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12-08 End of Day: Fresh Chinese Purchases Fail to Support as Markets Fade Following USDA Report

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Following quiet overnight trade that was higher, the corn market faded lower into the close following the release of today’s USDA WASDE update that showed only a minor 25 mb reduction to 23/24 ending stocks by raising export demand by the same amount.

  • Markets sold off, giving up earlier gains as the USDA left the soybean complex’s supply/demand numbers unchanged across all three commodities, and increased global stocks above expectations by 1.5 mmt in today’s update.

  • Despite the report of another Chinese purchase of SRW and the USDA’s reduction of wheat ending stocks by 25 mb, the wheat complex sold off as world wheat production was raised by 1 mmt and traders took profits from the recent rally.

  • US employment data that was released this morning came in better than expected. The unemployment rate came in at 3.7% versus 3.9% expected and rallied the US dollar, possibly adding some resistance to grain markets.  

  • To see the updated US 8 – 14 da temperature and precipitation outlooks, and South America’s 1 week total accumulated precipitation, the National Weather Service, and Climate Prediction Center, scroll down to other Charts/Weather Section.

  • CORN ACTION PLAN SUMMARY (approximately 3 bullet points)

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. Since the beginning of August, the corn market has traded sideways largely between 470 and 500. October’s brief breakout to 509 ½ and the subsequent failure to stay above the 50-day moving average indicates there is significant resistance in that price range. The failure of December’s USDA report to provide a bullish influence on the market puts the market at risk of drifting sideways to lower without a bullish catalyst. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

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

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

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

  • Corn prices faded from the highs after the USDA report. Additional purchases by China of wheat and soybeans, and a corn sale to “Unknown destinations” helped support the market early in the session, but prices faded after the USDA report’s release. March corn lost 2 ¼ cents on the day, but finished ¾ cents higher on the week.

  • The USDA raised export projections by 25 mb to 2.100 billion bushels for the marketing year in the USDA WASDE report on Friday morning. The USDA cited recent strength in export demand as the rationale. This lowered projected carryout to 2.131 billion bushels for ending stock for the 23/24 marketing year, below analyst expectations.

  • The slip in prices moved March futures back to the key support level of 485. March futures have traded around this price point the past six sessions and have consistently been in this area since the start of November. 

  • The USDA announced a private exporter sale of corn to Unknown Destination for 6.5 mb for the 23/24 marketing year this morning. The export sales help support overnight and morning corn prices.

  • In the WASDE report, USDA left Brazil and Argentina corn production unchanged from their November projections, taking a “wait and see” approach to the corn crops. On Thursday, CONAB estimated Brazil’s total corn crop for 23/24 at 118.53 mmt, down from previous estimates of 119.02 mmt. The USDA is forecasting a crop of 129 mmt.

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

Soybeans

Soybeans Action Plan Summary

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

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

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

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

  • Soybeans ended the day lower following today’s lackluster WASDE report, which saw very few changes from last month’s report. Both soybean meal and oil ended the day lower as well, with larger losses in soybean oil.

  • For the week, January soybeans lost 21 cents, January soybean meal lost 8.0 dollars, and January soybean oil lost 1.25 cents. This comes as non-commercials have been exiting a portion of their net long positions with improvements in South American weather.

  • In today’s USDA report, US ending stocks were unchanged at 245 mb, which was mostly in line with expectations. World ending stocks were reduced slightly, Argentinian soybean production was unchanged at 48.0 mmt, and Brazilian soybean production was reduced to 161.0 mmt from 163.0 mmt.

  • This morning, the USDA reported a private exporter sale of 136,000 metric tons of soybeans for delivery to China during the 23/24 marketing year.

Above: Since retreating from the November highs, soybeans have traded back through the 50-day moving average and 1297 support. Currently, the trend is lower, but the market shows signs of being oversold, which can be supportive if prices turn back higher. For now, support below the market remains near 1250, with nearby resistance near the 50-day moving average, around 1320, and again near 1352.

Wheat

Market Notes: Wheat

  • Wheat closed lower in all three US classes today after a relatively neutral WASDE report. The US 23/24 wheat ending stocks number was lowered to 658 mb, versus 684 mb last month. The world carryout came in at 258.2 mmt, compared to 258.7 in November.

  • US wheat exports were raised 25 mb from last month’s estimate, now at 725 mb for 23/24. The negativity at the close may be a reflection of a higher world production number though, at 783.01 mmt versus 781.98 mmt last month. With the recent run higher, profit taking was also a likely culprit.

  • Aside from today’s USDA report, there was also another announced sale of US wheat to China for the 23/24 marketing year, this time for 110,000 mt. Despite a lower close today, if these purchases continue, it will lend support to the market. On the other hand, rain forecasted for the US southern Plains next week may keep upside potential limited for now.

  • Egypt’s most recent wheat tender for 420,000 mt was fulfilled by Russia at $260 per mt FOB. France’s offer at $268 was the next cheapest, with Romania following them. Given the competition, it is a bit surprising, albeit welcome, that China is purchasing US wheat.

  • Today’s Jobs report indicated that the US added 199,000 jobs, and unemployment has fallen to 3.7%. This has the US Dollar Index higher, which may also have contributed to the negative close in wheat. Additionally, this may mean that the Federal Reserve sticks with their plan to have higher interest rates for longer; this may continue to affect commodity prices down the road.

  • From a global perspective, as of the July 1, the beginning of their marketing year, Ukraine’s total grain harvest has reached 57.6 mmt. Of that total, 22.5 mmt is wheat, which is said to be up 16% year on year. Over in France, winter wheat planting is 89% complete as of December 4. Typically, they are done by the end of November, but significant rain delays were present this year. Additionally, 77% of the French crop is reported to be in good to excellent condition.  

Chicago Wheat Action Plan Summary

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

  • No new action is recommended for 2024 Chicago wheat. Since July, new crop Chicago wheat has slowly worked its way lower with no significant opportunities to make additional sales. The lower market was driven mostly by managed fund selling from lower world wheat prices and weak US demand. As the market sold off, it became significantly oversold with managed funds building a short position in excess of 100,000 contracts. While bearish headwinds remain, the large fund short position and oversold condition of the market are two factors that could fuel a sizeable, short-covering rally. Additionally, price seasonals are supportive as prices tend to build in some risk premium going into the winter months. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion, and back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: Short covering and a seasonal build up of weather premium has driven Chicago wheat through the late August highs and may be on track to test the next level of resistance between 660 and 665 left in early August. The market shows signs of being overbought and could retreat. If it does, support may come in around 605 – 600, and again near the 50-day moving average near 575.

KC Wheat Action Plan Summary

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

  • No new action is recommended for 2024 KC wheat. At the end of August, the Jul ’24 contract broke out of roughly a one-year trading range, between 740 and 860, to the downside. Since that breakout, the market has continued to slowly stair-step lower, largely driven by managed fund selling, weak US export demand, and lower world wheat prices. As the selloff progressed, the funds built up the largest net short position in three years. While bearish headwinds remain, the significant oversold condition of the market and the large fund net short position are two factors that could fuel a short-covering rally in the months ahead. Price seasonals are also supportive as prices tend to build in some risk premium going into the winter months. Back in August, Grain Market Insider recommended buying Jul’24 KC wheat 660 puts to protect the downside following the range breakout. Though as the market recently got further extended into oversold territory and the July contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. Moving forward, Grain Market Insider is prepared to recommend exiting the last 25% on any further supportive market developments.

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

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

Above: Since the end of November, the wheat market has rallied largely on short covering activity from being extremely oversold. The market is now showing signs of being overbought and has posted a bearish reversal, though it’s close above the 50-day moving average suggests that there could still be more strength in the market. If not, and prices retreat below the 50-day moving average, support below the market may come in between 595 and 575.

Mpls Wheat Action Plan Summary

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

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

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

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

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

Other Charts / Weather

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

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

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12-07 End of Day: Grain Markets Finish Strong Ahead of Friday’s USDA Report

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Export sales that were at the upper end of expectations, lower Brazilian crop estimates, and outside support from neighboring wheat and soybeans supported corn prices to finish in the green, following choppy two sided trade early in the session.

  • A large private export sale totaling 136,000 mt of soybeans to China for this marketing year, along with rumors of China purchasing 3-4 additional cargoes, helped spark a rally in soybeans ahead of tomorrow’s December USDA WASE update. Possible short covering from the recent decline and strong soybean oil also lent support to erase yesterday’s losses, and close in an outside reversal higher.

  • In a surprise move, soybean oil rallied nearly 2.00 cents (almost 4%) ahead of the December, erasing almost two days of losses from possible fund short covering, as private estimates lower the Argentine soy outlook (typically the world’s largest soy product exporter). The move in soybean oil lent a large amount of support to soybeans. Meanwhile, soybean meal closed in the red, but well off the day’s lows.

  • March Chicago wheat closed higher for the eighth day in a row, with KC and Minneapolis both showing surprising comebacks from yesterday’s weakness. Recent Chinese SRW purchases, along with further possible short covering from the large fund short position ahead of tomorrow’s USDA update, lent support.

  • With little news to report on, the US dollar traded sharply lower throughout the day, in a show of its overall weakness, and erased the last two day’s gains as of this writing. The break in the dollar may have lent additional support to the commodity markets.

  • To see the updated US Drought Monitor with the weekly classification change map, and South America’s 2 week precipitation forecast as a percentage of normal, courtesy of the NDMC, the National Weather Service, and Climate Prediction Center, scroll down to other Charts/Weather Section.

  • CORN ACTION PLAN SUMMARY (approximately 3 bullet points)

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. Since the beginning of August, the corn market has traded sideways largely between 470 and 500. October’s brief breakout to 509 ½ and the subsequent failure to stay above the 50-day moving average indicates there is significant resistance in that price range. The failure of November’s USDA report to provide a bullish influence on the market puts the market at risk of drifting sideways to lower without a bullish catalyst. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

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

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

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

  • Corn futures followed the strength in other grains to push higher into the close at the end of the session on Thursday. March corn added 3 ¾ cents on the trading session.

  • The USDA released weekly export sales on Thursday morning. The USDA reported an increase of 1.289 mmt (50.7 mb) of corn export sales for last week. Corn sales commitments now total 1.014 bb for 23/24 and are up 35% from a year ago.

  • The US corn export program is beginning to ramp up as the calendar moves closer to the new year.  Currently, US corn has an advantage in price over competing supplies out of Brazil and Argentina until the March time window.

  • CONAB estimated Brazil’s total corn crop for 23/24 at 118.53 mmt down from previous estimates of 119.02 MMT. If realized, corn production would be down 13.42 mmt versus last year, or a drop of approximately 11%. CONAB cited the biggest reason for the lower production was due to reduced planted areas.

  • The USDA will release the next WASDE report on Friday morning at 11:00 a.m. CST. Expectations are for slight reductions in US corn ending stocks due to small demand adjustments from 2.156 billion bushels to 2.152 billion bushels. The market may be more focused on adjustments to the Brazilian corn and soybean production due to the difficult weather from early in the growing season.

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

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Since August, the 2023 soybean market has traded mostly between 1250 and 1400. After trading to 1251 last October, the Jan ’24 contract went on to test the Nov ’23 contract’s August high near 1400, but failed to break through the heavy resistance and has since retreated. Last summer, Grain Market Insider made two sales recommendations in the 1310 – 1360 price window versus Nov ’23, and while seasonally, we are at the time of year when prices tend to rally into the end of the year, due to the considerable overhead resistance in the market, Grain Market Insider may consider making additional old crop sales prior to year’s end.

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

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

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

  • Soybeans ended the day higher with the March contract closing above the 200-day moving average, following a day of good export sales and support from significantly higher soybean oil. Soybean meal was mixed with lower closes in the two front months, but higher in deferred months.

  • For the week ending November 30, the USDA reported an increase of 55.8 mb of soybean export sales for 23/24. This was down 20% from the previous week and 21% from the prior 4-week average. Last week’s export shipments of 49.1 mb were above the 28.2 mb needed each week to achieve the USDA’s export estimates, and primary destinations were to China, Spain, and the Netherlands.

  • Following the good export sales report, the USDA reported private exporter sales of 121,000 metric tons of soybeans for delivery to unknown destinations during the 23/24 marketing year. Exports have picked up in the window that Brazil is planting their soybean crop.

