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2-14 End of Day: Markets Red Across the Board on “Risk Off” Day in the Grains

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Weekly ethanol production numbers were strong, but not enough to shake off the weakness from neighboring wheat and soybeans as March corn drifted to a new contract low before recovering somewhat going into the close.

  • News of the Rosario Grain Exchange raising its forecast for Argentina’s soybean crop added pressure to the market after early strength in March soybeans faded and turned lower to trade the lowest spot month close since December 2020.

  • The higher forecast of Argentina’s soybean crop also added pressure to soybean meal, which saw two-sided trade before closing lower on the day. Whereas soybean oil came under pressure from sharply lower energy prices, although March Board crush margins remained relatively steady posting a 2-cent gain.

  • The Wheat complex came under pressure from an International Grains Council report stating that weekly wheat prices had dropped in many global nations. Additionally, Ukraine is on track to export its estimated 50 mmt wheat surplus. All three wheat classes posted losses for the day, with Chicago leading the way.

  • To see the updated US 7-day total precipitation forecast, NASA-Grace Drought Indicators for the US and South America, and Brazil’s 1-week precipitation forecast, courtesy of the National Weather Service and the Climate Prediction Center, and NASA-Grace, scroll down to the other Charts/Weather section.

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. With a general lack of bullish news and an estimated US carryout over 2.1 billion bushels, front month corn has languished in a sideways to lower trend since printing a high last October. While the lack of a bullish catalyst has been disappointing, the market is in a significantly oversold condition, and managed funds continue to hold a sizable net short position. Either or both could trigger a short covering rally at any time heading into the spring planting window. For now, Grain Market Insider continues to sit 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 or even summer.

  • No new action is recommended for 2024 corn. In January, Dec ’24 broke through the bottom end of the 485 ¾ to 602 range that had been in place since February ’22. While this was a disappointing development, bear spreading has allowed Dec ’24 to maintain more of its value versus old crop as traders attempt to price in a larger 2023 carryout with more uncertainty ahead for the 2024 crop. Additionally, Dec ’24 is significantly oversold on the weekly chart, which is supportive for a technical rally to begin at any time as the spring planting window quickly approaches. Given the amount of time and uncertainty that remains for the 2024 crop, Grain Market Insider will consider recommending additional sales on a retracement toward the low to mid 500 level.

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

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

  • With carryover weakness from wheat and soybeans, and only minor support from today’s positive ethanol numbers, March corn broke through downside congestion from the past few days and printed a new contract low and fresh closing low at prices not seen since December of 2020.

  • Adding to the pressure in the corn market was word that the Rosario Grain Exchange raised its estimate of Argentina’s corn crop by 3 mmt to 59 mmt. This is 4 mmt above the USDA’s current forecast of 55 mmt. Additionally, Argentina’s current March – May export prices are below US offers, though Ukraine’s are currently the cheapest on the world market for February.

  • Ethanol production for the week ending February 9 came in at a strong 7.581 million barrels, averaging 1.083 mbbl/day. This represents a 4.8% increase from last week and a 6.8% increase from last year. Estimated corn usage for the week was 107.5 mb, which is well ahead of the pace needed to reach the USDA’s forecast of 5.375 bb.

  • The USDA will hold its annual Ag Outlook Forum Thursday and Friday. Expectations are often for bearish numbers since the board typically uses trendline yields. For this year, the average trade guess for the Board’s 24/25 carryout is 2.493 bb with 91.6 ma planted, versus 2.172 bb from 94.6 ma this year.

  • Showers are expected to be widespread and heavy for much of Brazil by this weekend. The southern areas of Brazil, which is in need of rain the most, is expected to return to a drier pattern next week. In Argentina, heavy rain returned to the area and provided much needed moisture to stabilize the crop.

Above: Front month corn is showing signs of being very oversold and has uncovered support near 425, and any new bullish input could trigger a short covering rally toward the 450 – 460 resistance area. If prices fail to hold above initial 425 support, the next level of support remains near 415.

Soybeans

Soybeans Action Plan Summary

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

  • No new action is recommended for the 2024 crop. After the Nov ’24 contract broke through the bottom side of the 1233 – 1320 range, prices continued to retreat as South American weather conditions improved. Even though Nov ’24 runs similar downside risks as the front month contracts, which could press new crop prices toward 1150 or possibly the May ’23 low near 1115, plenty of time remains to market this crop. Considering the amount of uncertainty that lies ahead with the 2024 soybean crop, Grain Market Insider recommended back in December buying Nov ’24 1280 and 1360 calls to give you confidence to make sales against anticipated production, and to protect any sales in an extended rally. Additionally, the possibility remains that prices could retest the 2022 highs, at which point Grain Market Insider may consider recommending additional sales.

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

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

  • Soybeans ended the day significantly lower to make new lows for the year as pressure from an anticipated large soy crop from South America pressures the market. Both soybean meal and oil ended the day lower as well with lower soybean oil pressured by lower crude and heating oil (diesel).

  • This morning, the Rosario Grain Exchange in Argentina increased their estimate for soybean production by 2 mmt to 52 mmt on improved weather following the recent dry spell. This estimate is above the USDA’s most recent 50 mmt guess, and many analysts have Brazilian production pegged near 149 mmt, below the USDA’s 157 mmt estimate.

  • No flash sales have been reported this week and weekly export sales tomorrow are expected to be on the lower side around 300,000 metric tons. On the positive side, domestic crush demand has been firm, and crush premiums remain profitable enough to incentivize processors.

  • On Thursday, the USDA will begin its annual Outlook Forum and they will release their initial estimates for 24/25. Analysts are expecting that corn acres will be lowered by 3 million acres and that soybean acres will increase by 3.1 million acres to 86.7 ma.

Above: With the failure of 1180 support, it appears that front month soybeans could continue to drift lower towards 1140 – 1145 without fresh bullish input to turn the market around. The market continues to show signs of being oversold which can add support if a reversal happens. Overhead, nearby resistance may come in between 1200 and 1205, with additional resistance around 1220 – 1225.

Wheat

Market Notes: Wheat

  • Chicago Wheat led the charge lower this morning. And while still posting sharp losses for the day, it managed to come back to close near the middle of the daily range. In any case, much of the commodity complex was under pressure today in tandem with the grains. Some of this negativity may be a result of anticipated bearish numbers at the USDA during the Ag Outlook Forum tomorrow and Friday.

