Mexico more difficult and likely added to today’s pressure in the soy complex.

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 gave back all of yesterday’s gains and then some. Weakness today stemmed from consolidation in the US Dollar Index, a mixed close in Paris milling wheat, and a wetter nearby forecast in the US southern plains. Additionally, global freight costs are increasing due to low water levels on the Panama Canal and Houthi attacks on Red Sea shipping lanes; the rising costs may be reducing export competitiveness of US goods to some parts of the world.

  • Egypt’s tender did end up being fulfilled by Russia for all 480,000 mt. Of the total, 180,000 mt are to be shipped during the first half of February, while the remaining 300,000 mt will be shipped during the second half of February.

  • Despite an increased estimate of Ukraine’s 2023 grain harvest by consultancy APK-Inform, they kept their wheat production estimate unchanged at 21.5 mmt. The total grain harvest estimate was increased by 1.6 mmt to 56.3 mmt. However, that change is mostly reflected in the corn production number.

  • According to state-run news agency Xinhua, China has vowed to focus on grain and ag production during a recent conference. Their goal is said to be to strengthen the use of technology in agriculture, boost grain yields, and ensure that grain production in 2024 exceeds 650 mmt. As they work towards becoming more self-sufficient, this may mean reduced imports of US goods over the coming years.

  • An investment group in Brazil is looking to invest $62 million into a port terminal with a capacity of 3 mmt of grain. The reason behind the expansion is believed to be an attempt to reduce congestion on the roads from the transport of ag goods. The investment decision is expected to take place during the first half of 2024. Brazil continues to increase ag exports every year, and investment into port infrastructure may add pressure to the US export market down the road.

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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12-19 End of Day: Wheat Turns Higher on Tuesday, while Corn and Beans Slide Lower.

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Weakness in the soybeans and more favorable South American weather forecasts weighed on the corn market which posted a new low close for the move and settled just 2 ¼ cents off the day’s low.

  • Improved South American weather added resistance to soybean meal which settled 9.0 lower and helped press soybeans to a 17 ½ cent lower close. Soybeans continue to consolidate since printing a bullish reversal on 12/7, with mild support coming from soybean oil.

  • Reports from the EU’s Monitoring Ag Resources unit suggesting that the remaining planting of winter wheat may not be completed in parts of northern France, and rumors of more possible Chinese wheat purchases, may have lent support to the wheat complex today, in which all three wheat classes higher into the close.

  • To see the updated US 5-day precipitation forecast, 6 – 10 day temperature and precipitation outlooks, and Brazil’s and Argentina’s 2 week precipitation forecast, courtesy of the National Weather Service, 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:

  • Sellers stayed active in the corn market, pressured by soybeans as March corn lost 4 ¼ cents. With today’s close at 472 ¾, March corn established a new contract low close for the move. The intraday contract low is in reach at 470 ½ from November 29.

  • US Customs and Border Protection announced on Sunday night that it would temporarily close the Eagle Pass and El Paso rail gateways to Mexico to handle migrant surges. The move closes the number 2 and 3 gateways by volume and is backing up Mexico bound freight including grains. Mexico has bought 47% of current US corn export sales.

  • South American weather forecasts are staying supportive for the crop going into the end of the year with improved precipitation. Corn will stay a longer-term story with planting delays, unfavorable prices and dry weather limiting the potential acres for the key exportable second crop of Brazilian corn.

  • Chinese corn prices on the Dalian Commodity Exchange are trading to a multi-month low pressured by the arrival of Brazil corn exports. In November, China imported 3.590 mmt of corn, up 384% from last year and a record for the month. Since January, Chinese corn imports are up 12% over last year, influenced by cheap South American corn prices.

  • The softer tone of the market and the end of the calendar year should reduce farmer selling. Basis levels will likely stay firm, supported by friendly overall ethanol margins.

Above: Since the middle of November, the corn market has been rangebound between 470 on the downside and 497 on the upside. Upside resistance appears to be heavy given the bearish reversal that was posted on December 6. That heavy resistance also extends up to the October high of 509 ½, which the market will need more bullish influence to trade through. If the market retreats through nearby 470 support, major support remains 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.

  • 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 lower, wiping out yesterday’s gains that were caused by the Argentine government’s announcement that export taxes for soybean meal would increase. Today, scattered showers in the driest areas of Brazil along with an improved long-term forecast pressured soybeans and meal while soybean oil ended higher thanks to higher crude and palm oil.

  • Soybeans are currently at the bottom of their range, but the selloff today was a bit discouraging considering that the US dollar fell and that a flash sale was reported. These are both things that should have been supportive along with Argentina’s increase in export taxes which should have some bullish implications for meal.

  • This morning, the USDA reported private exporter sales of 132,000 metric tons of soybeans for delivery to unknown destinations during the 2023/2024 marketing year. While no sales were reported yesterday, there was a sale to either China or unknown destinations every day last week. This comes as the export window for the US nears its close with the looming Brazilian harvest.

  • Brazil’s soybean exports for the year have exceeded 100 million tons for the first time ever following their record harvest of 155 mmt. Brazil is the world’s largest soybean exporter and will likely keep that title as the USDA forecasts a harvest in 2024 of 161 mmt. Some private analysts have predicted that production may be as low as 155 mmt.

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 wheats rallied today, in the face of lower corn and soybean markets. This may be in part due to reports that wheat plantings in northern France are likely to remain incomplete due to the heavy rains they received, along with snow towards the end of planting. Apparently about 10% of the intended area will remain unplanted.

  • Egypt is tendering for more wheat. Russia will be the likely one to fulfill the tender, as they are the cheapest origin at $260 per ton FOB. France and Romania would be next in line but are about eight to ten dollars more per ton.

  • Rumors that China may be looking to purchase more US soft wheat are unconfirmed at this time. However, this may have lent some support to futures in any case. The recent Chinese purchases were significant, and if they step up again, it is likely to be in a big way.

  • Russia has stated that they have no interest in re-establishing the Black Sea Grain Initiative, despite efforts by Turkey to broker a deal. Since the corridor was closed in July, Ukraine has been able to ship 10 mmt of ag goods, but that is down 19% from last year.

  • Argentina saw some severe storms recently that have left about half a million homes without power. As it pertains to the wheat market, the storm may have also caused some crop losses for crops that are ready to harvest, including wheat, as wind gusts were reported to be up to 93 miles per hour. Additionally, corn and soybeans plantings may face some delays.

