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11-09 End of Day: Markets pressed lower by surprise increases in today’s USDA report.

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • The USDA surprised the market by raising yield and production more than they increased demand. The result ended up being a bearish 45 mb increase to 23/24 ending stocks that pushed the market lower, when the market was looking for an 18 mb increase.

  • Today’s report affected soybeans more dramatically than corn, in that the USDA increased stocks 25 mb by raising yield, where a 1 mb increase was expected, causing January soybeans to give up its gains and trade lower on the week.

  • Soybean meal saw no net revisions to supply or demand, while bean oil saw a decrease in its beginning stocks, thereby lowering its ending stocks by 159 mil. lbs. In reaction to the numbers, meal closed the day mixed with the front months gaining on the deferred, while oil closed higher. January Board crush margins gained 20 ¾ cents on the move.

  • Chicago wheat led the slide lower for the wheat complex, and was followed by KC and then Minneapolis, on a 15 mb increase to total US 23/24 wheat supplies where no change was anticipated by the market, and an increase to world ending stocks where a decrease was anticipated.

  • To see the US Drought Monitor and the 1-week Class Change map, courtesy of the NDMC and University of Nebraska, and the Brazil and Argentina 2-week precipitation forecasts, courtesy of NOAA, NWS, and the 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. The Dec ’23 contract’s quick move above 500 on October 19, and then below the 50-day moving average of 485 just three sessions later, on October 24, signals that there is heavy resistance above the market near the 100-day moving average, and prices continue to be at risk of drifting sideways to lower. The next major level of support remains near the August low of 462 for front month corn. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. So, for now, the thought process is to hold tight on any further sales recommendations until later this fall or early winter, with the objective of seeking out better pricing opportunities. If the market has not turned around by early winter, then Grain Market Insider may sit tight on the next sales recommendations until spring. If you end up harvesting more bushels than you can store this fall and must move them, consider protecting those sold bushels with either July or September ’24 call options.

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

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

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

  • The USDA Crop Production report lacked very little bullish news, triggering additional selling in the corn market. December corn futures lost 8 cents and posted a new contract low and low daily close for the recent move. The weak price action will likely pressure the market into Friday’s trade.

  • The USDA raised yield projections by 1.9 bushels/acre to 174.9 bushel/acre, which was above expectations. The increase in production added to the balance sheet, despite an increase in projected demand, and raised corn carryout to 2.156 billion bushels, up 45 mb from last month and above analysts’ expectations.

  • An increase in demand was questioned by market analysts as the USDA added 50 mb to export demand, 25 mb to ethanol demand, and 50 mb to feed usage. The new export target for the marketing year is 2.075 billion bushels, a 400+ mb increase over last year.

  • Weekly export sales were within expectations for corn in the USDA Export sales report. Last week, new sales for the marketing year totaled 1.015 mmt (40.0 mb), within analysts’ expectations. Corn sales commitments now total 759 mb for 23/24 and are up 31% from a year ago but behind the pace needed to reach the USDA export target.

  • South American weather stays in focus. Current weather models are leaning toward warm and dry conditions continuing into the end of the year. At this point, the weather is likely more supportive of the soybean market, but potential delays or loss of production in the second crop corn in Brazil could support corn prices in the late summer with possible improved late season demand.

Above: On November 3, the December contract posted a bullish key reversal with a low of 468. The 50-day moving average is just above the market at 484, and the market is oversold. If prices can push over 484, they may move higher to test 500 – 509 ½. If not, support below the market rests between 468 and 460. 

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. At the end of August, the soybean market turned lower and didn’t find any significant buying interest until it traded down to 1251 in early October. Since then, the nearby contract has traded through nearby resistance and the 50-day moving average and may be poised to test the August high. Looking back, since last May, nearby soybeans have been in a range from 1435 up top to 1251 down below. Last summer, Grain Market Insider did make two sales recommendations in the 1310 – 1360 price window versus Nov ’23. Given that those sales recommendations were made and given that now is not the time of year to be making many sales, if any, Grain Market Insider is content to hold tight on any further sales recommendations until later this fall or early winter. The focus for strategy right now is to be on the lookout for any call option buying opportunities. If you end up harvesting more bushels than you can store this fall, consider protecting any sold bushels with July or Aug ’24 call options. 

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

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

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

  • Soybeans ended the day lower following today’s WASDE report which wasn’t extremely bearish, but expectations were that the report would be friendly which caused a negative reaction. Soybean meal was slightly higher in the December contract but lower in the deferred months, while soybean oil was higher thanks to a reduction in ending stocks and gains in crude oil.

  • Highlights from today’s USDA report showed an unexpected increase in the estimate for US soybean yield to 49.9 bpa. Last month’s estimate was 49.6 bpa and no change was expected today. Due to the increase in yield, ending stocks went from 220 mb to 245 mb for 23/24, and demand was unchanged.

  • South American soybean production was also updated in today’s report with Argentina’s 22/23 production unchanged at 25 mmt, but Brazil’s increased to 158 mmt from 156 mmt. For 23/24, Argentina’s production estimate was unchanged at 48 mmt, but Brazil’s was increased to 163 mmt despite the hot and dry planting conditions that are persisting due to El Nino.

  • Export sales were strong today with an increase of 39.7 mb for 23/24, which was above the average trade guess. Export shipments of 82.2 mb were well above the 31.7 mb needed each week on average to meet the USDA’s export estimate. Further, flash sales were reported of 1,044,000 mt of soybeans to China for 23/24, and 662,500 mt were reported for delivery to unknown destinations.

Above: With the market showing signs of being overbought and after rejecting fresh market highs on November 7 and 8, it is at risk of further price erosion unless more bullish input is received. Heavy resistance rests just above the market between 1385 and 1410, while initial support remains below the market between 1334 and the 50-day moving average, and again down near 1300.

Wheat

Market Notes: Wheat

  • All eyes were on today’s WASDE report which ended up having a negative tone. The USDA estimated US 23/24 wheat carryout at 683 mb, above the pre-report estimate of 670 mb, which would have been unchanged from October. Additionally, the world ending stocks were also higher than expected at 258.7 mmt. This compares to a pre-report estimate of 257.9 mmt and last month’s number of 258.1 mmt.

  • As far as some of the world numbers are concerned, the USDA did lower Argentina’s crop to 15.0 mmt versus 16.5 mmt in October. And the Russian crop was in fact raised by 5 mmt from last month to 90 mmt of production. For reference, this is still below Russia’s estimate of 93 mmt. Overall, global wheat production was projected at 781.98 mmt, which was down slightly from 783.43 mmt last month.

  • In addition to the WASDE report, export sales were also released today. The USDA reported an increase of 13.0 mb of wheat export sales for 23/24. Last week’s shipments were disappointing though, at 4.9 mb. This is below the pace needed each week of 14.5 mb to meet their 23/24 export goal of 700 mb.

  • Vladimir Putin recently stated that in the coming year, Russia will have 60 mmt of wheat for export, which is about 10 mmt higher than other estimates. But with the USDA raising the world crop today and a higher projection for Russia this could be true. If so, it will continue to weigh on the export market and US futures.

  • Although the USDA did lower their Argentina wheat crop estimate today, it is still higher than some other projections. The Rosario Exchange reduced their projection of Argentina’s wheat crop by 5.6% to 13.5 mmt. They also reported that the wheat harvest is 10% complete, and while recent rains have helped to improve conditions it was too little too late to reverse the early damage done by drought.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. After making a high in late July, the Dec ’23 contract trended lower until finding support at 540 on September 29, from which it rallied back, briefly piercing 600 and the 50-day moving average. The market now appears to be finding value in the 540 – 616 range established since early September, as weak US export demand, driven by cheap Russian exports, remains the dominant headwind to higher prices. Grain Market Insider made sales recommendations in the late June rally around 720 and again earlier this fall near 604. With those two sales, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales in the 625 – 650 range. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. The July ’24 contract has been trading at a premium to the Dec ’23 contract since late April, which has steadily increased to about 55 cents, September 29, it traded as far out as 71 ¾ cents. Fund positioning and weak fundamentals have driven Dec ’23 closer to the mid to upper 500 range, and July ’24 to the low to mid 600s. The market risk for July ’24 remains the same as for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for this possibility, and back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels, and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

  • No action is currently recommended for 2025 Chicago Wheat. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted a year 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 Chicago wheat recommendations:

Above: December wheat rejected the bearish reversal from November 7 and traded sharply higher. It is now in range to test the October high of 604 ½ and possibly resistance near 618. If the market turns back lower, support below the market, may be found between 564 and 554.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since late July the Dec ’23 contract has been in a downtrend that has had periods of relative stability, but not any significant reversals higher. The market once again found nearby support as it traded to, and held, its recent low of 625 ½. Currently, weak US export demand, driven by cheap Russian exports, remains the dominant headwind, and the market is in need of bullish input to stabilize and rally prices back higher. If a bullish catalyst enters the market to push prices above 700, it may signal that a fall low is in place and would line up with the historical tendency for prices to appreciate into winter and early spring. Grain Market Insider’s strategy is to look for price appreciation going into this winter, as weather becomes a more prominent market mover with an eye on considering additional sales near 750 – 800. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 KC wheat. The July ’24 contract is currently trading near a 25-cent premium to July ’23, which is up significantly from last July’s 60-cent discount. Weak fundamentals have driven spread activity to push July ’23 toward its contract lows, while July ’24 has been able to maintain more of its value. The risk for the July ’24 contract is much like that for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July 660 puts to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 800 to take advantage of elevated prices before they eroded further. If the market receives the needed impetus to move prices back toward 750 – 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: Since breaking through the bottom of the consolidation range at 655, the market has drifted lower and tested minor support which has held so far with the low at 625 ½. The next level of major support below that remains near 575. Major resistance above the market remains around 690 – 700.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop. After making highs in July, and the subsequent downtrend to the October 2 low of 707 ½, the Dec ‘23 contract has traded mostly sideways with no significant reversal higher. With weak US export demand still the primary impediment to higher prices, the market remains at risk of trending lower if September’s low close of 709 is violated to the downside unless another bullish impetus enters the scene. If that happens and prices begin to push back toward 775, it may signal that a near-term low is in place. Earlier this year, Grain Market Insider made a sales recommendation during the July rally near 820, and with that sale in place, Grain Market Insider’s strategy is to look for price appreciation going into this winter with an eye on considering additional sales around 750 – 800, and again north of 825. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices. Even though the primary strategy is to look for higher prices, Grain Market Insider may also consider a “plan b” in the next couple of weeks if prices grind sideways to lower.

  • No new action is currently recommended for 2024 Minneapolis wheat. In the last three months, the Sep ’24 contract has gone from a 60 – 80 discount to Dec ’23, to a 50-cent premium. Weak fundamentals led bear spreading to drive Dec ’23 in search of new contract lows, while Sep ’24 remains off its low from last May. The risk for the Sep ’24 contract is much like that of Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July KC 660 puts (for their greater liquidity, and correlation to Minneapolis pricing) to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 815 to take advantage of elevated prices. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further. Grain Market Insider will then be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

  • No action is currently recommended for 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: On November 7 the December contract posted a bearish reversal, which may indicate lower prices ahead unless bullish information enters the market to turn prices higher. Currently, upside resistance now lies between 735 and 755, with initial support below the market near 703. The next major level of support is near 669, the May ’21 low.

Other Charts / Weather

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

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

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11-08 End of Day: Corn and wheat rally on USDA report positioning; beans settle well off their high.

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Buying interest came back into the corn market with support from wheat and position squaring ahead of tomorrow’s USDA report as traders took profits and covered short positions.

  • Despite Brazil’s continued threatening weather, and reports of large new sales to China and unknown destinations, the soybean market sold off for the second day in a row after making fresh highs.

  • December soybean meal again made new contract highs but met resistance and sold off which weighed on soybeans. Bean oil, on the other hand, continues to hold support just above last week’s low of 48.79 as traders cover shorts despite lower crude oil prices.

  • Possible cuts to South American production and firmer Matif wheat added to the buying pressure and short covering ahead of the USDA’s monthly WASDE report, with all three wheat classes settling higher on the day.

  • To see the US 7-day precipitation forecast, and the South American 1-week precipitation forecast as a percent of normal, courtesy of NOAA, NWS, and the 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. The Dec ’23 contract’s quick move above 500 on October 19, and then below the 50-day moving average of 485 just three sessions later, on October 24, signals that there is heavy resistance above the market near the 100-day moving average, and prices continue to be at risk of drifting sideways to lower. The next major level of support remains near the August low of 462 for front month corn. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. So, for now, the thought process is to hold tight on any further sales recommendations until later this fall or early winter, with the objective of seeking out better pricing opportunities. If the market has not turned around by early winter, then Grain Market Insider may sit tight on the next sales recommendations until spring. If you end up harvesting more bushels than you can store this fall and must move them, consider protecting those sold bushels with either July or September ’24 call options.

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

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

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

  • Buying strength moved into the corn market on Wednesday as prices held recent lows, triggering some short covering and position squaring before Thursday’s USDA Crop Production Report. Strong buying strength in the wheat markets helped support corn futures.

  • On November 9, the USDA will release the next Crop Production Report. Analyst expectations are for the USDA to slightly increase corn yield to 173.2 bushels/acre, which could add bushels back to an already heavy supply picture with a projected carry out increase to 2.129 billion bushels. Adjustments to harvested acres could be an unexpected number.

  • The USDA will release weekly export sales on Thursday morning. Expectations for new 23/24 marketing year sales range from 600,000-1.2 mmt. USDA announced a flash sale of corn to Mexico for 270,000 mt (10.6 mb) for the current marketing year.

  • South American weather stays in focus. Current weather models are leaning toward warm and dry conditions continuing into the end of the year. At this point, the weather is likely more supportive of the soybean market, but potential delays or loss of production in the second crop corn in Brazil could support corn prices in the late summer with possible improved late season demand.

  • A sharp drop in crude oil prices can limit gains in the corn market. Ethanol margins have been favorable, but weaker energy prices will likely weigh on those margins. December crude oil has lost approximately $7.00 for the week and is trading at its lowest levels since July.

Above: On November 3, the December contract posted a bullish key reversal with a low of 468. The 50-day moving average is just above the market at 484, and the market is oversold. If prices can push over 484, they may move higher to test 500 – 509 ½. If not, support below the market rests between 468 and 460. 

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. At the end of August, the soybean market turned lower and didn’t find any significant buying interest until it traded down to 1251 in early October. Since then, the nearby contract has traded through nearby resistance and the 50-day moving average and may be poised to test the August high. Looking back, since last May, nearby soybeans have been in a range from 1435 up top to 1251 down below. Last summer, Grain Market Insider did make two sales recommendations in the 1310 – 1360 price window versus Nov ’23. Given that those sales recommendations were made and given that now is not the time of year to be making many sales, if any, Grain Market Insider is content to hold tight on any further sales recommendations until later this fall or early winter. The focus for strategy right now is to be on the lookout for any call option buying opportunities. If you end up harvesting more bushels than you can store this fall, consider protecting any sold bushels with July or Aug ’24 call options. 