  • Also weighing on wheat today in particular was the International Grains Council stating that weekly wheat prices dropped in many nations globally. These include Argentina, Canada, Europe, Australia, Russia, and Ukraine. To boot, Ukraine is reportedly on track to export their entire surplus of 50 mmt of grain before their season ends in June (80 mmt of grain was harvested in 2023). This is despite the infrastructure damage caused by Russian attacks. According to consultancy APK-Inform, the Ukrainian grain harvest has reached 25.2 mmt as of February 9. And, according to Ukraine’s Ag Ministry, they are anticipating planting 2% more wheat this spring.

  • According to a Bloomberg analyst survey, 24/25 wheat planted acreage is expected to decline by 2.1 to 47.5 million acres. Additionally, carryout is expected to increase for wheat, corn, and soybeans. Wheat carryout in particular is expected to be at 720 mb, up 62 mb from 23/24. It should be noted that these numbers are separate from what will be released by the USDA at this week’s Outlook Forum.

  • European Union soft wheat exports totaled 18.6 mmt as of February 2. This is down about 8% year on year, compared to the 20.2 mmt last year, according to the European Commission. The top destinations were to north African nations, with Morocco in the lead at 2.67 mmt, followed by Nigeria and then Algeria.

  • As of February 14, the export duty for Russian wheat is said to have increased by 11.8%, from 3,804.6 to 4,058.9 Rubles per mt, according to their Ag Ministry. In June of 2021 the Russian government implemented a “grain damper” mechanism, essentially requiring export duties on wheat, corn, and barley, with the funds used to subsidize ag producers.

Chicago Wheat Action Plan Summary

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

  • No new action is recommended for 2024 Chicago wheat. Since early December, the July ’24 contract has traded mostly sideways to slightly lower after its brief short covering runup on Chinese buying. Although China has since been absent from the US wheat export market, prices appear to have found support above 585, and managed funds continue to hold a sizeable, short position that could trigger another short covering rally if a bullish impetus enters the market. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. Although, if the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

Above: Front month Minneapolis wheat broke through nearby downside support of 688 and may continue to drift lower to test the January low of 678 ¾. If the 678 ¾ area fails, the next major support level may come in around 669. Overhead, resistance remains between 710 and 720.

Mpls Wheat Action Plan Summary

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

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

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

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

Above: Front month Minneapolis wheat continues to drift lower, and with the failure of 669 support, the market is at risk of drifting lower toward the next major support level around 595 unless a bullish catalyst enters the scene. Although, prices are trending lower. The market is showing signs of being oversold, which can be supportive if prices reverse from fresh bullish input. If that happens, the first level of resistance may come in around 680 – 690.

Other Charts / Weather

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

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

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2-13 End of Day: Strong CPI Data and Sharply Higher US Dollar Adds Resistance to Markets

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Following two-sided trade that was mostly positive, the corn market gave up early strength to close at the lower end of a narrow 6-cent range. Corn prices were met with resistance from lower wheat and soybeans as they continued to consolidate on a lack of fresh news.

  • Early strength in soybeans faded with weakness from soybean meal on improved weather in South America following Argentina’s recent dry spell.

  • Soybean meal gave up yesterday’s gains as the prospect of increased supplies from Argentina continues to provide overhead resistance to prices. Soybean oil on the other hand posted a bullish reversal and recovered yesterday’s losses.

  • With pressure coming from a sharply higher US Dollar, the wheat complex settled mostly lower except for March Chicago wheat. March Chicago wheat closed unchanged with support coming from another round of bull spreading as traders continue to move short positions from the March to the deferred contracts.

  • The US Dollar advanced to new highs for the move following the release of January’s Consumer Price Index, which increased 0.3% when 0.2% was expected. Equity markets reacted negatively to the news as hopes for the Federal Reserve dropping interest rates in March quickly faded. Pressure from the higher dollar also likely carried over to the commodity markets.

  • To see the updated US 7-day total precipitation forecast, 8 – 14 day temperature and precipitation outlooks, and the 2-week South American forecast precipitation, courtesy of the National Weather Service and the Climate Prediction Center, scroll down to the other Charts/Weather section.

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. With a general lack of bullish news and an estimated US carryout over 2.1 billion bushels, front month corn has languished in a sideways to lower trend since printing a high last October. While the lack of a bullish catalyst has been disappointing, the market is in a significantly oversold condition, and managed funds continue to hold a sizable net short position. Either or both could trigger a short covering rally at any time heading into the spring planting window. For now, Grain Market Insider continues to sit 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 or even summer.

  • No new action is recommended for 2024 corn. In January, Dec ’24 broke through the bottom end of the 485 ¾ to 602 range that had been in place since February ’22. While this was a disappointing development, bear spreading has allowed Dec ’24 to maintain more of its value versus old crop as traders attempt to price in a larger 2023 carryout with more uncertainty ahead for the 2024 crop. Additionally, Dec ’24 is significantly oversold on the weekly chart, which is supportive for a technical rally to begin at any time as the spring planting window quickly approaches. Given the amount of time and uncertainty that remains for the 2024 crop, Grain Market Insider will consider recommending additional sales on a retracement toward the low to mid 500 level.

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

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

  • Choppy, but quiet corn market on Tuesday as trade was two-sided before pulling higher into the close.  March corn futures gained a ¼ cent on the session, and the trading range was a narrow 6 cents during the day from high to low.

  • Corn prices are consolidating around the 430 level for the March contract. This was the 4th consecutive day trading near this level as the market is looking for news to push prices in either direction.

  • A hotter than anticipated CPI data report this morning help push the US Dollar higher, which likely weighed on commodity prices. The stronger inflation levels have made the market concerned that the Fed will keep interest rates higher for a longer period, tightening money supply.

  • The corn market is likely supported by near-term demand optimism. Weekly export sales have begun to pick up as US corn is competitive on the global market, and export sales have reflected that fact.  This is a key window for US exporters to accumulate sales for shipment later this year. Currently, US export corn sales are running 30% higher than last year’s poor sales pace.

Above: Front month corn is showing signs of being very oversold and has uncovered support near 425, and any new bullish input could trigger a short covering rally toward the 450 – 460 resistance area. If prices fail to hold above initial 425 support, the next level of support remains near 415.