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. Since July, new crop Chicago wheat has slowly worked its way lower with no significant opportunities to make additional sales. The lower market was driven mostly by managed fund selling from lower world wheat prices and weak US demand. As the market sold off, it became significantly oversold with managed funds building a short position in excess of 100,000 contracts. While bearish headwinds remain, the large fund short position and oversold condition of the market are two factors that could fuel a sizeable, short-covering rally. Additionally, price seasonals are supportive as prices tend to build in some risk premium going into the winter months. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion, and 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 Jul ’24 contract broke out of roughly a one-year trading range, between 740 and 860, to the downside. Since that breakout, the market has continued to slowly stair-step lower, largely driven by managed fund selling, weak US export demand, and lower world wheat prices. As the selloff progressed, the funds built up the largest net short position in three years. 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 Jul’24 KC wheat 660 puts to protect the downside following the range breakout. Though 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: Following bearish reversals on December 6th and December 8th, the market has shown that there is significant overhead resistance above 680. The market is also showing signs of being oversold following the recent runup, which adds upward resistance and could add pressure if the market continues lower. Below the market, initial support comes in near 630, with further support remaining 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 precipitation, percent of normal, courtesy of the National Weather Service, Climate Prediction Center.

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

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12-18 End of Day: Monday Markets Close Mixed; Beans Higher; Corn and Wheat Lower.

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Weekly corn export inspections came in at 37 mb, near the high end of expectations but below the average needed to reach the USDA’s estimate. That and weakness from the neighboring wheat complex weighed on corn futures, which closed near the bottom of the somewhat tight 7 ¼ cent range.

  • The soybean complex got an added boost from an announcement reported by Reuters that Argentina is moving toward increasing its export tax on soybean meal and oil from 31% to 33%.

  • Soybean oil got additional support from higher energy markets and higher Malaysian palm oil, which carried over to Board crush margins that gained 11 ¾ in the spot January contracts and 8 ½ cents in the March.

  • The wheat complex saw two-sided trade that was mostly lower, with the day’s losses led by the KC contracts. A forecast for the return of moisture to the central and southern Plains added resistance, along with weekly export inspections that came in below expectations and the level needed to reach the USDA’s goal. Although the recent sales to China should show up in the coming weeks.

  • To see the updated US 6 – 10 day temperature and precipitation outlooks, as well as the Brazil and Argentina 1 week total accumulated precipitation, courtesy of the National Weather Service, 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:

  • As the trading volume began to thin going into the holiday trade, the sellers were active in the corn and wheat markets. March corn lost 6 cents and closed at its lowest point since November 30. The weak price action and close will leave the corn market vulnerable to additional selling pressure going into Tuesday.

  • Weekly export sales for corn 947,000 mt (37.3 mb) for the week ending December 14. Total inspections for 23/24 are now at 399 mb, up 27% from the previous year. The USDA is estimating corn exports at 2.100 bb in 23/24, up 26% from the previous year.  

  • China imported 3.59 mmt (141 mb) of corn in November, a record volume for any month. That comes despite China’s report of a record corn crop this past growing season. Total January-November imports were up 12% from last year, largely due to increased arrivals from Brazil. The strong import total brings concerns that China may not need US corn.

  • Ethanol margins should see some price support with a potential turn in energy prices. Both crude oil and gasoline prices saw support on concerns of trade disruptions in the Red Sea and the Suez Canal. Crude oil traded 2-3% higher during the session.

  • South American weather should remain good for Argentina and Brazil’s first crop corn in the coming week, but it’s still a concern in the longer view for the corn market. The impact of the potential of the Argentina crop returning to normal production will bring competition for US corn in the export market this spring.

Above: Since the middle of November, the corn market has been rangebound between 470 on the downside and 497 on the upside. Upside resistance appears to be heavy given the bearish reversal that was posted on December 6. That heavy resistance also extends up to the October high of 509 ½, which the market will need more bullish influence to trade through. If the market retreats through nearby 470 support, major support remains near 460.

Corn Managed Money Funds net position as of Tuesday, December 12. Net position in Green versus price in Red. Managers net bought 8,963 contracts between December 6 – 12, bringing their total position to a net short 151,570 contracts.

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 firmly higher as trade waits to see if the wetter Brazilian forecast materializes or remains hot and dry. Both soybean meal and oil ended the day higher as well with some support from a jump in crude oil prices.

  • Additional support came from an announcement out of Argentina stating that the government will look to increase export taxes on both soybean meal and oil from 31% to 33% as they attempt to raise funds and fight the extreme inflation that is plaguing the country. The increase in taxes hits especially hard considering the large amount of soybean meal that they are expected to export in the coming marketing year.

  • Crude oil prices jumped this morning after BP announced that they were pausing all Red Sea shipments of oil following attacks on vessels by Iran-backed Houthi rebels. Many freight firms have suspended transportation in the wake of the attacks, and this increase in crude prices has been supportive to soybean oil.

  • Weekly US export inspections for soybeans were good totaling 51.9 mb for the week ending December 14. This was toward the upper range of analysts’ expectations but was still down 17% from the previous year. Total inspections for 23/24 are now at 778 mb.

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.

Soybean Managed Money Funds net position as of Tuesday, December 12. Net position in Green versus price in Red. Money Managers net sold 5,784 contracts between December 6 – 12, bringing their total position to a net long 30,849 contracts.

Wheat

Market Notes: Wheat

  • All three US wheat classes posted losses, with Kansas City leading the way lower. Rains in the US Southern Plains, along with a firmer US Dollar may have been keeping a lid on the wheat market today. Additionally, the lack of follow through Chinese purchases is viewed as negative.

  • Disappointing weekly wheat inspections at 10.5 mb bring the 23/24 total inspections to 328 mb. That is down 22% from last year and is running behind the pace needed to meet the USDA’s goal.

  • Saudi Arabia bought 1.35 mmt of wheat over the weekend. Russia is believed to be the one to fulfill this purchase. As long as Russia continues to remain the dominant player on the export front, it will be difficult for wheat prices to rally.

  • Managed funds have recently reduced their net short position in wheat, but still hold about 70,000 short contracts of Chicago wheat. This does keep the market primed for more of a rally if there is a catalyst in the form of friendly news.

  • According to India’s food secretary, the nation has no current plan to import wheat from Russia. Additionally, they will hold off on adjusting any wheat import duties.