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

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

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

  • Soybeans ended the day higher but backed significantly off their morning highs which saw prices taking out yesterday’s high. Early support came from soybean meal which faded into the day, but soybean oil ended higher despite another selloff in crude oil.

  • Following yesterday when China made its largest single day purchase of US soybeans in over three months, more large sales were reported today with 433,000 mt sold to China for the 23/24 marketing year, 132,000 mt sold to unknown destinations, and another 344,500 mt that were previously unreported but sold to unknown destinations.

  • Brazilian weather has been a huge part of the recent rally in the soy complex with conditions in northern and central Brazil far too dry and impacting planting, while southern Brazil is still receiving large amounts of rain. Northern Brazil previously had some chances for scattered showers, but today the 10-day forecast turned hotter and drier. It is still early, but this trend could significantly impact South America’s crop.

  • Tomorrow, the USDA will release their WASDE report, and although few changes are expected, some analysts are predicting a slight decrease in US yields. Last month the USDA pegged yields at 49.6 bpa with ending stocks of just 220 mb. It is unlikely that the ending stocks number will change by much.

Above: With the market showing signs of being overbought and after rejecting fresh market highs on November 7 and 8, it is at risk of further price erosion unless more bullish input is received. Heavy resistance rests just above the market between 1385 and 1410, while initial support remains below the market between 1334 and the 50-day moving average, and again down near 1300.

Wheat

Market Notes: Wheat

  • After fading back off today’s highs, wheat still managed strong double-digit gains in both Chicago and Kansas City contracts. Minneapolis futures were also higher, but to a lesser degree. Support also came from a positive close in Paris Milling wheat futures.

  • Tomorrow traders will receive the USDA’s monthly WASDE report. While there are no major changes expected for wheat, there may have been some short covering today. It is possible that the USDA will lower Argentina’s crop by 1-2 mmt due to the weather issues they faced. But there is also a chance that they will Raise both the Russian crop and exports.

  • The average pre-report estimate for US 23/24 carryout comes int at 670 mb which is unchanged from October. For the world ending stocks, the projection is 257.9 mmt, down just slightly from 258.1 mmt last month.

  • Ukraine’s agriculture ministry said their grain exports between July 1 and November 6 are at 9.8 mmt, down from 14.3 mmt for the same time period last year. The European Union’s soft wheat exports also dropped 25% between July 1 to November 2, to 9.95 mmt versus 13.2 mmt a year earlier.

  • According to Sergi Lavrov, the Russian foreign minister, there has been no progress to revive the Black Sea Grain Initiative. This is despite efforts by the United Nations to broker a deal.

  • Egypt has seen weakness in their currency, with the Egyptian pound said to have dropped 49% versus the US dollar since 2021. This has reportedly reduced wheat imports by roughly 10 mmt over the past couple years. Additionally, Russia will not accept Egyptian pounds in exchange for wheat.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. After making a high in late July, the Dec ’23 contract trended lower until finding support at 540 on September 29, from which it rallied back, briefly piercing 600 and the 50-day moving average. The market now appears to be finding value in the 540 – 616 range established since early September, as weak US export demand, driven by cheap Russian exports, remains the dominant headwind to higher prices. Grain Market Insider made sales recommendations in the late June rally around 720 and again earlier this fall near 604. With those two sales, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales in the 625 – 650 range. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. The July ’24 contract has been trading at a premium to the Dec ’23 contract since late April, which has steadily increased to about 55 cents, September 29, it traded as far out as 71 ¾ cents. Fund positioning and weak fundamentals have driven Dec ’23 closer to the mid to upper 500 range, and July ’24 to the low to mid 600s. The market risk for July ’24 remains the same as for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for this possibility, and back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels, and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

  • No action is currently recommended for 2025 Chicago Wheat. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted a year 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 Chicago wheat recommendations:

Above: December wheat rejected the bearish reversal from November 7 and traded sharply higher. It is now in range to test the October high of 604 ½ and possibly resistance near 618. Below the market, support may be found between 564 and 554.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since late July the Dec ’23 contract has been in a downtrend that has had periods of relative stability, but not any significant reversals higher. The market once again found nearby support as it traded to, and held, its recent low of 625 ½. Currently, weak US export demand, driven by cheap Russian exports, remains the dominant headwind, and the market is in need of bullish input to stabilize and rally prices back higher. If a bullish catalyst enters the market to push prices above 700, it may signal that a fall low is in place and would line up with the historical tendency for prices to appreciate into winter and early spring. Grain Market Insider’s strategy is to look for price appreciation going into this winter, as weather becomes a more prominent market mover with an eye on considering additional sales near 750 – 800. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 KC wheat. The July ’24 contract is currently trading near a 25-cent premium to July ’23, which is up significantly from last July’s 60-cent discount. Weak fundamentals have driven spread activity to push July ’23 toward its contract lows, while July ’24 has been able to maintain more of its value. The risk for the July ’24 contract is much like that for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July 660 puts to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 800 to take advantage of elevated prices before they eroded further. If the market receives the needed impetus to move prices back toward 750 – 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: Since breaking through the bottom of the consolidation range at 655, the market has drifted lower and tested minor support which has held so far with the low at 625 ½. The next level of major support below that remains near 575. Major resistance above the market remains around 690 – 700.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop. After making highs in July, and the subsequent downtrend to the October 2 low of 707 ½, the Dec ‘23 contract has traded mostly sideways with no significant reversal higher. With weak US export demand still the primary impediment to higher prices, the market remains at risk of trending lower if September’s low close of 709 is violated to the downside unless another bullish impetus enters the scene. If that happens and prices begin to push back toward 775, it may signal that a near-term low is in place. Earlier this year, Grain Market Insider made a sales recommendation during the July rally near 820, and with that sale in place, Grain Market Insider’s strategy is to look for price appreciation going into this winter with an eye on considering additional sales around 750 – 800, and again north of 825. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices. Even though the primary strategy is to look for higher prices, Grain Market Insider may also consider a “plan b” in the next couple of weeks if prices grind sideways to lower.

  • No new action is currently recommended for 2024 Minneapolis wheat. In the last three months, the Sep ’24 contract has gone from a 60 – 80 discount to Dec ’23, to a 50-cent premium. Weak fundamentals led bear spreading to drive Dec ’23 in search of new contract lows, while Sep ’24 remains off its low from last May. The risk for the Sep ’24 contract is much like that of Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July KC 660 puts (for their greater liquidity, and correlation to Minneapolis pricing) to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 815 to take advantage of elevated prices. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further. Grain Market Insider will then be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

  • No action is currently recommended for 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: On November 7 the December contract posted a bearish reversal, which may indicate lower prices ahead unless bullish information enters the market to turn prices higher. Currently, upside resistance now lies between 735 and 755, with initial support below the market near 703. The next major level of support is near 669, the May ’21 low.

Other Charts / Weather

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

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

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11-07 End of Day: Sharply lower crude and “risk off” weakness leads markets lower.

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • The quick harvest pace continues to add resistance to the corn market which was pressed lower on technical selling and carryover weakness after trading below yesterday’s low.

  • After printing a fresh contract high, today’s selloff in soybean meal along with sharply lower bean oil, led to a bearish reversal in beans after the January soybean contract posted its own highest price since September 15.

  • Solid crop ratings, slow exports, cheap Russian prices, and weak Chinese economic data all weighed on the wheat complex with all three classes closing lower on the day. KC led the way lower.

  • Hawkish comments from the Minneapolis Federal Reserve Bank President Neel Kashkari indicated that more tightening of interest rates will be considered if needed. These comments likely led to the strength in the US dollar which gapped higher on the open of today’s trade and added to the pall of the US grain markets.

  • To see the US 8 – 14 day Temperature and Precipitation Outlooks, courtesy of the NWS, and CPC, and the South American GRACE-Based Root Zone Soil Moisture Drought Indicator, 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. The Dec ’23 contract’s quick move above 500 on October 19, and then below the 50-day moving average of 485 just three sessions later, on October 24, signals that there is heavy resistance above the market near the 100-day moving average, and prices continue to be at risk of drifting sideways to lower. The next major level of support remains near the August low of 462 for front month corn. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. So, for now, the thought process is to hold tight on any further sales recommendations until later this fall or early winter, with the objective of seeking out better pricing opportunities. If the market has not turned around by early winter, then Grain Market Insider may sit tight on the next sales recommendations until spring. If you end up harvesting more bushels than you can store this fall and must move them, consider protecting those sold bushels with either July or September ’24 call options.

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

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

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

  • An overall weak tone in the commodity space helped push corn futures lower, testing last week’s price low at $4.68 for December futures. December corn lost 8 ¾ cents on the day and established its new lowest close since September 2021. The weak price action and selling pressure have December corn poised to challenge or establish a new September low.

  • Corn harvest continues to move along ahead of schedule. The USDA Crop Progress report posted that corn harvest was at 81% harvested versus the 5-year average of 77%. The northern corn producing states are showing the biggest delays due to wet weather.

  • The strong pace of harvest has increased harvest pressure as fresh bushels are in the pipeline. Talk of improved yields in the last half of harvested has limited the corn market’s upside potential.

  • On November 9, the USDA will release the next Crop Production report. Early expectations are for the USDA to slightly increase corn yield and production, which could add bushels back to an already heavy supply picture. The corn market may likely be pricing in potential negative news.

  • South American weather is still a focus of the market at this time. Current weather is likely more supportive of the soybean market, but potential delays or loss of production in the second crop corn in Brazil could support corn prices in the late summer with possible improved late season demand.

Above: On November 3, the December contract posted a bullish key reversal with a low of 468. The 50-day moving average is just above the market at 484, and the market is oversold. If prices can push over 484, they may move higher to test 500 – 509 ½. If not, support below the market rests between 468 and 460. 

Corn percent harvested (red) versus the 5-year average (green) and last year (brown).

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. At the end of August, the soybean market turned lower and didn’t find any significant buying interest until it traded down to 1251 in early October. Since then, the nearby contract has traded through nearby resistance and the 50-day moving average and may be poised to test the August high. Looking back, since last May, nearby soybeans have been in a range from 1435 up top to 1251 down below. Last summer, Grain Market Insider did make two sales recommendations in the 1310 – 1360 price window versus Nov ’23. Given that those sales recommendations were made and given that now is not the time of year to be making many sales, if any, Grain Market Insider is content to hold tight on any further sales recommendations until later this fall or early winter. The focus for strategy right now is to be on the lookout for any call option buying opportunities. If you end up harvesting more bushels than you can store this fall, consider protecting any sold bushels with July or Aug ’24 call options. 

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

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

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

  • Soybeans ended the day lower apart from the November contract which held onto some of its gains in thin delivery cycle trade. This followed an impressive start to the day where all the contract months were solidly higher thanks to big gains in soybean meal, but technical resistance, the selloff in meal from the highs, and a drop in crude oil caused prices to fade.

  • Crop progress saw the soybean harvest at 91% complete, slightly below the average trade guess, but still above the 5-year average of 86%. The main soybean producing states are closer to 95% complete, and the 7-day forecast for the central US remains dry and favorable to wrap up harvest.

  • On Thursday, the USDA will release its WASDE report, and it will be revealed how much yields are lowered (if at all). The average trade guess is that yields will be decreased by 0.1 bpa which would have a minimal impact on ending stocks unless export demand is adjusted.

  • Some bearish influence came from negative economic data from China today. While total Chinese imports were within expectations, total Chinese exports fell by 6.4% for the month of October which was much more than anticipated and caused some concerns regarding crude oil demand. Crude oil fell by over 3.50 a barrel today following the news.

Above: After posting a bearish reversal on November 7 and with the market showing signs of being overbought, further price erosion could take place unless more bullish input is received. Significant resistance now rests between the new recent high of 1380 and 1385, while initial support remains below the market between 1334 and the 50-day moving average, and again down near 1300.

Soybeans percent harvested (red) versus the 5-year average (green) and last year (brown).

Wheat

Market Notes: Wheat

  • Early gains faded into a risk-off session with lower closes in corn, soybeans, soybean oil, oats, wheat, and cattle. At the time of writing, metals and energies are also sharply lower. It is possible that in the grain markets there is some positioning going on ahead of Thursday’s WASDE report, but the bigger factor may be recent bearish economic news out of China.

  • The wheat export inspections data yesterday at 2.6 mb was an all-time low for this time of year with records going back to 1983. This is in part due to Russia continuing to dominate on the export front. To make matters worse, the USDA could raise the Russian crop up from 85 mmt on this week’s report if Russia’s claims of a 93 mmt crop are to be believed.

  • According to the USDA, 90% of the winter wheat crop is planted, which is 1% above average but 1% below last year. Emergence is at 75%, and the crop is rated 50% good to excellent, up 3% from last week. For reference, last year at this time the crop was rated 30% good to excellent.

  • According to their agriculture ministry, Ukraine has left their estimate of the winter wheat planted area for the 2024 harvest unchanged at 4.36 million hectares, down from 4.46 million in 2023. As of November 6th, 3.87 million hectares or 88.8% of that area has been planted.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. After making a high in late July, the Dec ’23 contract trended lower until finding support at 540 on September 29, from which it rallied back, briefly piercing 600 and the 50-day moving average. The market now appears to be finding value in the 540 – 616 range established since early September, as weak US export demand, driven by cheap Russian exports, remains the dominant headwind to higher prices. Grain Market Insider made sales recommendations in the late June rally around 720 and again earlier this fall near 604. With those two sales, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales in the 625 – 650 range. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. The July ’24 contract has been trading at a premium to the Dec ’23 contract since late April, which has steadily increased to about 55 cents, September 29, it traded as far out as 71 ¾ cents. Fund positioning and weak fundamentals have driven Dec ’23 closer to the mid to upper 500 range, and July ’24 to the low to mid 600s. The market risk for July ’24 remains the same as for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for this possibility, and back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels, and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

  • No action is currently recommended for 2025 Chicago Wheat. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted a year 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 Chicago wheat recommendations:

Above: After testing the 50-day moving average, the December contract posted a bearish reversal indicating that resistance is now near 582. Further resistance remains above the market near 604 ½. Without bullish input, the market is likely to trend sideways to lower with initial support near 554 and the next major support level between 547 and 540.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since late July the Dec ’23 contract has been in a downtrend that has had periods of relative stability, but not any significant reversals higher. The market once again found nearby support as it traded to, and held, its recent low of 625 ½. Currently, weak US export demand, driven by cheap Russian exports, remains the dominant headwind, and the market is in need of bullish input to stabilize and rally prices back higher. If a bullish catalyst enters the market to push prices above 700, it may signal that a fall low is in place and would line up with the historical tendency for prices to appreciate into winter and early spring. Grain Market Insider’s strategy is to look for price appreciation going into this winter, as weather becomes a more prominent market mover with an eye on considering additional sales near 750 – 800. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 KC wheat. The July ’24 contract is currently trading near a 25-cent premium to July ’23, which is up significantly from last July’s 60-cent discount. Weak fundamentals have driven spread activity to push July ’23 toward its contract lows, while July ’24 has been able to maintain more of its value. The risk for the July ’24 contract is much like that for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July 660 puts to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 800 to take advantage of elevated prices before they eroded further. If the market receives the needed impetus to move prices back toward 750 – 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: Since breaking through the bottom of the consolidation range at 655, the market has drifted lower and tested minor support, which has held so far with the low at 625 ½. The next level of major support below that remains near 575. Major resistance above the market remains around 690 – 700, with minor resistance near 655.