Soybeans

Soybeans Action Plan Summary

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

  • No new action is recommended for the 2024 crop. After the Nov ’24 contract broke through the bottom side of the 1233 – 1320 range, prices continued to retreat as South American weather conditions improved. Even though Nov ’24 runs similar downside risks as the front month contracts, which could press new crop prices toward 1150 or possibly the May ’23 low near 1115, plenty of time remains to market this crop. Considering the amount of uncertainty that lies ahead with the 2024 soybean crop, Grain Market Insider recommended back in December buying Nov ’24 1280 and 1360 calls to give you confidence to make sales against anticipated production, and to protect any sales in an extended rally. Additionally, the possibility remains that prices could retest the 2022 highs, at which point Grain Market Insider may consider recommending additional sales.

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

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

  • Soybeans ended the day lower after a session of mixed trade which saw prices higher earlier this morning before fading along with soybean meal. Soybean oil managed a higher close with support from Malaysian palm oil.

  • Price trends in the soybean meal market are a concern to overall soybean prices. Front month March soybean meal failed to hold the key psychological $350/ton level and posted its lowest daily close since March 2022. The prospects of improved Argentina supplies and strong crush totals in the US are pressuring soybean meal futures.

  • Today’s inflation data that was released showed inflation cooling year over year but still above expectations which caused the US Dollar to rally and consequently soybeans and wheat prices to fall along with equity markets that moved sharply lower. The fear is that the Fed will postpone rate cuts that were expected this year.

  • Weather in South America has improved significantly this week after a stretch of dryness in Argentina. 23% of Brazil’s soy crop has reportedly been harvested which is well above last year’s pace of 17%. Many analysts still expect Brazilian production slightly below 150 mmt as early yields have been on the low side.

Above: Front month soybeans appear to be consolidating just above 1180 support and continue to show signs of being very oversold on the weekly charts. If this support level holds, the market’s oversold status should be supportive with some bullish input. Right now, overhead resistance comes in between 1205 and 1210, with additional resistance around 1225. Support below the 1180 area remains between 1140 and 1145.

Wheat

Market Notes: Wheat

  • Apart from March Chicago wheat which settled unchanged, all three US wheat classes posted losses today. Pressure stemmed from a sharply higher US Dollar Index, which is now at the highest level since mid-November. The jump in the dollar can be attributed to today’s CPI data in which consumer prices were said to be up 3.1% compared to the same time last year – which was higher than expected. This also pressured equity markets, and at the time of this writing, the Dow is down over 700 points.

  • Adding to the bearish tone for the wheat market is the fact that prices in both France and Australia are near two-year lows. This is likely a result of stiff competition out of the Black Sea and from Russia in particular.

  • Russia’s Ag Ministry is said to have proposed an increase to the quota on grain exports in 2024 to 28 mmt. The current quota stands at 24 mmt; the changes would apply to wheat, corn, rye, barley and meslin (a wheat / rye hybrid).

  • Texas released data on their winter wheat crop yesterday afternoon. The crop condition was downgraded by 4% to 42% good to excellent. However, the poor to very poor category improved from 20% to 19%. By area planted, Texas is the second largest winter wheat producing state in the US, so the decline in the GTE rating may provide some support.

  • According to France’s Agriculture Ministry, as of February 1, French farmers have planted 6.2 million hectares of winter crops for 2024 harvest. In total that is down 7.5% from last year and 6.1% from the average. Soft wheat in particular comes in at 4.4 million hectares, which is down 7.7% from last year and 7.5% from the average. The decline in that area is largely blamed on weather issues that disrupted fieldwork and planting.

Chicago Wheat Action Plan Summary

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

  • No new action is recommended for 2024 Chicago wheat. Since early December, the July ’24 contract has traded mostly sideways to slightly lower after its brief short covering runup on Chinese buying. Although China has since been absent from the US wheat export market, prices appear to have found support above 585, and managed funds continue to hold a sizeable, short position that could trigger another short covering rally if a bullish impetus enters the market. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. Although, if the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

Above: Front month Minneapolis wheat broke through nearby downside support of 688 and may continue to drift lower to test the January low of 678 ¾. If the 678 ¾ area fails, the next major support level may come in around 669. Overhead, resistance remains between 710 and 720.

Mpls Wheat Action Plan Summary

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

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

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

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

Above: Front month Minneapolis wheat continues to drift lower and is beginning to show signs of being oversold, which can be supportive if prices reverse. The breach of the January low indicates that prices may drift further towards 669 support. If a bullish catalyst enters the scene to turn prices around, overhead resistance may come in around 690.

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.

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

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2-12 End of Day: Strong Weekly Export Inspections Lead Soybeans Higher

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • With both China and Brazil on holiday for the week, the corn market was dominated by quiet back-and-forth trade in a 5-cent range that garnered support from neighboring soybeans. Although weekly export inspections came in at the upper end of expectations, and remain 31% above last year, they fell short of the pace needed to reach the USDA’s forecast.

  • Strong weekly export inspections helped to rally soybeans with some possible short covering. Export inspections came in at the top end of expectations and well ahead of the pace needed to reach the USDA’s goal, though they remain 23% behind last year’s total for the same period.

  • Soybean meal followed through from Friday’s reversal with some likely short covering adding support. Soybean oil also followed through from Friday’s price action, but to the downside as lower heating oil futures (a proxy for diesel fuel) and profit taking from last week’s rally weighed on prices.

  • The wheat complex settled mostly lower with Chicago fractionally mixed, whereas KC and Minneapolis posted small losses. Bull spreading was noted in all three classes as funds continued to roll short positions out of the leading March contract to the deferred. Lower Russian export prices continue to add resistance to the US market.

  • To see the updated US 5-day total precipitation forecast, 6 – 10 day temperature and precipitation outlooks, and the 1-week South American forecast precipitation anomaly, courtesy of the National Weather Service and the Climate Prediction Center, scroll down to the other Charts/Weather section.

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. With a general lack of bullish news and an estimated US carryout over 2.1 billion bushels, front month corn has languished in a sideways to lower trend since printing a high last October. While the lack of a bullish catalyst has been disappointing, the market is in a significantly oversold condition, and managed funds continue to hold a sizable net short position. Either or both could trigger a short covering rally at any time heading into the spring planting window. For now, Grain Market Insider continues to sit 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 or even summer.