  • Some private analysts have lowered their outlook for the Argentinian soybean production, the world’s largest exporter of soy products, and this may have given soybean oil a boost today.

  • There are few changes expected in tomorrow’s USDA WASDE report. US 23/24 ending stocks are estimated to come in at 242 mb versus November’s reported 245 mb. Whereas South American production may see some more changes. Argentina’s production is expected to come in at 48.2 mmt versus last month’s 48 mmt, and Brazil’s soybean crop is expected to drop to 160.1 mmt versus 163 mmt last month.

Above: Since retreating from the November highs, soybeans have traded back through the 50-day moving average and 1297 support. Currently, the trend is lower, but the market shows signs of being oversold, which can be supportive if prices turn back higher. For now, support below the market remains near 1250, with nearby resistance near the 50-day moving average, around 1320, and again near 1352.

Wheat

Market Notes: Wheat

  • Wheat recovered from yesterday’s losses in all three US futures classes today. In fact, the grain complex as a whole reversed from the previous day with higher closes across the board in corn and soybeans too. March Chicago wheat, which did barely close higher yesterday, has now closed higher for eight sessions in a row.

  • Today, the USDA reported an increase of 13.1 mb for 23/24 wheat export sales, but a reduction of 0.3 mb for 24/25. The recent sales to China may mean that the USDA’s 700 mb export goal could be too low. With some private guesses suggesting it may need to be up to 30 mb higher. This is unlikely to be reflected in tomorrow’s report, but could be changed in the future.

  • Tomorrow’s WASDE report is expected to be relatively neutral for wheat. In fact, the pre-report estimate for US 23/24 wheat carryout is unchanged from last month at 684 mb. As for the world numbers, the average pre-report ending stocks estimate comes in at 258.8 mmt, up just 0.1 mmt from last month’s number.

  • While the carryout numbers are expected to see little change, it is possible that the USDA may make some revisions to global production numbers. Recently, both Canada and Australia increased their wheat production estimates above the last USDA estimates.

  • The national wheat harvest in Argentina is reported to be 37% complete, in line with 38% last year. Estimates of their wheat production range from 13.5 to 14.7 mmt, and the USDA’s last estimate was 15 mmt. Therefore, it is possible there will be a revision lower tomorrow. Some areas of Argentina are seeing poorer yields due to early dryness, but the coastal growing regions received good rain with yields said to more than offset any losses in the dry areas.

Chicago Wheat Action Plan Summary

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

  • No new action is recommended for 2024 Chicago wheat. Since July, new crop Chicago wheat has slowly worked its way lower with no significant opportunities to make additional sales. The lower market was driven mostly by managed fund selling from lower world wheat prices and weak US demand. As the market sold off, it became significantly oversold with managed funds building a short position in excess of 100,000 contracts. While bearish headwinds remain, the large fund short position and oversold condition of the market are two factors that could fuel a sizeable, short-covering rally. Additionally, price seasonals are supportive as prices tend to build in some risk premium going into the winter months. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion, and back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: Short covering and a seasonal build up of weather premium has driven Chicago wheat through the late August highs and may be on track to test the next level of resistance between 660 and 665 left in early August. The market shows signs of being overbought and could retreat. If it does, support may come in around 605 – 600, and again near the 50-day moving average near 575.

KC Wheat Action Plan Summary

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

  • No new action is recommended for 2024 KC wheat. At the end of August, the Jul ’24 contract broke out of roughly a one-year trading range, between 740 and 860, to the downside. Since that breakout, the market has continued to slowly stair-step lower, largely driven by managed fund selling, weak US export demand, and lower world wheat prices. As the selloff progressed, the funds built up the largest net short position in three years. While bearish headwinds remain, the significant oversold condition of the market and the large fund net short position are two factors that could fuel a short-covering rally in the months ahead. Price seasonals are also supportive as prices tend to build in some risk premium going into the winter months. Back in August, Grain Market Insider recommended buying Jul’24 KC wheat 660 puts to protect the downside following the range breakout. Though as the market recently got further extended into oversold territory and the July contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. Moving forward, Grain Market Insider is prepared to recommend exiting the last 25% on any further supportive market developments.

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

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

Above: Since the end of November, the wheat market has rallied largely on short covering activity from being extremely oversold. The market is now showing signs of being overbought and has posted a bearish reversal, though it’s close above the 50-day moving average suggests that there could still be more strength in the market. If not, and prices retreat below the 50-day moving average, support below the market may come in between 595 and 575.

Mpls Wheat Action Plan Summary

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

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

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

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

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

Other Charts / Weather

Brazil 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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12-06 End of Day: Markets Open Strong but Reverse to Close Mostly Lower

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • The corn market opened strong, but quickly succumbed to weakness from neighboring soybeans and wheat, which led the market lower with additional weakness coming from sharply lower crude oil and more favorable South American weather forecasts.

  • Despite higher trade overnight and another large private soybean sale of 136k mt to China, soybeans could not hold the gains and traded lower from the 8:30 opening bell. Weakness from the product side of the complex weighed on the market, possibly triggering more fund long liquidation.

  • Soybean meal and oil came under pressure from more favorable South American weather forecasts and sharply lower crude and palm oil, closing sharply lower in both markets, and shaving 20 cents off January board crush, erasing this week’s gain.

  • The wheat complex was largely unable to hold early gains made in the overnight session and posted bearish reversals in both KC and Minneapolis. Another large SRW sale to China likely gave Chicago the strength to hold a 2 cent gain into the close, but Black Sea export prices continue to dominate and add resistance to US prices.

  • To see the updated US 7-day precipitation forecast, Brazil’s 2 week precipitation forecast, and the GRACE based drought indicator maps for both US and SA, courtesy of the National Weather Service, Climate Prediction Center, and nasagrace.unl.edu, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. Since the beginning of August, the corn market has traded sideways largely between 470 and 500. October’s brief breakout to 509 ½ and the subsequent failure to stay above the 50-day moving average indicates there is significant resistance in that price range. The failure of November’s USDA report to provide a bullish influence on the market puts the market at risk of drifting sideways to lower without a bullish catalyst. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

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

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

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

  • Strong selling in the commodity space weighed on corn futures, which reversed off session highs.  March corn lost 6 ¼ cents on the session. The weak price action damaged an improving technical picture and could trigger additional long liquidation and selling going into tomorrow’s session.

  • Strong selling in the crude oil market was the driver behind the liquidation of length across the ag commodity markets on Wednesday. Crude oil futures traded over $3.00 lower and under $70.00 a barrel before seeing some price recovery.

  • Farmer selling and hedge pressure likely limited the market’s rally potential. As prices ran into resistance near the 490 – 500 window, they were possibly met by some producer selling.

  • Corn demand has improved in recent weeks. The USDA will release weekly export sales on Thursday morning. Expectations are for last week’s new sales to range from 725,000 – 1,500,000 mt.

  • Ethanol production for last week averaged 1.076 million barrels/day. This was up 6.4% from last week and over the 5-year average. Ethanol stocks were 21.439 million barrels, up slightly from last week.  Total corn used for ethanol production last week was 21.693 mb. This is currently ahead of the USDA projected pace for the marketing year.

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

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Since August, the 2023 soybean market has traded mostly between 1250 and 1400. After trading to 1251 last October, the Jan ’24 contract went on to test the Nov ’23 contract’s August high near 1400, but failed to break through the heavy resistance and has since retreated. Last summer, Grain Market Insider made two sales recommendations in the 1310 – 1360 price window versus Nov ’23, and while seasonally, we are at the time of year when prices tend to rally into the end of the year, due to the considerable overhead resistance in the market, Grain Market Insider may consider making additional old crop sales prior to year’s end.

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

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

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

  • Strong selling in the soy products and crude oil pressured soybean futures lower on the session.  January soybeans lost 10 cents on the day and closed under the key 1300 support level.

  • Edible oil prices struggle as palm oil prices continue to slide. The weakness in the edible oil market pressured soybean oil futures, closing back under 50.00 cents/pound.

  • China stayed active in the US soybean export market, as the USDA announced a sale of 136,000 mt of soybeans for the current marketing year. This sale was likely for February delivery out of the PNW.

  • Weekly export sales for soybeans are expected to range from 1.0 – 1.8 mmt for last week. The USDA will release the weekly export sales report on Thursday morning.

  • Brazilian weather has improved significantly, with rain having fallen in some of the driest areas of the country with more expected. While production will still likely be variable in some regions, the recent rains may have helped stabilize the crop in other areas.

Above: Since retreating from the November highs, soybeans have traded back through the 50-day moving average and 1297 support. Currently, the trend is lower, but the market shows signs of being oversold, which can be supportive if prices turn back higher. For now, support below the market remains near 1250, with nearby resistance near the 50-day moving average, around 1320, and again near 1352.

Wheat

Market Notes: Wheat

  • March Chicago wheat managed to just barely stay afloat with a gain of 2-1/4 cents for the day, with bull spreading noted, likely spurred by recent Chinese purchases, as the deferred contracts lost ground to the nearby ones. However, all three US wheat classes closed lower overall.

  • Another large private sale of US SRW wheat to China was announced by the USDA, this time for 372,000 mt for delivery during the 23/24 marketing year. Despite this sale, the market appeared to implement a risk off posture today, with lower closes in corn, soybeans, meal, bean oil, and livestock. Additionally, crude oil is sharply lower, which is down almost $3 per barrel as of this writing.

  • On a positive note, March Chicago wheat was able to close just above its 100 day moving average of 632 ¼ for the first time since the end of July. Combined with the recent correction from oversold, this may indicate that there is still enough technical buying in wheat for momentum to continue higher, regardless of an off day today.

  • Egypt purchased 180,000 mt of wheat from Russia and Ukraine on an international tender. This is a reminder that Black Sea wheat exports remain competitive, especially from Russia, and it may take more friendly news to push wheat significantly higher.

  • European Union soft wheat exports, as of Sunday, totaled 12.5 mmt since the season began on July 1. This compares with 15.3 mmt at the same time last year, representing a decline of 18% year on year. For a similar timeframe, Ukrainian grain exports have totaled about 13.7 mmt versus 19 mmt last year. That 13.7 mmt figure includes about 6.1 mmt of wheat this season, versus 7.2 mmt last year.

Chicago Wheat Action Plan Summary

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

  • No new action is recommended for 2024 Chicago wheat. Since July, new crop Chicago wheat has slowly worked its way lower with no significant opportunities to make additional sales. The lower market was driven mostly by managed fund selling from lower world wheat prices and weak US demand. As the market sold off, it became significantly oversold with managed funds building a short position in excess of 100,000 contracts. While bearish headwinds remain, the large fund short position and oversold condition of the market are two factors that could fuel a sizeable, short-covering rally. Additionally, price seasonals are supportive as prices tend to build in some risk premium going into the winter months. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion, and back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: Short covering and a seasonal build up of weather premium has driven Chicago wheat through the late August highs and may be on track to test the next level of resistance between 660 and 665 left in early August. The market shows signs of being overbought and could retreat. If it does, support may come in around 605 – 600, and again near the 50-day moving average near 575.

KC Wheat Action Plan Summary

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

  • No new action is recommended for 2024 KC wheat. At the end of August, the Jul ’24 contract broke out of roughly a one-year trading range, between 740 and 860, to the downside. Since that breakout, the market has continued to slowly stair-step lower, largely driven by managed fund selling, weak US export demand, and lower world wheat prices. As the selloff progressed, the funds built up the largest net short position in three years. While bearish headwinds remain, the significant oversold condition of the market and the large fund net short position are two factors that could fuel a short-covering rally in the months ahead. Price seasonals are also supportive as prices tend to build in some risk premium going into the winter months. Back in August, Grain Market Insider recommended buying Jul’24 KC wheat 660 puts to protect the downside following the range breakout. Though as the market recently got further extended into oversold territory and the July contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. Moving forward, Grain Market Insider is prepared to recommend exiting the last 25% on any further supportive market developments.

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

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

Above: Since the end of November, the wheat market has rallied largely on short covering activity from being extremely oversold. The market is now showing signs of being overbought, though its close above 661 and the 50-day moving average suggests that it may test the October highs around 692. If not, and prices retreat, support below the market will likely come in between 595 and 575.