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. Since July, new crop Chicago wheat has slowly worked its way lower with no significant opportunities to make additional sales. The lower market was driven mostly by managed fund selling from lower world wheat prices and weak US demand. As the market sold off, it became significantly oversold with managed funds building a short position in excess of 100,000 contracts. While bearish headwinds remain, the large fund short position and oversold condition of the market are two factors that could fuel a sizeable, short-covering rally. Additionally, price seasonals are supportive as prices tend to build in some risk premium going into the winter months. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion, and 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.

Chicago Wheat Managed Money Funds net position as of Tuesday, December 12. Net position in Green versus price in Red. Money Managers net bought 26,693 contracts between December 6 – 12, bringing their total position to a net short 69,529 contracts.

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 Jul ’24 contract broke out of roughly a one-year trading range, between 740 and 860, to the downside. Since that breakout, the market has continued to slowly stair-step lower, largely driven by managed fund selling, weak US export demand, and lower world wheat prices. As the selloff progressed, the funds built up the largest net short position in three years. 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 Jul’24 KC wheat 660 puts to protect the downside following the range breakout. Though 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: Following bearish reversals on December 6th and December 8th, the market has shown that there is significant overhead resistance above 680. The market is also showing signs of being oversold following the recent runup, which adds upward resistance and could add pressure if the market continues lower. Below the market, initial support comes in near 630, with further support remaining around 595 and 575. 

KC Wheat Managed Money Funds net position as of Tuesday, December 12. Net position in Green versus price in Red. Money Managers net bought 8,154 contracts between December 6 – 12, bringing their total position to a net short 30,704 contracts.

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.

Minneapolis Wheat Managed Money Funds net position as of Tuesday, December 12. Net position in Green versus price in Red. Money Managers net bought 123 contracts between December 6 – 12, bringing their total position to a net short 26,768 contracts.

Other Charts / Weather

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

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

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12-15 End of Day: Markets Close Mostly Higher and Near the Day’s Highs

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • After briefly trading lower on this morning’s open, the corn market saw two-sided trade with little fresh news and closed higher on the day, on some likely position squaring ahead of the weekend.

  • The USDA reported another round of private exporter sales, and near record NOPA crush numbers for November lent support to the soybean market that saw choppy two-sided to close the day mixed and well off its lows. 

  • Soybean meal and oil also saw choppy two sided trade and closed mostly higher, which added support to soybeans and was reflected in the 7 ¾ cent gain in January Board crush margins.

  • All three wheat classes settled firmly in the green on follow-through strength from yesterday’s solid export sales that were a marketing year high and the largest since 2020.

  • To see the updated US 8 – 14 day temperature and precipitation outlooks, as well as the Brazil and Argentina 2-week forecast total precipitation courtesy of the National Weather Service, 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 saw some late session buying strength to push slightly higher on the sessions. March corn added 3 ¾ cents on the days but was 2 ½ cents on the week. 

  • Relatively quiet news day in the corn markets as prices saw positive money flow toward the end of the session. Managed funds are still sitting in a large short position in the corn market, and likely squared some of those positions heading into the weekend.

  • December corn futures expired on Thursday. The concern in the market now is the carry to the March contract. March is currently holding a 23 ¾ cent carry to December’s final closing price, and this could keep pressure on the March contract as demand concerns, and a large current supply of corn, will limit the front end of the corn market.

  • Ethanol margins should see some price support with a potential turn in energy prices. Both crude oil and gasoline prices are looking to close the week with gains for the first time in 8 weeks on Friday afternoon. This could signal a potential near-term low in energy prices, which should help support the corn market if the trend turns higher.

  • South American weather will remain a focus for the market. The next 7 days show a more moderating precipitation. Longer extended forecasts are more favorable for crop growth, but those forecasts will need to materialize. The South American weather concerns will likely be a longer-term corn story as Brazil looks towards soybean harvest and corn planting in the weeks ahead.

Above: Since the middle of November, the corn market has been rangebound between 470 on the downside and 497 on the upside. Upside resistance appears to be heavy given the bearish reversal that was posted on December 6. That heavy resistance also extends up to the October high of 509 ½, which the market will need more bullish influence to trade through. If the market retreats through nearby 470 support, major support remains near 460.

Soybeans

Soybeans Action Plan Summary

  • Grain Market Insider sees a continued opportunity to sell a portion of your old crop 2023 soybean production. Since last summer, the soybean market has been mostly rangebound between 1435 on the topside and 1251 on the bottom. Within this range, the 1330 area has been a strong pivot point. When over 1330, the front month has been able to challenge the 1400 area, but below 1330 the front month has challenged the 1250 area. Following last Friday’s USDA update, the market has attempted to rally above 1330, but so far that rally has been rejected. This rejection poses the risk that the front month could challenge the 1250 area again. Also, given the projected record large global carryout of soybeans, Grain Market Insider wants to take advantage of the historical value of 1300+ soybean prices.

  • 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 mostly lower apart from the January contract which closed higher by a hair. Soybeans came back significantly from their lows earlier in the day, and soybean oil ended with a higher close, while meal ended higher in the two front months.

  • For the week, January soybeans gained 11 ¾ cents, January meal gained just 0.90, and January soybean oil lost 0.21. Some strength came from the hot and dry conditions in Brazil this week, but rain is set to return next week. Flash sales were reported nearly every day this week, which also added support.

  • This morning, the USDA reported private exporter sales of 134,000 mt of soybeans for delivery to China and 447,500 mt for delivery to unknown during the 23/24 marketing year. Just this week, 1,436,500 mt of soybean were reportedly sold with China and unknown destinations as the main buyers. At least one sale was reported each day this week.

  • The NOPA crush report was released today and showed a near record crush for November at 189.038 mb, which was above the average trade guess of 187 mb and above last year’s 179 mb. Crush margins have slipped this week but remain profitable.

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 classes closed higher again today, despite a mixed to lower close in Paris milling wheat futures. The US March contracts all closed near session highs, despite the US Dollar’s two-sided trade, and strength into the close. Yesterday’s export sales were a marketing year high at 54.8 mb and the largest since June of 2020. Wheat may have traded higher today following through on that news. With the recent large sales to China, wheat export commitments are now up 3% versus a year ago, with the USDA forecasting a decline of 4.5%.

  • On a bearish note, rain today in the US southern Plains will benefit the winter wheat crop and also help soil conditions. There are also chances for more rain over the next two weeks. While this may not have much impact currently, it may lead to improved conditions in the spring that could pressure the market.