  • No new action is recommended for 2024 corn. In January, Dec ’24 broke through the bottom end of the 485 ¾ to 602 range that had been in place since February ’22. While this was a disappointing development, bear spreading has allowed Dec ’24 to maintain more of its value versus old crop as traders attempt to price in a larger 2023 carryout with more uncertainty ahead for the 2024 crop. Additionally, Dec ’24 is significantly oversold on the weekly chart, which is supportive for a technical rally to begin at any time as the spring planting window quickly approaches. Given the amount of time and uncertainty that remains for the 2024 crop, Grain Market Insider will consider recommending additional sales on a retracement toward the low to mid 500 level.

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

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

  • Quiet day in the corn market, but futures found some footing for the first time in a week. March corn gained 1 ½ cents on the session as overall news was lacking in the corn market.

  • Weekly export inspections were within estimates at 34.6 mb (880,00 mt). Total inspections for 23/24 are now at 677 mb, which is up 31% from last year. The corn market is starting to hit a window where the inspection numbers should and need to increase weekly.

  • Managed funds are still pushing the short side of the market. On last week’s Commitment of Traders report, managed funds added 17,593 net short positions to increase their net short position to 297,744 total contracts.

  • Rainfall in Argentina over the weekend has stabilized the crops in many areas. The forecast is staying supportive grain development as adequate moisture stays in the forecast.

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

Above: Corn Managed Money Funds net position as of Tuesday, February 6. Net position in Green versus price in Red. Managers net sold 17,593 contracts between January 31 – February 6, bringing their total position to a net short 297,744 contracts.

Soybeans

Soybeans Action Plan Summary

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

  • No new action is recommended for the 2024 crop. After the Nov ’24 contract broke through the bottom side of the 1233 – 1320 range, prices continued to retreat as South American weather conditions improved. Even though Nov ’24 runs similar downside risks as the front month contracts, which could press new crop prices toward 1150 or possibly the May ’23 low near 1115, plenty of time remains to market this crop. Considering the amount of uncertainty that lies ahead with the 2024 soybean crop, Grain Market Insider recommended back in December buying Nov ’24 1280 and 1360 calls to give you confidence to make sales against anticipated production, and to protect any sales in an extended rally. Additionally, the possibility remains that prices could retest the 2022 highs, at which point Grain Market Insider may consider recommending additional sales.

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

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

  • Soybeans ended the day higher to start the week after a poor showing last week with the WASDE report pressuring prices. Soybean meal ended the day higher, while soybean oil was lower with some possible pressure from lower heating oil.

  • This morning, the USDA reported total soybean export inspections at 48.7 mb for the week ending Thursday, February 8. This was near the higher end of the estimated trade range which likely added support today. Total inspections are now at 1,131 mb for 23/24 which is down 23% from the previous year.

  • Funds hold a large net short position in soybeans and sold an additional 22,053 contracts as of February 6, leaving them with a net short position of 130,300 contracts. With the market oversold and funds so short, some short covering may have taken place today.

  • Over the weekend, Argentina benefited from much needed rain in some of the drier areas, while Brazil received scattered showers as well. Private analysts are still expecting Brazilian soy production to be lower than USDA estimates with many projecting total production around 149 mmt.

Above: Front month soybeans appear to be consolidating just above 1180 support and continue to show signs of being very oversold on the weekly charts. If this support level holds, the market’s oversold status should be supportive with some bullish input. Right now, overhead resistance comes in between 1205 and 1210, with additional resistance around 1225. Support below the 1180 area remains between 1140 and 1145.

Above: Soybean Managed Money Funds net position as of Tuesday, February 6. Net position in Green versus price in Red. Money Managers net sold 22,053 contracts between January 31 – February 6, bringing their total position to a net short 130,300 contracts.

Wheat

Market Notes: Wheat

  • US wheat closed mostly lower in all three classes today, with the exception being March and May Chicago wheat. The former gained less than a penny, while the latter was neutral. Paris milling wheat also closed lower for the session, offering some weakness to the US market. Competitive Russian exports continue to act as the main anchor; their FOB values are said to be around $235 per mt, which is up from last week, but well below the $250 area at the end of December.

  • Weekly wheat inspections at 15 mb bring total 23/24 inspections to 430 mb. That is down 18% from last year and current inspections are behind the USDA’s projected pace. On last week’s WASDE report, they left their estimate of 23/24 wheat exports unchanged at 725 mb.

  • Ukraine’s Ag Minister said that their winter wheat acres are down compared to last year, which along with the grain quality and economic issues they are facing may lower production. However, their spring wheat acreage may be higher and potentially reduce that concern.

  • According to the CFTC, as of February 6, the fund short position in Chicago wheat increased by about 3% from the previous data on January 30. The net short went from 64,818 to 66,738 contracts. The net short Kansas City wheat position was virtually unchanged for the same time period at around 33,000 contracts. While over in the Minneapolis wheat, funds covered 1,174 contracts, almost 5%, of their net short positions to bring their net short position to 25,906 contracts.

  • Later this week the USDA will hold their annual Ag Outlook Forum. While the numbers they will give are by no means official estimates, the trade will likely react to them anyways. Last year the forum’s estimate of wheat acreage was 49.5 million, which was in line with the actual 49.6 ma planted.

Chicago Wheat Action Plan Summary

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

  • No new action is recommended for 2024 Chicago wheat. Since early December, the July ’24 contract has traded mostly sideways to slightly lower after its brief short covering runup on Chinese buying. Although China has since been absent from the US wheat export market, prices appear to have found support above 585, and managed funds continue to hold a sizeable, short position that could trigger another short covering rally if a bullish impetus enters the market. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. Although, if the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

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

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

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

Above: Chicago Wheat Managed Money Funds net position as of Tuesday, February 6. Net position in Green versus price in Red. Money Managers net sold 1,920 contracts between January 31 – February 6, bringing their total position to a net short 66,738 contracts.

KC Wheat Action Plan Summary

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

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

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

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

Above: Front month Minneapolis wheat broke through nearby downside support of 688 and may continue to drift lower to test the January low of 678 ¾. If the 678 ¾ area fails, the next major support level may come in around 669. Overhead, resistance remains between 710 and 720.

Above: KC Wheat Managed Money Funds net position as of Tuesday, February 6. Net position in Green versus price in Red. Money Managers net sold 42 contracts between January 31 – February 6, bringing their total position to a net short 33,397 contracts.

