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01-17 End of Day: Weak Chinese Economic Data Presses Markets Lower

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Spillover weakness from soybeans and a stronger US dollar weighed on the corn market that set a new contract low, and low close for March corn.

  • Reports of a slowing Chinese economy and sharply lower soybean meal kept downward pressure on soybeans, which closed near the day’s lows following choppy trade that saw prices on both sides of unchanged.

  • Talk of increasing Argentine soybean production that could exceed 52 mmt weighed heavily on soybean meal, which closed the day forming a bearish reversal. Soybean oil, on the other hand, settled in the green after making a new low for the move, possibly with help from crude oil, which also rallied off its lows.

  • Unconfirmed rumors of Chinese vessels loading SRW wheat in the Gulf of Mexico may have added support to March Chicago wheat, which closed fractionally higher, while the complex as whole saw pressure from neighboring soybeans and a rising dollar to close mostly lower.

  • To see the updated GRACE-based drought indicator maps of the US and South America, courtesy of the NDMC and NASA, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

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

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

  • No Action is currently recommended for 2025 corn. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted 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:

  • Disappointing price action in the corn market, as prices failed to hold the session highs and finished with losses. March corn established a new contract low and low close, losing 1 ¼ cents on the session.  Strong selling pressure in the soybean market and a surge higher in the US dollar weighed on corn prices on Tuesday. 

  • Technically, March corn futures failed to push back through the psychological 450 level, setting up the afternoon retest of the lows of the session. The negative price action and weak close will keep sellers active going into Thursday’s trade.

  • China reported weak GDP data overnight, which triggered selling pressure across the commodity sector. The Chinese economy grew 5.2% in the fourth quarter, which had analysts concerned about the overall Chinese economy. The slower growth rate weighed heavily on soybeans and the rest of the commodity markets for the early part of the session.

  • The soft price action showed that sellers are in control of the market, and any buying strength runs into selling pressure. Hedge Funds continue to push their large net short position in the corn market, now estimated to have over 250,000 contracts.

  • The US Dollar Index has rallied steadily since the first of the year. The Dollar Index traded to its highest level in six weeks at the 103-basis point level. The stronger dollar limits US competitiveness for grains and weighed on prices.

Above: Earlier in January, March corn broke through 460 support, which is now nearby resistance, and retreated toward nearby support around 440. The market shows signs of being oversold, which can be supportive if bullish information enters the market. If prices break below 440, the next major support level comes in near 415. Overhead, if prices rally above 460, additional resistance may enter in between 470-480.

Soybeans

Soybeans Action Plan Summary

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

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

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

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

  • Soybeans ended the day sharply lower following poor GDP data out of China and a lack of Chinese demand for soybeans. Soybean meal was the biggest loser of the day, but soybean oil managed to end the day slightly higher.

  • Yesterday, the NOPA crush report showed 195.33 million bushels of soybeans crushed in December, which was well above the average trade guess and a record for any month. The crush was up 10% year over year and up 5% from the prior December high. This should be supportive, but aggressive fund selling, and the South American harvest has pressured soybeans.

  • Chinese GDP data showed about 5% annual growth for 2023, but their economic recovery is still seen as uneven and concerning. Some analysts are predicting that the Chinese economy will see another slowdown later this year, which could impact imports of agricultural goods.

  • Soybean production in Brazil was estimated at 157 mmt by the USDA last week, but many analysts have that number at 150 mmt or below. The concerning thing has been the lack of soybean purchases by China from Brazil recently after China went on a buying spree last year.

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

Wheat

Market Notes: Wheat

  • Wheat attempted a rally today, with March Chicago up over a dime at one point. This could be tied to unconfirmed rumors that there are ships in the US Gulf loading SRW wheat to deliver to China. However, March Chicago ended up closing just a half cent higher, while the rest of the wheat contracts in all three classes settled with losses for the day.

  • A combination of a higher US Dollar Index and sharply lower soybean futures likely weighed both wheat and corn today. Additionally, while about 20% of the US winter wheat crop was exposed to the recent cold temperatures, most are not expecting winterkill to be much of an issue. This may have offered some weakness to wheat, as there was some anticipation that crop damage would be a bullish factor.

  • As of January 14, EU soft wheat exports reached 16.88 mmt since the season began in July. This compares with 18.17 mmt for the same timeframe last year, representing a roughly 7% decline year over year.

  • According to FranceAgriMer, French soft wheat exports for 23/24 are estimated at 17.01 mmt, down from the previous estimate of 17.2 mmt. The stockpile projection also increased from 3.22 mmt to 3.43 mmt.