Winter wheat percent planted (red) versus the 5-year average (green) and last year (brown).

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

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop. After making highs in July, and the subsequent downtrend to the October 2 low of 707 ½, the Dec ‘23 contract has traded mostly sideways with no significant reversal higher. With weak US export demand still the primary impediment to higher prices, the market remains at risk of trending lower if September’s low close of 709 is violated to the downside unless another bullish impetus enters the scene. If that happens and prices begin to push back toward 775, it may signal that a near-term low is in place. Earlier this year, Grain Market Insider made a sales recommendation during the July rally near 820, and with that sale in place, Grain Market Insider’s strategy is to look for price appreciation going into this winter with an eye on considering additional sales around 750 – 800, and again north of 825. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices. Even though the primary strategy is to look for higher prices, Grain Market Insider may also consider a “plan b” in the next couple of weeks if prices grind sideways to lower.

  • No new action is currently recommended for 2024 Minneapolis wheat. In the last three months, the Sep ’24 contract has gone from a 60 – 80 discount to Dec ’23, to a 50-cent premium. Weak fundamentals led bear spreading to drive Dec ’23 in search of new contract lows, while Sep ’24 remains off its low from last May. The risk for the Sep ’24 contract is much like that of Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July KC 660 puts (for their greater liquidity, and correlation to Minneapolis pricing) to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 815 to take advantage of elevated prices. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further. Grain Market Insider will then be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

  • No action is currently recommended for 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: On November 7 the December contract posted a bearish reversal, which may indicate lower prices ahead unless bullish information enters the market to turn prices higher. Currently, upside resistance now lies between 735 and 755, with initial support below the market near 703. The next major level of support is near 669, the May ’21 low.

Other Charts / Weather

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11-06 End of Day: South American weather rallies soybeans.

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • After trading a tight 4-cent range and failing to hold the day’s highs despite strength in both wheat and soybeans, the corn market closed nearly unchanged following choppy trade with the quick harvest pace and hedge pressure limiting any gains.

  • South American weather concerns and sharply higher soybean oil aided the soybean market to double-digit gains and the fifth higher close in a row.

  • Soybean meal was the weak leg of the complex today as traders likely lifted some long positions to take profits from the rally that began in early October. Soybean oil, on the other hand, likely saw some short covering that was sparked by higher energy prices.

  • Despite weak export inspections that were the lowest in 54 weeks and lower Matif wheat futures, all three classes closed the day on the positive side of unchanged, led by Minneapolis. Additionally, after posting large managed fund positions in Friday’s Commitment of Traders report and record large in Minneapolis wheat, a level of short covering may have been at play today and added to the markets’ strength.

  • To see the US 6 – 10 day Temperature and Precipitation Outlooks, and the South American 1-week forecast precipitation maps as a percent of normal, courtesy of the 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. The Dec ’23 contract’s quick move above 500 on October 19, and then below the 50-day moving average of 485 just three sessions later, on October 24, signals that there is heavy resistance above the market near the 100-day moving average, and prices continue to be at risk of drifting sideways to lower. The next major level of support remains near the August low of 462 for front month corn. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. So, for now, the thought process is to hold tight on any further sales recommendations until later this fall or early winter, with the objective of seeking out better pricing opportunities. If the market has not turned around by early winter, then Grain Market Insider may sit tight on the next sales recommendations until spring. If you end up harvesting more bushels than you can store this fall and must move them, consider protecting those sold bushels with either July or September ’24 call options.

  • No new action is recommended for 2024 corn. The Dec ’24 contract has held up better than Dec ’23 as bear spreading over the last several months has brought increased buying interest into Dec ’24 and other further out contract months. Back in late July, the Dec ’23 contract traded up to a 25-cent premium over Dec ’24. Now, Dec ’24 holds about a 30-cent premium over Dec ’23. This bear spreading has held the Dec ’24 price up about 28 cents from its year-to-date low. The risk for 2024 prices is the same as for 2023 prices, which is a continuation of a lower trend without further bullish input. Grain Market Insider is watching for signs of a change in the current trend to look at recommending buying Dec ’24 call options. This past spring, Grain Market Insider recommended buying 560 and 610 Dec ’23 call options ahead of the summer rally and having those in place helped provide confidence to pull the trigger on recommending 2023 sales into that sharp rally, knowing that if corn kept rallying and went to 700 or 800 that the call options would protect those sold bushels.

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

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

  • It was a choppy session in the corn market as prices failed to follow through Friday’s strong technical close. December corn finished the day unchanged with disappointing price action, failing to hold the highs of the session. Hedge pressure still limits the corn market, despite strength seen in both the soybean and wheat market.

  • Corn export demand is still a concern for the market. The USDA did announce a flash sale of corn to Mexico; Mexico bought 289,575 mt (11.4 mb) for the current marketing year. Mexican demand has been good, but these sales are routine and fail to move the market overall.

  • Weekly export inspections for corn were within expectations. Last week, the US inspected 535,000 MT (21.1 mb) for shipment. Total inspections are at 216 mb for the current marketing year, up 23% from last year, and slightly ahead of expected USDA export pace.

  • USDA will release the harvest pace on Monday afternoon with the USDA crop progress report. Last week, 71% of the corn crop was harvested, and expectation should have moved into the last 20% remaining for this week. The harvest pace and selling pressure has limited the corn market.

  • On November 9, the USDA will release the next Crop Production report. The market could be choppy this week with position squaring going into the report. Early expectations are for the USDA to slightly increase corn yield and production, which could add bushels back to an already heavy supply picture.

Above: On November 3, the December contract posted a bullish key reversal with a low of 468. The 50-day moving average is just above the market at 484, and the market is oversold. If prices can push over 484, they may move higher to test 500 – 509 ½. If not, support below the market rests between 468 and 460. 

Corn Managed Money Funds net position as of Tuesday, Oct. 31. Net position in Green versus price in Red. Managers net sold 44,002 contracts between Oct. 25 – 31, bringing their total position to a net short 144,432 contracts.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. At the end of August, the soybean market turned lower and didn’t find any significant buying interest until it traded down to 1251 in early October. Since then, the nearby contract has traded through nearby resistance and the 50-day moving average and may be poised to test the August high. Looking back, since last May, nearby soybeans have been in a range from 1435 up top to 1251 down below. Last summer, Grain Market Insider did make two sales recommendations in the 1310 – 1360 price window versus Nov ’23. Given that those sales recommendations were made and given that now is not the time of year to be making many sales, if any, Grain Market Insider is content to hold tight on any further sales recommendations until later this fall or early winter. The focus for strategy right now is to be on the lookout for any call option buying opportunities. If you end up harvesting more bushels than you can store this fall, consider protecting any sold bushels with July or Aug ’24 call options. 

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

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

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

  • Soybeans ended the day firmly higher for the fifth consecutively higher close. Support has mainly come from higher soybean meal, tight US ending stocks, and a concerning forecast for South American weather. Soybean oil was higher today but overall has trended lower since August.

  • Export sales have picked up in this period that Brazil is running low on soybeans to ship as they are planting, and another sale was reported today of 126,000 metric tons for delivery to China during the 23/24 marketing year. The increase in export demand has been complemented by the uptick in domestic crush demand.

  • Export inspections today were also strong with 2,085k tons reported for soybeans which was near the upper range of analyst expectations. Thursday’s WASDE report may, however, show a decrease in exports as they are still behind last year. Analysts are expecting that the USDA might decrease the national soybean yield but also decrease exports which would leave the carryout potentially unchanged at 220 mb.

  • A large part of this recent rally can likely be attributed to poor weather conditions in South America with Argentina and northern Brazil still dry, but southern Brazil receiving too much rain and flooding. So far, weather models are forecasting more of the same with hotter temperatures to come. Some Brazilian producers are either replanting their soybeans or opting to rip them up in favor of planting cotton.

Above: On November 3, January soybeans maintained strength above the 50-day moving average and closed above 1334 resistance, which now has become support. With the strong close, the market is poised to test 1370 – 1385. Below the market support is now between 1334 and the 50-day moving average, and again down near 1300.

Soybean Managed Money Funds net position as of Tuesday, Oct. 31. Net position in Green versus price in Red. Money Managers net bought 15,400 contracts between Oct. 25 – 31, bringing their total position to a net long 23,153 contracts.

Wheat

Market Notes: Wheat

  • After trading both sides of unchanged, wheat managed a positive close despite a slightly higher US Dollar, poor export inspections (71,068 mt), and lower Matif futures. This may signal that wheat is trying to find a bottom and support at these lower levels.

  • Traders are anticipating this week’s USDA report. With Russia estimating their own wheat crop at 93 mmt as of last week, it is possible that the USDA could make an upward revision from their 85 mmt crop estimate.

  • Brazil is said to have 2.5 mmt of feed wheat on hand that is very competitive on the export market. Reportedly, it is around $212 per mt on a FOB basis for December shipment.

  • According to the UN Food and Agricultural Organization, winter wheat growing areas in the northern hemisphere are expected to shrink in 2024 as a reflection of lower crop prices.

  • Odesa was again attacked by Russia with missiles and drones. This damaged the port and wounded eight people, but the market seemed to brush it off as old news.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. After making a high in late July, the Dec ’23 contract trended lower until finding support at 540 on September 29, from which it rallied back, briefly piercing 600 and the 50-day moving average. The market now appears to be finding value in the 540 – 616 range established since early September, as weak US export demand, driven by cheap Russian exports, remains the dominant headwind to higher prices. Grain Market Insider made sales recommendations in the late June rally around 720 and again earlier this fall near 604. With those two sales, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales in the 625 – 650 range. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. The July ’24 contract has been trading at a premium to the Dec ’23 contract since late April, which has steadily increased to about 55 cents, September 29, it traded as far out as 71 ¾ cents. Fund positioning and weak fundamentals have driven Dec ’23 closer to the mid to upper 500 range, and July ’24 to the low to mid 600’s. The market risk for July ’24 remains the same as for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for this possibility, and back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward June’s highs, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

  • No action is currently recommended for 2025 Chicago Wheat. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted a year 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 Chicago wheat recommendations:

Above: On October 20, the December contract posted a bearish reversal after making a new recent high of 604 ½.  The market has retreated and solidified resistance above the market that now stands between 604 ½ and 618.  Without bullish input, the market is likely to trend sideways to lower with the next major support level between 547 and 540.

Chicago Wheat Managed Money Funds net position as of Tuesday, Oct. 31. Net position in Green versus price in Red. Money Managers net sold 9,321 contracts between Oct. 25 – 31, bringing their total position to a net short 101,575 contracts.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since late July the Dec ’23 contract has been in a downtrend that has had periods of relative stability, but not any significant reversals higher. The market once again found nearby support as it traded to, and held, its recent low of 625 ½. Currently, weak US export demand, driven by cheap Russian exports, remains the dominant headwind, and the market is in need of bullish input to stabilize and rally prices back higher. If a bullish catalyst enters the market to push prices above 700, it may signal that a fall low is in place and would line up with the historical tendency for prices to appreciate into winter and early spring. Grain Market Insider’s strategy is to look for price appreciation going into this winter, as weather becomes a more prominent market mover with an eye on considering additional sales near 750 – 800. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 KC wheat. The July ’24 contract is currently trading near a 25-cent premium to July ’23, which is up significantly from last July’s 60-cent discount. Weak fundamentals have driven spread activity to push July ’23 toward its contract lows, while July ’24 has been able to maintain more of its value. The risk for the July ’24 contract is much like that for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July 660 puts to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 800 to take advantage of elevated prices before they eroded further. If the market receives the needed impetus to move prices back toward 750 – 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: Since breaking through the bottom of the consolidation range at 655, the market has drifted lower and tested minor support, which has held so far with the low at 625 ½. The next level of major support below that remains near 575. Major resistance above the market remains around 690 – 700, with minor resistance near 655.

KC Wheat Managed Money Funds net position as of Tuesday, Oct. 31. Net position in Green versus price in Red. Money Managers net sold 3,628 contracts between Oct. 25 – 31, bringing their total position to a net short 32,622 contracts.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop. After making highs in July, and the subsequent downtrend to the October 2 low of 707 ½, the Dec ‘23 contract has traded mostly sideways with no significant reversal higher. With weak US export demand still the primary impediment to higher prices, the market remains at risk of trending lower if September’s low close of 709 is violated to the downside unless another bullish impetus enters the scene. If that happens and prices begin to push back toward 775, it may signal that a near-term low is in place. Earlier this year, Grain Market Insider made a sales recommendation during the July rally near 820, and with that sale in place, Grain Market Insider’s strategy is to look for price appreciation going into this winter with an eye on considering additional sales around 750 – 800, and again north of 825. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices. Even though the primary strategy is to look for higher prices, Grain Market Insider may also consider a “plan b” in the next couple of weeks if prices grind sideways to lower.

  • No new action is currently recommended for 2024 Minneapolis wheat. In the last three months, the Sep ’24 contract has gone from a 60 – 80 discount to Dec ’23, to a 50-cent premium. Weak fundamentals led bear spreading to drive Dec ’23 in search of new contract lows, while Sep ’24 remains off its low from last May. The risk for the Sep ’24 contract is much like that of Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July KC 660 puts (for their greater liquidity, and correlation to Minneapolis pricing) to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 815 to take advantage of elevated prices. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further. Grain Market Insider will then be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: Since the last week of October, the December contract has resumed the downward trend that has been in place since the end of July and found nearby support near 703. If fresh bullish news doesn’t enter the market, prices could slide to the next level of support near 669, the May ’21 low. If prices turn higher, initial resistance remains between 745 – 760.

Minneapolis Wheat Managed Money Funds net position as of Tuesday, Oct. 31. Net position in Green versus price in Red. Money Managers net sold 3,801 contracts between Oct. 25 – 31, bringing their total position to a net short 28,882 contracts.