Mpls Wheat Action Plan Summary

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

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

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

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

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

Above: Minneapolis Wheat Managed Money Funds net position as of Tuesday, February 6. Net position in Green versus price in Red. Money Managers net bought 1,174 contracts between January 31 – February 6, bringing their total position to a net short 25,906 contracts.

Other Charts / Weather

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

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

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2-9 End of Day: Markets Close Lower on the Week as Bearish USDA Data Looms Overhead

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • March corn failed to trade above yesterday’s high and reversed lower as it followed through on yesterday’s weakness and posted yet another new contract low and settled below nearby support.

  • With the USDA’s bearish 315 mb carryout and anticipation of a large South American harvest looming, soybeans reversed yesterday’s gains and turned back lower in today’s trade. So far, support around 1180 in the March continues to hold.

  • Soybean oil turned and closed the day lower with traders likely taking profits from this week’s rally after hitting resistance at the 50-day moving average. March meal reversed back higher after posting a fresh 2-year low to close slightly lower. Bull spreading supported the front months versus the deferred.

  • The wheat complex had a mixed close, with all three classes well off their respective highs, and Minneapolis mostly lower. Bull spreading was noted in Chicago and Minneapolis as the front months gained on the deferreds on possible short covering from the funds sizable net short positions.

  • To see the updated US 5-day total precipitation forecast, 6 – 10 day temperature and precipitation outlooks, and the 2-week Brazil forecast precipitation, courtesy of the National Weather Service and the Climate Prediction Center, scroll down to the other Charts/Weather section.

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. With a general lack of bullish news and an estimated US carryout over 2.1 billion bushels, front month corn has languished in a sideways to lower trend since printing a high last October. While the lack of a bullish catalyst has been disappointing, the market is in a significantly oversold condition, and managed funds continue to hold a sizable net short position. Either or both could trigger a short covering rally at any time heading into the spring planting window. For now, Grain Market Insider continues to sit 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 or even summer.

  • No new action is recommended for 2024 corn. In January, Dec ’24 broke through the bottom end of the 485 ¾ to 602 range that had been in place since February ’22. While this was a disappointing development, bear spreading has allowed Dec ’24 to maintain more of its value versus old crop as traders attempt to price in a larger 2023 carryout with more uncertainty ahead for the 2024 crop. Additionally, Dec ’24 is significantly oversold on the weekly chart, which is supportive for a technical rally to begin at any time as the spring planting window quickly approaches. Given the amount of time and uncertainty that remains for the 2024 crop, Grain Market Insider will consider recommending additional sales on a retracement toward the low to mid 500 level.

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

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

  • Corn futures finished lower again to end the week as the lack of bullish news kept the sellers active.  March corn placed another round of new contract lows as the futures dropped 4 ¼ cents on the session. For the week, March futures lost 13 ¾ cents and has traded steady or lower for the past seven sessions.

  • The weak price action in the corn and soybean markets make it difficult for buyers to step in the market. March corn has drifted through a key level of support at both 440 and 430 levels. This leaves the door open for additional technical selling next week.

  • Corn prices reflected the negative sentiment of increasing US supplies. Despite the small adjustment in Thursday’s USDA report, corn ending stock still increased by 10 mb. This is the third time in four months that corn ending stocks in the US have increased. The stocks-to-use ratio has been raised to 14.9%, the highest since 2018-19 marketing year.

  • Managed money continues to grow its large short position in the grain markets. Last week, managed funds were short 280,151 contract of corn, and that position likely grew this week with the additional selling pressure. The next Commitment of Traders report will be released on Friday afternoon.

  • With the CONAB lowering anticipated Brazilian corn production to 113 mmt, a big focus will be on the Argentina crop this spring. Expectations are for a record crop near 55 mmt, but recent hot and dry weather has helped support the market. This week, weather forecasts have moderated and turned more friendly to crop production, which has weighed on both corn and soybean futures.

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

Soybeans

Soybeans Action Plan Summary

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

  • No new action is recommended for the 2024 crop. After the Nov ’24 contract broke through the bottom side of the 1233 – 1320 range, prices continued to retreat as South American weather conditions improved. Even though Nov ’24 runs similar downside risks as the front month contracts, which could press new crop prices toward 1150 or possibly the May ’23 low near 1115, plenty of time remains to market this crop. Considering the amount of uncertainty that lies ahead with the 2024 soybean crop, Grain Market Insider recommended back in December buying Nov ’24 1280 and 1360 calls to give you confidence to make sales against anticipated production, and to protect any sales in an extended rally. Additionally, the possibility remains that prices could retest the 2022 highs, at which point Grain Market Insider may consider recommending additional sales.

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

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

  • Soybeans closed lower today on the heels of yesterday’s bearish WASDE report, which saw US ending stocks increased and Brazilian production not lowered as much as expected. Both soybean meal and oil ended the day lower as well, despite gains in crude oil.

  • For the week, March soybeans lost 5 cents, March soybean meal lost $10.00, and March soybean oil gained 2.53 cents. Pressure has come from steady selling by non-commercials, improved Argentinian weather, poor export sales, and anticipation of a large upcoming South American harvest.

  • Yesterday, traders were slightly divided between the estimates over Brazil’s soybean production by the USDA and CONAB. The USDA maintained their position that Brazil would have a larger soy crop at 156 mmt, while CONAB’s estimates were far lower at 149 mmt. Historically, the USDA is typically more accurate, but the numbers had trade questioning the USDA’s accuracy.

  • Also, in yesterday’s WASDE report, soybean export demand was lowered from 1.755 billion bushels to 1.720 bb as China notably looks to South America for the bulk of its purchases. US shipments are currently down 22% from the previous year.

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

Wheat

Market Notes: Wheat

  • Wheat closed mixed among the three US classes. This is despite a strong reversal off the contract low with a sharply higher close for March Matif wheat. Overall, March Chicago wheat has been in a relatively narrow trading range recently and seems to be limited to the upside around the six dollar level. Spillover pressure from lower corn and soybeans today may have also limited the rally in wheat.

  • Bull spreading was again noted in Chicago wheat futures, in which nearby contracts rallied more strongly compared to deferred contracts. With the funds still net short a sizeable amount of wheat, this may indicate that they are exiting some of their positions in the front months ahead of the potential polar vortex predicted towards the end of this month.  