  • As of January 17, Russia’s export duty on wheat has declined from 4,165.9 rubles per mt to 3,946.5 rubles. This represents a 5.3% decrease, and Russian wheat export values remain the world’s cheapest at $240 to $245 per mt. Despite these low prices, Algeria’s recent wheat purchase for up to 650,000 mt of wheat was sourced mainly from Europe.

Chicago Wheat Action Plan Summary

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

  • No new action is recommended for 2024 Chicago wheat. Since early December, the July ’24 contract has traded mostly sideways to slightly lower after its brief short covering runup on Chinese buying. Although China has since been absent from the US wheat export market, managed funds continue to hold a sizeable, short position that could trigger another short covering rally if a bullish impetus enters the market. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. 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. Since early September, the July ’25 contract has been rangebound, largely between 650 on the bottom and 675 on the top. Grain Market Insider’s strategy for the 2025 crop year up to this point has been to sit tight. Though if prices break out of the topside of this range toward the 690 – 705 area, we will consider taking advantage of the rally and making sales recommendations.

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

Above: The March contract’s closing through the bottom end of the recent range and 100-day moving average lends a bearish tilt to the market, which runs the risk of drifting lower toward the next major level of support near 556. If a bullish catalyst enters the market to turn prices higher, overhead resistance remains near 650.

KC Wheat Action Plan Summary

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

Above: The breach of 700 in the March contract could indicate further weakness with the next area of major support down near 669. The market does show signs of being oversold, which is supportive if the market turns back higher. Overhead initial resistance lies around 700 and then again between 721 and 734.

Other Charts / Weather

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01-16 End of Day: Markets Start the Week Mostly Lower on Follow Through Price Action

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • After trading on both sides of unchanged, carryover weakness from lower wheat and expectations of large US and world corn supplies pressed the corn market to close lower on the day.

  • The soybean market saw choppy two sided trade to start the week, and ended the day mixed as old crop gained on new crop. Record NOPA crush numbers helped to lend support, along with sharply higher soybean meal, while sharply lower bean oil added resistance.

  • Weak weekly export inspections and a sharply higher US dollar weighed heavily on the wheat complex today as all three classes closed lower, with both Chicago and KC showing double digit losses to start the week.

  • The US dollar gapped higher on the day’s opening and gained nearly 1% at the time of writing, to trade above the 50-day moving average for the first time since November. While the gap higher appears to be technical in nature, the higher trade, nevertheless, likely added resistance to the grain markets.

  • To see the updated US 6 – 10 day temperature and precipitation outlooks, and 2-week total precipitation forecasts for Brazil and Argentina, courtesy of the NWS, NOAA, and CPC, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. After posting a high in October, front month corn futures have steadily drifted sideways to lower with a general lack of bullish news and an estimated carryout around 2.1 billion bushels. If the January USDA report fails to provide a bullish catalyst to the market, it remains at risk of continuing to languish in the same pattern. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

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

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

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

  • Corn futures finished the session lower, pressured by the prospects of large US and global corn supplies, and selling pressure in the wheat market triggered by a jump in the value of the US dollar.  March corn lost 3 ½ cents on the session, but did hold above Friday’s report day lows.

  • The corn market continues to look for positive news after Friday’s USDA Grain Stocks and WASDE report. US corn carryout was raised by 30 mb to 2.162 bb, but the 12 mmt rise in Chinese corn production helped surge world ending stock above expectations, reflecting a potential record Chinese corn crop. The heavier global supplies keep pressure on a market searching for demand.

  • Demand will stay a focus for the corn market and the need for export sales is important. The USDA announced a flash sale of 126,700 mt (5 mb) of corn to Mexico.

  • USDA reported weekly export inspections at 876,000 mt (34.5 MB) for the week ending January 11.  Total inspection has reached 548 mb, up 29% year over year, the USDA is forecasting a 26% jump.

  • Managed funds are staying aggressively short the market and growing this position. On last week’s Commitment of Traders eport, funds were short 230,723 net contracts of corn. The position is likely to be larger after the strong selling pressure to end the week.

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

Corn Managed Money Funds net position as of Tuesday, Jan 2. Net position in Green versus price in Red. Managers net sold 33,397 contracts between Jan. 3 – 9, bringing their total position to a net short 230,723 contracts.

Soybeans

Soybeans Action Plan Summary

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

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

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

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

  • Soybeans ended the day higher with support from higher soybean meal and a record-breaking NOPA crush report. Last week’s trade was rough with March soybeans losing 32 cents after a bearish WASDE report on Friday, but they ended the week significantly off their report lows.