Other Charts / Weather

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

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

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11-03-23 End of Day: A Six-Week Low in the US Dollar Helps Drive Market Higher

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Technical buying and short covering dominated the corn market as money flow moved into the grain markets, sparked by a sharply lower US dollar, and led December corn to post a bullish reversal on the day.

  • Despite the sharp drop in soybean oil and lower crude oil, the report of another sale totaling 131k mt of soybeans to unknown destinations, along with sharply higher soybean meal and the lower US dollar helped soybeans rally to double-digit gains across the board.

  • Carryover strength from corn and beans, a reduction in world wheat stocks by FAO-AMIS, and the weak US dollar all contributed to the gains in the wheat complex that may have posted near-term lows if the rally can be sustained.

  • A weaker than expected US employment report rallied the stock market and interest rate futures (lowered int. rates) and pressed the US dollar lower to its lowest level since late mid-September. The break in the dollar in turn lent support to the grain markets. The weaker employment report reflects a weaker economy and reduces the need for additional rate hikes by the Federal Reserve.

  • To see the US 7-day precipitation forecast,  the South American 7-day total accumulated precipitation and 1-week forecast precipitation maps, courtesy of the 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. On October 19, December corn closed above 500 for the first time since the end of July. While the market was unable to follow through to the upside, the overall trend remains positive with successively higher lows, from mid-August. If the market can maintain a close above 500 and the 100-day moving average, it may aim to test resistance near 547. Otherwise, if the market closes below the 50-day moving average near 485, it may run the risk of continuing to trend sideways to lower, with a worst-case scenario being a sideways to lower trend into late November, or even early January. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. So, for now, the thought process is to hold tight on any further sales recommendations until later this fall or early winter, with the objective of seeking out better pricing opportunities. If the market has not turned around by early winter, then Grain Market Insider may sit tight on the next sales recommendations until spring. If you end up harvesting more bushels than you can store this fall and must move them, consider protecting those sold bushels with either July or September ’24 call options. 

  • No new action is recommended for 2024 corn. The Dec ’24 contract has held up better than Dec ’23 as bear spreading over the last several months has brought increased buying interest into Dec ’24 and other further out contract months. Back in late July, the Dec ’23 contract traded up to a 25-cent premium over Dec ’24. Now, Dec ’24 holds about a 30 cent premium over Dec ’23. This bear spreading has held the Dec ’24 price up about 28 cents from its year-to-date low. The risk for 2024 prices is the same as for 2023 prices, which is a continuation of a lower trend without further bullish input. Grain Market Insider is watching for signs of a change in the current trend to look at recommending buying Dec ’24 call options. This past spring, Grain Market Insider recommended buying 560 and 610 Dec ’23 call options ahead of the summer rally and having those in place helped provide confidence to pull the trigger on recommending 2023 sales into that sharp rally, knowing that if corn kept rallying and went to 700 or 800 that the call options would protect those sold bushels.

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

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

  • Short covering and technical buying helped pull corn futures higher to end the week, as grain markets saw good money flow during Friday’s session. Overnight, December corn futures tested and held the September low and a strong break in the US dollar triggered fund short liquidation. Dec corn gained 7 ¼ cents on the day but was 3 ½ cents lower on the week.

  • The US dollar broke over a full basis point lower on Friday as the move lower in the dollar was triggered by weakness in today’s employment report and a more dovish (friendly) tone by the Fed regarding interest rates going forward. The Dollar Index posted a weekly bearish reversal on charts, which could lead to additional long liquidation.

  • Corn futures did post a technical reversal on daily charts during today’s session but failed at nearby overhead resistance. Trade early next week and the potential follow-through in price gains will be very key or sellers could take over the market again.

  • Price gains in the corn market were limited by continued hedge pressure. With harvest moving into the last 15% to be completed, fresh supplies of better-than-expected yields in some areas are hitting the cash market.

  • On November 9, the USDA will release the next crop production report. The market could be choppy next week with position squaring going into the report. Early expectations are for the USDA to slightly increase corn yield and production, which could add bushels back to an already heavy supply picture.

Above: On November 3, the December contract posted a bullish key reversal with a low of 468. The 50-day moving average is just above the market at 484, and the market is oversold. If prices can push over 484, they may move higher to test 500 – 509 ½. If not, support below the market rests between 468 and 460. 

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. At the end of August, the soybean market turned lower and didn’t find any significant buying interest until it traded down to 1251 in early October. Since then, the nearby contract has traded through nearby resistance and the 50-day moving average and may be poised to test the August high. Looking back, since last May, nearby soybeans have been in a range from 1435 up top to 1251 down below. Last summer, Grain Market Insider did make two sales recommendations in the 1310 – 1360 price window versus Nov ’23. Given that those sales recommendations were made and given that now is not the time of year to be making many sales, if any, Grain Market Insider is content to hold tight on any further sales recommendations until later this fall or early winter. The focus for strategy right now is to be on the lookout for any call option buying opportunities. If you end up harvesting more bushels than you can store this fall, consider protecting any sold bushels with July or Aug ’24 call options. 

  • No action is recommended for the 2024 crop.  Nov ’24 has traded at a discount to the 2023 crop for nearly its entire contract life and that discount extended out to 142 versus the Jan ’24 contract in late July, with it recently trading between 17 ¾ and 66 cents.  Since July, the Nov ’24 contract has mostly traded between 1250 and 1320. To date, Grain Market Insider has not recommended any sales for next year’s soybean crop. First sales targets will probably be early winter at the soonest. Currently, Grain Market Insider’s focus is also on watching for any opportunities to recommend buying call options.

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

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

  • Soybeans closed firmly higher to end the week following strong gains yesterday, as well. The US dollar moved sharply lower which helped support the grain complex today. Soybean meal posted huge gains with the Jan contract up 4%. For the week, Nov soybeans gained 30-1/4, Dec meal lost 0.30, and Dec bean oil lost 2.91.

  • This was a good week for export demand with a solid export inspections number, good export sales yesterday of 37.1 mb for 23/24, and huge shipments of 73.2 mb which were primarily to China. Today, private exporters also reported sales of 131,150 mt of soybeans for delivery to unknown destinations for the 23/24 year.

  • US soybean yields are coming under more scrutiny as many producers report better than expected corn yields, but subpar soybean yields. StoneX recently revised their bean yield estimates lower than their last month’s guess, and next week the USDA will update their estimate in the WASDE report, which has the potential to be reduced.

  • In Brazil, weather is still a concern with the 10-day forecast turning very dry again. Argentina has received some beneficial rains, but southern Brazil is still too wet. There have been reports in Brazil of producers recently tearing up planted soybeans in favor of cotton.

Above: On November 3, January soybeans maintained strength above the 50-day moving average and closed above 1334 resistance, which now has become support. With the strong close, the market is poised to test 1370 – 1385. Below the market support is now between 1334 and the 50-day moving average, and again down near 1300.

Wheat

Market Notes: Wheat

  • The US Dollar Index was sharply lower today. As of this writing, it is down 1.07 at 105.05; this is quite a dip and certainly helped the grain markets to rally today with strong gains in corn and wheat. Soybeans were the leader with more than 20-cent gains and helped to pull wheat higher too.

  • All three US wheat futures classes could be considered at or near oversold levels, and with today’s move higher stochastics are indicating potential buy signals. If the rally can be sustained on Monday, a near-term bottom might be in.

  • Also helping wheat today was a cut to the estimate of world wheat stocks by FAO-AMIS. For 23/24 the projection is now at 315.1 mmt vs 319.3 mmt last month. With the next USDA report due for release this upcoming Thursday, traders will have to wait and see if they make any sort of similar revision.

  • While they have received recent rains that have benefited soil moisture levels, it hasn’t been enough to reverse the drought in Argentina. According to the Buenos Aires Grain Exchange, Argentina’s wheat crop is now forecasted down 4.9% to 15.4 mmt, vs 16.2 mmt previously. There could also be further cuts if the frost in the forecast is accurate.

  • Rain in France is slowing fieldwork, and as of October 30th, an estimated 62% of their soft wheat crop is planted. According to FranceAgriMer, that is down from both last year and the five-year average. The short-term forecast may call for more rain, causing continued delays.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. Since making a mid-summer high in late July, the Dec ’23 contract has been in a downtrend, but after finding support at 540 on September 29, the market has steadily rallied, briefly piercing 600 and the 50-day moving average.  With weak US export demand driven by cheap Russian exports being the dominant headwind, it appears that prices may be finding value in the 540 – 616 range established since early September.  Grain Market Insider made sales recommendations in the late June rally around 720, and again earlier this fall near 604. With those two sales, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales in the 625 – 650 range. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. The July ’24 contract has been trading at a premium to the Dec ’23 contract since late April, which has steadily increased to about 55 cents, September 29, it traded as far out as 71 ¾ cents. Fund positioning and weak fundamentals have driven Dec ’23 closer to the mid to upper 500 range, and July ’24 to the low to mid 600’s. The market risk for July ’24 remains the same as for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for this possibility, and back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward June’s highs, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

  • No action is currently recommended for 2025 Chicago Wheat. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted a year 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 Chicago wheat recommendations:

Above: On October 20, the December contract posted a bearish reversal after making a new recent high of 604 ½.  The market has retreated and solidified resistance above the market that now stands between 604 ½ and 618.  Without bullish input, the market is likely to trend sideways to lower with the next major support level between 547 and 540.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. With prices falling below the October 12 low of 655 ¼, the Dec ’23 contract continues to search for support as it resumes the downtrend that has been in place since late July. Currently, weak US export demand, driven by cheap Russian exports, remains the dominant headwind, and the market is in need of bullish input to stabilize and rally prices back higher. If a bullish catalyst enters the market to push prices above 700, it may signal that a fall low is in place and would line up with the historical tendency for prices to appreciate into winter and early spring. Grain Market Insider’s strategy is to look for price appreciation going into this winter, as weather becomes a more prominent market mover with an eye on considering additional sales near 750 – 800. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 KC wheat. The July ’24 contract is currently trading near a 25-cent premium to July ’23, which is up significantly from last July’s 60-cent discount. Weak fundamentals have driven spread activity to push July ’23 toward its contract lows, while July ’24 has been able to maintain more of its value. The risk for the July ’24 contract is much like that for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July 660 puts to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 800 to take advantage of elevated prices before they eroded further. If the market receives the needed impetus to move prices back toward 750 – 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: Since breaking through the bottom of the consolidation range at 655, the market has drifted lower and has now tested minor support near 630, which has held so far. The next level of major support below that remains near 575. Major resistance above the market remains around 690 – 700, with minor resistance near 655.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop.  After making highs in July, and the subsequent downtrend to the October 2 low of 707 ½, the Dec ‘23 contract has traded mostly sideways with no significant reversal higher. With weak US export demand still the primary impediment to higher prices, the market remains at risk of trending lower if 707 ½ is violated to the downside unless another bullish impetus enters the scene. If that happens and prices begin to push back toward 775, it may signal that a near-term low is in place. Earlier this year, Grain Market Insider made a sales recommendation during the July rally near 820, and with that sale in place, Grain Market Insider’s strategy is to look for price appreciation going into this winter with an eye on considering additional sales around 750 – 800, and again north of 825. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices. Even though the primary strategy is to look for higher prices, Grain Market Insider may also consider a “plan b” in the next couple of weeks if prices grind sideways to lower.

  • No new action is currently recommended for 2024 Minneapolis wheat.  In the last three months, the Sep ’24 contract has gone from a 60 – 80 discount to Dec ’23, to a 50-cent premium. Weak fundamentals led bear spreading to drive Dec ’23 in search of new contract lows, while Sep ’24 remains off its low from last May. The risk for the Sep ’24 contract is much like that of Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July KC 660 puts (for their greater liquidity, and correlation to Minneapolis pricing) to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 815 to take advantage of elevated prices. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further. Grain Market Insider will then be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: Since the last week of October, the December contract has resumed the downward trend that has been in place since the end of July and found nearby support near 703. If fresh bullish news doesn’t enter the market, prices could slide to the next level of support near 669, the May ’21 low. If prices turn higher, initial resistance remains between 745 – 760.

Other Charts / Weather

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

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

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

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

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

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11-02-23 End of Day: Technical Selling Presses Corn Lower Despite Higher Beans and Wheat

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Despite decent ethanol production, lackluster export demand, harvest pressure, and continued technical selling dominated the corn market, pressing it to its lowest level since late September.

  • Firm export sales, record September crush numbers, and analysts’ expectations of lower yields ahead gave the soybean market a strong push to end higher on the day, despite a mixed close for the products and a loss of 17 cents in December Board crush margins.

  • Disappointing soybean meal exports likely led to profit taking and a lower close in front month meal after trading higher overnight, while reports of the lowest soybean oil stocks since 2017 and strong crude oil supported bean oil to a positive close after printing a new 4-month low.  

  • A weak US dollar, renewed supply concerns from Ukraine, and a reduction in Russian wheat exports, all added levels of support to the wheat complex that opened weak but settled on the positive side of unchanged in all three classes.

  • Falling treasury yields in the overnight, carried over to the day session and weighed heavily on the US dollar, which gapped lower as trading opened, giving up all of yesterday’s gains.  The lower dollar likely provided support to US commodity markets.

  • To see the November US Drought Monitor and weekly change maps, courtesy of the NDMC and the University of Nebraska, and the South American 1-week forecast precipitation maps for South America, courtesy of the 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. On October 19, December corn closed above 500 for the first time since the end of July. While the market was unable to follow through to the upside, the overall trend remains positive with successively higher lows, from mid-August. If the market can maintain a close above 500 and the 100-day moving average, it may aim to test resistance near 547. Otherwise, if the market closes below the 50-day moving average near 485, it may run the risk of continuing to trend sideways to lower, with a worst-case scenario being a sideways to lower trend into late November, or even early January. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. So, for now, the thought process is to hold tight on any further sales recommendations until later this fall or early winter, with the objective of seeking out better pricing opportunities. If the market has not turned around by early winter, then Grain Market Insider may sit tight on the next sales recommendations until spring. If you end up harvesting more bushels than you can store this fall and must move them, consider protecting those sold bushels with either July or September ’24 call options. 

  • No new action is recommended for 2024 corn. The Dec ’24 contract has held up better than Dec ’23 as bear spreading over the last several months has brought increased buying interest into Dec ’24 and other further out contract months. Back in late July, the Dec ’23 contract traded up to a 25-cent premium over Dec ’24. Now, Dec ’24 holds about a 30 cent premium over Dec ’23. This bear spreading has held the Dec ’24 price up about 28 cents from its year-to-date low. The risk for 2024 prices is the same as for 2023 prices, which is a continuation of a lower trend without further bullish input. Grain Market Insider is watching for signs of a change in the current trend to look at recommending buying Dec ’24 call options. This past spring, Grain Market Insider recommended buying 560 and 610 Dec ’23 call options ahead of the summer rally and having those in place helped provide confidence to pull the trigger on recommending 2023 sales into that sharp rally, knowing that if corn kept rallying and went to 700 or 800 that the call options would protect those sold bushels.