  • The Indian government is reported to have cut the wheat stockpile limits in half for traders and chain retailers, from 1,000 to 500 mt. Stock limits were also said to be reduced for wheat processors. According to the Ministry of Consumer Affairs, wheat stocking entities will be required to register and update their position each week. This is all said to be in attempt to eliminate the potential for artificial scarcity of the crop.

  • As of February 3, barge shipments on the Mississippi River have increased to 598,000 tons versus 342,000 tons the week prior. Of that total, just 26,000 tons were wheat. However, that is nearly a 770% increase from 3,000 tons as of January 27.

  • According to the US Climate Prediction Center, there is a historical tendency for a La Nina weather pattern to follow a strong El Nino pattern. The current El Nino pattern is forecasted to become neutral between April-June, but could then return to La Nina; there is a 55% chance of this happening according to the CPC. If accurate, this could affect wheat production in the US down the road.

Chicago Wheat Action Plan Summary

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

  • No new action is recommended for 2024 Chicago wheat. Since early December, the July ’24 contract has traded mostly sideways to slightly lower after its brief short covering runup on Chinese buying. Although China has since been absent from the US wheat export market, prices appear to have found support above 585, and managed funds continue to hold a sizeable, short position that could trigger another short covering rally if a bullish impetus enters the market. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. Although, if the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

Above: Front month Minneapolis wheat broke through nearby downside support of 688 and may continue to drift lower to test the January low of 678 ¾. If the 678 ¾ area fails, the next major support level may come in around 669. Overhead, resistance remains between 710 and 720.

Mpls Wheat Action Plan Summary

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

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

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

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

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

Other Charts / Weather

Above: Brazil 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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2-8 End of Day: Beans Higher, Wheat and Corn Lower Following USDA and CONAB Data Dump

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Corn futures ended the day slightly lower after digesting a mixed bag of data from the USDA. US ending stocks for corn came in slightly higher than last month at 2.172 billion bushels, while world corn ending stocks came in lower than last month at 322.06 mmt in today’s WASDE report.

  • Soybean futures closed higher today despite a smaller than expected cut to Brazilian soybean production in today’s USDA WASDE report. CONAB cut their Brazilian soybean production estimate this morning down to 149.4 mmt, this compares to today’s USDA Brazilian soybean production estimate at 156 mmt.

  • Soybean oil futures were higher again today, marking their fourth consecutive session of gains, while soybean meal futures were lower on the day.

  • Wheat prices were lower today after the USDA’s WASDE report showed larger than expected US wheat ending stocks. World wheat ending stocks, on the other hand, came in below expectations given increased exports in Ukraine, Australia, and Argentina versus last month’s estimates.

  • To see the updated US Drought Monitor, and the 2-week Brazil forecast precipitation anomaly, courtesy of the National Weather Service and the Climate Prediction Center, scroll down to the other Charts/Weather section.

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. With a general lack of bullish news and an estimated US carryout over 2.1 billion bushels, front month corn has languished in a sideways to lower trend since printing a high last October. While the lack of a bullish catalyst has been disappointing, the market does show signs of being oversold, and managed funds continue to hold a sizable net short position, which could trigger a short covering rally if bullish input enters the scene. For now, Grain Market Insider continues to sit 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. In January, Dec ’24 broke through the bottom end of the 485 ¾ to 602 range that had been in place since February ’22. While this was a disappointing development, bear spreading has allowed Dec ’24 to maintain more of its value versus old crop, as traders attempt to price in a larger 2023 carryout with more uncertainty remaining for the 2024 crop. Additionally, Dec ’24 does show signs of being oversold on the weekly chart, which is supportive if a bullish catalyst enters the scene. Given the amount of uncertainty that remains for the 2024 crop, Grain Market Insider will consider recommending additional sales on a retracement toward the low to mid 500 level.No Action is currently recommended for 2025 corn. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next year. It will probably be late winter or early spring of 2024 before Grain Market Insider starts considering the first sales targets.

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

  • On a day with a lot of data, corn futures finished lower on the day. March corn lost 1 cent, but again posted a new contract low and low close during the session as the market digested CONAB, USDA and weekly export information.

  • The USDA raised the U.S. corn carryout by 10 mb to 2.172 billion bushels by making a small reduction of 10 mb to the industrial usage of corn. This carryout increase was above market expectations, which were looking for a small decrease month over month.

  • Regarding South American production, the USDA made minimal changes to their Brazil and Argentina corn production forecasts. The USDA left Argentina unchanged at a projected crop of 55 MMT from last month, but lowered the Brazil forecast by 3MMT to 124 MMT.

  • The Brazil Ag Agency, CONAB, released their month production numbers for corn this morning. CONAB dropped their corn production forecast to 113.7 MMT, down from 117.6 in January. The USDA is at 124 MMT. CONAB lowered their demand forecast and export projections to reflect a possible increase in total corn carryout at the end of the market year, despite the reduced production.

  • Weekly export sales for corn were near the top end of expectations. Last week, U.S. exporters posted new sales of 1.219 MMT (48.0 mb). Total sales commitments are reaching 1.374 billion bushels, up 30% from last year. USDA announced a flash export sale of 200,000 MT (7.1 mb) of corn to Columbia this morning. This was the second announce flash sale this week, as the U.S. corn export window is open and available.

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

Soybeans

Soybeans Action Plan Summary

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

  • No new action is recommended for the 2024 crop. After the Nov ’24 contract broke through the bottom side of the 1233 – 1320 range, prices continued to retreat as South American weather conditions improved. Even though Nov ’24 runs similar downside risks as the front month contracts, which could press new crop prices toward 1150 or possibly the May ’23 low near 1115, plenty of time remains to market this crop. Considering the amount of uncertainty that lies ahead with the 2024 soybean crop, Grain Market Insider recommended back in December buying Nov ’24 1280 and 1360 calls to give you confidence to make sales against anticipated production, and to protect any sales in an extended rally. Additionally, the possibility remains that prices could retest the 2022 highs, at which point Grain Market Insider may consider recommending additional sales.

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

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

  • Soybeans ended the day slightly higher after a day of volatile trade, which saw March soybeans as low as $13.80-1/2. The WASDE report was relatively bearish, but the data that was released by the USDA was in conflict with earlier data released by Brazil’s CONAB. Soybean meal ended the day lower, while soybean oil was higher, along with higher crude oil.