  • The biggest story in soybeans today was the NOPA crush report that showed 195.33 million bushels of soybeans crushed in December, which was well above the average trade guess and a record for any month. The crush was up 10% year over year and up 5% from the prior December high.

  • While soybean meal saw higher trade following the NOPA report, soybean oil moved lower. Soybean oil stocks were pegged at 1.36 billion pounds, which was above the average trade guess of 1.291 billion pounds, but stocks were still down 24% year over year.

  • The USDA reported weekly export inspections at 1.264 mmt (46.4 mb) for the week ending January 11.  Total inspections have reached 940 mb, down 21% year over year. The USDA is forecasting a 12% drop.

  • The highlights of Friday’s WASDE report were an unexpected increase in US soybean yields for 23/24 and a decline in Brazilian production that was much smaller than expected or is likely realistic. The USDA currently estimates Brazilian soy production at 157 mmt which is down from their last guess of 161 mmt, but most analysts are guessing that number is closer to 150, and some are even in the low 140’s due to the early drought and heat.

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

Soybean Managed Money Funds net position as of Tuesday, Jan. 9. Net position in Green versus price in Red. Money Managers net sold 19,619 contracts between Jan. 3 – 9, bringing their total position to a net short 31,248 contracts.

Wheat

Market Notes: Wheat

  • All three US wheats finished with losses; both Chicago and KC wheat showed double digit losses. Weakness stemmed from a sharply higher US Dollar Index, which actually gapped higher today. As of this writing, it is up 0.99 at 103.40. This higher dollar should make US exports less competitive, which is not helped by the fact that the USDA increased their estimate of Russian and Ukrainian exports last week.  

  • The USDA reported weekly wheat inspections at 8.6 mb, which brings the 23/24 total inspections to 381 mb. That is below the pace needed to meet the USDA’s goal and is also down 16% from last year. On Friday, the USDA left their estimate of 23/24 wheat exports unchanged at 725 mb.

  • Although they have not made any changes to the export ban on wheat, they did suggest that they have a better than expected wheat crop. Said to be around 114 mmt, this is above the USDA’s projection, and may indicate that they will not need to import wheat this year. If true, this could add to the bearish tone in the market.

  • Over the past three weeks, 1.3 mmt of ag goods on ocean vessels are said to have been rerouted to avoid traveling through the Suez Canal and Red Sea region. Ships want to avoid conflict in that area, but this is also resulting in increased global freight costs. Reportedly, an average of 80 mmt of grain passes through the Red Sea every year with just over a third of that going to China.  

  • According to Ukraine’s agriculture ministry, 2.1 mmt of grain has been exported so far this month, up from 1.7 mmt last year. While no explanation was offered regarding the monthly increase, it should be noted that their total grain exports are down from last year since the season began July 1. The total so far is 20.6 mmt versus 24.5 mmt last year and of that total, 8.2 mmt is wheat.

Chicago Wheat Action Plan Summary

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

  • No new action is recommended for 2024 Chicago wheat. Since early December, the July ’24 contract has traded mostly sideways to slightly lower after its brief short covering runup on Chinese buying. Although China has since been absent from the US wheat export market, managed funds continue to hold a sizeable, short position that could trigger another short covering rally if a bullish impetus enters the market. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. 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. Since early September, the July ’25 contract has been rangebound, largely between 650 on the bottom and 675 on the top. Grain Market Insider’s strategy for the 2025 crop year up to this point has been to sit tight. Though if prices break out of the topside of this range toward the 690 – 705 area, we will consider taking advantage of the rally and making sales recommendations.

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

Above: The March contract is closing through the bottom end of the recent range and 100-day moving average lends a bearish tilt to the market, which runs the risk of drifting lower toward the next major level of support near 556. If a bullish catalyst enters the market to turn prices higher, overhead resistance remains near 650.

Chicago Wheat Managed Money Funds net position as of Tuesday, Jan. 9. Net position in Green versus price in Red. Money Managers net bought 2,289 contracts between Jan 3 – 9, bringing their total position to a net short 57,988 contracts.

KC Wheat Action Plan Summary

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

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

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

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

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

KC Wheat Managed Money Funds net position as of Tuesday, Jan. 9. Net position in Green versus price in Red. Money Managers net sold 230 contracts between Jan. 3 – 9, bringing their total position to a net short 34,266 contracts.

Mpls Wheat Action Plan Summary

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

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

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

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

Above: The breach of 700 in the March contract could indicate further weakness with the next area of major support down near 669. The market does show signs of being oversold, which is supportive if the market turns back higher. Overhead initial resistance lies around 700 and then again between 721 and 734.