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

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

  • Weak price action triggered by hedge pressure and technical selling weighed on corn futures during the session, despite overall commodity market strength on Thursday. December corn lost 5 cents and posted its lowest close since September 27, 2021.

  • Weekly export sales for corn were within expectations but lackluster. The USDA reported new sales of 748,000 mt (29,5 mb) for the current marketing year. Mexico was the top buyer of US corn last week. Year-over-year, corn export sales are up 26%, but still behind the pace needed to reach USDA’s marketing year export targets.

  • Ethanol margins should remain friendly and supportive of the corn market in the near term. Ethanol production has remained strong, but ethanol stocks are historically low. The combination should keep the ethanol processor active in the corn market, and in need of supply.

  • The weak price action and negative close will likely keep short sellers active in the corn market. The downside trend under the December contract points to a test of the fall low and possibly the 460 level if selling pressure continues.

  • South American weather is forecasted to stay hot and dry for areas of Brazil, and parts of Argentina are seeing signs of last year’s drought persist. While South American weather is still in its early stages, weather will grow of more importance in the weeks ahead. If soybean planting stays delayed, that could push planting of the key 2nd corn crop past the ideal weather window.

Above: The market has been drifting lower since trading up to 509 ½ and failing on October 20, and upside resistance has moved lower with it. Currently, nearby resistance rests between 476 and 486, with major support remaining near 460. Below 460, the next level of support may come in between 440 and 414.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. At the end of August, the soybean market turned lower and didn’t find any significant buying interest until it traded down to 1251 in early October. Since then, the nearby contract rallied through resistance near 1287 on its way to the recent high of 1334 and testing the 50-day moving average. Looking back, since last May, nearby soybeans have been in a range from 1435 up top to 1251 down below. Last summer, Grain Market Insider did make two sales recommendations in the 1310 – 1360 price window versus Nov ’23. Given that those sales recommendations were made and given that now is not the time of year to be making many sales, if any, Grain Market Insider is content to hold tight on any further sales recommendations until later this fall or early winter. The focus for strategy right now is to be on the lookout for any call option buying opportunities. If you end up harvesting more bushels than you can store this fall, consider protecting any sold bushels with July or Aug ’24 call options. 

  • No action is recommended for the 2024 crop.  Nov ’24 has traded at a discount to the 2023 crop for nearly its entire contract life and that discount extended out to 142 versus the Jan ’24 contract in late July, with it recently trading between 17 ¾ and 66 cents.  Since July, the Nov ’24 contract has mostly traded between 1250 and 1320 and is currently testing the bottom end of that range. To date, Grain Market Insider has not recommended any sales for next year’s soybean crop. First sales targets will probably be early winter at the soonest. Currently, Grain Market Insider’s focus is also on watching for any opportunities to recommend buying call options.

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

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

  • Soybeans ended the day firmly higher following good export sales and some analyst expectations that the national soybean yield may decrease. Crude oil gained over two dollars a barrel today which, along with gains in palm oil, supported soybean oil. Soybean meal was bear spread with the front months lower but deferred contracts higher.

  • Soybean export sales have begun picking up with China as a more active buyer, and today’s export sales report showed increases of 37.1 mb for the 23/24 marketing year which was on the higher end of analyst expectations. Shipments were huge at 73.2 mb and much higher than the 32.6 mb needed on average to meet the USDA’s expectations.

  • Today’s Fats and Oils report showed September soybean crush at 175 mb, in line with analysts’ expectations and the largest September crush on record. Soybean oil stocks were down 25% from a year ago, but soybean meal stocks were reportedly 18% higher than a year ago despite the export demand.

  • In South America, excessive rain in the southern region and dryness in the northern regions of Brazil have some analysts expecting that the final soybean crop will be closer to 150 mmt rather than the 163 mmt that the USDA has estimated. Lower South American production coupled with tight US ending stocks could give soybeans momentum to rally.

Above: In the middle of October, the market traded up to 1334 and pierced the upper end of resistance, and the 50-day moving average, before retreating lower. If the market can maintain a close above resistance at 1334, it would be poised to make a run to test 1370. Otherwise, initial support to the downside may be found near 1300 and again near 1273. Key support for the move remains down near 1250.

Wheat

Market Notes: Wheat

  • Wheat managed to make small gains in all three US classes. The US Dollar Index gapped lower after yesterday’s Fed comments indicated that interest rates would be kept unchanged. This may have eased some pressure on the wheat market, allowing for small, but welcomed gains in price. If the US dollar continues to trend lower, the export market may begin to pick up, providing more long-term support.

  • The USDA reported export sales of 10.1 mb of wheat, bringing the 23/24 total to 417.5 mb, down 7% from last year. About 14.2 mb of wheat need to be shipped each week to meet the USDA’s export goal of 700 mb, but shipments last week of just 3.7 mb were well below that figure.

  • Rumors continue to circulate that China is looking for US SRW wheat pricing out of the Gulf, and so far there has been no confirmation of any purchases. However, they have recently purchased a combined total of 4.5 mmt from France and Australia.

  • There is renewed concern about grain flow out of Ukraine. Apparently, Russia has planted explosives along Black Sea shipping lanes. In addition, Ukraine has new export registration and license requirements that may slow down exports of wheat and corn.

  • SovEcon reduced their estimate of Russian wheat exports to 48.8 mmt from 49.2 mmt previously. Reportedly, wheat export sales have significantly declined recently, and it may be tied, in part, to the government’s attempt to limit exports at these recent low levels. In addition, the Russian agriculture ministry is proposing a six-month ban on durum wheat exports from December 1 – May 31.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. Since making a mid-summer high in late July, the Dec ’23 contract has been in a downtrend, but after finding support at 540 on September 29, the market has steadily rallied, briefly piercing 600 and the 50-day moving average.  With weak US export demand driven by cheap Russian exports being the dominant headwind, it appears that prices may be finding value in the 540 – 616 range established since early September.  Grain Market Insider made sales recommendations in the late June rally around 720, and again earlier this fall near 604. With those two sales, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales in the 625 – 650 range. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. The July ’24 contract has been trading at a premium to the Dec ’23 contract since late April, which has steadily increased to about 55 cents, September 29, it traded as far out as 71 ¾ cents. Fund positioning and weak fundamentals have driven Dec ’23 closer to the mid to upper 500 range, and July ’24 to the low to mid 600’s. The market risk for July ’24 remains the same as for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for this possibility, and back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward June’s highs, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

  • No action is currently recommended for 2025 Chicago Wheat. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted a year 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 Chicago wheat recommendations:

Above: On October 20, the December contract posted a bearish reversal after making a new recent high of 604 ½.  The market has retreated and solidified resistance above the market that now stands between 604 ½ and 618.  Without bullish input, the market is likely to trend sideways to lower with the next major support level between 547 and 540.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. With prices falling below the October 12 low of 655 ¼, the Dec ’23 contract continues to search for support as it resumes the downtrend that has been in place since late July. Currently, weak US export demand, driven by cheap Russian exports, remains the dominant headwind, and the market is in need of bullish input to stabilize and rally prices back higher. If a bullish catalyst enters the market to push prices above 700, it may signal that a fall low is in place and would line up with the historical tendency for prices to appreciate into winter and early spring. Grain Market Insider’s strategy is to look for price appreciation going into this winter, as weather becomes a more prominent market mover with an eye on considering additional sales near 750 – 800. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 KC wheat. The July ’24 contract is currently trading near a 25-cent premium to July ’23, which is up significantly from last July’s 60-cent discount. Weak fundamentals have driven spread activity to push July ’23 toward its contract lows, while July ’24 has been able to maintain more of its value. The risk for the July ’24 contract is much like that for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July 660 puts to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 800 to take advantage of elevated prices before they eroded further. If the market receives the needed impetus to move prices back toward 750 – 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: Since breaking through the bottom of the consolidation range at 655, the market has drifted lower and has now tested minor support near 630, which has held so far. The next level of major support below that remains near 575. Major resistance above the market remains around 690 – 700, with minor resistance near 655.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop.  After making highs in July, and the subsequent downtrend to the October 2 low of 707 ½, the Dec ‘23 contract has traded mostly sideways with no significant reversal higher. With weak US export demand still the primary impediment to higher prices, the market remains at risk of trending lower if 707 ½ is violated to the downside unless another bullish impetus enters the scene. If that happens and prices begin to push back toward 775, it may signal that a near-term low is in place. Earlier this year, Grain Market Insider made a sales recommendation during the July rally near 820, and with that sale in place, Grain Market Insider’s strategy is to look for price appreciation going into this winter with an eye on considering additional sales around 750 – 800, and again north of 825. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices. Even though the primary strategy is to look for higher prices, Grain Market Insider may also consider a “plan b” in the next couple of weeks if prices grind sideways to lower.

  • No new action is currently recommended for 2024 Minneapolis wheat.  In the last three months, the Sep ’24 contract has gone from a 60 – 80 discount to Dec ’23, to a 50-cent premium. Weak fundamentals led bear spreading to drive Dec ’23 in search of new contract lows, while Sep ’24 remains off its low from last May. The risk for the Sep ’24 contract is much like that of Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July KC 660 puts (for their greater liquidity, and correlation to Minneapolis pricing) to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 815 to take advantage of elevated prices. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further. Grain Market Insider will then be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: Since the last week of October, the December contract has resumed the downward trend that has been in place since the end of July and found nearby support near 703. If fresh bullish news doesn’t enter the market, prices could slide to the next level of support near 669, the May ’21 low. If prices turn higher, initial resistance remains between 745 – 760.

Other Charts / Weather

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

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

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11-01-23 End of Day: Wheat rebounds, soybeans higher, corn slides

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Sellers remain a dominant force in the corn market with harvest pressure continuing to weigh on prices and a general lack of fresh bullish news to bring in new buying interest.

  • After trading lower on this morning’s open, soybeans recovered along with meal to close 10 ¼ cents off the low and 4 ½ cents higher, despite sharply lower bean oil.

  • While the improving weather outlook for Argentina spurred some profit taking in soybean meal, higher domestic demand, and the prospect for increased exports, it kept the market supported as it recovered from early losses to close the day just 60 cents below unchanged. Whereas, soybean oil resumed its slide lower as it broke through the June 22 low of 51.36, despite strong biofuel use numbers.

  • Despite strength in the US dollar and weakness in the corn market, the wheat complex staged a bit of a recovery today led by KC and Chicago, with short covering spread action possibly weighing on Minneapolis which finished mixed and near unchanged across the board.

  • The US dollar followed through on yesterday’s strong gains to post its highest level in four weeks before retreating and is within striking distance of testing October’s high. Much of the dollar’s strength is coming from generally weak economic data out of Europe.  

  • To see the November US Temperature and Precipitation Outlooks, and the South American 1-week total precipitation for South America, courtesy of the NWS, CPC, 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. On October 19, December corn closed above 500 for the first time since the end of July. While the market was unable to follow through to the upside, the overall trend remains positive with successively higher lows, from mid-August. If the market can maintain a close above 500 and the 100-day moving average, it may aim to test resistance near 547. Otherwise, if the market closes below the 50-day moving average near 485, it may run the risk of continuing to trend sideways to lower, with a worst-case scenario being a sideways to lower trend into late November, or even early January. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. So, for now, the thought process is to hold tight on any further sales recommendations until later this fall or early winter, with the objective of seeking out better pricing opportunities. If the market has not turned around by early winter, then Grain Market Insider may sit tight on the next sales recommendations until spring. If you end up harvesting more bushels than you can store this fall and must move them, consider protecting those sold bushels with either July or September ’24 call options. 

  • No new action is recommended for 2024 corn. The Dec ’24 contract has held up better than Dec ’23 as bear spreading over the last several months has brought increased buying interest into Dec ’24 and other further out contract months. Back in late July, the Dec ’23 contract traded up to a 25-cent premium over Dec ’24. Now, Dec ’24 holds about a 30 cent premium over Dec ’23. This bear spreading has held the Dec ’24 price up about 28 cents from its year-to-date low. The risk for 2024 prices is the same as for 2023 prices, which is a continuation of a lower trend without further bullish input. Grain Market Insider is watching for signs of a change in the current trend to look at recommending buying Dec ’24 call options. This past spring, Grain Market Insider recommended buying 560 and 610 Dec ’23 call options ahead of the summer rally and having those in place helped provide confidence to pull the trigger on recommending 2023 sales into that sharp rally, knowing that if corn kept rallying and went to 700 or 800 that the call options would protect those sold bushels.

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

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

  • Corn prices saw weak price action as futures broke support under the most recent trading range. December futures lost 3 ¾ cents but held the next level of support at 475 on the close. Corn prices remain pressured by the ongoing harvest, and the lack of fresh news overall to bring buying into the market.

  • Weekly ethanol output rose to an 11-week high at 1.052 million barrels/day for the week ending October 27. This is up from last week and the multi-year average. Last week ethanol production used 101.7 mb of corn, up from last week, but slightly below last year’s levels. Ethanol stocks remain low at 21.0 million barrels. This was the lowest week for ethanol stocks since December 2021.

  • Demand overall remains a concern in the corn market. The USDA will release weekly export sales on Thursday morning. Last week saw a jump in sales to 1.35 mmt for corn. The market will be watching to see if that stronger sales trend can continue.

  • The weak price action and negative close will likely keep short sellers active in the corn market. The downside trend under the December contract points to a test of the fall low and possibly the 460 level if selling pressure continues.

  • South American weather is forecasted to stay dry and hot for areas of Brazil, and parts of Argentina are seeing signs of last year’s drought persist. While South American weather is still in its early stages, weather will grow more important in the weeks ahead. If soybean planting stays delayed, that could push planting of the key 2nd corn crop past the ideal weather window.

Above: The corn market has largely been rangebound since the beginning of August, with only minor short covering moving the market higher until recently. With the market trading up to 509 ½ and failing, the next major resistance level now sits at that recent high, with further resistance near the July 31 high of 516 ¼. If the market retreats, the next major support level remains near 460.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. At the end of August, the soybean market turned lower and didn’t find any significant buying interest until it traded down to 1251 in early October. Since then, the nearby contract rallied through resistance near 1287 on its way to the recent high of 1334 and testing the 50-day moving average. Looking back, since last May, nearby soybeans have been in a range from 1435 up top to 1251 down below. Last summer, Grain Market Insider did make two sales recommendations in the 1310 – 1360 price window versus Nov ’23. Given that those sales recommendations were made and given that now is not the time of year to be making many sales, if any, Grain Market Insider is content to hold tight on any further sales recommendations until later this fall or early winter. The focus for strategy right now is to be on the lookout for any call option buying opportunities. If you end up harvesting more bushels than you can store this fall, consider protecting any sold bushels with July or Aug ’24 call options. 