  • Today, the USDA released its WASDE report, which had a bearish tone for soybeans. The US carryout for 23/24 was increased to 315 mb from 280 mb due to a decrease in exports. Brazilian soybean production was only lowered to 156 mmt from 157 mmt last month when the average trade guess was closer to 153 mmt. Argentinian production was unchanged at 50.0 mmt.

  • Brazil’s CONAB also released estimates for production, but they were in stark contrast with the USDA’s estimates with 149.40 mmt of soybeans expected and 113.70 mmt of corn expected. Traders seemed unsure about which agency was correct, which caused volatile trade.

  • Today’s export sales report was poor for soybeans, with sales below the lowest range of estimates at 12.5 mb for 23/24. This was down 25% from the prior 4-week average. Export shipments of 60.8 mb last week were well above the 22.7 mb needed each week to meet the USDA’s estimates, and primary destinations were to China, the Netherlands, and Mexico.

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

Wheat

Market Notes: Wheat

  • All three US wheat futures classes posted double digit losses today. The WASDE report was relatively neutral when it came to the wheat numbers, but futures were under pressure even before the data was released. This is likely a result of continued cheapness of Russian offerings, along with some meteorologists predicting that the polar vortex may not dip into the US at the end of the month, potentially eliminating the threat of winterkill.

  • On today’s report, the USDA projected US wheat carryout at 658 mb, up from the average trade guess of 649 mb and the January estimate of 648 mb. In terms of global numbers, wheat ending stocks were projected at 259.4 mmt, down just slightly from an average pre-report estimate of 260.1 mmt and a 260.0 mmt estimate in January.

  • As far as additional data, total wheat use was estimated at 1.869 bb, down from 1.879 bb last month. Globally, world wheat production was pegged at 785.74 mmt, up from last month’s estimate of 784.91 mmt. Other notable figures include Australian production at 25.5 mmt, unchanged from last month, and Ukraine exports at 15.0 mmt vs 14.0 mmt in January. Additionally, Russian exports were kept the same at 51.0 mmt.  

  • The USDA also reported weekly export sales today and said there was an increase of 13.9 mb of wheat export sales for 23/24 and an increase of 0.3 mb for 24/25. Shipments last week at 11.6 mb were behind the pace needed of 17.2 mb every week to meet the USDA’s goal of 725 mb. On today’s report, that export estimate was unchanged from last month.

  • According to their Bureau of Meteorology, Australia had their warmest winter on record. Additionally, it was their eighth warmest year on record overall. Furthermore, as claimed by Copernicus, Europe’s Earth observation agency, globally 2023 was the hottest year on record.

  • Statistics Canada also released data today. They said that as of December 31, 2023, wheat stocks fell because of lower production, down 10.3% year over year at 20.7 mmt. Moreover, wheat exports at 10.6 mmt were up 2.7%, which surpassed the five-year average.

Chicago Wheat Action Plan Summary

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

  • No new action is recommended for 2024 Chicago wheat. Since early December, the July ’24 contract has traded mostly sideways to slightly lower after its brief short covering runup on Chinese buying. Although China has since been absent from the US wheat export market, prices appear to have found support above 585, and managed funds continue to hold a sizeable, short position that could trigger another short covering rally if a bullish impetus enters the market. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. Although, if the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

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

Other Charts / Weather

Above: US Drought Monitor as of February 6, 2024

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

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

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

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

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

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

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

  • To see the updated US and South American GRACE-Based Drought Indicator maps, and the 1-week GFS precipitation forecast for South America, courtesy of the National Weather Service, NOAA, and the Climate Prediction Center, scroll down to the other Charts/Weather section.

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

Corn

Corn Action Plan Summary

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

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

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

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

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

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

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

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

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

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

Soybeans

Soybeans Action Plan Summary

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

  • No new action is recommended for the 2024 crop. After the Nov ’24 contract broke through the bottom side of the 1233 – 1320 range, prices continued to retreat as South American weather conditions improved. Even though Nov ’24 runs similar downside risks as the front month contracts, which could press new crop prices toward 1150 or possibly the May ’23 low near 1115, plenty of time remains to market this crop. Considering the amount of uncertainty that lies ahead with the 2024 soybean crop, Grain Market Insider recommended back in December buying Nov ’24 1280 and 1360 calls to give you confidence to make sales against anticipated production, and to protect any sales in an extended rally. Additionally, the possibility remains that prices could retest the 2022 highs, at which point Grain Market Insider may consider recommending additional sales.

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

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

  • Soybeans ended the day lower after two consecutively higher closes on Monday and Tuesday. Better rain forecasts in South America, poor export demand, and concerns about Chinese purchases being cancelled. Soybean meal ended the day lower, while soybean oil was higher.

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

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

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

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

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

Wheat

Market Notes: Wheat

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

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

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

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

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

Chicago Wheat Action Plan Summary

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

  • No new action is recommended for 2024 Chicago wheat. Since early December, the July ’24 contract has traded mostly sideways to slightly lower after its brief short covering runup on Chinese buying. Although China has since been absent from the US wheat export market, prices appear to have found support above 585, and managed funds continue to hold a sizeable, short position that could trigger another short covering rally if a bullish impetus enters the market. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. Although, if the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

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

Other Charts / Weather

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

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

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

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

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

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

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

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

  • To see the updated US 6 – 10 day temperature and precipitation outlooks, and the 1-week GFS precipitation forecast as a percent of normal for South America, courtesy of the National Weather Service, NOAA, and the Climate Prediction Center, scroll down to the other Charts/Weather section.

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

Corn

Corn Action Plan Summary

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

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

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

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

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

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

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

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

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

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

Soybeans

Soybeans Action Plan Summary

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

  • No new action is recommended for the 2024 crop. After the Nov ’24 contract broke through the bottom side of the 1233 – 1320 range, prices continued to retreat as South American weather conditions improved. Even though Nov ’24 runs similar downside risks as the front month contracts, which could press new crop prices toward 1150 or possibly the May ’23 low near 1115, plenty of time remains to market this crop. Considering the amount of uncertainty that lies ahead with the 2024 soybean crop, Grain Market Insider recommended back in December buying Nov ’24 1280 and 1360 calls to give you confidence to make sales against anticipated production, and to protect any sales in an extended rally. Additionally, the possibility remains that prices could retest the 2022 highs, at which point Grain Market Insider may consider recommending additional sales.

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

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

  • Soybeans closed higher for the second consecutive day as futures traded within a range of 1180 and 1220. Yesterday’s export inspections report was encouraging to traders with a significant amount of soybeans heading to China.