Minneapolis Wheat Managed Money Funds net position as of Tuesday, Jan. 9. Net position in Green versus price in Red. Money Managers net sold 1,905 contracts between Jan. 3 – 9, bringing their total position to a net short 28,637 contracts.

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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01-12 End of Day: Bearish USDA Numbers Press Markets Lower to End the Week.

ByGrain Market Insider

The CME and Total Farm Marketing offices will be closed Monday, January 15, 2024, in observance of Martin Luther King Jr. Day

 

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Net increases in 23/24 US corn ending stocks and South American production pressed March corn 16 ¾ cents lower to fresh contract lows before rebounding 6 cents into the close.

  • USDA soybean projections that came in above expectations across the board for both US production and ending stocks, as well as both Brazil and Argentina production, slammed March soybeans to a low of 1203 before they recovered to close 11 ¼ cents off the low.

  • Both soybean meal and oil saw wide ranges on both sides of unchanged before closing lower on the day. Meal posted a new low for the move before rebounding to close just $0.10 lower, while soybean oil posted a bearish reversal and closed with a 0.47 cent loss.  

  • A generally bearish USDA report weighed on the wheat complex despite lower US ending stocks and planted acreage estimates. Chicago contracts led the way down with all three classes settling lower on the day but well off their respective lows.

  • To see the updated US 6 – 10 day temperature and precipitation outlooks, and 2-week precipitation forecasts as a percent of normal for Brazil and Argentina, courtesy of the NWS, NOAA, and CPC, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. After posting a high in October, front month corn futures have steadily drifted sideways to lower with a general lack of bullish news and an estimated carryout around 2.1 billion bushels. If the January USDA report fails to provide a bullish catalyst to the market, it remains at risk of continuing to languish in the same pattern. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

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

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

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

  • Grain markets saw strong selling pressure as a bearish USDA WASDE report reflected strong global and US corn supplies. The report brought increased yield adjustments for US production this past growing season. March corn futures traded to new contract lows, down 10 ¾ cents on the session. For the week, March corn futures lost 13 ¾ cents.

  • The USDA raised US corn yield this past season to 177.3 bushels/acre, up 2.4 bushel from the December projection. This, taking away a small reduction in harvested acres raised corn production 107 mb over the December report. After demand adjustments, US corn ending stocks were raised 31 mb, and above market expectations. This projected carryout is 802 mb higher than last year.

  • The USDA made changes in their forecast for South American production for this growing season. The USDA lowered projected Brazil corn production to 127 mmt, down 2 mmt from December, and left Argentina corn production unchanged. Both moves reflect the current weather situation in each country. Yesterday, the Rosario Grain Exchange raised the Argentina crop to a projected 59 mmt, which would be a record for the South American country.

  • US Quarterly Grain Stocks as of December 1 for corn were 12.169 billion bushels, over 100 mb above analyst expectations, and 1.35 billion bushels larger than last year. The jump in stocks is reflective of the strong corn production in the US this past season.

  • With the strong US and Argentina production, world corn ending stocks for corn are estimated at 325.22 mmt, up 10 mmt from last month and 12 mmt above the trade guesses for the report.

Soybeans

Soybeans Action Plan Summary

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

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

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

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

  • The USDA released its monthly WASDE update and quarterly grain stocks as of December 1. 23/24 production and ending stocks both came in above expectations, as did December 1 grain stocks to initially push soybeans 33 cents lower but close with just a 12 ¼ cent loss. 

  • US 23/24 ending stocks are now estimated at 280 mb, up 35 million from last month, with higher Dec. 1 stocks of 3.0 bb and production of 4.126 bb both contributing to the higher ending stocks.

  • The USDA’s South American production estimates also came in above expectations. Brazil’s soybean production is now estimated at 157 mmt, versus the average trade guess of 156.26, and the USDA estimated Argentina’s production 2 mmt above the average guess of 48 mmt.

  • With increases in both US and South American production, the USDA raised its projection for world ending stocks slightly from 114.21 mmt in December, to 114.6 mmt, where average trade expectations were for a net reduction to 111.58 mmt.

  • Next Tuesday NOPA will release its monthly crush report relaying total crush amounts for the month of December. Average estimates are calling for a record 193.12 mb of soybeans crushed last month, if realized. The total would represent a 2.2% increase from November’s 189.038 mb crushed and an 8.8% increase from last year. Dec. 31 soybean oil stocks are estimated to increase 6.4% to 1.291 billion lbs.