  • No action is recommended for the 2024 crop.  Nov ’24 has traded at a discount to the 2023 crop for nearly its entire contract life and that discount extended out to 142 versus the Jan ’24 contract in late July, with it recently trading between 17 ¾ and 66 cents.  Since July, the Nov ’24 contract has mostly traded between 1250 and 1320 and is currently testing the bottom end of that range. To date, Grain Market Insider has not recommended any sales for next year’s soybean crop. First sales targets will probably be early winter at the soonest. Currently, Grain Market Insider’s focus is also on watching for any opportunities to recommend buying call options.

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

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

  • Soybeans traded either side of unchanged today but ultimately ended higher. There was early support from both soybean meal and oil, but both fell with soybean oil closing sharply lower due to a decline in crude oil that followed the Fed’s rate announcement.

  • The Federal Reserve announced today that it would keep the federal funds rate unchanged at 5.25% to 5.50% but indicated that another rate hike could be implemented in December, but that they need to see how the economy performs in the meantime. Crude oil took a hit from this news which dragged soybean oil lower.

  • NOPA crush numbers will be released later today with the average trade estimate at 175 mb. This would be above the 169 mb crushed in August, and also above the 167.6 mb a year ago. Crush margins have been very profitable lately and domestic demand has been firm.

  • In South America, excessive rain in the southern region and dryness in the northern regions of Brazil have some analysts expecting that the final soybean crop will be closer to 150 mmt rather than the 163 mmt that the USDA has estimated. Lower South American production coupled with tight US ending stocks could give soybeans momentum to rally.

Above: In the middle of October, the market traded up to 1334 and pierced the upper end of resistance, and the 50-day moving average, before retreating lower. If the market can maintain a close above resistance at 1334, it would be poised to make a run to test 1370. Otherwise, initial support to the downside may be found near 1300 and again near 1273. Key support for the move remains down near 1250.

Wheat

Market Notes: Wheat

  • Both Chicago and Kansas City put some green on the board today, despite the rise in the US Dollar Index and lower corn futures. Whereas Minneapolis futures ended with a mixed close. The relative weakness of Minneapolis in today’s trade could be the result of spread action.

  • Brazil continues to be too dry in the north and central areas, while the southern region has received too much rain and has had flooding issues. And though they received recent rains, the US ag attaché in Argentina is still predicting their wheat production to fall to 14.5 mmt.

  • China has reportedly made purchases of 2 mmt of wheat from Australia, with another 2.5 mmt from France. Floods are said to have damaged about 20% of China’s wheat crop, and they may look to import more down the road.

  • For this marketing year that began July 1st, as of October 27th the EU’s soft wheat exports are down 24% from last year, representing a decline from 12.6 to 9.6 mmt.

  • According to their agriculture ministry, as of October 31st, Ukraine has planted 4.2 million hectares of winter grain. This includes 3.7 million hectares of wheat, a year-over-year increase of 6%.

  • Russia’s wheat export duty has reportedly dropped 14%, as of November 1st, to 4,923.4 rubles per metric ton, down from 5,297.7 rubles. This could help Russia maintain their dominance in the world wheat market.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. Since making a mid-summer high in late July, the Dec ’23 contract has been in a downtrend, but after finding support at 540 on September 29, the market has steadily rallied, briefly piercing 600 and the 50-day moving average.  With weak US export demand driven by cheap Russian exports being the dominant headwind, it appears that prices may be finding value in the 540 – 616 range established since early September.  Grain Market Insider made sales recommendations in the late June rally around 720, and again earlier this fall near 604. With those two sales, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales in the 625 – 650 range. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. The July ’24 contract has been trading at a premium to the Dec ’23 contract since late April, which has steadily increased to about 55 cents, September 29, it traded as far out as 71 ¾ cents. Fund positioning and weak fundamentals have driven Dec ’23 closer to the mid to upper 500 range, and July ’24 to the low to mid 600’s. The market risk for July ’24 remains the same as for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for this possibility, and back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward June’s highs, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

  • No action is currently recommended for 2025 Chicago Wheat. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted a year 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 Chicago wheat recommendations:

Above: On October 20, the December contract posted a bearish reversal after making a new recent high of 604 ½.  The market has retreated and solidified resistance above the market that now stands between 604 ½ and 618.  Without bullish input, the market is likely to trend sideways to lower with the next major support level between 547 and 540.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. With prices falling below the October 12 low of 655 ¼, the Dec ’23 contract continues to search for support as it resumes the downtrend that has been in place since late July. Currently, weak US export demand, driven by cheap Russian exports, remains the dominant headwind, and the market is in need of bullish input to stabilize and rally prices back higher. If a bullish catalyst enters the market to push prices above 700, it may signal that a fall low is in place and would line up with the historical tendency for prices to appreciate into winter and early spring. Grain Market Insider’s strategy is to look for price appreciation going into this winter, as weather becomes a more prominent market mover with an eye on considering additional sales near 750 – 800. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 KC wheat. The July ’24 contract is currently trading near a 25-cent premium to July ’23, which is up significantly from last July’s 60-cent discount. Weak fundamentals have driven spread activity to push July ’23 toward its contract lows, while July ’24 has been able to maintain more of its value. The risk for the July ’24 contract is much like that for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July 660 puts to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 800 to take advantage of elevated prices before they eroded further. If the market receives the needed impetus to move prices back toward 750 – 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: Since breaking through the bottom of the consolidation range at 655, the market has drifted lower and is now testing minor support near 630, with the next level of major support remaining near 575. Major resistance above the market remains around 690 – 700, with minor resistance near 655.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop.  After making highs in July, and the subsequent downtrend to the October 2 low of 707 ½, the Dec ‘23 contract has traded mostly sideways with no significant reversal higher. With weak US export demand still the primary impediment to higher prices, the market remains at risk of trending lower if 707 ½ is violated to the downside unless another bullish impetus enters the scene. If that happens and prices begin to push back toward 775, it may signal that a near-term low is in place. Earlier this year, Grain Market Insider made a sales recommendation during the July rally near 820, and with that sale in place, Grain Market Insider’s strategy is to look for price appreciation going into this winter with an eye on considering additional sales around 750 – 800, and again north of 825. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices. Even though the primary strategy is to look for higher prices, Grain Market Insider may also consider a “plan b” in the next couple of weeks if prices grind sideways to lower.

  • No new action is currently recommended for 2024 Minneapolis wheat.  In the last three months, the Sep ’24 contract has gone from a 60 – 80 discount to Dec ’23, to a 50-cent premium. Weak fundamentals led bear spreading to drive Dec ’23 in search of new contract lows, while Sep ’24 remains off its low from last May. The risk for the Sep ’24 contract is much like that of Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July KC 660 puts (for their greater liquidity, and correlation to Minneapolis pricing) to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 815 to take advantage of elevated prices. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further. Grain Market Insider will then be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: Since the beginning of October, the market has been consolidating, with the upper end of the range acting as resistance. Initial support below the market lies near the October 2 low, between 711 and 707, with major support remaining near 665. If prices turn higher, initial resistance remains between 745 – 760.

Other Charts / Weather

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

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

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10-31-23 End of Day: Lack of bullish news weighs on corn & wheat; flash sale & rebounding meal support beans

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • A swift harvest pace and a lack of bullish news kept the corn futures caught between a firmer soybean market and weak wheat complex, to show only minor gains for its 5th day of consolidation.

  • Bolstered by a 239k mt flash sale to Mexico, soybeans ended the day with relatively minor gains following a volatile trade that saw a 24-cent range and lower prices in the overnight.

  • Though Argentina may be seeing some improvement, their available supplies remain low and continue to support soybean meal and soybeans. Bean oil, on the other hand, added resistance to soybeans as it retreated nearly 2% on weaker palm and crude oil.

  • Solid crop ratings, poor exports, and a lack of fresh bullish news pressed the wheat complex lower again today as Russia continues to export wheat at discount prices.

  • To see the updated US 3-4 week Temperature and Precipitation Outlooks, the South American 1-week precipitation forecast, and the GRACE-Based Root Zone Soil Moisture Drought Indicator courtesy of the NWS, CPC, NASA and the National Drought Mitigation Center scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. On October 19, December corn closed above 500 for the first time since the end of July. While the market was unable to follow through to the upside, the overall trend remains positive with successively higher lows, from mid-August. If the market can maintain a close above 500 and the 100-day moving average, it may aim to test resistance near 547. Otherwise, if the market closes below the 50-day moving average near 485, it may run the risk of continuing to trend sideways to lower, with a worst-case scenario being a sideways to lower trend into late November, or even early January. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. So, for now, the thought process is to hold tight on any further sales recommendations until later this fall or early winter, with the objective of seeking out better pricing opportunities. If the market has not turned around by early winter, then Grain Market Insider may sit tight on the next sales recommendations until spring. If you end up harvesting more bushels than you can store this fall and must move them, consider protecting those sold bushels with either July or September ’24 call options. 

  • No new action is recommended for 2024 corn. The Dec ’24 contract has held up better than Dec ’23 as bear spreading over the last several months has brought increased buying interest into Dec ’24 and other further out contract months. Back in late July, the Dec ’23 contract traded up to a 25-cent premium over Dec ’24. Now, Dec ’24 holds about a 30 cent premium over Dec ’23. This bear spreading has held the Dec ’24 price up about 28 cents from its year-to-date low. The risk for 2024 prices is the same as for 2023 prices, which is a continuation of a lower trend without further bullish input. Grain Market Insider is watching for signs of a change in the current trend to look at recommending buying Dec ’24 call options. This past spring, Grain Market Insider recommended buying 560 and 610 Dec ’23 call options ahead of the summer rally and having those in place helped provide confidence to pull the trigger on recommending 2023 sales into that sharp rally, knowing that if corn kept rallying and went to 700 or 800 that the call options would protect those sold bushels.

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

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

  • Another sideways day of trade in the corn market as December futures gained ½ cent on the session.  The Dec contract had a 5 ½ cent trading range on the day, trading within this narrow range for the 5th consecutive day as the market lacks fresh news.

  • Corn harvest has moved to 71% complete as stated in the USDA Crop Progress report. This was slightly higher than market expectations and 5% above the 5-year average of 66%.

  • South American weather is forecasted to stay dry and hot for areas of Brazil, and areas of Argentina are seeing signs of last year’s drought persist. While South American weather is still in its early stages, weather will grow more in importance in the weeks ahead. If soybean planting stays delayed, that could push planting of the key 2nd corn crop past the ideal weather window.

  • The lack of fresh news and ongoing harvest pressure will likely keep the path of least resistance lower in the corn market unless some more friendly news were to develop in the near term

  • Last week, managed money funds were reported as net short 100,430 corn contracts, reducing their short positions by 8,440 contracts. Global and US corn supplies are still heavy, and funds will still need a reason to exit those remaining short positions, which is lacking at this time.

Above: The corn market has largely been rangebound since the beginning of August, with only minor short covering moving the market higher until recently. With the market trading up to 509 ½ and failing, the next major resistance level now sits at that recent high, with further resistance near the July 31 high of 516 ¼. If the market retreats, the next major support level remains near 460.

Above: Corn percent harvested (red) versus the 5-year average (green) and last year (brown).

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. At the end of August, the soybean market turned lower and didn’t find any significant buying interest until it traded down to 1251 in early October. Since then, the nearby contract rallied through resistance near 1287 on its way to the recent high of 1334 and testing the 50-day moving average. Looking back, since last May, nearby soybeans have been in a range from 1435 up top to 1251 down below. Last summer, Grain Market Insider did make two sales recommendations in the 1310 – 1360 price window versus Nov ’23. Given that those sales recommendations were made and given that now is not the time of year to be making many sales, if any, Grain Market Insider is content to hold tight on any further sales recommendations until later this fall or early winter. The focus for strategy right now is to be on the lookout for any call option buying opportunities. If you end up harvesting more bushels than you can store this fall, consider protecting any sold bushels with July or Aug ’24 call options. 

  • No action is recommended for the 2024 crop.  Nov ’24 has traded at a discount to the 2023 crop for nearly its entire contract life and that discount extended out to 142 versus the Jan ’24 contract in late July, with it recently trading between 17 ¾ and 66 cents.  Since July, the Nov ’24 contract has mostly traded between 1250 and 1320 and is currently testing the bottom end of that range. To date, Grain Market Insider has not recommended any sales for next year’s soybean crop. First sales targets will probably be early winter at the soonest. Currently, Grain Market Insider’s focus is also on watching for any opportunities to recommend buying call options.

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

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

  • Soybeans ended the day slightly higher after a volatile day in which they opened lower overnight, gained as much as 15 cents in the November contract near midday, then faded into the close. Support came from higher soybean meal while soybean oil was lower along with lower crude and palm oil.

  • Yesterday evening’s Crop Progress report showed that the soybean harvest is ahead of the normal pace at 85% complete. The 5-year average is 78%, and Illinois and Iowa are both far ahead of the average pace at 89% and 93% complete respectively.

  • Today, private exporters reported sales of 239,492 metric tons of soybeans for delivery to Mexico during the 23/24 marketing year. This comes after multiple sales to China last week and impressive export inspections on Monday.

  • In South America, planting is pressing on as chances for rain in central Brazil and Argentina improve slightly, but southern Brazil remains too wet. Argentina’s soybean production will very likely be much higher than last year’s drought ridden crop which will eventually impact the large US exports of soybean meal.

Above: In the middle of October, the market traded up to 1334 and pierced the upper end of resistance, and the 50-day moving average, before retreating lower. If the market can maintain a close above resistance at 1334, it would be poised to make a run to test 1370. Otherwise, initial support to the downside may be found near 1300 and again near 1273. Key support for the move remains down near 1250.

Above: Soybeans percent harvested (red) versus the 5-year average (green) and last year (brown).

Wheat

Market Notes: Wheat

  • The wheat market continues to see a lack of new bullish headlines, and that is keeping it under pressure. All three US futures classes, alongside Paris futures, closed with losses on the day. There have been no major updates regarding the war in the Middle East or the Black Sea, but Russia does continue to offer cheap wheat for export, around $230 per metric ton, further undercutting US offers.

  • Yesterday afternoon the USDA said 84% of the winter wheat crop is planted, down just 1% from average. And with emergence at 64% (in line with the average), the crop was rated 47% good to excellent. While this may be just slightly lower than what the trade was looking for, it is well above last year’s initial rating of 28% GTE. This can be attributed to improved soil moisture and easing drought in the southern Plains.

  • The US Dollar Index was on the rise again today and is close to testing the 107 level again. This, along with yesterday’s poor inspections data, a good crop rating, and no fresh news, all combined to offer weakness to the market. The silver lining may be Chinese demand, as they are reportedly ready to import a record amount of wheat due to damage to their crop. Recently they have been making purchases from Australia and France.