Mpls Wheat Action Plan Summary

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

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

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

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

Above: After making a new contract low on November 27, the March contract found buying interest from its oversold status and record fund short. The market will need more bullish input to push prices above resistance at 740 and 750, at which point they could run toward 790. If prices retreat, support could be found near the recent low of 697 ½ before the May ’21 low of 669.

Other Charts / Weather

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

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12-05 End of Day: Another SRW Sale to China Supports Wheat and Corn; Bean Complex Closes Mixed

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Strength from higher wheat likely triggered more short covering in the corn market, which led it to close just off its highs following two sided trade.

  • Following firmer prices overnight and a strong opening of the day session, soybeans traded lower throughout much of the day on sharply lower soybean oil and expectations of more favorable Brazilian weather before turning back higher to close fractionally mixed on sharply higher soybean meal.

  • Soybean oil likely came under pressure from a Bloomberg survey of plantation exec.’s, analysts, and traders that estimated Malaysian palm oil stocks at the highest level in 3 years.  Meanwhile, soybean meal traded higher off extremely oversold conditions, supporting soybeans and Board crush margins.

  • The report of another large private sale totaling 198k mt of SRW wheat to China ignited a gap higher in Chicago wheat as the markets reopened for the day session. Markets stayed mostly firm throughout the day in all three classes. Minneapolis and KC closed mid-range and well off session highs, with Chicago closing just 5 cents of its highs.

  • To see the updated US 8 – 14 day temperature and precipitation outlooks, and Brazil and Argentina’s 2 week forecast precipitation as a percent of normal, courtesy of the National Weather Service, Climate Prediction Center, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. Since the beginning of August, the corn market has traded sideways largely between 470 and 500. October’s brief breakout to 509 ½ and the subsequent failure to stay above the 50-day moving average indicates there is significant resistance in that price range. The failure of November’s USDA report to provide a bullish influence on the market puts the market at risk of drifting sideways to lower without a bullish catalyst. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

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

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

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

  • Corn futures finished with moderate gains on Tuesday, as late buying strength in the grain markets, and a strong wheat market helped push corn prices higher. March corn added 5 cents and posted its highest close in nearly two weeks.

  • Funds have built a net short position of 206,478 contracts in last week’s Commitment of Trader’s report. The improved technical picture and the price strength in wheat is leading to an end-of-year short covering rally in corn. The upside may stay limited due to large supplies, but an improved demand picture could help sustain the rally into 2024.

  • The USDA will release the next WASDE report on Friday, December 8. The grain market is likely going to square positions going into the report, and for corn, could see additional short covering and possible price support.

  • The corn market is waiting for Chinese export demand, which is currently down 71% year-over-year at this point, but China has been active in the US wheat export market recently, and that has helped trigger some optimism in the extremely short corn market.

  • Weak price action in the crude oil market could limit buying strength in corn, as well as other commodities. Ethanol margins are still positive, but could be squeezed with crude oil challenging the lower $70 a barrel price level.

Above: The corn market has so far held nearby support near 470, while knocking on the door of nearby overhead resistance at 496. Heavy resistance remains between 500 and 509 ½, and the market will need more bullish influence to push through and test the mid 500’s. Below the market, further support remains near 460, and 415.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Since August, the 2023 soybean market has traded mostly between 1250 and 1400. After trading to 1251 last October, the Jan ’24 contract went on to test the Nov ’23 contract’s August high near 1400, but failed to break through the heavy resistance and has since retreated. Last summer, Grain Market Insider made two sales recommendations in the 1310 – 1360 price window versus Nov ’23, and while seasonally, we are at the time of year when prices tend to rally into the end of the year, due to the considerable overhead resistance in the market, Grain Market Insider may consider making additional old crop sales prior to year’s end.

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

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

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

  • Soybeans traded both sides of unchanged throughout the day, but ultimately closed mixed, with the January contract slightly lower, March unchanged, and November slightly higher. Soybean meal was lower throughout the day, but rallied into the close, which supported soybeans.

  • Brazilian weather has improved significantly, with rain having fallen in some of the driest areas of the country with more expected. Despite this change, 4.2% of Mato Grosso, which is the largest soybean producing state, will need to be replanted, and many analysts are revising their estimates of total production lower. Many estimates are now closer to 150 mmt, compared to the 163 mmt estimated by the USDA.

  • In Malaysia, palm oil reserves have reportedly risen to a 4-year high at 2.48 million tons. This is the seventh month in a row that palm oil stockpiles have risen there as production outpaces export demand. These large supplies could be a factor in pressuring US soybean oil.

  • Yesterday’s soybean inspections were reported at 40.7 mb, which was on the low end, and although export demand has picked up recently, sales are still down by 17%. Yesterday, a sale of soybean cake and meal was reported to the Philippines totaling 183,000 mt. This Friday, the USDA will release their WASDE report, and it will be revealed if any changes are made to demand.

Above: On November 15, January soybeans posted a bearish reversal after coming within 11 cents of the August high. Since then, the market has retested the recent high and failed, creating a head-and-shoulders pattern, which suggests a potential to test October’s 1250 low unless bullish input enters the market. For now, heavy resistance remains between 1400 and 1410, with nearby resistance near 1350. Support below the market remains near 1297.

Wheat

Market Notes: Wheat

  • Wheat was able to rally today in the face of a lower close for Paris milling wheat futures, and a US Dollar Index that is making another leg higher. Fund short covering appears to persist, as another announced sale of US wheat to China was confirmed today by the USDA. Today’s sale was for 198,000 mt of SRW wheat, in addition to yesterday’s 440,000 mt sale, their largest purchase in three years.

  • Globally, there is still uncertainty about what wheat production will look like. Bearish figures were released by both Stats Canada and ABARE (Australia). The Canadian wheat production estimate was pegged at 31.954 mmt, higher than trade expectations and last month’s number of 29.835 mmt. Additionally, the estimate of Australian wheat production was raised to 25.5 mmt, which is 1 mmt above the current USDA projection.

  • With a current wheat import duty at 40%, India is said to be considering lowering that to between 15% and 20% to import up to 1 mmt of Russian wheat. India’s internal wheat prices remain high, and this may be an effort to reduce food price inflation.

  • The next WASDE report will be released this Friday. Pre-report estimates call for little to no change for US wheat ending stocks, with the same being true for corn and soybeans. The world ending stocks are projected to remain neutral as well, with no major changes expected.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. After making a high in late July, nearby Chicago wheat trended lower until finding support at 540. During that time, driven by weak US export demand and lower world wheat prices, funds established most of their short position that currently exceeds 100,000 contracts. While bearish obstacles remain, the large short fund position and a seasonal pattern that is currently supportive, could fuel an extended short-covering rally. Earlier this year, Grain Market Insider made sales recommendations in the late June rally around 720 and again earlier this fall near 604. With those two sales, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales in the 625 – 650 range. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. Since July, new crop Chicago wheat has slowly worked its way lower with no significant opportunities to make additional sales. The lower market was driven mostly by managed fund selling from lower world wheat prices and weak US demand. As the market sold off, it became significantly oversold with managed funds building a short position in excess of 100,000 contracts. While bearish headwinds remain, the large fund short position and oversold condition of the market are two factors that could fuel a sizeable, short-covering rally. Additionally, price seasonals are supportive as prices tend to build in some risk premium going into the winter months. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion, and back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: Chicago wheat recently broke out of its trading range and approaching resistance between the 200-day moving average and the late August highs near 645, driven largely by short covering and the seasonal build up of weather premium.  For now, support below the market comes in near the 50-day moving average, around 575, and again between 555 and 540.

KC Wheat Action Plan Summary

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

  • No new action is recommended for 2024 KC wheat. At the end of August, the Jul ’24 contract broke out of roughly a one-year trading range, between 740 and 860, to the downside. Since that breakout, the market has continued to slowly stair-step lower, largely driven by managed fund selling, weak US export demand, and lower world wheat prices. As the selloff progressed, the funds built up the largest net short position in three years. While bearish headwinds remain, the significant oversold condition of the market and the large fund net short position are two factors that could fuel a short-covering rally in the months ahead. Price seasonals are also supportive as prices tend to build in some risk premium going into the winter months. Back in August, Grain Market Insider recommended buying Jul’24 KC wheat 660 puts to protect the downside following the range breakout. Though as the market recently got further extended into oversold territory and the July contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. Moving forward, Grain Market Insider is prepared to recommend exiting the last 25% on any further supportive market developments.

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

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

Above: Since the end of November, the wheat market has rallied largely on short covering activity from being extremely oversold. The market is now showing signs of being overbought, though its close above 661 and the 50-day moving average suggests that it may test the October highs around 692. If not, and prices retreat, support below the market will likely come in between 595 and 575.

Mpls Wheat Action Plan Summary

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

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

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

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

Above: After making a new contract low on November 27, the March contract found buying interest from its oversold status and record fund short. The market will need more bullish input to push prices above resistance at 740 and 750, at which point they could run toward 790. If prices retreat, support could be found near the recent low of 697 ½ before the May ’21 low of 669.

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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12-04 End of Day: SA Weather Breaks Beans; Short Covering Bids Wheat

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Despite strong export inspections and a flash sale to Mexico, choppy two sided trade that saw both sides of unchanged dominated the corn market, which was caught between a strong wheat market and weaker soybeans.

  • The prospect of much needed moisture in Brazil, and poor export inspections weighed heavily on the soybean market, which ultimately took January soybeans down nearly 19 cents, despite briefly trading on the positive side of unchanged earlier in the day.

  • While both soybean meal and oil traded lower on the day by double digits, it was the break in soybeans that led the complex lower as indicated by the improvement in January Board crush margins, which gained 6 ¾ cents. Crush margins remain strong and should continue to support domestic demand and basis.

  • A 440k mt flash sale to China spurred the wheat complex to finish the day strong, led by the Chicago contracts, which printed a solid close above its 100-day moving average. KC and Minneapolis had strong closes as well, both closing above their respective 50-day moving averages, Minneapolis for the second day in a row. 

  • To see the updated US 7-day precipitation forecast, Brazil’s 2 week forecast total precipitation, and map of Brazil’s average temperature, courtesy of the National Weather Service, Climate Prediction Center, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. Since the beginning of August, the corn market has traded sideways largely between 470 and 500. October’s brief breakout to 509 ½ and the subsequent failure to stay above the 50-day moving average indicates there is significant resistance in that price range. The failure of November’s USDA report to provide a bullish influence on the market puts the market at risk of drifting sideways to lower without a bullish catalyst. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

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

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

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

  • Mixed trade to start the week in the corn market as corn futures saw two-sided trade before settling slightly higher in the March, with a ¾ cent gain. The corn market was supported by a strong wheat market, but limited by selling pressure in the soybean complex.

  • Funds added to their short position last week by selling a net 20,976 contracts to build a net short position of 206,478 contracts in last week’s Commitment of Trader’s report. The improved technical picture after last week’s strength and jump in demand could have the funds squaring positions into the end of the year, supporting a potential limited price rally.

  • Weekly export inspections for corn were above analyst expectations at 1.158 mmt (45.6 mb). The stronger than anticipated exports could be an indication the US corn export window could be starting to open.

  • South American weather will stay a focus of the grain markets going into December and the end of the year. The weather has improved, but overall conditions still have limitations. The current South American weather could potentially be a larger corn story in late spring and summer based on its impacts for the planting of the second crop Brazil corn crop.

  • The USDA announced a flash sale of corn to Mexico this morning. Mexico purchased 267,000 mt (16.2 mb) of corn for the current marketing year.

Above: The corn market has so far held nearby support near 470, while knocking on the door of nearby overhead resistance at 496. Heavy resistance remains between 500 and 509 ½, and the market will need more bullish influence to push through and test the mid 500’s. Below the market, further support remains near 460, and 415.

Corn Managed Money Funds net position as of Tuesday, Nov. 28. Net position in Green versus price in Red. Managers net sold 20,976 contracts between Nov. 22-28, bringing their total position to a net short 206,478 contracts.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Since August, the 2023 soybean market has traded mostly between 1250 and 1400. After trading to 1251 last October, the Jan ’24 contract went on to test the Nov ’23 contract’s August high near 1400, but failed to break through the heavy resistance and has since retreated. Last summer, Grain Market Insider made two sales recommendations in the 1310 – 1360 price window versus Nov ’23, and while seasonally, we are at the time of year when prices tend to rally into the end of the year, due to the considerable overhead resistance in the market, Grain Market Insider may consider making additional old crop sales prior to year’s end.