  • Rainfall totals in Mato Grosso, Brazil are expected to decline over the next couple of weeks. Although with the rain they have received recently, this shouldn’t cause much issue. However, some of the other drier areas of Brazil may get good rain coverage over the next couple of weeks.

Wheat

Market Notes: Wheat

  • Wheat closed lower in all three classes alongside Paris milling wheat, and as the US Dollar continues to consolidate. Of course, today’s price action had much more to do with all the data released by the USDA. Initially, wheat was a little higher just after the report came out, possibly because winter wheat acreage was estimated at 34.4 million acres versus an expected 35.9 ma. But the negative tone of the report in general weighed on wheat by the end of the session.

  • The USDA pegged US wheat quarterly stocks for December 1 at 1.410 bb. The trade was looking for 1.383 bb, which compares to 1.780 bb in September and 1.312 bb in December 2022.

  • US ending stocks for wheat came in at 647 mb, whereas the trade was looking for 658 mb. This is also a decline from the December report which was 659 mb. For the world number, the USDA estimated 260.0 mmt of wheat carryout, up from the average trade estimate of 258.3 mmt, and up from December at 258.2 mmt.

  • For Russia and Ukraine, wheat exports were both raised slightly to 51.0 mmt and 14.0 mmt respectively. US wheat exports were left unchanged by the USDA at 725 mb. As far as other world numbers, production in Australia at 25.5 mmt and in Argentina at 15.0 mmt were both unchanged from last month by the USDA.

  • According to the Buenos Aires Grain Exchange, their 23/24 wheat crop is 95% harvested, and their production estimate was unchanged from 15.1 mmt. For reference, this is up from 12.2 mmt last year.

  • The NOAA Climate Prediction Center estimates a 73% chance that El Nino will become neutral this spring. In other words, the pattern should come to an end. This may provide good conditions for planting in the US this spring. They also suggested that after a neutral period, the pattern will have a 64% chance to switch back to La Nina by August.

Chicago Wheat Action Plan Summary

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

  • No new action is recommended for 2024 Chicago wheat. Since early December, the July ’24 contract has traded mostly sideways to slightly lower after its brief short covering runup on Chinese buying. Although China has since been absent from the US wheat export market, managed funds continue to hold a sizeable, short position that could trigger another short covering rally if a bullish impetus enters the market. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. 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. Since early September, the July ’25 contract has been rangebound, largely between 650 on the bottom and 675 on the top. Grain Market Insider’s strategy for the 2025 crop year up to this point has been to sit tight. Though if prices break out of the topside of this range toward the 690 – 705 area, we will consider taking advantage of the rally and making sales recommendations.

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

KC Wheat Action Plan Summary

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

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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01-11 End of Day: Grains Settle Mixed as They Consolidate Ahead of Friday’s USDA Report.

ByGrain Market Insider

The CME and Total Farm Marketing offices will be closed Monday, January 15, 2024, in observance of Martin Luther King Jr. Day

 

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Choppy trade dominated the corn which finished the day slightly lower. Export sales that came in on the low end of expectations lent resistance to prices despite a 175,000 mt sale to Mexico.

  • Soybeans ended the day firmer following choppy two-sided trade, as the market garnered some support from short covering activity ahead of tomorrow’s USDA update.

  • Soybean oil also lent strength to soybeans today as it continued to follow through on Monday’s bullish reversal and rallies in the energy sector. Soybean meal, on the other hand, declined again with pressure coming from slowing US demand amid the anticipated recovery of Argentine production.

  • A bearish reversal in Paris milling wheat and US export sales that came in below expectations weighed on the wheat complex that saw a mild selloff in all three classes. Though weekly sales were below expectations, year-over-year sales remain 2% higher than last year.

  • Consumer price data was released today and was 0.2% higher than expected on an annualized basis. This triggered some buying in the US dollar which showed only modest gains at the time of writing on thoughts the Federal Reserve may be less dovish with interest rates in 2024. Overall, lower prices for the US dollar are anticipated, which could lend support to commodities.

  • To see the updated US Drought Monitor, and 2-week precipitation forecasts for Brazil and Argentina, courtesy of the NDMC, NWS, and CPC, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. After posting a high in October, front month corn futures have steadily drifted sideways to lower with a general lack of bullish news and an estimated carryout around 2.1 billion bushels. If the January USDA report fails to provide a bullish catalyst to the market, it remains at risk of continuing to languish in the same pattern. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

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

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

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

  • Corn prices stay choppy going into Friday’s USDA report. March corn slipped 1 ¾ cents on the session and had a narrow 5 ¾ cent trading range as prices hover around the 460 level.