  • Now that the Federal Reserve’s policy on raising interest rates seems to have ceased, this could mean that fund money may begin to flow back into the agriculture sector. Currently, index fund holdings in the ag space are down about 35% from the peak in 2022 when the Fed began raising rates.

  • Farmer groups are opposing Argentina’s move toward increasing export taxes on corn, wheat, and other ag goods, from the current 12% to 15% under the new president’s leadership. Argentina has also re-opened their grain export registry after a brief pause.

  • The El Nino weather pattern is expected to intensify to one of the top levels on record. If these predictions are true, it would make this El Nino pattern one of the strongest historically since 1950. This pattern could mean a colder winter for the southern US, but milder conditions in northern regions, and far reaching impact globally. The US Climate Prediction Center is estimating a 75% chance that the pattern will persist into May.

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. Since July, new crop Chicago wheat has slowly worked its way lower with no significant opportunities to make additional sales. The lower market was driven mostly by managed fund selling from lower world wheat prices and weak US demand. As the market sold off, it became significantly oversold with managed funds building a short position in excess of 100,000 contracts. While bearish headwinds remain, the large fund short position and oversold condition of the market are two factors that could fuel a sizeable, short-covering rally. Additionally, price seasonals are supportive as prices tend to build in some risk premium going into the winter months. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion, and 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 Jul ’24 contract broke out of roughly a one-year trading range, between 740 and 860, to the downside. Since that breakout, the market has continued to slowly stair-step lower, largely driven by managed fund selling, weak US export demand, and lower world wheat prices. As the selloff progressed, the funds built up the largest net short position in three years. 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 Jul’24 KC wheat 660 puts to protect the downside following the range breakout. Though 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: Following bearish reversals on December 6th and December 8th, the market has shown that there is significant overhead resistance above 680. The market is also showing signs of being oversold following the recent runup, which adds upward resistance and could add pressure if the market continues lower. Below the market, initial support comes in near 630, with further support remaining 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

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

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

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12-14 End of Day: Soybeans and Wheat Higher on Falling US Dollar Index

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Corn closed fractionally lower on the day in the front month March contract, while the deferred contracts held onto fractional gains. Corn experienced light volume and low volatility today typical of “holiday trade”.

  • Soybeans ended higher on the day with support from a falling US dollar, as well as yet another daily flash sale reported to unknown destinations.

  • All three wheat classes closed higher today. Last week’s net export sales for wheat were the largest for a single week since September of 2007, reflecting China’s recent US wheat purchases.

  • To see the updated US Drought Monitor, as well as the Brazil 1 week forecast total precipitation courtesy of the National Weather Service, 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:

  • The corn market faded from early session strength to finish mixed on the session. December corn futures expired during the session and settled on final trades at $4.56 ¾. March corn was ¼ cent lower on the day in a market that saw noticeable bear spreading.

  • As December expires, March is currently holding a 23 ¾ cent carry to the final December price. This could keep pressure on the March contract as demand concerns and a large current supply of corn will limit the front end of the corn market.

  • The USDA reported weekly export sales for corn at 1.418 MMT (55.8 mb) for last week. Corn sales commitments now total 1.069 bb in 2023-24 and are up 36% from a year ago. Pace is ahead of current USDA projections, but the market will need to see consistent export sales totals.

  • Ethanol margins should see some price support with a boost in energy prices on the session. Both crude oil and gasoline prices treaded firmly higher on the session, and that helped support the corn market.

  • South American weather will stay a focus to the market. The next 7 days show a more moderate precipitation, but above average temperature forecast. Longer extended forecasts are more favorable for crop growth, but those forecasts will need to materialize. The South America weather concerns will likely be a longer-term corn story as Brazil looks towards soybean harvest and corn planting in the weeks ahead.

Above: Since the lead month rolled to the March contract, the corn market has been rangebound between 470 on the downside and 497 on the upside. Upside resistance appears to be heavy given the bearish reversal that was posted on December 6. That heavy resistance also extends up to the October high of 509 ½, which the market will need more bullish influence to trade through. If the market retreats through nearby 470 support, major support remains near 460.

Soybeans

Soybeans Action Plan Summary

  • Grain Market Insider sees a continued opportunity to sell a portion of your old crop 2023 soybean production. Since last summer, the soybean market has been mostly rangebound between 1435 on the topside and 1251 on the bottom. Within this range, the 1330 area has been a strong pivot point. When over 1330, the front month has been able to challenge the 1400 area, but below 1330 the front month has challenged the 1250 area. Following last Friday’s USDA update, the market has attempted to rally above 1330, but so far that rally has been rejected. This rejection poses the risk that the front month could challenge the 1250 area again. Also, given the projected record large global carryout of soybeans, Grain Market Insider wants to take advantage of the historical value of 1300+ soybean prices.

  • 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 two consecutively lower closes and remained above the 200-day moving average. Today’s support was largely due to a sharp decline in the US dollar as well as a strong weekly Export Sales report and a daily flash sale reported.

  • For the week ending December 7, the USDA reported an increase of 39.8 mb of soybean export sales for the 23/24 marketing year. While strong, this was 23% below the previous week and 46% from the prior 4-week average. Export shipments were above the 27.7 mb needed each week at 42.6 mb and primary destinations were to China, Germany, and Mexico.

  • This morning, private exporters reported a large flash sale of 400,000 mt of soybeans for delivery to unknown destinations for the 23/24 marketing year. US soybeans are competitive with Brazilian offers, but that export window will likely close soon as the bulk of South America’s bean harvest approaches in a few months.

  • While Brazilian weather is expected to remain hot and dry over the next 5 days, the longer-term weather forecast is better, and most analysts are projecting total production between 155 and 160 mmt. Argentinian production is estimated around 48 mmt.

Above: Since retreating from the November highs, soybeans traded through 1297, but held support around 1292. If prices retreat lower through 1292, they could test support near 1250. Up above, psychological resistance may enter in near 1350, with heavy resistance up near recent highs around 1400.

Wheat

Market Notes: Wheat

  • All three US wheat classes closed with modest gains today, rebuffing the weakness yesterday. The 100-day moving average for March Chicago wheat is at 6.24, and with that contract trading below that level, it might now act as an area of resistance. Going forward, more friendly news may be needed to push back above that moving average.