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

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

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

  • January soybeans ended the day lower, breaking out of the bottom of their range after better-than-expected rains fell throughout South America this weekend. A flash sale and strong crush numbers were friendly, but ultimately, this market is trading weather.

  • The focus for the soy complex has fallen almost exclusively on Brazilian weather over the past few months, but a wetter weather pattern appears to be emerging. Despite extremely tight US ending stocks, if a large soy crop comes out of South America, it may be difficult for prices to remain this elevated.

  • Demand has been a high point of the soy complex with a flash sale reported to the Philippines by private exporters of 183,000 mt of soybean cake and meal for the 23/24 marketing year. In addition, October crush came in at a whopping 201.1 mb, another record-breaking month. Weekly export inspections, on the other hand, came in lower than expected at 1.109 mmt, versus 1.573 mmt last week.

  • Soybeans have been the only product in the grain complex that funds have maintained a net long position in, but they have recently begun reducing that position. As of last week, they were sellers of 14,025 contracts, which brought their net long position down to 67,562 contracts, and this pattern could continue if South American weather remains favorable.

Above: On November 15, January soybeans posted a bearish reversal after coming within 11 cents of the August high. Since then, the market has retested the recent high and failed, creating a head-and-shoulders pattern, which suggests a potential to test October’s 1250 low unless bullish input enters the market. For now, heavy resistance remains between 1400 and 1410, with nearby resistance near 1350. Support below the market remains near 1297.

Soybean Managed Money Funds net position as of Tuesday, Nov. 28. Net position in Green versus price in Red. Money Managers net sold 14,025 contracts between Nov. 22-28, bringing their total position to a net long 67,562 contracts.

Wheat

Market Notes: Wheat

  • Wheat closed higher in all three US futures classes, with Chicago contracts leading the charge, despite the uptick in the US Dollar Index. Support came from an announced sale to China for the 23/24 marketing year in the amount of 440,000 mt. There is likely also some short covering happening, as the correction from being technically oversold continues.

  • Today’s rally also comes despite a poor export inspections number. For the week ending November 30, the USDA reported that wheat inspections were 6.9 mb, bringing total 23/24 inspections to 306 mb. That is down 24% from last year, and inspections are running behind schedule to meet the USDA’s goal.

  • According to the Bahia Blanca Grain Exchange, a crop tour in Argentina found that wheat production in the southwestern region could be 27% below last year at 2.8 mmt, due to the lack of rain that caused poor yield results. It should be noted, however, that this decline in production should be more than offset by increases in the coastal areas, which received better precipitation.

  • According to CFTC data, the combined short position of the funds in Chicago, Kansas City, and Minneapolis wheat is a record short as of last Tuesday’s close. With the recent reversals higher, it is likely that funds are covering some of that short position. This could be due, in part, to Russia’s wheat values starting to creep higher, which is, in turn, easing pressure on the US market. There is also talk about the potential threat of winterkill for some Russian wheat, adding fuel to the fire.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. After making a high in late July, nearby Chicago wheat trended lower until finding support at 540. During that time, driven by weak US export demand and lower world wheat prices, funds established most of their short position that currently exceeds 100,000 contracts. While bearish obstacles remain, the large short fund position and a seasonal pattern that is currently supportive, could fuel an extended short-covering rally. Earlier this year, Grain Market Insider made sales recommendations in the late June rally around 720 and again earlier this fall near 604. With those two sales, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales in the 625 – 650 range. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. Since July, new crop Chicago wheat has slowly worked its way lower with no significant opportunities to make additional sales. The lower market was driven mostly by managed fund selling from lower world wheat prices and weak US demand. As the market sold off, it became significantly oversold with managed funds building a short position in excess of 100,000 contracts. While bearish headwinds remain, the large fund short position and oversold condition of the market are two factors that could fuel a sizeable, short-covering rally. Additionally, price seasonals are supportive as prices tend to build in some risk premium going into the winter months. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion, and back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: Chicago wheat recently broke out of its trading range and approaching resistance between the 200-day moving average and the August highs near 645, driven largely by short covering and the seasonal build up of weather premium. For now, support below the market comes in near the 50-day moving average, around 575, and again between 555 and 540.

Chicago Wheat Managed Money Funds net position as of Tuesday, Nov. 28. Net position in Green versus price in Red. Money Managers net sold 11,810 contracts between Nov. 22-28, bringing their total position to a net short 119,986 contracts.

KC Wheat Action Plan Summary

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

  • No new action is recommended for 2024 KC wheat. At the end of August, the Jul ’24 contract broke out of roughly a one-year trading range, between 740 and 860, to the downside. Since that breakout, the market has continued to slowly stair-step lower, largely driven by managed fund selling, weak US export demand, and lower world wheat prices. As the selloff progressed, the funds built up the largest net short position in three years. While bearish headwinds remain, the significant oversold condition of the market and the large fund net short position are two factors that could fuel a short-covering rally in the months ahead. Price seasonals are also supportive as prices tend to build in some risk premium going into the winter months. Back in August, Grain Market Insider recommended buying Jul’24 KC wheat 660 puts to protect the downside following the range breakout. Though as the market recently got further extended into oversold territory and the July contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. Moving forward, Grain Market Insider is prepared to recommend exiting the last 25% on any further supportive market developments.

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

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

Above: After posting a fresh contract low on November 27, KC wheat has experienced a short covering rally back into the resistance area between 633 and 661.  If the market can close above 661, it may then be poised to test 690.  If not, and prices retreat, support below the market will likely come in between 595 and 575.

KC Wheat Managed Money Funds net position as of Tuesday, Nov. 28. Net position in Green versus price in Red. Money Managers net sold 2,236 contracts between Nov. 22-28, bringing their total position to a net short 49,749 contracts.

Mpls Wheat Action Plan Summary

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

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

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

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

Above: After making a new contract low on November 27, the March contract found buying interest from its oversold status and record fund short. The market will need more bullish input to push prices above resistance at 740 and 750, at which point they could run toward 790. If prices retreat, support could be found near the recent low of 697 ½ before the May ’21 low of 669.

Minneapolis Wheat Managed Money Funds net position as of Tuesday, Nov. 28. Net position in Green versus price in Red. Money Managers net sold 1,309 contracts between Nov. 22-28, bringing their total position to a net short 28,917 contracts.

Other Charts / Weather

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12-01 End of Day: Short Covering Carries Grains Higher as Beans Retreat.

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • The recent drop in open interest, along with the rising wheat market and sizable fund short position in corn, suggests traders have likely been covering short positions in the corn market and supporting prices, which have closed higher for the third day in a row.

  • Profit taking and the prospect of a more normal South American weather pattern led the soybean market to a lower close with lower meal and soybean oil adding to the negativity.  

  • Friendly bio/renewable diesel data out of the EIA’s monthly report failed to support soybean oil which followed both palm and crude oil lower. While larger crop prospects out of Argentina continues to weigh on soybean meal.

  • The wheat complex settled in the green again for the fourth day in a row. Open interest in all three classes has dropped over the same time frame suggesting that the rally has likely been driven short covering from the markets recently being oversold.

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

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. Since the beginning of August, the corn market has traded sideways largely between 470 and 500. October’s brief breakout to 509 ½ and the subsequent failure to stay above the 50-day moving average indicates there is significant resistance in that price range. The failure of November’s USDA report to provide a bullish influence on the market puts the market at risk of drifting sideways to lower without a bullish catalyst. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

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

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

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

  • Corn futures rallied off session lows to finish with marginal gains on Friday.  March corn gained 2 cents on the session.  For the week, March corn settled 1 ½ cents over last week’s close and 13 ½ cents off the lows for this week.

  • Weakness in the soybean market and crude oil market in the afternoon limited the corn rally.  Soybeans are staying focused on South American weather, which has some rainfall potential for the weekend into next week.  Argentina weather stays improved, the prospects of a “normal” corn and soybean crop next spring limits the corn market’s ability to rally.

  • December corn is now in the delivery period. There were “zero” deliveries against the December futures on Thursday, but 221 contract on Friday. The delivered bushels and retendering of those bushels provided the weakness in the morning trade.

  • Funds are still carrying a sizable bearish bet on corn futures with an estimated net short of 200,000 contracts. The improved technical picture with this week’s strength and jump in demand could have the funds squaring positions into the end of the year, supporting a limited price rally.

  • South American weather will stay a focus of the grain markets going into December and the end of the year. The prospects of further soybean planting delays will push second-crop corn planting back even further. The current South American weather could potentially be a larger corn story in late spring and summer.

Above: The nearby corn contract has rejected the 100-day moving average on the daily continuous chart and has slipped below the 50-day moving average. Initial resistance now rests just above the market near 496 with further heavy resistance between 500 and 509 ½. Support below the market remains near 460, with the next major area of support near 415.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. At the end of August, the soybean market turned lower and didn’t find any significant buying interest until it traded down to 1251 in early October. Since then, the nearby contract has traded through the 50-day moving average and tested the August high. Looking back, since last May, nearby soybeans have been in a range from 1435 up top to 1251 down below. Last summer, Grain Market Insider did make two sales recommendations in the 1310 – 1360 price window versus Nov ’23. Seasonally, we are at the time of year when prices tend to rally into year’s end, and if the markets remain firm to higher in the next few weeks, Grain Market Insider may consider suggesting making additional old crop sales, while also continuing to be on the lookout for any call option buying opportunities to help protect current and future sales. 

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

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

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

  • Soybeans ended the day lower with pressure from sharply lower soybean meal as traders prepare for an influx of Argentinian meal now that their weather forecasts have turned more favorable. Soybean oil ended the day slightly lower but has held up relatively well compared to meal.

  • This week held more positive news for export demand with the USDA reporting an increase of 69.6 mb of soybean export sales in 23/24 last week and big export shipments of 54.3 mb. In addition, two large private sales were reported this morning with one to China in the amount of 132,000 mt and one to unknown in the amount of 198,000 mt. Both were for the 23/24 marketing year.

  • Tight US ending stocks and strong demand both domestically and for exports have been a key factor in keeping soybean futures elevated, but South American weather is looking like less of a problem now, and large combined production between Brazil and Argentina could pressure prices in the coming months.

  • Thanks to strong cash markets, there have been no deliveries against the December contracts for either soybean meal or oil. Crush margins also remain firm despite some recent weakness in the soy products. Soybean oil has a good outlook with renewable fuel production in September reportedly record large and 43% higher than the previous year.

Above: On November 15, January soybeans posted a bearish reversal after coming within 11 cents of the August high. Since then, the market has retested the recent high and failed, creating a head-and-shoulders pattern which suggests a potential to test October’s 1250 low unless bullish input enters the market. For now, heavy resistance remains between 1400 and 1410, with support below the market near the 50-day moving average and again near 1297.

Wheat

Market Notes: Wheat

  • The wheat market managed another positive close for all three US classes. Paris milling wheat also finished on a positive note. Support also stemming from possible short covering on oversold conditions, and a lower US Dollar Index.

  • There are rumors that France has sold 2.5 mmt of wheat to China for December through March. For the week ending November 23, China was the top buyer of US wheat, purchasing 197,300 tons.

  • It is possible that China may be buying wheat for their reserves since there is similar talk in the corn market, that China may purchase 30-40 mmt, whereas the USDA is looking for 23 mmt. These purchases may be due to political tension, but the reasoning remains unclear.

  • Stats Canada will release their next update on December 4. Pre-report estimates peg wheat production at 0.7% higher for 2023 versus Stats Canada’s previous forecast. The average guess is for 30.03 mmt of production, with 29.30 mmt on the low end and 30.90 mmt on the high end.