  • This morning the USDA released weekly export sales for last week. US exporters reported new sales of 487,600 mt (19.2 mb) for the current marketing year. This total was at the low end of expectations by analysts and disappointing in a difficult demand market. Total corn sales commitments now total 1.192 billion bushels and are up 38% from a year ago.

  • The USDA announced a flash sale of 175,000 mt (6.9 mb) of corn to Mexico for the current marketing year. This was the first announcement of an export sale of grain since December 19. The corn market is looking for additional export business, as the window for US corn exports should be more open before the South American harvest begins.

  • The Rosario Grain Exchange raised its forecast for the 23/24 Argentina corn crop by 3 mmt. The exchange expects Argentina to produce 59 mmt of corn this season, which would be record production for the South American country.

  • On Friday, the USDA will release the January WASDE, Crop Production and Grain Stocks reports. Expectations are for corn carryout projections to be reduced slightly as the USDA adjusts harvested acres and yield. Demand and first quarter usage will be closely watched, as improved feed demand at the end of the year could tighten overall supplies. Beside US totals, the markets will keep a close eye on any adjustments to Brazil and Argentina crop production.

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

Soybeans

Soybeans Action Plan Summary

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

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

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

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

  • Soybeans began the trading session significantly higher overnight with the March contract as much as 10 cents higher, but both soybean and meal prices faded into the close with soybeans unchanged and meal lower. Soybean oil had support from higher palm and crude oil.

  • Overnight, weather models were adjusted to show dryness in central and northern Brazil over the next 7-days, but the recent rains have been steady and have likely helped the crop out quite a bit. Brazil has some areas of very low yielding soybeans, but this may be partially priced in at this point.

  • Tomorrow, the USDA will release the WASDE report, and traders will be watching the South American numbers closely. Brazil’s estimated soybean production will likely be reduced, but there is a chance that Argentina’s will be increased. US ending stocks for both corn and soybeans are expected to decline slightly when looking at the average trade guesses.

  • Today’s export sales report was disappointing for soybeans with 10.3 mb sold for 23/24 which brings this year’s total sales 17% below last year at this time. Last week’s export shipments of 31.7 mb were above the 24.9 mb needed each week to meet the USDA’s estimates. Primary estimates were to China, Mexico, and Japan.

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

Wheat

Market Notes: Wheat

  • All three US wheat classes posted modest losses of about seven to eight cents for each class across the board. Some weakness may have stemmed from expectations for a relatively neutral report tomorrow in terms of the supply and demand numbers. Also, Paris milling wheat futures posted a reversal from yesterday, in which they took out yesterday’s high but also closed below yesterday’s low. This looks technically weak and offers no support for the US market.

  • The USDA reported an increase of only 4.7 mb of wheat export sales for 23/24 and was below the lower end of expectations. However, shipments last week totaled 21.5 mb, which is above the pace of 16.8 mb needed per week to meet the USDA’s 725 mb export goal.

  • The average trade guess for winter wheat acreage in tomorrow’s USDA update comes in at 35.9 million acres versus 36.7 in 2023. Some private guesses call for a reduction of up to 2 ma, though the range of estimates is relatively wide with 34.5 ma on the low end to 39.4 ma on the high end.

  • The average pre-report estimate of US wheat quarterly stocks as of December 1 is pegged at 1.383 bb, versus 1.780 bb in September, and compares with 1.312 bb in December of 2022. In addition, US wheat ending stocks are expected to come in near unchanged at 658 mb, versus 659 mb in December.

  • Turkey, Romania, and Bulgaria have reportedly joined forces to sweep the Black Sea for mines and defuse them. Additionally, other NATO members including the US and UK are being excluded from the operation; this is said to be in an effort to minimize tensions in that region. De-mining these areas will improve shipping safety for Ukrainian vessels carrying grain and other goods. In December, Ukraine shipped 4.8 mmt of grain via their own corridor; this is more than any single month during the export deal with Russia.

  • Russia continues to offer the world’s cheapest wheat, with export values falling between $245 to $247 per mt FOB. Russia recently supplied most of the wheat for Egypt’s tender in which they purchased 6-7 cargoes of wheat.

Chicago Wheat Action Plan Summary

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

  • No new action is recommended for 2024 Chicago wheat. Since early December, the July ’24 contract has traded mostly sideways to slightly lower after its brief short covering runup on Chinese buying. Although China has since been absent from the US wheat export market, managed funds continue to hold a sizeable, short position that could trigger another short covering rally if a bullish impetus enters the market. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. 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. Since early September, the July ’25 contract has been rangebound, largely between 650 on the bottom and 675 on the top. Grain Market Insider’s strategy for the 2025 crop year up to this point has been to sit tight. Though if prices break out of the topside of this range toward the 690 – 705 area, we will consider taking advantage of the rally and making sales recommendations.