  • In Brazil, unfavorable weather has impacted the quality of their wheat crop. This has caused their internal prices to recently increase. Additionally, a fire that broke out at one of the key ports in Brazil is causing grain shipping delays. The port in Paranagua is Brazil’s second largest, and this just adds to the logistics issues they have been facing recently with low river water levels.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. Since making a mid-summer high in late July, the Dec ’23 contract has been in a downtrend, but after finding support at 540 on September 29, the market has steadily rallied, briefly piercing 600 and the 50-day moving average.  With weak US export demand driven by cheap Russian exports being the dominant headwind, it appears that prices may be finding value in the 540 – 616 range established since early September.  Grain Market Insider made sales recommendations in the late June rally around 720, and again earlier this fall near 604. With those two sales, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales in the 625 – 650 range. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. The July ’24 contract has been trading at a premium to the Dec ’23 contract since late April, which has steadily increased to about 55 cents, September 29, it traded as far out as 71 ¾ cents. Fund positioning and weak fundamentals have driven Dec ’23 closer to the mid to upper 500 range, and July ’24 to the low to mid 600’s. The market risk for July ’24 remains the same as for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for this possibility, and back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward June’s highs, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

  • No action is currently recommended for 2025 Chicago Wheat. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted a year 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 Chicago wheat recommendations:

Above: On October 20, the December contract posted a bearish reversal after making a new recent high of 604 ½.  The market has retreated and solidified resistance above the market that now stands between 604 ½ and 618.  Without bullish input, the market is likely to trend sideways to lower with the next major support level between 547 and 540.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. With prices falling below the October 12 low of 655 ¼, the Dec ’23 contract continues to search for support as it resumes the downtrend that has been in place since late July. Currently, weak US export demand, driven by cheap Russian exports, remains the dominant headwind, and the market is in need of bullish input to stabilize and rally prices back higher. If a bullish catalyst enters the market to push prices above 700, it may signal that a fall low is in place and would line up with the historical tendency for prices to appreciate into winter and early spring. Grain Market Insider’s strategy is to look for price appreciation going into this winter, as weather becomes a more prominent market mover with an eye on considering additional sales near 750 – 800. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 KC wheat. The July ’24 contract is currently trading near a 25-cent premium to July ’23, which is up significantly from last July’s 60-cent discount. Weak fundamentals have driven spread activity to push July ’23 toward its contract lows, while July ’24 has been able to maintain more of its value. The risk for the July ’24 contract is much like that for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July 660 puts to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 800 to take advantage of elevated prices before they eroded further. If the market receives the needed impetus to move prices back toward 750 – 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: Since the end of September, KC wheat has been consolidating and recently broke through the bottom of the range at 655. The market is now poised to test minor support near 630, with the next level of major support remaining near 575.  Resistance above the market remains around 690 – 700.

Above: Winter wheat percent planted (red) versus the 5-year average (green) and last year (brown).

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

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop.  After making highs in July, and the subsequent downtrend to the October 2 low of 707 ½, the Dec ‘23 contract has traded mostly sideways with no significant reversal higher. With weak US export demand still the primary impediment to higher prices, the market remains at risk of trending lower if 707 ½ is violated to the downside unless another bullish impetus enters the scene. If that happens and prices begin to push back toward 775, it may signal that a near-term low is in place. Earlier this year, Grain Market Insider made a sales recommendation during the July rally near 820, and with that sale in place, Grain Market Insider’s strategy is to look for price appreciation going into this winter with an eye on considering additional sales around 750 – 800, and again north of 825. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices. Even though the primary strategy is to look for higher prices, Grain Market Insider may also consider a “plan b” in the next couple of weeks if prices grind sideways to lower.

  • No new action is currently recommended for 2024 Minneapolis wheat.  In the last three months, the Sep ’24 contract has gone from a 60 – 80 discount to Dec ’23, to a 50-cent premium. Weak fundamentals led bear spreading to drive Dec ’23 in search of new contract lows, while Sep ’24 remains off its low from last May. The risk for the Sep ’24 contract is much like that of Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July KC 660 puts (for their greater liquidity, and correlation to Minneapolis pricing) to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 815 to take advantage of elevated prices. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further. Grain Market Insider will then be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: Since the beginning of October, the market has been consolidating, with the upper end of the range acting as resistance. Initial support below the market lies near the October 2 low, between 711 and 707, with major support remaining near 665. If prices turn higher, initial resistance remains between 745 – 760.

Other Charts / Weather

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

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

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10-30-2023: Markets are mostly lower on lack of fresh bullish news, lower crude, and potential SA weather improvement.

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • A lack of any fresh bullish news, along with weakness in soybeans and the crude oil market, gave sellers what they needed to keep corn below unchanged for much of the day and settle with minor losses, despite stronger prices in the overnight session.

  • Sharply lower soybean meal dragged the soybean market to double-digit losses for old crop despite export inspections that were well above the pace needed to reach the USDA’s goal. The losses were also felt in December and January Board crush margins, which were down 19 ¼ and 14 ¾ cents respectively, though to a still very strong 231 ¾ for December, and 171 ½ for January.

  • After making new contract highs on Friday, the prospect of improving conditions in South America weighed heavily on soybean meal, which sold off through the day as traders took profits from the recent run-up and unwound long meal-short oil spreads. The spreading also helped to support bean oil despite lower crude and palm oil prices.

  • Despite all three wheat classes trading above unchanged earlier in the session, only KC was able to settle higher on the day while Chicago and Minneapolis both closed lower on the day as weekly export inspections failed to reach the pace needed for the USDA to reach its forecast, and supplies continue to flow through Ukraine’s “humanitarian corridor.”

  • To see the updated US 5-day precipitation forecast, 6 to 10-day Temperature and Precipitation Outlooks, and the South American 1-week precipitation forecast courtesy of the National Weather Service, Climate Prediction Center, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. On October 19, December corn closed above 500 for the first time since the end of July. While the market was unable to follow through to the upside, the overall trend remains positive with successively higher lows, from mid-August. If the market can maintain a close above 500 and the 100-day moving average, it may aim to test resistance near 547. Otherwise, if the market closes below the 50-day moving average near 485, it may run the risk of continuing to trend sideways to lower, with a worst-case scenario being a sideways to lower trend into late November, or even early January. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. So, for now, the thought process is to hold tight on any further sales recommendations until later this fall or early winter, with the objective of seeking out better pricing opportunities. If the market has not turned around by early winter, then Grain Market Insider may sit tight on the next sales recommendations until spring. If you end up harvesting more bushels than you can store this fall and must move them, consider protecting those sold bushels with either July or September ’24 call options. 

  • No new action is recommended for 2024 corn. The Dec ’24 contract has held up better than Dec ’23 as bear spreading over the last several months has brought increased buying interest into Dec ’24 and other further out contract months. Back in late July, the Dec ’23 contract traded up to a 25-cent premium over Dec ’24. Now, Dec ’24 holds about a 30 cent premium over Dec ’23. This bear spreading has held the Dec ’24 price up about 28 cents from its year-to-date low. The risk for 2024 prices is the same as for 2023 prices, which is a continuation of a lower trend without further bullish input. Grain Market Insider is watching for signs of a change in the current trend to look at recommending buying Dec ’24 call options. This past spring, Grain Market Insider recommended buying 560 and 610 Dec ’23 call options ahead of the summer rally and having those in place helped provide confidence to pull the trigger on recommending 2023 sales into that sharp rally, knowing that if corn kept rallying and went to 700 or 800 that the call options would protect those sold bushels.

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

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

  • The corn market lacking very little fresh bullish news, saw weak price action trading 2 ½ cents lower in the December futures on Monday. Selling in the soybean market and a drop in crude oil prices limited upside potential in corn futures.

  • Within expectations, weekly export inspections totaled 20.9 mb for the week ending October 26. Total export inspections for the current marketing year are 195 mb, up 17% versus last year. The USDA is targeting total exports for the year at 2.025 billion bushels, up 22% year-over-year.

  • Corn harvest is expected to reach 69% complete on Monday’s USDA Crop Progress report. This would be up 10% over last week. Although progress may have slowed week over week due to rainfall in the covered areas of the Corn Belt in the past 7 days, harvest pressure has also limited corn prices.

  • South American weather is forecasted to stay dry and hot for areas of Brazil, and areas of Argentina are seeing signs of last year’s drought persist. While South American weather is still in its early stages, weather will grow more in importance in the weeks ahead.

  • Last week, managed money funds were reported as net short 100,430 corn contracts, reducing their short positions by 8,440 contracts. Global and US corn supplies are still heavy, and funds will still need a reason to exit those remaining short positions, which is lacking at this time.

Above: The corn market has largely been rangebound since the beginning of August, with only minor short covering moving the market higher until recently. With the market trading up to 509 ½ and failing, the next major resistance level now sits at that recent high, with further resistance near the July 31 high of 516 ¼. If the market retreats, the next major support level remains near 460.

Corn Managed Money Funds net position as of Tuesday, October 24. Net position in Green versus price in Red. Managers net bought 8,440 contracts between October 18 – 24, bringing their total position to a net short 100,430 contracts.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Front month soybeans have been finding buying interest around the June 2023 low of 1256 ¾ in the Nov ’23 contract, and since the beginning of October, they have also traded largely between 1260 and 1280. The close over 1287 ¼ on October 12 could be a signal that a harvest/fall low is in. In the big picture, since May 2023, Nov ’23 has traded in a range from 1251 on the downside to 1435 on the topside. Last summer, Grain Market Insider did make two sales recommendations in the 1310 – 1360 price window versus Nov ’23. Given that those sales recommendations were made and given that now is not the time of year to be making many sales, if any, Grain Market Insider is content to hold tight on any further sales recommendations until later this fall or early winter. The focus for strategy right now is to be on the lookout for any call option buying opportunities. If you end up harvesting more bushels than you can store this fall, consider protecting any sold bushels with July or Aug ’24 call options.

  • No action is recommended for the 2024 crop.  Nov ’24 has traded at a discount to the 2023 crop for nearly its entire contract life and that discount extended out to 142 versus the Jan ’24 contract in late July, with it recently trading between 17 ¾ and 66 cents.  Since July, the Nov ’24 contract has mostly traded between 1250 and 1320 and is currently testing the bottom end of that range. To date, Grain Market Insider has not recommended any sales for next year’s soybean crop. First sales targets will probably be early winter at the soonest. Currently, Grain Market Insider’s focus is also on watching for any opportunities to recommend buying call options.

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

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

  • Soybeans ended the day lower due to pressure from lower soybean meal, lower world veg oils, and a selloff in crude oil. Soybean meal made new contract highs on Friday but gave back those gains today as the market became very overbought.

  • Soybean export inspections for the week ending Thursday, October 26, totaled 69.5 mb and were within the average trade range. Total inspections for 23/24 are now at 366 mb, which is down 3% from last year. Overall, soybean exports have improved over the past few months.

  • While export demand has picked up, domestic demand has been stout as well with crush margins increasing significantly and incentivizing processors. Exports of soybean meal have increased greatly as the world turned to the US in place of Argentina, and the use of soybean oil as biofuel has been gaining more traction as well.

  • Weather in South America has not improved much with the central and northern regions of Brazil remaining dry along with Argentina, but planting is pressing on anyway after previous delays. The 10-day forecast is still very dry, but there are better rain chances for Argentina and the main growing area of Mato Grosso, in Brazil. Southern Brazil remains far too wet with reports of flooding.

Above: In the middle of October, the market traded up to 1334 and pierced the upper end of resistance, and the 50-day moving average, before retreating lower. If the market can maintain a close above resistance at 1334, it would be poised to make a run to test 1370. Otherwise, initial support to the downside may be found near 1300 and again near 1273. Key support for the move remains down near 1250.

Soybean Managed Money Funds net position as of Tuesday, October 24. Net position in Green versus price in Red. Money Managers net bought 9,737 contracts between October 18 – 24, bringing their total position to a net long 7,753 contracts.

Wheat

Market Notes: Wheat

  • Wheat had a mixed close with losses in Chicago and Minneapolis, but small gains in KC. Bear spreading was a noted feature in the Chicago contracts – nearby months were under more selling pressure compared to deferred ones. This may be a result of the recent rains in Argentina (with more in the forecast) that are leading some to think their production may improve.

  • Also weighing on wheat today were poor export inspections. The USDA said only 7 mb of wheat were inspected, bringing the 23/24 total to 261 mb, and below the pace needed to meet their estimate. That is down 26% from last year, and the USDA is estimating 700 mb of exports.

  • Despite Israel sending ground troops into Gaza, the fighting seems to currently be contained to that area and has not spread into the wider region. Along with profit taking, this may explain why crude oil is nearly three dollars per barrel lower as of this writing. Regardless, crude trending lower throughout the session also pressured the grain markets.

  • Ukraine shipments through the Black Sea were temporarily paused last week due to tax and customs issues, according to officials. There were also rumors of explosives and / or threats from Moscow. However, vessels are said to be moving through the corridor again with most of the ag goods headed for the EU and Africa.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. Since making a mid-summer high in late July, the Dec ’23 contract has been in a downtrend, but after finding support at 540 on September 29, the market has steadily rallied, briefly piercing 600 and the 50-day moving average.  With weak US export demand driven by cheap Russian exports being the dominant headwind, it appears that prices may be finding value in the 540 – 616 range established since early September.  Grain Market Insider made sales recommendations in the late June rally around 720, and again earlier this fall near 604. With those two sales, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales in the 625 – 650 range. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. The July ’24 contract has been trading at a premium to the Dec ’23 contract since late April, which has steadily increased to about 55 cents, September 29, it traded as far out as 71 ¾ cents. Fund positioning and weak fundamentals have driven Dec ’23 closer to the mid to upper 500 range, and July ’24 to the low to mid 600’s. The market risk for July ’24 remains the same as for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for this possibility, and back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward June’s highs, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

  • No action is currently recommended for 2025 Chicago Wheat. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted a year 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 Chicago wheat recommendations:

Above: On October 20, the December contract posted a bearish reversal after making a new recent high of 604 ½.  The market has retreated and solidified resistance above the market that now stands between 604 ½ and 618.  Without bullish input, the market is likely to trend sideways to lower with the next major support level between 547 and 540.