  • The USDA reported an increase of 54.8 mb of wheat export sales for 23/24 and an increase of 0.7 mb for 24/25. This is reflective of the recent Chinese purchases. On the negative side, with the USDA estimating exports of 725 mb, last week’s shipments at 10.6 mb were below the 16.4 mb pace per week needed to meet their goal.

  • Following the Federal Reserve’s announcement yesterday afternoon, the US Dollar Index was under pressure again today with another sharp drop. As of this writing, it is just below the 102 level, when it was over 104 just a few short sessions ago. This decline should provide some support to the export market and may have given wheat futures a boost today.

  • According to the Rosario Grain Exchange, Argentina’s wheat harvest is reported to be 57% complete. Additionally, their wheat crop estimate is now 7.4% higher at 14.5 mmt vs 13.5 mmt previously. The reason, as stated by the exchange, is due to cooler temperatures and better rains that helped the plants when they were filling.

  • In contrast to Argentina, the Brazilian 23/24 wheat crop is now seen lower on estimates by StoneX, at 8.59 mmt, vs 9.28 mmt previously. Furthermore, the yield is expected to drop 28.4% from the previous harvest. This may also result in Brazil wheat imports increasing down the road.

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. Since July, new crop Chicago wheat has slowly worked its way lower with no significant opportunities to make additional sales. The lower market was driven mostly by managed fund selling from lower world wheat prices and weak US demand. As the market sold off, it became significantly oversold with managed funds building a short position in excess of 100,000 contracts. While bearish headwinds remain, the large fund short position and oversold condition of the market are two factors that could fuel a sizeable, short-covering rally. Additionally, price seasonals are supportive as prices tend to build in some risk premium going into the winter months. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion, and 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 on short covering activity largely, from being oversold, Chicago wheat became overbought and began to turn lower following the December 8 USDA update. Overhead resistance comes in near 650, and again between 660 and 665. The overbought status of the market may encourage additional selling and a test of the 50-day moving average near 580, with further 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 Jul ’24 contract broke out of roughly a one-year trading range, between 740 and 860, to the downside. Since that breakout, the market has continued to slowly stair-step lower, largely driven by managed fund selling, weak US export demand, and lower world wheat prices. As the selloff progressed, the funds built up the largest net short position in three years. 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 Jul’24 KC wheat 660 puts to protect the downside following the range breakout. Though 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: Following bearish reversals on December 6th and December 8th, the market has shown that there is significant overhead resistance above 680. The market is also showing signs of being oversold following the recent runup, which adds upward resistance and could add pressure if the market continues lower. Below the market, initial support comes in near 630, with further support remaining 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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12-13 End of Day: Argentine Currency Devaluation Pressures Grains Lower

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Argentina is moving to devalue its currency, which weighed heavily on the soybean complex. The move would likely increase Argentine farmer selling and exports, adding competition to US exports. Soybean meal also continues to see pressure (adding resistance to soybeans) from the improved Argentine weather outlook and crop prospects, which could likely return the country to the world’s top soy product exporter status.  

  • The devaluation of Argentina’s currency, the world’s 3rd largest corn exporter, also weighed on the corn market, despite strong ethanol production numbers that came in above expectations and well ahead of the pace needed to reach the USDA’s corn usage estimate.

  • There are thoughts that the policy changes in Argentina could increase the country’s wheat crop by as much as 60%, and this could have added downward pressure to the wheat markets. While Chicago made new lows for the move, KC and Minneapolis also gave up most, if not all, of yesterday’s gains on the reversal lower.

  • To see the updated US 5-day precipitation forecast, 6 – 10 day temperature and precipitation outlooks, and Brazil’s and Argentina’s 7-day total accumulated precipitation maps, courtesy of the National Weather Service, NOAA, and Climate Prediction Center, 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 and the grain markets traded lower on Wednesday. March corn lost 5 ¾ cents on the session as grain markets saw broad based selling pressure.

  • Argentina devalued their currency, the peso, versus the dollar to stabilize Argentina’s economy. The drop in the peso value makes Argentina’s ag exports more competitive on the world export market, which pressured the ag commodity markets on Wednesday. 

  • Ethanol production fell to 1,074,000 barrels/day, down slightly from last week, but up 1.2% from last year. Production was above expectations and the 2nd highest of the marketing year. There was 108 mil. bu. of corn used in the production process. Ethanol margins are likely to tighten as pressure in the crude oil market could be starting to tighten those margins.

  • The USDA will release weekly export sales on Thursday morning. Corn sales have improved, which is needed by the market given the supply. Expectations for new sales to range from 800,000 – 1,600,000 mt last week.

  • South American weather stays a focus. The next 7 days show a drier forecast with a strong heat wave returning. Longer extended forecasts are more favorable for crop growth if those forecasts materialize.

Above: Since the lead month rolled to the March contract, the corn market has been rangebound between 470 on the downside and 497 on the upside. Upside resistance appears to be heavy given the bearish reversal that was posted on December 6. That heavy resistance also extends up to the October high of 509 ½, which the market will need more bullish influence to trade through. If the market retreats through nearby 470 support, major support remains near 460.

Soybeans

Soybeans Action Plan Summary

  • Grain Market Insider sees a continued opportunity to sell a portion of your old crop 2023 soybean production. Since last summer, the soybean market has been mostly rangebound between 1435 on the topside and 1251 on the bottom. Within this range, the 1330 area has been a strong pivot point. When over 1330, the front month has been able to challenge the 1400 area, but below 1330 the front month has challenged the 1250 area. Following last Friday’s USDA update, the market has attempted to rally above 1330, but so far that rally has been rejected. This rejection poses the risk that the front month could challenge the 1250 area again. Also, given the projected record large global carryout of soybeans, Grain Market Insider wants to take advantage of the historical value of 1300+ soybean prices.

  • 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 lower again with prices now back below all major moving averages on a nearby, front month chart. The forecast for more favorable Brazilian weather a week from now, along with anticipation of increased Argentine selling pressured the soy complex lower today.

  • Newly inaugurated Argentinian president, Javier Milei, has been preparing to get inflation in check with policy changes to grain export taxes. So far, they temporarily suspended export licenses and devalued the Argentinian peso by half. Milei is also expected to make adjustments to export taxes on grain, which could further incentivize selling.

  • This morning, the USDA reported private exporter sales of 125,000 metric tons of soybeans for delivery to unknown destinations during the 2024/2025 marketing year. This is the fifth consecutive sale since last Thursday by either China or unknown destinations.