  • The Buenos Aires Grain Exchange kept their 23/24 wheat production estimate unchanged at 14.7 mmt, versus 12.2 mmt last year, and they stated that the harvest has advanced to 36.4% complete from 26.4%.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. After making a high in late July, nearby Chicago wheat trended lower until finding support at 540. During that time, driven by weak US export demand and lower world wheat prices, funds established most of their short position that currently exceeds 100,000 contracts. While bearish obstacles remain, the large short fund position and a seasonal pattern that is currently supportive, could fuel an extended short-covering rally. Earlier this year, Grain Market Insider made sales recommendations in the late June rally around 720 and again earlier this fall near 604. With those two sales, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales in the 625 – 650 range. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. Since July, new crop Chicago wheat has slowly worked its way lower with no significant opportunities to make additional sales. The lower market was driven mostly by managed fund selling from lower world wheat prices and weak US demand. As the market sold off, it became significantly oversold with managed funds building a short position in excess of 100,000 contracts. While bearish headwinds remain, the large fund short position and oversold condition of the market are two factors that could fuel a sizeable, short-covering rally. Additionally, price seasonals are supportive as prices tend to build in some risk premium going into the winter months. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion, and back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: Chicago wheat continues to trade in a broad range between 604 ½ up top, and 540 on the bottom, with most activity between 595 and 555. The market continues to need a significant bullish catalyst to drive prices higher above 604 ½. While short covering and profit taking continues to occur near the bottom end of the range, if the market breaches 540 support, it runs the risk of further erosion.

KC Wheat Action Plan Summary

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

  • No new action is recommended for 2024 KC wheat. At the end of August, the Jul ’24 contract broke out of roughly a one-year trading range, between 740 and 860, to the downside. Since that breakout, the market has continued to slowly stair-step lower, largely driven by managed fund selling, weak US export demand, and lower world wheat prices. As the selloff progressed, the funds built up the largest net short position in three years. While bearish headwinds remain, the significant oversold condition of the market and the large fund net short position are two factors that could fuel a short-covering rally in the months ahead. Price seasonals are also supportive as prices tend to build in some risk premium going into the winter months. Back in August, Grain Market Insider recommended buying Jul’24 KC wheat 660 puts to protect the downside following the range breakout. Though as the market recently got further extended into oversold territory and the July contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. Moving forward, Grain Market Insider is prepared to recommend exiting the last 25% on any further supportive market developments.

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

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

Above: The recent resumption of the downtrend has left the KC wheat market oversold with resistance now above the market between 633 and 661. The market’s oversold status can be supportive if a catalyst enters the market to turn prices back higher. Without a bullish catalyst, March ’24 runs the risk of retreating further and testing 575 support. 

Mpls Wheat Action Plan Summary

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

  • Grain Market Insider sees a continued opportunity to sell a portion of your 2024 Spring wheat crop. Since late July, Sept ’24 Mpls wheat has been slowly stair-stepping lower, providing no rallies of substance to sell into. While we see improving conditions in the market that could provide fuel for a bottom and future upside sales opportunities, we also know historically, that if the market breaks support this time of year, it poses the risk that prices could continue to trend overall lower into spring of next year. All that said, a close below 743 support would signal that a trend lower into next year is a risk. Although Grain Market Insider still looks for higher prices, we know from our historical research the importance of having a “plan b” this time of year. With a daily close below 743, Grain Market Insider will recommend selling a portion of your 2024 crop while prices are still relatively elevated and historically good in case they erode further. While the mid-700s may not be the 1000 or higher that we’ve seen in the last two years, it remains much better than the possible 500 – 600 that the market saw back in 2020 and early 2021. 

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

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

Above: After making a new contract low on November 27, the March contract found buying interest from its oversold status and record fund short. The market will need more bullish input to push prices above resistance at 740 and 750, at which point they could run toward 790. If prices retreat, support could be found near the recent low of 697 ½ before the May ’21 low of 669.

Other Charts / Weather

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

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

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11-30 End of Day: Strong Export Sales Push Corn Market Higher While Beans Slide Lower to End November.

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Strong export sales and likely covering of short positions pushed the corn market higher today. “Unknown Destinations” and Mexico were the largest buyers of US corn last week.

  • Despite sharply higher closes in both corn and wheat and stronger than expected bean export sales, soybean prices slipped lower today as traders continue to anticipate better chances for the driest areas of Brazil to receive rainfall over the next few weeks.

  • All three wheats closed higher again today on continued short covering and technical buying. Front month KC wheat futures managed to close above the 20-day moving average for the first time since September 15.

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

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. Since the beginning of August, the corn market has traded sideways largely between 470 and 500. October’s brief breakout to 509 ½ and the subsequent failure to stay above the 50-day moving average indicates there is significant resistance in that price range. The failure of November’s USDA report to provide a bullish influence on the market puts the market at risk of drifting sideways to lower without a bullish catalyst. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. So, for now, the thought process is to hold tight on any further sales recommendations until later this fall or early winter, with the objective of seeking out better pricing opportunities. If the market has not turned around by early winter, then Grain Market Insider may sit tight on the next sales recommendations until spring.

  • No new action is recommended for 2024 corn. Since late February ’22, Dec ’24 has been bound by 489 ¾ on the bottom and 600 on the top. After testing 491 to 547 last July, it has mostly traded between 500 and 525. During this time, Dec ’24 has held up better as bear spreading has allowed Dec ’24 to maintain more of its value versus Dec ’23 as traders attempt to price in a larger 2023 carryout with more uncertainty remaining for the 2024 crop. Moving forward, the risk for 2024 prices is the same as for 2023 prices, which is a continuation of a lower trend without further bullish input. Grain Market Insider is watching for signs of a change in the current trend to look at recommending buying Dec ’24 call options. This past spring, Grain Market Insider recommended buying 560 and 610 Dec ’23 call options ahead of the summer rally and having those in place helped provide confidence to pull the trigger on recommending 2023 sales into that sharp rally, knowing that if corn kept rallying and went to 700 or 800 that the call options would protect those sold bushels.

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

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

  • Short covering and strong export sales numbers helped push the corn market higher on the session for Thursday. Dec corn traded 12 cents higher, and March added 7 cents.

  • December corn went into the delivery period with “first notice day” today. There were “zero” deliveries against the December futures which is supportive in prices. The large spread or carry between Dec and March corn triggered some short covering in the December futures.

  • Weekly Exports sales were well above expectations on Thursday’s USDA export sales report. Last week, U.S. exports posted new sales of 1,927,800 MT (75.9 mb) of corn exports for the marketing year. Total sales are now at 963 mb, which is 33% greater than last year. “Unknown destinations” and Mexico were the largest buyers of U.S. corn last week.

  • Funds are still carrying a sizable bearish bet on corn futures with an estimated net short of 200,000 contracts. U.S. corn export sales for the week ending November 23 were a hefty 75.9 mb for 2023-24. The improved technical picture and jump in demand could have the funds square positions into the end of the year, supporting a limited price rally.

  • South American weather will stay as focus of the grain markets going into December and the end of the year. The prospects of further soybean planting delays will push second-crop corn planting back even further. The current South American weather could potentially be a larger corn story in late spring and summer.

Above: The nearby corn contract has rejected the 100-day moving average on the daily continuous chart and has slipped below the 50-day moving average. Initial resistance now rests just above the market near 496 with further heavy resistance between 500 and 509 ½. Support below the market remains near 460, with the next major area of support near 415.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. At the end of August, the soybean market turned lower and didn’t find any significant buying interest until it traded down to 1251 in early October. Since then, the nearby contract has traded through the 50-day moving average and tested the August high. Looking back, since last May, nearby soybeans have been in a range from 1435 up top to 1251 down below. Last summer, Grain Market Insider did make two sales recommendations in the 1310 – 1360 price window versus Nov ’23. Seasonally, we are at the time of year when prices tend to rally into year’s end, and if the markets remain firm to higher in the next few weeks, Grain Market Insider may consider suggesting making additional old crop sales, while also continuing to be on the lookout for any call option buying opportunities to help protect current and future sales. 

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

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

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

  • Soybeans ended the day lower despite gains in both corn and wheat. While funds may be short covering corn and wheat to end the month, they may also be reducing their large net long position in case South American weather continues to improve.

  • Both soybean meal and oil closed lower today, but crush margins remain profitable as demand for renewable diesel increases and export demand for meal remains strong. This strong domestic demand has been a major factor in supporting prices considering tight ending stocks.

  • Today’s export sales report was friendly with the USDA reporting an increase of 69.6 million bushels of soybean export sales. This was above the upper range of expectations but still down 17% from the previous year. Shipments were primarily to China, Mexico, and Vietnam. In addition, a flash sale of 134,000 mt of soybeans was reported to China for the 23/24 marketing year.

  • Today, OPEC agreed to a significant production cut of another million barrels per day which will most likely elevate crude oil prices further, especially with ongoing war in the Middle East. Higher crude oil prices could be supportive to soybean oil.

Above: On November 15, January soybeans posted a bearish reversal after coming within 11 cents of the August high. Since then, the market has retested the recent high and failed, creating a head-and-shoulders pattern which suggests a potential to test October’s 1250 low unless bullish input enters the market. For now, heavy resistance remains between 1400 and 1410, with support below the market near the 50-day moving average and again near 1297.

Wheat

Market Notes: Wheat

  • Wheat continued to rally today with Chicago posting double digit gains. A technical correction from oversold conditions may have led to funds covering their short position. As it is also the end of the month, there may have been some position squaring as well. This rally also comes despite firmness in the US Dollar Index, which as of writing is back up to 103.50.

  • The USDA reported an increase of 22.9 mb of wheat export sales for 23/24 and an increase of 0.4 mb for 24/25. To reach the USDA’s 23/24 export goal of 700 mb, 15.1 mb need to be shipped each week. But last week’s shipments were below that pace at 12.5 mb.

  • Taiwan flour millers purchased about 110,000 mt of US milling wheat for January / February shipment. This also offered some support to the market and may indicate that global importers may be looking for US wheat after it hit recent lows.

  • According to IKAR, their first estimate of the 24/25 Russian wheat crop is 92 mmt. Exports are projected at 48 mmt. Planted area may be the second largest on record as well. This could offer some bearish resistance down the road, as Russia is already the prevailing force in the wheat export market.

  • The El Nino weather pattern is brining rains to Argentina’s coastal region. Wheat crops in these areas are seeing yields above expectations, which may help to offset some of the losses in other parts of the country. However, farmers there are not selling their wheat – they are waiting for the new president to take office. There is talk that there may be further devaluation of their currency.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. After making a high in late July, nearby Chicago wheat trended lower until finding support at 540 on September 29, from which it rallied back, briefly piercing 600 and the 50-day moving average. The market now appears to be finding value in the 540 – 616 range established since early September, as weak US export demand, driven by cheap Russian exports, remains the dominant headwind to higher prices. Grain Market Insider made sales recommendations in the late June rally around 720 and again earlier this fall near 604. With those two sales, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales in the 625 – 650 range. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. Since July, new crop Chicago wheat has slowly worked its way lower with no significant opportunities to make additional sales. The lower market was driven mostly by managed fund selling from lower world wheat prices and weak US demand. As the market sold off, it became significantly oversold with managed funds building a short position in excess of 100,000 contracts. While bearish headwinds remain, the large fund short position and oversold condition of the market are two factors that could fuel a sizeable, short-covering rally. Additionally, price seasonals are supportive as prices tend to build in some risk premium going into the winter months. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion, and back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: Chicago wheat continues to trade in a broad range between 604 ½ up top, and 540 on the bottom, with most activity between 595 and 555. The market continues to need a significant bullish catalyst to drive prices higher above 604 ½. While short covering and profit taking continues to occur near the bottom end of the range, if the market breaches 540 support, it runs the risk of further erosion.

KC Wheat Action Plan Summary

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

  • No new action is recommended for 2024 KC wheat. At the end of August, the Jul ’24 contract broke out of roughly a one-year trading range, between 740 and 860, to the downside. Since that breakout, the market has continued to slowly stair-step lower, largely driven by managed fund selling, weak US export demand, and lower world wheat prices. As the selloff progressed, the funds built up the largest net short position in three years. While bearish headwinds remain, the significant oversold condition of the market and the large fund net short position are two factors that could fuel a short-covering rally in the months ahead. Price seasonals are also supportive as prices tend to build in some risk premium going into the winter months. Back in August, Grain Market Insider recommended buying Jul’24 KC wheat 660 puts to protect the downside following the range breakout. Though as the market recently got further extended into oversold territory and the July contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. Moving forward, Grain Market Insider is prepared to recommend exiting the last 25% on any further supportive market developments.

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

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

Above: The recent resumption of the downtrend has left the KC wheat market oversold with resistance now above the market between 633 and 661. The market’s oversold status can be supportive if a catalyst enters the market to turn prices back higher. Without a bullish catalyst, March ’24 runs the risk of retreating further and testing 575 support. 