Chicago Wheat Managed Money Funds net position as of Tuesday, October 24. Net position in Green versus price in Red. Money Managers net bought 12,153 contracts between October 18 – 24, bringing their total position to a net short 92,254 contracts.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. With prices falling below the Oct. 12 low of 655 ¼, the Dec ’23 contract continues to search for support as it resumes the downtrend that has been in place since late July. Currently, weak US export demand, driven by cheap Russian exports, remains the dominant headwind, and the market is in need of bullish input to stabilize and rally prices back higher. If a bullish catalyst enters the market to push prices towards 750, it may signal that a fall low is in place and would line up with the historical tendency for prices to appreciate into winter and early spring. Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales 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 KC wheat. Currently, July ’24 is trading near a 25-cent premium to the Dec ’23 contract, up from a 60-cent discount last July, as bear spreading due to weak fundamentals has driven the Dec ’23 contract closer to its contract lows, while the July ’24 contract remains more elevated as it tests Feb ’22 lows. The risk for the July ’24 contract is much like that for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July 660 puts to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 800 to take advantage of elevated prices before they eroded further. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

To date, Grain Market Insider has issued the following K.C. recommendations:

Above: Since the end of September, KC wheat has been consolidating and recently broke through the bottom of the range at 655. The market is now poised to test minor support near 630, with the next level of major support remaining near 575.  Resistance above the market remains around 690 – 700.

KC Wheat Managed Money Funds net position as of Tuesday, October 24. Net position in Green versus price in Red. Money Managers net sold 2,043 contracts between October 18 – 24, bringing their total position to a net short 28,994 contracts.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop. The Dec ’23 contract has been in a downtrend since making highs in late July and continues to search for support while showing signs of being oversold. With weak U.S. export demand driven by cheap Russian exports being the dominant headwind, the market is in need of bullish input to stabilize and rally prices back higher. If a bullish catalyst were to enter the market and push prices towards 800, it may signal that a fall low is in place, which would line up with the historical tendency for prices to appreciate into winter. Earlier this year, Grain Market Insider made a sales recommendation during the July rally near 820. With that sale, Grain Market Insider’s strategy is to look for price appreciation going into this winter with an eye on considering additional sales around 750 – 800, and again north of 825. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is currently recommended for 2024 Minneapolis wheat.  In the last three months, the Sep ’24 contract has gone from a 60 – 80 discount to Dec ’23, to a nearly 50-cent premium. Weak fundamentals led bear spreading to drive Dec ’23 in search of new contract lows, while Sep ’24 remains off its low from last June. The risk for the Sep ’24 contract is much like that of Dec ’23.  The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July KC 660 puts (for their greater liquidity, and correlation to Minneapolis pricing) to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 815 to take advantage of elevated prices. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further. Grain Market Insider will then be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: Since the beginning of October, the market has been consolidating, with the upper end of the range acting as resistance. Initial support below the market lies near the October 2 low, between 711 and 707, with major support remaining near 665. If prices turn higher, initial resistance remains between 745 – 760.

Minneapolis Wheat Managed Money Funds net position as of Tuesday, October 24. Net position in Green versus price in Red. Money Managers net bought 648 contracts between October 18 – 24, bringing their total position to a net short 25,081 contracts. 

Other Charts / Weather

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

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

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

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Grain Market Insider: October 27, 2023

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • As weather concerns in South America may be getting priced into the market, corn could only muster mediocre gains as it appeared caught between a weaker wheat complex and a strong bean complex.

  • Led by sharply higher soybean meal and Brazilian weather concerns, January soybeans traded to their highest level in over a month and pierced the 50-day moving average before closing 5 ¾ cents of the day’s high.

  • The prospect of increased US exports due to extremely low Argentine supplies continues to support the meal market, which closed 12.90 higher. While soybean oil didn’t rally sharply, it also posted respectable gains, and added 16 ½ cents to December Board crush margins, which also lent further support to the soybean market.

  • Reports out of Ukraine that their “Humanitarian Corridor” isn’t closed weighed on the wheat complex, and while the recent rainfall in the southern Plains hasn’t eliminated the drought conditions, they may have added pressure to the KC contracts, which led the complex lower on the day.

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

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. On October 19, December corn closed above 500 for the first time since the end of July. While the market was unable to follow through to the upside, the overall trend remains positive with successively higher lows, from mid-August. If the market can maintain a close above 500 and the 100-day moving average, it may aim to test resistance near 547. Otherwise, if the market closes below the 50-day moving average near 485, it may run the risk of continuing to trend sideways to lower, with a worst-case scenario being a sideways to lower trend into late November, or even early January. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. So, for now, the thought process is to hold tight on any further sales recommendations until later this fall or early winter, with the objective of seeking out better pricing opportunities. If the market has not turned around by early winter, then Grain Market Insider may sit tight on the next sales recommendations until spring. If you end up harvesting more bushels than you can store this fall and must move them, consider protecting those sold bushels with either July or September ’24 call options. 

  • No new action is recommended for 2024 corn. The Dec ’24 contract has held up better than Dec ’23 as bear spreading over the last several months has brought increased buying interest into Dec ’24 and other further out contract months. Back in late July, the Dec ’23 contract traded up to a 25-cent premium over Dec ’24. Now, Dec ’24 holds about a 30 cent premium over Dec ’23. This bear spreading has held the Dec ’24 price up about 28 cents from its year-to-date low. The risk for 2024 prices is the same as for 2023 prices, which is a continuation of a lower trend without further bullish input. Grain Market Insider is watching for signs of a change in the current trend to look at recommending buying Dec ’24 call options. This past spring, Grain Market Insider recommended buying 560 and 610 Dec ’23 call options ahead of the summer rally and having those in place helped provide confidence to pull the trigger on recommending 2023 sales into that sharp rally, knowing that if corn kept rallying and went to 700 or 800 that the call options would protect those sold bushels.

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

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

  • The corn market traded higher to end the week, supported by strength in the soybean market. Friday’s higher trade ended a 5-session selling streak in the corn market as December corn closed 1 ½ cents higher. Despite being higher on Friday, Dec corn lost 14 ¾ cents for the week and posted its lowest weekly close in a month.

  • Overall, a quiet news day for the corn market. Prices were supported by strong soybean and soybean meal prices, a higher crude oil market, which helped trigger some end of week profit taking of short positions. Nearby resistance over the December contract is at $4.85, and trading below leaves open the greater possibility of lower trade.

  • Corn has seen an uptick in demand, which can support the market. Cash basis has firmed as the US moves into the second half of harvest, ethanol margins remain supportive, and export sales this week were above expectations at 53.2 mb. The market will be watching to see if an improving demand will be a trend.

  • South American weather is forecasted to stay dry and hot for areas of Brazil, and areas of Argentina are seeing signs of last year’s drought persist. While South American weather is still in its early stages, weather will grow more in importance in the weeks ahead.

  • Last week, anaged money funds were reported as net short 108,000 corn contracts, and that position likely grew this week.  Global and US corn supplies are still heavy, and funds will still need a reason to want to exit those short positions.

Above: The corn market has largely been rangebound since the beginning of August, with only minor short covering moving the market higher until recently. With the market trading up to 509 ½ and failing, the next major resistance level now sits at that recent high, with further resistance near the July 31 high of 516 ¼. If the market retreats, the next major support level remains near 460.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Front month soybeans have been finding buying interest around the June 2023 low of 1256 ¾ in the Nov ’23 contract, and since the beginning of October, they have also traded largely between 1260 and 1280. The close over 1287 ¼ on October 12 could be a signal that a harvest/fall low is in. In the big picture, since May 2023, Nov ’23 has traded in a range from 1251 on the downside to 1435 on the topside. Last summer, Grain Market Insider did make two sales recommendations in the 1310 – 1360 price window versus Nov ’23. Given that those sales recommendations were made and given that now is not the time of year to be making many sales, if any, Grain Market Insider is content to hold tight on any further sales recommendations until later this fall or early winter. The focus for strategy right now is to be on the lookout for any call option buying opportunities. If you end up harvesting more bushels than you can store this fall, consider protecting any sold bushels with July or Aug ’24 call options.

  • No action is recommended for the 2024 crop.  Nov ’24 has traded at a discount to the 2023 crop for nearly its entire contract life and that discount extended out to 142 versus the Jan ’24 contract in late July, with it recently trading between 17 ¾ and 66 cents.  Since July, the Nov ’24 contract has mostly traded between 1250 and 1320 and is currently testing the bottom end of that range. To date, Grain Market Insider has not recommended any sales for next year’s soybean crop. First sales targets will probably be early winter at the soonest. Currently, Grain Market Insider’s focus is also on watching for any opportunities to recommend buying call options.

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

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

  • Soybeans ended the day higher following significant gains from soybean meal and oil. The bulk of the bullish news came earlier in the week, but soybeans had not been able to break out of this week’s tight range. For the week, November soybeans lost 5 cents, December meal gained $18.50, making new contract highs, and December soybean oil lost 1.12 cents.

  • Soy products were behind today’s rally in soybeans, with soybean meal posting contract highs. Soybean meal exports have climbed as the US has been able to pick up Argentinian business. Soybean oil moved higher along with crude oil, and the gains in both products have greatly improved crush margins, helping demand.

  • Yesterday, export sales were announced with increases of 50.6 mb for 23/24, and export shipments far above expectations at 87.6 mb. Along with that positive news, two sales of soybeans were reported to China for a total of 232,000 for 23/24. The renewed interest from China in US soybean purchases has been encouraging, and the purchasing agreement signed earlier in the week instilled more confidence.

  • Weather in South America has not improved much with only slight showers in Argentina that helped some key wheat areas. Northern Brazil is dry and is forecast to remain that way, while southern Brazil is too wet with parts of it flooding. Producers in both regions are beginning to replant soybeans as a result.

Above: In the middle of October, the market traded up to 1334 and pierced the upper end of resistance, and the 50-day moving average, before retreating lower. If the market can maintain a close above resistance at 1334, it would be poised to make a run to test 1370. Otherwise, initial support to the downside may be found near 1300 and again near 1273. Key support for the move remains down near 1250.

Wheat

Market Notes: Wheat

  • Despite corn and soybeans finishing the session on a positive note, wheat could not do the same and posted losses in all three US futures classes. Yesterday’s reports that Ukraine temporarily suspended their humanitarian corridor later were denied, and the shipping lanes are still open. In fact, four vessels were reported to have left today with an additional 23 loading. This is likely the main culprit that pressured wheat today.

  • In addition to the above point, recent rains in the US southern Plains may have also burdened wheat futures. With the first winter wheat crop ratings due for release on Monday, the trade is looking for conditions to come in around 50% good to excellent. If that is accurate, it would be the highest rating for this time of year since 2019.

  • On a bullish note, there is still talk that India may eventually need to import wheat due to rising prices and inflation. Reportedly, their government has plans to sell more wheat from their reserves to help alleviate rising costs. They are said to be ready to sell 300,000 mt, which is up from 200,000 mt previously.

  • Argentina’s wheat crop is reported to be 6.8% harvested, according to the Buenos Aires Grain Exchange. Recent rains there were significant and have helped to stabilize the crop. The BAGE also said that 54% of the planted area now has sufficient, or even optimal moisture, versus only 8% the previous week.

  • The EU slightly increased their estimate of the soft wheat harvest to 125.5 mmt, up from the 125.3 mmt estimate in September. However, exports were reduced by 1 mmt to 31 mmt. The European Commission also increased their carryout estimate to 19.1 mmt vs 17.8 mmt last month.

  • The EU slightly increased their estimate of the soft wheat harvest to 125.5 mmt, up from the 125.3 mmt estimate in September. However, exports were reduced by 1 mmt to 31 mmt. The European Commission also increased their carryout estimate to 19.1 mmt vs 17.8 mmt last month.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. Since making a mid-summer high in late July, the Dec ’23 contract has been in a downtrend, but after finding support at 540 on September 29, the market has steadily rallied, briefly piercing 600 and the 50-day moving average.  With weak US export demand driven by cheap Russian exports being the dominant headwind, it appears that prices may be finding value in the 540 – 616 range established since early September.  Grain Market Insider made sales recommendations in the late June rally around 720, and again earlier this fall near 604. With those two sales, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales in the 625 – 650 range. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. The July ’24 contract has been trading at a premium to the Dec ’23 contract since late April, which has steadily increased to about 55 cents, September 29, it traded as far out as 71 ¾ cents. Fund positioning and weak fundamentals have driven Dec ’23 closer to the mid to upper 500 range, and July ’24 to the low to mid 600’s. The market risk for July ’24 remains the same as for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for this possibility, and back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward June’s highs, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

  • No action is currently recommended for 2025 Chicago Wheat. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted a year 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 Chicago wheat recommendations:

Above: On October 20, the December contract posted a bearish reversal after making a new recent high of 604 ½.  The market has retreated and solidified resistance above the market that now stands between 604 ½ and 618.  Without bullish input, the market is likely to trend sideways to lower with the next major support level between 547 and 540.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. With prices falling below the Oct. 12 low of 655 ¼, the Dec ’23 contract continues to search for support as it resumes the downtrend that has been in place since late July. Currently, weak US export demand, driven by cheap Russian exports, remains the dominant headwind, and the market is in need of bullish input to stabilize and rally prices back higher. If a bullish catalyst enters the market to push prices towards 750, it may signal that a fall low is in place and would line up with the historical tendency for prices to appreciate into winter and early spring. Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales 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 KC wheat. Currently, July ’24 is trading near a 25-cent premium to the Dec ’23 contract, up from a 60-cent discount last July, as bear spreading due to weak fundamentals has driven the Dec ’23 contract closer to its contract lows, while the July ’24 contract remains more elevated as it tests Feb ’22 lows. The risk for the July ’24 contract is much like that for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July 660 puts to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 800 to take advantage of elevated prices before they eroded further. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

To date, Grain Market Insider has issued the following K.C. recommendations:

Above: Since the end of September, KC wheat has been consolidating and recently broke through the bottom of the range at 655. The market is now poised to test minor support near 630, with the next level of major support remaining near 575.  Resistance above the market remains around 690 – 700.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop. The Dec ’23 contract has been in a downtrend since making highs in late July and continues to search for support while showing signs of being oversold. With weak U.S. export demand driven by cheap Russian exports being the dominant headwind, the market is in need of bullish input to stabilize and rally prices back higher. If a bullish catalyst were to enter the market and push prices towards 800, it may signal that a fall low is in place, which would line up with the historical tendency for prices to appreciate into winter. Earlier this year, Grain Market Insider made a sales recommendation during the July rally near 820. With that sale, Grain Market Insider’s strategy is to look for price appreciation going into this winter with an eye on considering additional sales around 750 – 800, and again north of 825. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is currently recommended for 2024 Minneapolis wheat.  In the last three months, the Sep ’24 contract has gone from a 60 – 80 discount to Dec ’23, to a nearly 50-cent premium. Weak fundamentals led bear spreading to drive Dec ’23 in search of new contract lows, while Sep ’24 remains off its low from last June. The risk for the Sep ’24 contract is much like that of Dec ’23.  The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July KC 660 puts (for their greater liquidity, and correlation to Minneapolis pricing) to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 815 to take advantage of elevated prices. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further. Grain Market Insider will then be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: Since the beginning of October, the market has been consolidating, with the upper end of the range acting as resistance. Initial support below the market lies near the October 2 low, between 711 and 707, with major support remaining near 665. If prices turn higher, initial resistance remains between 745 – 760.

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.