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

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

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

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

Wheat

Market Notes: Wheat

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

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

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

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

Chicago Wheat Action Plan Summary

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

  • No new action is recommended for 2024 Chicago wheat. Since early December, the July ’24 contract has traded mostly sideways to slightly lower after its brief short covering runup on Chinese buying. Although China has since been absent from the US wheat export market, prices appear to have found support above 585, and managed funds continue to hold a sizeable, short position that could trigger another short covering rally if a bullish impetus enters the market. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. Although, if the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

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

Other Charts / Weather

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

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

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

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

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

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

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

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

  • To see the updated US 5-day precipitation forecast, 6 – 10 day temperature and precipitation outlooks, and the 1-week GFS precipitation forecast for South America, courtesy of the National Weather Service, NOAA, and the Climate Prediction Center, scroll down to the other Charts/Weather section.

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

Corn

Corn Action Plan Summary

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

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

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

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

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

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

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

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

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

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

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

Soybeans

Soybeans Action Plan Summary

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

  • No new action is recommended for the 2024 crop. After the Nov ’24 contract broke through the bottom side of the 1233 – 1320 range, prices continued to retreat as South American weather conditions improved. Even though Nov ’24 runs similar downside risks as the front month contracts, which could press new crop prices toward 1150 or possibly the May ’23 low near 1115, plenty of time remains to market this crop. Considering the amount of uncertainty that lies ahead with the 2024 soybean crop, Grain Market Insider recommended back in December buying Nov ’24 1280 and 1360 calls to give you confidence to make sales against anticipated production, and to protect any sales in an extended rally. Additionally, the possibility remains that prices could retest the 2022 highs, at which point Grain Market Insider may consider recommending additional sales.

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

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

  • Soybeans ended the day higher, along with both soybean meal and oil, after a lower start. The release of the export inspections report was very friendly, and prices began to move higher after that. Improved weather in South America could be a bearish factor this week.

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

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

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

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

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

Wheat

Market Notes: Wheat

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

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

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

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

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

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

Chicago Wheat Action Plan Summary

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

  • No new action is recommended for 2024 Chicago wheat. Since early December, the July ’24 contract has traded mostly sideways to slightly lower after its brief short covering runup on Chinese buying. Although China has since been absent from the US wheat export market, prices appear to have found support above 585, and managed funds continue to hold a sizeable, short position that could trigger another short covering rally if a bullish impetus enters the market. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. Although, if the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

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

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

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

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

Other Charts / Weather

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

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

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

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

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

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

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

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

  • To see the updated US 7 day precipitation forecast, 6 – 10 day temperature and precipitation outlooks, and the 2-week GFS precipitation forecast as a percent of normal for South America, courtesy of the National Weather Service, NOAA, and the Climate Prediction Center, scroll down to the other Charts/Weather section.

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

Corn

Corn Action Plan Summary

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

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

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

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

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

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

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

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

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

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

Soybeans

Soybeans Action Plan Summary

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

  • No new action is recommended for the 2024 crop. After the Nov ’24 contract broke through the bottom side of the 1233 – 1320 range, prices continued to retreat as South American weather conditions improved. Even though Nov ’24 runs similar downside risks as the front month contracts, which could press new crop prices toward 1150 or possibly the May ’23 low near 1115, plenty of time remains to market this crop. Considering the amount of uncertainty that lies ahead with the 2024 soybean crop, Grain Market Insider recommended back in December buying Nov ’24 1280 and 1360 calls to give you confidence to make sales against anticipated production, and to protect any sales in an extended rally. Additionally, the possibility remains that prices could retest the 2022 highs, at which point Grain Market Insider may consider recommending additional sales.

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

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

  • Soybeans ended the day significantly lower again to end the week with pressure from Brazil’s advancing harvest, lower soy products, and poor export sales. Soybean meal has been rangebound for the past few weeks, while soybean oil has trended lower on increased supply and demand concerns.

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

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

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

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

Wheat

Market Notes: Wheat

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

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

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

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

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

Chicago Wheat Action Plan Summary

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

  • No new action is recommended for 2024 Chicago wheat. Since early December, the July ’24 contract has traded mostly sideways to slightly lower after its brief short covering runup on Chinese buying. Although China has since been absent from the US wheat export market, prices appear to have found support above 585, and managed funds continue to hold a sizeable, short position that could trigger another short covering rally if a bullish impetus enters the market. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. Although, if the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

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

Other Charts / Weather

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

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

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

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

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

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

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

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

  • To see the updated US Drought Monitor, and the 2-week GFS precipitation forecast for South America, courtesy of the NDMC, National Weather Service, NOAA, and the Climate Prediction Center, scroll down to the other Charts/Weather section.

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

Corn

Corn Action Plan Summary

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

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

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

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

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

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

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

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

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

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

Soybeans

Soybeans Action Plan Summary

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

  • No new action is recommended for the 2024 crop. After the Nov ’24 contract broke through the bottom side of the 1233 – 1320 range, prices continued to retreat as South American weather conditions improved. Even though Nov ’24 runs similar downside risks as the front month contracts, which could press new crop prices toward 1150 or possibly the May ’23 low near 1115, plenty of time remains to market this crop. Considering the amount of uncertainty that lies ahead with the 2024 soybean crop, Grain Market Insider recommended back in December buying Nov ’24 1280 and 1360 calls to give you confidence to make sales against anticipated production, and to protect any sales in an extended rally. Additionally, the possibility remains that prices could retest the 2022 highs, at which point Grain Market Insider may consider recommending additional sales.

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

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

  • Soybeans closed significantly lower today following two consecutive days of higher prices. Today’s export sales report was very poor, and both soybean meal and oil moved lower and pressured soybeans. There was a flash sale reported, but it was overshadowed by the low export number.

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

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

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

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

Wheat

Market Notes: Wheat

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

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

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

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

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

Chicago Wheat Action Plan Summary

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

  • No new action is recommended for 2024 Chicago wheat. Since early December, the July ’24 contract has traded mostly sideways to slightly lower after its brief short covering runup on Chinese buying. Although China has since been absent from the US wheat export market, prices appear to have found support above 585, and managed funds continue to hold a sizeable, short position that could trigger another short covering rally if a bullish impetus enters the market. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. Although, if the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

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

Other Charts / Weather

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

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