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

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

KC Wheat Action Plan Summary

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

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

Other Charts / Weather

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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01-10 End of Day: Beans Slide Lower While Corn and Wheat Consolidate.

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Corn futures saw two-sided trade on both sides of unchanged to close fractionally mixed on the day as selling pressure from neighboring soybeans offset news of CONAB’s downgrade of Brazil’s corn crop.

  • Soybeans gave up yesterday’s gains and then some with weakness coming from CONAB’s estimate of Brazil’s soybean production that came in higher than expected, as well as reports of an early Brazilian soybean harvest that may be closing the US export window early.

  • Soybean meal and oil also showed losses for the day. Slowing meal demand and increasing supplies continue to add resistance to meal and soybean prices, although crush margins remain profitable, incentivizing crushers.

  • The wheat complex ended the day mixed with both Chicago and Minneapolis slightly higher on the day and KC slightly lower as the markets continue to consolidate ahead of Friday’s USDA WASDE and winter wheat plantings report.

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

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

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

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

  • It was a quiet news day in the corn market as prices traded off early session lows to finish mixed on the day. March corn gained ¾ of a cent in a day that saw a 6 ¾ cent trading range. Steady selling pressure in the soybean market limited the corn market’s upside potential on the day.

  • The Brazil Ag agency, CONAB, released their January corn production estimates this morning. CONAB lowered its projection for the 2023/24 corn crop to 117.6 mmt, down 0.93 mmt from their December projections and down 14.35 mmt from last year. CONAB did leave their second crop corn projection unchanged at this point. Poor early season weather and reduced planting area was the reason for the decrease.

  • USDA will release weekly export sales totals on Thursday morning. Expectations are for corn sales to range from 400,000 to 1.0 mmt. Corn should be entering a more active export window, but the market hasn’t had a published export sale since December 19.

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

  • Managed and speculative funds are maintaining the pressure on the short side on the market. With this week’s overall selling pressure, funds are expected to be short over 200,000 net contracts of corn, likely the largest short position since 2020, as the prospects of growing supplies and demand concerns are in control of the market.

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

Soybeans

Soybeans Action Plan Summary

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

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

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

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

  • Soybeans ended the day lower but have maintained a trading range over the past three days with the March contract finding support at 1235. Both soybean meal and oil were lower with soybean oil pressured by lower palm oil and crude oil.

  • CONAB numbers were released and were higher than expected for soybeans which pressured the market today. CONAB projected that Brazil will produce 155.27 mmt of soybeans for 23/24, but many private analysts have their projections closer to 150 mmt. The USDA’s guess in December was 161 mmt which certainly seems too high, but on Friday it will become a question of how much they reduce that number by.

  • Soybean exports have begun to slow down as the export window in the US is closing with some parts of Brazil harvesting their soybeans that were damaged from heat and dryness. Monday’s export inspections report was disappointing, and there has not been a flash sale announced for soybeans since December 19.

  • South American weather is forecast to be wet throughout this week before turning drier. Argentina’s crop has benefitted from good weather throughout the growing season, but some areas of Brazil delt with the heat and drought for too long, and the recent rainfall has not been as beneficial as had hoped.

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

Wheat

Market Notes: Wheat

  • Wheat had a mixed close and was close to neutral. Chicago and Minneapolis posted small gains while KC was down slightly. The market may be entering a “wait and see” mode ahead of Friday’s USDA reports. In addition to supply and demand, traders will also receive the winter wheat acreage estimate and private guesses are calling for a reduction of at least one million acres.

  • The US Dollar Index has been consolidating for the past several sessions. If it breaks out to the upside, it will pressure the wheat market, but if it trends lower again, that would offer support. With Russia still taking the lead on exports, it would be beneficial to see the Dollar trend lower.

  • Another issue faced by not only wheat, but the commodity complex as a whole, is the continuation of drone attacks on merchant vessels in the Red Sea. This is affecting trade routes and raising freight costs, and reportedly the number of attacks yesterday was the largest to date.

  • From the beginning of their season on July 1, as of January 7, EU soft wheat exports totaled 15.8 mmt. This represents an 11% drop from the 17.8 mmt last year. The top destinations were countries in North Africa, including Morocco, Algeria, and Nigeria.