Mpls Wheat Action Plan Summary

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

  • Grain Market Insider sees a continued opportunity to sell a portion of your 2024 Spring wheat crop. Since late July, Sept ’24 Mpls wheat has been slowly stair-stepping lower, providing no rallies of substance to sell into. While we see improving conditions in the market that could provide fuel for a bottom and future upside sales opportunities, we also know historically, that if the market breaks support this time of year, it poses the risk that prices could continue to trend overall lower into spring of next year. All that said, a close below 743 support would signal that a trend lower into next year is a risk. Although Grain Market Insider still looks for higher prices, we know from our historical research the importance of having a “plan b” this time of year. With a daily close below 743, Grain Market Insider will recommend selling a portion of your 2024 crop while prices are still relatively elevated and historically good in case they erode further. While the mid-700s may not be the 1000 or higher that we’ve seen in the last two years, it remains much better than the possible 500 – 600 that the market saw back in 2020 and early 2021. 

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

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

Above: After making a new contract low on November 27, the March contract found buying interest from its oversold status and record fund short. The market will need more bullish input to push prices above resistance at 740 and 750, at which point they could run toward 790. If prices retreat, support could be found near the recent low of 697 ½ before the May ’21 low of 669.

Other Charts / Weather

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11-29 End of Day: Wheat Continues its Short Cover Rally.

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • December corn continues to trade lower on further liquidation ahead of tomorrow’s First Notice Day. March corn rallied back after making a fresh contract low to close higher on the day with a classic bullish reversal.

  • After trading on both sides of unchanged, the soybean complex settled mixed with the January beans closing fractionally better, unable to hold above the psychological level of 1350 from overnight, while meal and oil both settled lower on the day. Soybean meal continued its slide lower despite firm bids for export and oil turned lower after hitting resistance at last week’s highs.

  • The wheat complex continued its march higher with all three classes settling in the green as oversold markets and potential reductions to Australia’s wheat crop entice traders to cover short positions.

  • Before rallying back higher, the US dollar printed a fresh three-month low which may have added a layer of support to the grain markets, as the financial markets have begun to embrace the idea that the US economy may be slowing and in less need of further tightening from the Federal Reserve.

  • To see the updated US and South American GRACE-Based Root Zone Soil Moisture Drought Indicator maps, courtesy nasagrace.unl.edu and the NDMC, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. Since the beginning of August, the corn market has traded sideways largely between 470 and 500. October’s brief breakout to 509 ½ and the subsequent failure to stay above the 50-day moving average indicates there is significant resistance in that price range. The failure of November’s USDA report to provide a bullish influence on the market puts the market at risk of drifting sideways to lower without a bullish catalyst. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. So, for now, the thought process is to hold tight on any further sales recommendations until later this fall or early winter, with the objective of seeking out better pricing opportunities. If the market has not turned around by early winter, then Grain Market Insider may sit tight on the next sales recommendations until spring.

  • No new action is recommended for 2024 corn. Since late February ’22, Dec ’24 has been bound by 489 ¾ on the bottom and 600 on the top. After testing 491 to 547 last July, it has mostly traded between 500 and 525. During this time, Dec ’24 has held up better as bear spreading has allowed Dec ’24 to maintain more of its value versus Dec ’23 as traders attempt to price in a larger 2023 carryout with more uncertainty remaining for the 2024 crop. Moving forward, the risk for 2024 prices is the same as for 2023 prices, which is a continuation of a lower trend without further bullish input. Grain Market Insider is watching for signs of a change in the current trend to look at recommending buying Dec ’24 call options. This past spring, Grain Market Insider recommended buying 560 and 610 Dec ’23 call options ahead of the summer rally and having those in place helped provide confidence to pull the trigger on recommending 2023 sales into that sharp rally, knowing that if corn kept rallying and went to 700 or 800 that the call options would protect those sold bushels.

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

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

  • After posting new lows for the recent move, corn futures found some buying strength and prices reversed off session lows. March corn futures gained 2 ¼ cents on the session. The turn higher in prices marked a bullish reversal on corn charts, which could lead to some additional buying strength in upcoming sessions.

  • The First Notice Day for December corn is tomorrow November 30, and that may have added to the selling pressure in the December contract since the holder of long corn contracts needs to exit those positions or risk the prospects of delivery.

  • Ethanol production slipped to 1,011,000 barrels per day last week, down slightly from last week and last year. Ethanol stocks slipped to 21.4 million barrels. Total corn used last week was estimated at 100.6 mb. For the marketing year, corn used for ethanol production reached 1.238 billion bushels, up 32 mb from last year or 2.7%

  • USDA will release weekly exports sales on Thursday morning. Total new sales for corn are expected to range from 600,000 – 1,200,000 mt for last week. Overall corn export sales have improved but are still below the pace needed to meet USDA targets.

  • The weaker corn price, and strong premiums for Brazil and Argentina corn can improve the prospects of more corn export business for the US. A strong Brazilian real versus the US dollar will also be a contributing factor to possible improved sale pace.

Above: The nearby corn contract has rejected the 100-day moving average on the daily continuous chart and has slipped below the 50-day moving average. Initial resistance now rests just above the market near 496 with further heavy resistance between 500 and 509 ½. Support below the market remains near 460, with the next major area of support near 415.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. At the end of August, the soybean market turned lower and didn’t find any significant buying interest until it traded down to 1251 in early October. Since then, the nearby contract has traded through the 50-day moving average and tested the August high. Looking back, since last May, nearby soybeans have been in a range from 1435 up top to 1251 down below. Last summer, Grain Market Insider did make two sales recommendations in the 1310 – 1360 price window versus Nov ’23. Seasonally, we are at the time of year when prices tend to rally into year’s end, and if the markets remain firm to higher in the next few weeks, Grain Market Insider may consider suggesting making additional old crop sales, while also continuing to be on the lookout for any call option buying opportunities to help protect current and future sales. 

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

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

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

  • Soybeans traded both sides of unchanged today but ultimately ended the day mixed with the front months slightly higher and the November ‘24 contract slightly lower. Both soybean meal and oil ended the day lower with meal under pressure from expectations of a normal Argentinian harvest.

  • After last year’s drought in Argentina, soybean production was severely cut which caused the normally number one exporter of soybean meal to run short on supplies. As a result, the US picked up a lot of that business, but now Argentina weather is looking favorable for this year’s soybean crop and could cause US meal prices to fall sharply.

  • In Brazil, weather is expected to improve over the next seven days with better chances for rain in central and northern Brazil and decreased chances in rain-soaked southern Brazil. The country is reportedly 8 to 10 days behind its normal pace of planting, but the worst of the El Nino pattern may be over.

  • While US exports have improved over the past few months, total export sales are still 20% behind year ago levels as we compete with last year’s record Brazilian harvest and cheaper prices. Meanwhile, domestic demand has been firm with profitable crush margins.

Above: On November 15, January soybeans posted a bearish reversal after coming within 11 cents of the August high. Since then, the market has retested the recent high and failed, creating a head-and-shoulders pattern which suggests a potential to test October’s 1250 low unless bullish input enters the market. For now, heavy resistance remains between 1400 and 1410, with support below the market near the 50-day moving average and again near 1297.

Wheat

Market Notes: Wheat

  • All three US wheat futures classes closed higher with Kansas City leading the way. Support came from higher Matif futures, as well as correction from oversold conditions. There were also reports that heavy rain in southeastern Australia contributed to crop damage. This headline offered support to prices, with talk that their production may decline by 100,000 mt, and 1 mmt of wheat may be downgraded to feed.

  • Also supportive to wheat is the fact that Russian wheat values have moved higher, putting US and French soft wheat back on the playfield (in terms of the export market). Whether or not this will last is the question though; Russia’s ag minister stated that with 98% of the crop harvested, 99 mmt of wheat has been collected which would be the second largest crop on record.

  • According to SovEcon, the 2024 Russian wheat crop is estimated to fall to 89.8 mmt, versus 91.5 previously, due to expectations for declining conditions and poorer yields. A crop this size would still be above average, however, and Russia is likely to remain dominant on the export front.

  • India has announced a $142 billion plan to extend a free food program for 800 million people. The five year program extension will allow recipients to get five kilograms of rice or wheat per month. The extension will begin January 1st and is intended to help consumers face high internal food costs.

  • The US Dollar, while on both sides of unchanged today, has been in an overall downtrend. This may have also offered support to wheat and the grain complex today. Traders will await any news from the Federal Reserve regarding further interest rate increases versus pausing the hikes, which will have continued impact on the US Dollar index.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. After making a high in late July, nearby Chicago wheat trended lower until finding support at 540 on September 29, from which it rallied back, briefly piercing 600 and the 50-day moving average. The market now appears to be finding value in the 540 – 616 range established since early September, as weak US export demand, driven by cheap Russian exports, remains the dominant headwind to higher prices. Grain Market Insider made sales recommendations in the late June rally around 720 and again earlier this fall near 604. With those two sales, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales in the 625 – 650 range. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. After retesting the 800 level back in July, new crop Chicago wheat retreated steadily until hitting the late September low of 610 ¼. Since then, prices have been mostly rangebound between 620 and 650.  Just as fund positioning and weak fundamentals have driven old crop prices down closer to the mid to upper 500 range and new crop prices to the low to mid 600s. The risk of further new crop price erosion remains without fresh bullish input to move prices higher. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for this possibility, and back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels, and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: On November 15 nearby Chicago wheat rolled from the December contract to the March. While it appears that prices made a significant move, it is in fact the premium in March that is being represented on the chart. Upside resistance remains between 604 ½ and 618, while support below the market, remains between 564 and 554.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since late July the nearby KC wheat has been in a downtrend that has had periods of relative stability, but not any significant reversals higher. The market once again found nearby support as it traded to, and held, its recent low of 625 ½. Currently, weak US export demand, driven by cheap Russian exports, remains the dominant headwind, and the market is in need of bullish input to stabilize and rally prices back higher. If a bullish catalyst enters the market to push prices above 700, it may signal that a fall low is in place and would line up with the historical tendency for prices to appreciate into winter and early spring. Grain Market Insider’s strategy is to look for price appreciation going into this winter, as weather becomes a more prominent market mover with an eye on considering additional sales near 750 – 800. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 KC wheat. At the end of August, the Jul ’24 contract broke out of roughly a one-year trading range, between 740 and 860, to the downside. Since that breakout, the market has continued to slowly stair-step lower, largely driven by managed fund selling, weak US export demand, and lower world wheat prices. As the selloff progressed, the funds built up the largest net short position in three years. While bearish headwinds remain, the significant oversold condition of the market and the large fund net short position are two factors that could fuel a short-covering rally in the months ahead. Price seasonals are also supportive as prices tend to build in some risk premium going into the winter months. Back in August, Grain Market Insider recommended buying Jul’24 KC wheat 660 puts to protect the downside following the range breakout. Though as the market recently got further extended into oversold territory and the July contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. Moving forward, Grain Market Insider is prepared to recommend exiting the last 25% on any further supportive market developments.

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

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

Above: The recent resumption of the downtrend has left the KC wheat market oversold with resistance now above the market between 633 and 661. The market’s oversold status can be supportive if a catalyst enters the market to turn prices back higher. Without a bullish catalyst, March ’24 runs the risk of retreating further and testing 575 support. 

Mpls Wheat Action Plan Summary

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

  • Grain Market Insider sees a continued opportunity to sell a portion of your 2024 Spring wheat crop. Since late July, Sept ’24 Mpls wheat has been slowly stair-stepping lower, providing no rallies of substance to sell into. While we see improving conditions in the market that could provide fuel for a bottom and future upside sales opportunities, we also know historically, that if the market breaks support this time of year, it poses the risk that prices could continue to trend overall lower into spring of next year. All that said, a close below 743 support would signal that a trend lower into next year is a risk. Although Grain Market Insider still looks for higher prices, we know from our historical research the importance of having a “plan b” this time of year. With a daily close below 743, Grain Market Insider will recommend selling a portion of your 2024 crop while prices are still relatively elevated and historically good in case they erode further. While the mid-700s may not be the 1000 or higher that we’ve seen in the last two years, it remains much better than the possible 500 – 600 that the market saw back in 2020 and early 2021. 

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

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

Above: Since the nearby contract rolled from the December to the March, prices have steadily declined through the October low of 703 ¼ and may be on track to test major support near the May ’21 low of 669. If prices turn back higher, resistance now stands between 721 and 740 with heavy resistance near 750.