  • Brazilian weather is set to remain hot and dry over the next 5 days, but rain is forecast to return on December 19 and is expected to last well into January. Southern Brazil is still too wet and is expected to receive more rain over the next 7 days before drying out slightly into the new year.

Above: Since retreating from the November highs, soybeans traded through 1297, but held support around 1292. If prices retreat lower through 1292, they could test support near 1250. Up above, psychological resistance may enter in near 1350, with heavy resistance up near recent highs around 1400.

Wheat

Market Notes: Wheat

  • Kansas City futures led the wheat complex lower today, but all three classes had sharp losses. The big news weighing on the grain markets relates to Argentina’s new president and his economic policy. In addition to currency devaluation and possible export tax adjustments, there is also talk that Argentina will expand wheat production under his leadership. Some estimates see production increase as much as 60% to 25 mmt next growing season, due to deregulation that encourages more output.

  • This afternoon, the Fed announced that they will be keeping interest rates unchanged for the third time in a row. After the announcement, the US Dollar Index dropped significantly, and this may provide some support to wheat tomorrow, as the two tend to share an inverse relationship.

  • According to Argus, Ukrainian wheat production in 2024 will fall to 20.2 mmt, a 12-year low, and representing a 9% decline. Smaller plantings are said to be the cause of the decline, which would be the lowest since 12/13. 

  • Adding to bearishness today was an estimate from FAO-AMIS, which raised world wheat stockpiles for the 23/24 season from 315.1 mmt to 319.3 mt. The production estimates for Russia, Turkey, and Saudi Arabia were increased. Additionally, corn and rice stockpile estimates were also increased.

  • From a technical perspective, March Chicago wheat did hold just above the six-dollar level today, with a low of 6.02-1/2. The 21, 40, and 50-day moving averages all converge around this level, making six dollars an important area of support. A break below this level would make the market look more technically weak.

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. Since July, new crop Chicago wheat has slowly worked its way lower with no significant opportunities to make additional sales. The lower market was driven mostly by managed fund selling from lower world wheat prices and weak US demand. As the market sold off, it became significantly oversold with managed funds building a short position in excess of 100,000 contracts. While bearish headwinds remain, the large fund short position and oversold condition of the market are two factors that could fuel a sizeable, short-covering rally. Additionally, price seasonals are supportive as prices tend to build in some risk premium going into the winter months. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion, and 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 on short covering activity largely, from being oversold, Chicago wheat became overbought and began to turn lower following the December 8 USDA update. Overhead resistance comes in near 650, and again between 660 and 665. The overbought status of the market may encourage additional selling and a test of the 50-day moving average near 580, with further 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 Jul ’24 contract broke out of roughly a one-year trading range, between 740 and 860, to the downside. Since that breakout, the market has continued to slowly stair-step lower, largely driven by managed fund selling, weak US export demand, and lower world wheat prices. As the selloff progressed, the funds built up the largest net short position in three years. 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 Jul’24 KC wheat 660 puts to protect the downside following the range breakout. Though 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: Following bearish reversals on December 6th and December 8th, the market has shown that there is significant overhead resistance above 680. The market is also showing signs of being oversold following the recent runup, which adds upward resistance and could add pressure if the market continues lower. Below the market, initial support comes in near 630, with further support remaining 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

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

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

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

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12-12 End of Day: Textbook Turnaround Tuesday, Corn and Wheat Reverse Higher, Soybeans Lower

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Support from significantly higher wheat carried over to the corn futures, which settled mid-range and in the green. Upside strength was limited though, by losses in crude oil and neighboring soybeans.

  • Argentina’s new president Milei temporarily suspended its grain export register on Monday. The move comes just before announcements regarding new economic measures, some of which may increase farmer selling and exports. The news may have added pressure to January soybeans which rejected trade near 1350 and above the 100-day moving average.

  • Both soybean meal and oil settled near the lower end of their respective ranges, with meal losing ground in sympathy with soybeans and improved Argentine crop prospects, while pressure from sharply lower crude oil weighed on soybean oil.

  • To stabilize its domestic prices, Russia has banned the export of Durum wheat until May 31st, effective immediately. This may have lent some support to the wheat market, which experienced an impressive turnaround from yesterday’s sharp losses in all three classes.

  • To see the updated US 5-day precipitation forecast, 6 – 10 day temperature and precipitation outlooks, and South America’s GRACE-Based Drought Indicator, courtesy of the National Weather Service, Climate Prediction Center, and the NDMC with the University of Nebraska, 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 used strength in the wheat market to close with small gains on the session. March corn traded 3 ¾ cents higher, holding around the active 485 trading price in range bound activity.

  • Corn futures were limited by selling strength in soybean markets and the crude oil markets. Crude oil traded 3-4% lower on the session. Lower crude brings concern about margin for the ethanol industry, a key domestic demand for corn.

  • South American weather stays a focus. The next 7 days show a drier forecast with a strong heat wave returning. Longer extended forecasts are more favorable for crop growth if those forecasts materialize.

  • China’s grain output rose 1.3% year on year to a record high of 695.41 mmt in 2023. This data was provided by the National Bureau of Statistics on Monday. The record corn production may limit some US corn exports.

  • The cash market may act independently of the futures market while prices trade in a range bound fashion. The fluctuation in basis in different regions will likely provide limited marketing opportunities based on overall available supplies.

Above: Since the lead month rolled to the March contract, the corn market has been rangebound between 470 on the downside and 497 on the upside. Upside resistance appears to be heavy given the bearish reversal that was posted on December 6. That heavy resistance also extends up to the October high of 509 ½, which the market will need more bullish influence to trade through. If the market retreats through nearby 470 support, major support remains near 460.

Soybeans

Soybeans Action Plan Summary

  • Grain Market Insider sees a continued opportunity to sell a portion of your old crop 2023 soybean production. Since last summer, the soybean market has been mostly rangebound between 1435 on the topside and 1251 on the bottom. Within this range, the 1330 area has been a strong pivot point. When over 1330, the front month has been able to challenge the 1400 area, but below 1330 the front month has challenged the 1250 area. Following last Friday’s USDA update, the market has attempted to rally above 1330, but so far that rally has been rejected. This rejection poses the risk that the front month could challenge the 1250 area again. Also, given the projected record large global carryout of soybeans, Grain Market Insider wants to take advantage of the historical value of 1300+ soybean prices.