  • Another major winter storm is set to hit the Midwest later this week. While the moisture may be beneficial, the extreme cold temperatures may not. Areas with little to no snow cover may face the risk of crop damage, but at this time the consensus is that it won’t be a major issue. In addition to the US, colder temperatures will also make their way into Europe and the Black Sea.

  • Egypt purchased 420,000 mt of wheat in their tender. The majority of which, was sourced from Russia, but one cargo was said to come from Ukraine. Other tenders include Algeria and Japan; Japan is looking to purchase from the US and Canada.

Chicago Wheat Action Plan Summary

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

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

  • No action is currently recommended for 2025 Chicago Wheat. Since early September, the July ’25 contract has been rangebound, largely between 650 on the bottom and 675 on the top. Grain Market Insider’s strategy for the 2025 crop year up to this point has been to sit tight. Though if prices break out of the topside of this range toward the 690 – 705 area, we will consider taking advantage of the rally and making sales recommendations.

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

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

KC Wheat Action Plan Summary

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

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

Other Charts / Weather

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

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

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

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

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

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

  • To see the updated US 5-day precipitation forecast, 6-10 day temperature and precipitation outlooks, and Brazil’s 1-week forecast total precipitation, courtesy of NWS and NOAA, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. After posting a high in October, front month corn futures have steadily drifted sideways to lower with a general lack of bullish news and an estimated carryout around 2.1 billion bushels. If the January USDA report fails to provide a bullish catalyst to the market, it remains at risk of continuing to languish in the same pattern. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

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

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

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

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

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

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

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

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

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

Soybeans

Soybeans Action Plan Summary

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

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

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

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

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

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

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

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

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

Wheat

Market Notes: Wheat

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

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

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

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

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

Chicago Wheat Action Plan Summary

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

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

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

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

Other Charts / Weather

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

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

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

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

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

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

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

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

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

  • To see the updated US 5-day precipitation forecast, 6-10 day temperature and precipitation outlooks, and Brazil’s 1-week forecast total precipitation, courtesy of NWS, NOAA, and NDMC scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. After posting a high in October, front month corn futures have steadily drifted sideways to lower with a general lack of bullish news and an estimated carryout around 2.1 billion bushels. If the January USDA report fails to provide a bullish catalyst to the market, it remains at risk of continuing to languish in the same pattern. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

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

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

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

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

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

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

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

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

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

Soybeans

Soybeans Action Plan Summary

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

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

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

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

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

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

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

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

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

Wheat

Market Notes: Wheat

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

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

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

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

Chicago Wheat Action Plan Summary

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

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

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

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

Other Charts / Weather

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

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

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

|

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

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

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

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

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

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

  • To see the updated US 7-day precipitation forecast, 8-14 day temperature and precipitation outlooks, and Brazil’s 2-week forecast total precipitation, courtesy of NWS, NOAA, and NDMC scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. After posting a high in October, front month corn futures have steadily drifted sideways to lower with a general lack of bullish news and an estimated carryout around 2.1 billion bushels. If the January USDA report fails to provide a bullish catalyst to the market, it remains at risk of continuing to languish in the same pattern. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

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

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

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

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

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

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

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

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

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

Soybeans

Soybeans Action Plan Summary

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

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

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

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

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

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

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

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

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

Wheat

Market Notes: Wheat

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

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

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

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

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

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

Chicago Wheat Action Plan Summary

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

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

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

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

Other Charts / Weather

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

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

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

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

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

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

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

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

  • To see the updated US Drought Monitor, and Brazil’s 1-week forecast total precipitation, courtesy of NWS, NOAA, and NDMC scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. After posting a high in October, front month corn futures have steadily drifted sideways to lower with a general lack of bullish news and an estimated carryout around 2.1 billion bushels. If the January USDA report fails to provide a bullish catalyst to the market, it remains at risk of continuing to languish in the same pattern. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

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

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

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

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

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

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

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

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

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

Soybeans

Soybeans Action Plan Summary

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

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

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

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

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

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

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

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

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

Wheat

Market Notes: Wheat

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

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

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

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

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

Chicago Wheat Action Plan Summary

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

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

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

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

Other Charts / Weather

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

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

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

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

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

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

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

  • To see the updated US 6-10 day temperature and precipitation outlooks, and GRACE-Based drought indicators for North and South America courtesy of NWS, NOAA, NDMC, and NASA scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

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

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

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

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

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

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

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

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

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

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

Soybeans

Soybeans Action Plan Summary

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

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

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

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

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

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

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

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

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

Wheat

Market Notes: Wheat

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

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

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

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

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

Chicago Wheat Action Plan Summary

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

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

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

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

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