Other Charts / Weather

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11-28 End of Day: Beans and Wheat Close Higher in Typical Turnaround Tuesday Fashion.

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Position squaring and December ’23 liquidation ahead of Thursday’s first notice day likely led to bear spreading in the corn market, as traders sold the December contract versus the deferred contracts.

  • Soybeans followed through to the upside and closed higher on the day with the aid of a 123k mt sale to unknown destinations and support from sharply higher soybean oil.

  • Buying in January soybean oil carried over from Monday’s firmer trade and closed 1.88 cents higher with support coming from sharply higher crude oil. Meanwhile, soybean meal likely succumbed to some long liquidation ahead of first notice day and a fund position that is the largest since last March.

  • While all three wheat classes shed some of the recent weakness and closed higher on the day, KC led the rally which posted a bullish key reversal. 

  • To see the updated US 5 day precipitation forecast and 6 – 10 day Temperature and Precipitation Outlooks, and the Brazil 2-week forecast precipitation and average temperatures, courtesy of the National Weather Service, Climate Prediction Center, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. Since the beginning of August, the corn market has traded sideways largely between 470 and 500. October’s brief breakout to 509 ½ and the subsequent failure to stay above the 50-day moving average indicates there is significant resistance in that price range. The failure of November’s USDA report to provide a bullish influence on the market puts the market at risk of drifting sideways to lower without a bullish catalyst. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. So, for now, the thought process is to hold tight on any further sales recommendations until later this fall or early winter, with the objective of seeking out better pricing opportunities. If the market has not turned around by early winter, then Grain Market Insider may sit tight on the next sales recommendations until spring.

  • No new action is recommended for 2024 corn. Since late February ’22, Dec ’24 has been bound by 489 ¾ on the bottom and 600 on the top. After testing 491 to 547 last July, it has mostly traded between 500 and 525. During this time, Dec ’24 has held up better as bear spreading has allowed Dec ’24 to maintain more of its value versus Dec ’23 as traders attempt to price in a larger 2023 carryout with more uncertainty remaining for the 2024 crop. Moving forward, the risk for 2024 prices is the same as for 2023 prices, which is a continuation of a lower trend without further bullish input. Grain Market Insider is watching for signs of a change in the current trend to look at recommending buying Dec ’24 call options. This past spring, Grain Market Insider recommended buying 560 and 610 Dec ’23 call options ahead of the summer rally and having those in place helped provide confidence to pull the trigger on recommending 2023 sales into that sharp rally, knowing that if corn kept rallying and went to 700 or 800 that the call options would protect those sold bushels.

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

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

  • Despite strong buying in other grain markets and the commodity sector in general, corn futures closed mixed on the session. With selling pressure in the front-end contracts, December corn lost 4 cents for the day.

  • The upcoming first notice day for December corn is Thursday, 11/30, and that may have added to the selling pressure since the holder of long corn contracts needs to exit those positions or risk the prospects of delivery.

  • Strong buying in the wheat market and soybean market helped limit the downside in corn futures. Wheat futures shook off earlier session pressure to post positive closes. December corn did test key support at a new low of 450, and that level could be a key psychological price point which could trigger additional support if prices can hold above it.

  • Buying in the crude oil market likely helped support corn prices. Ethanol margins will likely remain supportive based on improved gasoline demand and driving over the past holiday weekend.

  • Corn harvest is basically complete as the USDA reported corn harvest at 96% complete on this week’s Crop Progress report. Hedge pressure should start being minimized as extra supplies that were pushed on to the market are being worked through, and producers are storing bushels to encourage a more supportive cash market.

Above: The nearby corn contract has rejected the 100-day moving average on the daily continuous chart and has slipped below the 50-day moving average. Initial resistance now rests just above the market near 496 with further heavy resistance between 500 and 509 ½. Support below the market remains near 460, with the next major area of support near 415.

Corn Managed Money Funds net position as of Tuesday, November 21. Net position in Green versus price in Red. Managers net sold 22,016 contracts between November 15 – 21, bringing their total position to a net short 185,502 contracts.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. At the end of August, the soybean market turned lower and didn’t find any significant buying interest until it traded down to 1251 in early October. Since then, the nearby contract has traded through the 50-day moving average and tested the August high. Looking back, since last May, nearby soybeans have been in a range from 1435 up top to 1251 down below. Last summer, Grain Market Insider did make two sales recommendations in the 1310 – 1360 price window versus Nov ’23. Seasonally, we are at the time of year when prices tend to rally into year’s end, and if the markets remain firm to higher in the next few weeks, Grain Market Insider may consider suggesting making additional old crop sales, while also continuing to be on the lookout for any call option buying opportunities to help protect current and future sales. 

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

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

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

  • Soybeans ended the day higher today as prices rebounded from three previous consecutive lower closes. Soybeans remain in a wide trading range over the past month, with swings a result of changes in Brazilian weather forecasts. Soybean meal ended lower while soybean oil was higher.

  • The prospect of tight US ending stocks in 2024 along with good demand recently, has helped support soybean prices while corn and wheat have slipped to new lows. This morning, a flash sale was reported totaling 123,300 metric tons of soybeans to unknown destinations for 23/24.

  • While Brazilian weather may be forecast to improve over the next seven days, the hot and dry conditions in the central and northern regions that soybeans were planted may impact final yields. Several private analysts have reduced their estimates for Brazilian production and MB Agro is saying this could lead to a decrease in export potential to 96 mmt from 100 mmt.

  • As of November 21, funds were shown to be long 81,587 contracts of soybeans, a reduction of 6,326 contracts from the previous week. Funds also have a large net long position in soybean meal which is over 137,000 contracts and has helped prices remain elevated.

Above: On November 15, January soybeans posted a bearish reversal after coming within 11 cents of the August high. Since then, the market has retested the recent high and failed, creating a head-and-shoulders pattern which suggests a potential to test October’s 1250 low unless bullish input enters the market. For now, heavy resistance remains between 1400 and 1410, with support below the market near the 50-day moving average and again near 1297.

Soybean Managed Money Funds net position as of Tuesday, November 21. Net position in Green versus price in Red. Money Managers net sold 6,326 contracts between November 15 – 21, bringing their total position to a net long 81,587 contracts.

Wheat

Market Notes: Wheat

  • Yesterday afternoon’s Crop Progress report showed winter wheat is 91% emerged versus 89%  on average. Additionally, the crop rating improved 2% to 50% good to excellent. This was better than expected and well above last year’s 34% GTE. Nevertheless, wheat rallied today, reversing off yesterday’s lows. Technically, all three US futures classes could be considered oversold, and this may be the start of a correction to the upside.

  • On a bearish note, Russia has said that their grain harvest is now 98% complete with 151 mmt collected. Of that total, 99 mmt is said to be wheat, which is well above the USDA estimate of 90 mmt. If true, given the fact that they are already dominating exports, this would continue to pressure US exports and the futures market.

  • According to the CFTC, between November 14 and November 21, managed funds added nearly 19,000 contracts to their short Chicago wheat position, leaving them net short about 108,000 contracts. This could lead to a significant short covering rally if there is enough new bullish news to act as a catalyst.

  • Severe storms in the Black Sea have resulted in a pause on the loading of grain in both Ukrainian and Russian ports. Additionally, over one million people are said to be without power. The storm is forecasted to last for most of the week with winds up to 90 miles per hour.

  • Wheat harvest in Brazil is nearly complete – CONAB said that as of November 18, 94.2% of the crop has been collected. But in the southern regions, quality is lacking due to the heavy amounts of rain they have received. This is keeping their internal wheat prices on the rise.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. After making a high in late July, nearby Chicago wheat trended lower until finding support at 540 on September 29, from which it rallied back, briefly piercing 600 and the 50-day moving average. The market now appears to be finding value in the 540 – 616 range established since early September, as weak US export demand, driven by cheap Russian exports, remains the dominant headwind to higher prices. Grain Market Insider made sales recommendations in the late June rally around 720 and again earlier this fall near 604. With those two sales, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales in the 625 – 650 range. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. After retesting the 800 level back in July, new crop Chicago wheat retreated steadily until hitting the late September low of 610 ¼. Since then, prices have been mostly rangebound between 620 and 650.  Just as fund positioning and weak fundamentals have driven old crop prices down closer to the mid to upper 500 range and new crop prices to the low to mid 600s. The risk of further new crop price erosion remains without fresh bullish input to move prices higher. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for this possibility, and back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels, and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: On November 15 nearby Chicago wheat rolled from the December contract to the March. While it appears that prices made a significant move, it is in fact the premium in March that is being represented on the chart. Upside resistance remains between 604 ½ and 618, while support below the market, remains between 564 and 554.

Chicago Wheat Managed Money Funds net position as of Tuesday, November 21. Net position in Green versus price in Red. Money Managers net sold 18,905 contracts between November 15 – 21, bringing their total position to a net short 108,176 contracts.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since late July the nearby KC wheat has been in a downtrend that has had periods of relative stability, but not any significant reversals higher. The market once again found nearby support as it traded to, and held, its recent low of 625 ½. Currently, weak US export demand, driven by cheap Russian exports, remains the dominant headwind, and the market is in need of bullish input to stabilize and rally prices back higher. If a bullish catalyst enters the market to push prices above 700, it may signal that a fall low is in place and would line up with the historical tendency for prices to appreciate into winter and early spring. Grain Market Insider’s strategy is to look for price appreciation going into this winter, as weather becomes a more prominent market mover with an eye on considering additional sales near 750 – 800. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • Grain Market Insider sees a continued opportunity to cover half of the remaining July ’24 KC wheat 660 puts at current market prices, minus fees and commission. Last week Grain Market Insider suggested covering half of the originally recommended July ’24 KC wheat 660 puts at approximately 61 cents in premium minus fees, and commission. At 61 cents, the puts were about double their original cost. In yesterday’s and today’s trading sessions, the July ’24 contract may have found support at about the 630 level. Given the extreme oversold condition of the market, Grain Market Insider recommends covering another half of the remaining position to protect some of the current gains. This recommendation means that 75% of the original position should be closed out, leaving 25% of the original position to continue to provide downside protection in the event the market fails to rally off this 630 area.

  • 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: The recent resumption of the downtrend has left the KC wheat market oversold with resistance now above the market between 633 and 661. The market’s oversold status can be supportive if a catalyst enters the market to turn prices back higher. Without a bullish catalyst, March ’24 runs the risk of retreating further and testing 575 support. 

KC Wheat Managed Money Funds net position as of Tuesday, November 21. Net position in Green versus price in Red. Money Managers net sold 10,064 contracts between November 15 – 21, bringing their total position to a net short 47,513 contracts.

Winter wheat condition percent good-excellent (red) versus the 5-year average (green) and last year (pink).

Mpls Wheat Action Plan Summary

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

  • Grain Market Insider sees a continued opportunity to sell a portion of your 2024 Spring wheat crop. Since late July, Sept ’24 Mpls wheat has been slowly stair-stepping lower, providing no rallies of substance to sell into. While we see improving conditions in the market that could provide fuel for a bottom and future upside sales opportunities, we also know historically, that if the market breaks support this time of year, it poses the risk that prices could continue to trend overall lower into spring of next year. All that said, a close below 743 support would signal that a trend lower into next year is a risk. Although Grain Market Insider still looks for higher prices, we know from our historical research the importance of having a “plan b” this time of year. With a daily close below 743, Grain Market Insider will recommend selling a portion of your 2024 crop while prices are still relatively elevated and historically good in case they erode further. While the mid-700s may not be the 1000 or higher that we’ve seen in the last two years, it remains much better than the possible 500 – 600 that the market saw back in 2020 and early 2021. 

  • Grain Market Insider sees a continued opportunity to cover half of the remaining July ’24 KC wheat 660 puts at current market prices, minus fees and commission. Last week Grain Market Insider suggested covering half of the originally recommended July ’24 KC wheat 660 puts at approximately 61 cents in premium, minus fees and commission. At 61 cents, the puts were about double their original cost. In yesterday’s and today’s trading sessions, the July ’24 contract may have found support at about the 630 level. Given the extreme oversold condition of the market, Grain Market Insider recommends covering another half of the remaining position to protect some of the current gains. This recommendation means that 75% of the original position should be closed out, leaving 25% of the original position to continue to provide downside protection in the event the market fails to rally off this 630 area.