  • 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 lower closing just above the 50-day moving average. A short span of upcoming hot and dry weather in central and northern Brazil added some weather premium back into the market causing yesterday’s rally. Both soybean meal and oil ended the day lower.

  • March soybeans have gained just over 32 cents from their low last week due to news that the 7-day forecast for Brazil would be hot and dry. Heavier rains are forecast to fall beginning December 19 and are expected to last into January, so crop stress should be limited.

  • This morning, the USDA reported private exporter sales of 198,000 metric tons of soybeans for delivery to unknown destinations for the 23/24 marketing year. So far, there have been sales reported every day, from last Thursday through today, primarily by China or unknown.

  • Crude oil fell to its lowest level since June today which pressured soybean oil, but on the other hand, stockpiles of Malaysian palm oil shrunk last month which could offer support. In addition, the NOPA crush report will be released on Friday and trade is looking for another record large month at 191 mb crushed.

Above: Since retreating from the November highs, soybeans traded through 1297, but held support around 1292. If prices retreat lower through 1292, they could test support near 1250. Up above, psychological resistance may enter in near 1350, with heavy resistance up near recent highs around 1400.

Wheat

Market Notes: Wheat

  • All three US wheat classes reversed from yesterday’s lower closes to finish with double-digit gains today. This rally may have been in part sparked by the Russian government’s ban on durum wheat exports. The ban is in effect until May 31, and is reported to have been put in place to help their domestic prices.

  • Also giving a boost today was a higher close for Paris milling wheat futures, and a drop in the US Dollar Index. However, on a bearish note, with the recent upturn in wheat prices, the US has quickly become uncompetitive on the world export market, and this may mean that there will not be any more Chinese purchases to help support the market.

  • Kansas released updated crop conditions for their state yesterday. Wheat condition declined 1%, to 39% good to excellent. Additionally, poor to very poor declined 1% while fair increased 2%. Conditions look much better than at the same time last year. 

  • According to their agriculture ministry, French soft wheat planting for 2024 is down 5.1% year on year with 4.5 million hectares planted and represents a 4.7% decline from the five-year average. The cause of the decline is being blamed on heavy rains.

Chicago Wheat Action Plan Summary

  • Grain Market Insider sees an active opportunity to sell a portion of your 2023 Soft Red Winter wheat crop. Since the end of July, the wheat market has been in a downtrend due to low world wheat prices generating weak US export demand, with no significant rallies to take advantage of. This current rally has now taken prices in excess of 80 cents from the November low and coincides with a 38% retracement back toward last July’s highs, and the 612 to 646 congestion area from last September. Considering this bounce in the market may be temporary, Grain Market Insider recommends taking advantage of this rally, and these still historically good prices, to make an additional sale on your 2023 crop.

  • No new action is recommended for 2024 Chicago wheat. Since July, new crop Chicago wheat has slowly worked its way lower with no significant opportunities to make additional sales. The lower market was driven mostly by managed fund selling from lower world wheat prices and weak US demand. As the market sold off, it became significantly oversold with managed funds building a short position in excess of 100,000 contracts. While bearish headwinds remain, the large fund short position and oversold condition of the market are two factors that could fuel a sizeable, short-covering rally. Additionally, price seasonals are supportive as prices tend to build in some risk premium going into the winter months. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion, and 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 on short covering activity largely, from being oversold, Chicago wheat became overbought and began to turn lower following the December 8 USDA update. Overhead resistance comes in near 650, and again between 660 and 665. The overbought status of the market may encourage additional selling and a test of the 50-day moving average near 580, with further 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 Jul ’24 contract broke out of roughly a one-year trading range, between 740 and 860, to the downside. Since that breakout, the market has continued to slowly stair-step lower, largely driven by managed fund selling, weak US export demand, and lower world wheat prices. As the selloff progressed, the funds built up the largest net short position in three years. 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 Jul’24 KC wheat 660 puts to protect the downside following the range breakout. Though 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: Following bearish reversals on December 6th and December 8th, the market has shown that there is significant overhead resistance above 680. The market is also showing signs of being oversold following the recent runup, which adds upward resistance and could add pressure if the market continues lower. Below the market, initial support comes in near 630, with further support remaining 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

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

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12-11 End of Day: Follow Through Weakness Leads Wheat and Corn Lower, Despite Sharply Higher Soybeans

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Carryover weakness from the wheat market, weak export inspections, and a looming 2.1 billion bushel carryout all weighed on the corn market which closed back below the 50-day moving average on the nearby continuous chart.

  • Another large private sale to unknown destinations and renewed South American weather concerns lent support to the soybean market which gapped higher on Sunday night’s open and closed near the top of its 31 ½ cent range.

  • Soybean meal and oil both closed very strong alongside soybeans with 8.5 and 0.91 gains respectively. Soybean meal is currently showing signs of being very oversold, much like soybeans, which is likely adding support to the market.

  • Weak export inspections may have added fuel to the fire as traders sold all three wheat classes on follow through technical weakness after showing signs of being overbought from the recent rally.

  • To see the updated US 8 – 14 day temperature and precipitation outlooks, and South America’s 2-week forecast precipitation maps, courtesy of the National Weather Service, and Climate Prediction Center, 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:

  • Aggressive selling in the wheat market dragged the corn market lower on the session. The March corn contract closed 4 cents lower, and below the 10-day moving average, which could bring additional selling pressure into the overnight session.

  • Despite the small increase in export demand in Friday’s WASDE report, corn ending stocks are still heavy in the market’s mind at 2.135 billion bushels. A stocks-to-use ratio of 14.7% is the largest in 5-years and projects to potentially lower corn prices to trigger additional demand.

  • With the recent prices rally, the funds decreased their net short position in the corn market by 45,000 contracts to –160,533 net short contracts. The price move was disappointing, only being 20-25 cents for that short liquidation. The decreased short position opens the door for additional selling pressure in the corn market in the short term.

  • Soybeans rallied aggressively to start the week, but that spill over support was ignored by the corn market. The Brazil weather forecast turned warmer and drier on afternoon models, and that triggered buying in the soybean market to start the week.

  • After a strong week last week, weekly export inspections for corn were disappointing at 712,000 MT (28 mb) at the low end of expectations. Total inspections in 2023-24 are now at 361 mb, up 28% from the previous year. The USDA is estimating corn exports at 2.100 bb in 2023-24, up 26% from the previous year.