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

Above: Since the nearby contract rolled from the December to the March, prices have steadily declined through the October low of 703 ¼ and may be on track to test major support near the May ’21 low of 669. If prices turn back higher, resistance now stands between 721 and 740 with heavy resistance near 750.

Minneapolis Wheat Managed Money Funds net position as of Tuesday, November 21. Net position in Green versus price in Red. Money Managers net bought 118 contracts between November 15 – 21, bringing their total position to a net short 27,608 contracts.

Other Charts / Weather

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

Brazil average temperature courtesy of the National Weather Service, Climate Prediction Center.

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11-27 A Lack of Bullish News Presses Corn and Wheat to Fresh Lows.

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Despite trading firmer in the overnight session, corn futures were pressed to their lowest close in over two years on a lack of fresh news and weak export inspections that came in at a marketing year low.

  • Disappointing export inspections and decent rainfall in some of Brazil’s driest areas weighed heavily on the soybean market which closed mixed and near unchanged following two-sided trade and firmer markets in both products.

  • Both soybean meal and oil closed the day higher with gains lending support to a weak soybean market and raising Board crush margins in the January contracts 15 cents to 192 ½.

  • After trading higher overnight, all three wheat classes followed through on last week’s weakness and traded to fresh contract lows. A lack of bullish news, lower Matif wheat, and year to date export inspections, at 77% of last year’s pace, continue to weigh on prices.

  • To see the updated US 8 – 14 day Temperature and Precipitation Outlooks and the Brazil and Argentina 2-week forecast precipitation percent of normal, courtesy of the National Weather Service, Climate Prediction Center, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. Since the beginning of August, the corn market has traded sideways largely between 470 and 500. October’s brief breakout to 509 ½ and the subsequent failure to stay above the 50-day moving average indicates there is significant resistance in that price range. The failure of November’s USDA report to provide a bullish influence on the market puts the market at risk of drifting sideways to lower without a bullish catalyst. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. So, for now, the thought process is to hold tight on any further sales recommendations until later this fall or early winter, with the objective of seeking out better pricing opportunities. If the market has not turned around by early winter, then Grain Market Insider may sit tight on the next sales recommendations until spring.

  • No new action is recommended for 2024 corn. Since late February ’22, Dec ’24 has been bound by 489 ¾ on the bottom and 600 on the top. After testing 491 to 547 last July, it has mostly traded between 500 and 525. During this time, Dec ’24 has held up better as bear spreading has allowed Dec ’24 to maintain more of its value versus Dec ’23 as traders attempt to price in a larger 2023 carryout with more uncertainty remaining for the 2024 crop. Moving forward, the risk for 2024 prices is the same as for 2023 prices, which is a continuation of a lower trend without further bullish input. Grain Market Insider is watching for signs of a change in the current trend to look at recommending buying Dec ’24 call options. This past spring, Grain Market Insider recommended buying 560 and 610 Dec ’23 call options ahead of the summer rally and having those in place helped provide confidence to pull the trigger on recommending 2023 sales into that sharp rally, knowing that if corn kept rallying and went to 700 or 800 that the call options would protect those sold bushels.

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

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

  • Corn futures pushed to new nearby lows on the trading session to start the week, pressured by strong selling in the wheat market and on-going demand concerns. December corn lost 7 ¾ cents and posted its lowest daily close since July 2021.

  • The weak price action and the overall negative trend keeps pressure on the corn market as bullish news is still limited in a market that is working through the final pieces of this year’s corn harvest.

  • Weekly corn export inspections were below analyst expectations at 407,000 mt (16 mb). Year-over-year, total inspections are up 25% for the marketing year. Last week’s shipping pace was impacted by the Thanksgiving Day Holiday, and water level concerns reoccurring for the Mississippi River.

  • Brazil weather is still a focal point in the markets. Some weather seems to be stabilizing, which has pressured soybean futures. Corn is more likely a longer-term story as delayed soybean planting will push corn planting back on Brazil’s key second corn crop. Argentina weather is improving, and corn and soybean production could return to more “normal” levels than the last two years influenced by drought.

Above: The nearby corn contract has rejected the 100-day moving average on the daily continuous chart and has slipped below the 50-day moving average. Initial resistance now rests just above the market near 496 with further heavy resistance between 500 and 509 ½. Support below the market remains near 460, with the next major area of support near 415.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. At the end of August, the soybean market turned lower and didn’t find any significant buying interest until it traded down to 1251 in early October. Since then, the nearby contract has traded through the 50-day moving average and tested the August high. Looking back, since last May, nearby soybeans have been in a range from 1435 up top to 1251 down below. Last summer, Grain Market Insider did make two sales recommendations in the 1310 – 1360 price window versus Nov ’23. Seasonally, we are at the time of year when prices tend to rally into year’s end, and if the markets remain firm to higher in the next few weeks, Grain Market Insider may consider suggesting making additional old crop sales, while also continuing to be on the lookout for any call option buying opportunities to help protect current and future sales. 

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

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

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

  • Soybeans ended the day slightly lower in the front months but higher to unchanged in deferred months in a day of mixed trade that saw prices anywhere from 7 cents lower to 7 cents higher. Soybean meal and oil ended the day higher, further improving crush margins.

  • Soybean inspections totaled 53 mb for the week ending Thursday, November 13, which was within the trade range but down slightly from last week. Total inspections for 23/24 are now at 641 mb, which is down 11% from the previous year.

  • In Brazil, showers were reported in the central region of the country over the weekend and temperatures fell slightly, but there still has not been a major soaking rain that is needed, and crop failure is expected to occur in Mato Grosso and other northern states. Southern Brazil has been getting flooded with rain which will likely affect their production as well.

  • While more favorable South American weather has caused soybeans to fall to the low end of their recent trading range, exports have picked up with 16.6 mb of new sales to China and unknown on Friday, and domestic demand has been strong with profitable crush margins.

Above: On November 15, January soybeans posted a bearish reversal after coming within 11 cents of the August high. Since then, the market has retested the recent high and failed, creating a head-and-shoulders pattern which suggests a potential to test October’s 1250 low unless bullish input enters the market. For now, heavy resistance remains between 1400 and 1410, with support below the market near the 50-day moving average and again near 1297.

Wheat

Market Notes: Wheat

  • Another risk off session and lack of fresh news contributed to pressure in the wheat market. All three US futures classes closed with double digit losses, alongside lower Matif futures. March Matif wheat has been lower for eight of the past ten sessions. Today’s lower price action is also despite the US Dollar being in a downtrend.

  • Weekly wheat inspections totaled 10.2 mb, bringing the 23/24 inspection totals to 299 mb. This is down 23% from last year and inspections are running behind the USDA’s estimated pace.

  • Ukraine is doubling down on their export corridor. News outlets are reporting that they are planning to have convoy vessels in place for protection in the Black Sea. With the war raging on, Ukraine has shipped only 12.7 mmt of grain so far this season, versus 17.6 mmt at the same time last year.

  • Argentina’s wheat harvest is reported to be 27% complete. But early drought there, and also in Australia, could mean a combined reduction of 9-12 mmt of exports of wheat globally.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. After making a high in late July, nearby Chicago wheat trended lower until finding support at 540 on September 29, from which it rallied back, briefly piercing 600 and the 50-day moving average. The market now appears to be finding value in the 540 – 616 range established since early September, as weak US export demand, driven by cheap Russian exports, remains the dominant headwind to higher prices. Grain Market Insider made sales recommendations in the late June rally around 720 and again earlier this fall near 604. With those two sales, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales in the 625 – 650 range. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. After retesting the 800 level back in July, new crop Chicago wheat retreated steadily until hitting the late September low of 610 ¼. Since then, prices have been mostly rangebound between 620 and 650.  Just as fund positioning and weak fundamentals have driven old crop prices down closer to the mid to upper 500 range and new crop prices to the low to mid 600s. The risk of further new crop price erosion remains without fresh bullish input to move prices higher. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for this possibility, and back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels, and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: On November 15 nearby Chicago wheat rolled from the December contract to the March. While it appears that prices made a significant move, it is in fact the premium in March that is being represented on the chart. Upside resistance remains between 604 ½ and 618, while support below the market, remains between 564 and 554.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since late July the nearby KC wheat has been in a downtrend that has had periods of relative stability, but not any significant reversals higher. The market once again found nearby support as it traded to, and held, its recent low of 625 ½. Currently, weak US export demand, driven by cheap Russian exports, remains the dominant headwind, and the market is in need of bullish input to stabilize and rally prices back higher. If a bullish catalyst enters the market to push prices above 700, it may signal that a fall low is in place and would line up with the historical tendency for prices to appreciate into winter and early spring. Grain Market Insider’s strategy is to look for price appreciation going into this winter, as weather becomes a more prominent market mover with an eye on considering additional sales near 750 – 800. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • Grain Market Insider sees a continued opportunity to cover half of the remaining July ’24 KC wheat 660 puts at current market prices, minus fees and commission. Last week Grain Market Insider suggested covering half of the originally recommended July ’24 KC wheat 660 puts at approximately 61 cents in premium minus fees, and commission. At 61 cents, the puts were about double their original cost. In yesterday’s and today’s trading sessions, the July ’24 contract may have found support at about the 630 level. Given the extreme oversold condition of the market, Grain Market Insider recommends covering another half of the remaining position to protect some of the current gains. This recommendation means that 75% of the original position should be closed out, leaving 25% of the original position to continue to provide downside protection in the event the market fails to rally off this 630 area.

  • 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: The recent resumption of the downtrend has left the KC wheat market oversold with resistance now above the market between 633 and 661. The market’s oversold status can be supportive if a catalyst enters the market to turn prices back higher. Without a bullish catalyst, March ’24 runs the risk of retreating further and testing 575 support. 

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop. After making highs in July, and the subsequent downtrend to the October 2 low of 707 ½, nearby Minneapolis wheat has traded mostly sideways with no significant reversal higher. With weak US export demand still the primary impediment to higher prices, the market remains at risk of trending lower if September’s low close of 709 is violated to the downside unless another bullish impetus enters the scene. If that happens and prices begin to push back toward 775, it may signal that a near-term low is in place. Earlier this year, Grain Market Insider made a sales recommendation during the July rally near 820, and with that sale in place, Grain Market Insider’s strategy is to look for price appreciation going into this winter with an eye on considering additional sales around 750 – 800, and again north of 825. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices. Even though the primary strategy is to look for higher prices, Grain Market Insider may also consider a “plan b” in the next couple of weeks if prices grind sideways to lower.

  • Grain Market Insider sees a continued opportunity to sell a portion of your 2024 Spring wheat crop. Since late July, Sept ’24 Mpls wheat has been slowly stair-stepping lower, providing no rallies of substance to sell into. While we see improving conditions in the market that could provide fuel for a bottom and future upside sales opportunities, we also know historically, that if the market breaks support this time of year, it poses the risk that prices could continue to trend overall lower into spring of next year. All that said, a close below 743 support would signal that a trend lower into next year is a risk. Although Grain Market Insider still looks for higher prices, we know from our historical research the importance of having a “plan b” this time of year. With a daily close below 743, Grain Market Insider will recommend selling a portion of your 2024 crop while prices are still relatively elevated and historically good in case they erode further. While the mid-700s may not be the 1000 or higher that we’ve seen in the last two years, it remains much better than the possible 500 – 600 that the market saw back in 2020 and early 2021. 

  • Grain Market Insider sees a continued opportunity to cover half of the remaining July ’24 KC wheat 660 puts at current market prices, minus fees and commission. Last week Grain Market Insider suggested covering half of the originally recommended July ’24 KC wheat 660 puts at approximately 61 cents in premium, minus fees and commission. At 61 cents, the puts were about double their original cost. In yesterday’s and today’s trading sessions, the July ’24 contract may have found support at about the 630 level. Given the extreme oversold condition of the market, Grain Market Insider recommends covering another half of the remaining position to protect some of the current gains. This recommendation means that 75% of the original position should be closed out, leaving 25% of the original position to continue to provide downside protection in the event the market fails to rally off this 630 area.

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

Above: Since the nearby contract rolled from the December to the March, prices have steadily declined through the October low of 703 ¼ and may be on track to test major support near the May ’21 low of 669. If prices turn back higher, resistance now stands between 721 and 740 with heavy resistance near 750.

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.