Above: Since the lead month rolled to the March contract, the corn market has been rangebound between 470 on the downside and 497 on the upside. Upside resistance appears to be heavy given the bearish reversal that was posted on December 6. That heavy resistance also extends up to the October high of 509 ½, which the market will need more bullish influence to trade through. If the market retreats through nearby 470 support, major support remains near 460.

Above: Corn Managed Money Funds net position as of Tuesday, December 5. Net position in Green versus price in Red. Managers net bought 45,945 contracts between November 29 – December 5, bringing their total position to a net short 160,533 contracts.

Soybeans

Soybeans Action Plan Summary

  • Grain Market Insider sees a continued opportunity to sell a portion of your old crop 2023 soybean production. Since last summer, the soybean market has been mostly rangebound between 1435 on the topside and 1251 on the bottom. Within this range, the 1330 area has been a strong pivot point. Getting over 1330 the front month has been able to challenge the 1400 area, but below 1330 the front month has challenged the 1250 area. Today, the January contract attempted to get back over 1330, with an intraday high of 1330 ¾, but was rejected. This rejection poses the risk that the front month could challenge the 1250 area again. Also, given the projected record large global carryout of soybeans, Grain Market Insider wants to take advantage of the historical value of 1300+ soybean prices.

  • 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 sharply higher with support from higher soybean meal and oil, along with another export sale reported to China. South American weather was supportive as well today with heat and dryness forecast this week before rains are expected to fall later in the week.

  • Export inspections were a little soft today with the USDA reporting inspections at 36.2 mb for the week ending Thursday, December 7. Total inspections for 23/24 are now at 725 mb, which is down 16% from the previous year. The USDA is estimating total soybean exports at 1.755 bb for 23/24 which would be down 12% from the previous year.

  • Another flash sale was reported this morning by the USDA totaling 132,000 metric tons of soybeans for delivery to unknown destinations during the 23/24 marketing year. This follows up on two sales from last Thursday and Friday which were 121,000 metric tons and 136,000 metric tons to unknown and China.

  • Traders were likely expecting more bullish numbers in Friday’s WASDE report, so the lack of any big changes caused some selling. Ending stocks were unchanged at 245 mb, but Brazilian production was lowered to 161 mmt from 163 mmt.

Above: Since retreating from the November highs, soybeans traded through 1297, but held support around 1292. If prices retreat lower through 1292, they could test support near 1250. Up above, psychological resistance may enter in near 1350, with heavy resistance up near recent highs around 1400.

Above: Soybean Managed Money Funds net position as of Tuesday, December 5. Net position in Green versus price in Red. Money Managers net sold 30,929 contracts between November 2 – December 5, bringing their total position to a net long 36,633 contracts.

Wheat

Market Notes: Wheat

  • All three US wheat futures classes posted double-digit losses today. The weakness may have stemmed partly from a technically overbought situation. On daily stochastics, each of the three March wheats show a sell crossover signal, with momentum turning downward. In addition to the technical weakness, funds may be adding back to short positions after last Friday’s USDA report did not offer friendly news to feed the bull.  

  • Wheat inspections of 10.4 mb bring the 23/24 total inspections to 316 mb. That is down 23% from last year and is behind the pace needed to meet the USDA’s goal of 725 mb from Friday’s updated WASDE report.

  • Forecasted rains in the US southern Plains for the middle of this week are expected to limit upside potential for the wheat market, with areas of Texas and Kansas expected to receive widespread coverage. As of the last Crop Progress report, winter wheat conditions are much more favorable compared to last year.

  • There is talk that China may be interested in purchasing more US wheat, but with Russia still offering wheat for sale at cheap prices, more friendly news may be needed to rally the market. Unfortunately, there are concerns that demand from north African and Middle Eastern nations may be down from normal and last year.

  • Ukraine’s farm ministry has stated that the country reached a record grain yield, and they increased the 2023 harvest estimate to 59.7 mmt. Of that total, wheat harvest is expected to account for 22.2 mmt.  

  • This week, traders will receive the next statement from the Federal Reserve regarding interest rates. Current expectations are that they may keep rates steady, but last week’s jobs data offered signs of labor market strength. This may mean that they will stick with their “higher rates for longer” stance, which may in turn affect commodity markets like wheat.

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. Since July, new crop Chicago wheat has slowly worked its way lower with no significant opportunities to make additional sales. The lower market was driven mostly by managed fund selling from lower world wheat prices and weak US demand. As the market sold off, it became significantly oversold with managed funds building a short position in excess of 100,000 contracts. While bearish headwinds remain, the large fund short position and oversold condition of the market are two factors that could fuel a sizeable, short-covering rally. Additionally, price seasonals are supportive as prices tend to build in some risk premium going into the winter months. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion, and 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 on short covering activity largely, from being oversold, Chicago wheat became overbought and began to turn lower following the December 8 USDA update. Overhead resistance comes in near 650, and again between 660 and 665. The overbought status of the market may encourage additional selling and a test of the 50-day moving average near 580, with further support near 556.

Above: Chicago Wheat Managed Money Funds net position as of Tuesday, December 5. Net position in Green versus price in Red. Money Managers net bought 23,764 contracts between November 29 – December 5, bringing their total position to a net short 96,222 contracts.

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 Jul ’24 contract broke out of roughly a one-year trading range, between 740 and 860, to the downside. Since that breakout, the market has continued to slowly stair-step lower, largely driven by managed fund selling, weak US export demand, and lower world wheat prices. As the selloff progressed, the funds built up the largest net short position in three years. 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 Jul’24 KC wheat 660 puts to protect the downside following the range breakout. Though 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: Minneapolis wheat continues to appear rangebound between about 750 on the topside and 700 on the bottom. If prices can break through upside resistance, they could run toward 790. Otherwise, if prices break out of the bottom end of the range, support may come in near the late May ’21 low near 669. 

Above: KC Wheat Managed Money Funds net position as of Tuesday, December 5. Net position in Green versus price in Red. Money Managers net bought 10,891 contracts between November 29 – December 5, bringing their total position to a net short 38,858 contracts.

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.

Above: Minneapolis Wheat Managed Money Funds net position as of Tuesday, December 5. Net position in Green versus price in Red. Money Managers net bought 2,026 contracts between November 29 – December 5, bringing their total position to a net short 26,891 contracts.

Other Charts / Weather

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

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