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01-02 End of Day: Grains Red to Start 2024

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Corn futures followed soybean prices sharply lower to start the holiday-shortened trading week. Weaker oil prices and a stronger US Dollar also added pressure to corn today.

  • Soybean prices fell sharply to start 2024 after weekend rains fell in the driest areas of northern Brazil. Those same areas and greater portions of Brazil are forecast for more beneficial rains into mid-January.

  • All three wheat classes suffered losses to start the New Year. A stronger US Dollar paired with falling corn and soybean prices are the main culprits to today’s losses.

  • To see the updated US 6-10 day temperature and precipitation outlooks, and 1-week precipitation forecasts for both Brazil and Argentina, courtesy of NWS and NOAA, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

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

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

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

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

  • Strong selling pressure across the grain markets helped push corn futures lower to start the 2024 calendar year. March corn closed 7 ½ cents lower on the session, establishing a new contract low close.

  • An improved weather forecast and rainfall in areas of Brazil triggered the selling in the grain markets. Soybean futures finished with strong double-digit losses. Wheat futures posted double-digit losses as well, pressured by cheaper global wheat prices and a stronger US Dollar.

  • Weekly corn export inspections were impacted by the Christmas holiday. Last week, U.S. exporters shipped 569.7 MT (22.4 mb). Total inspections are now at 470 mb, up 24%.

  • Ethanol margins are seeing pressure as gasoline demand during the holiday window was weaker than anticipated. Softer crude oil and gasoline prices helped pressure the corn market.

  • Corn cash basis is holding firm and may see some improvement as low prices are halting producer selling. The cash market may have to make adjustments to trigger bushels out of producer’s hands.

Above: Since the middle of November, the March corn contract has been rangebound mostly between 495 up top and 470 on the bottom. Overhead resistance lies between 490 and 497, with heavier resistance near 510, and without fresh bullish input, the market runs the risk testing major support near 460.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Front month soybeans continue to be rangebound, largely between 1290 and 1400. At some point, the front month will eventually break out of that range, and if it breaks out to the downside, then the first risk would be 1180. If the breakout occurs to the topside, then the first opportunity would be 1510. The biggest looming catalyst behind a potential downside breakout is the projected record global carryout of soybeans, while the biggest looming catalyst for a potential upside breakout is continued adverse South American weather. Given the uncertainty of which direction the market will go, Grain Market Insider recently recommended adding to sales as the current price level is still historically good. It’s been disappointing how the market has been unable to push higher despite the South American planting disruptions. Because of that, Grain Market Insider’s concern is that, if the weather pattern doesn’t remain adverse, the path of least resistance could be lower. Grain Market Insider will continue to look at additional sales opportunities, as well as potential re-ownership strategies.

  • Grain Market Insider sees a continued opportunity to buy November ’24 1280 soybean calls and November ‘24 1360 soybean calls in equal quantities with a total net spend of approximately 111 cents plus commission and fees. Since the middle of last July, the Nov ’24 contract has been largely rangebound between 1250 and 1320. Today’s settlement of 1265 ¼ is the fourth day in a row with a close above 1250 support and the third day in a row with a stronger closing price. Grain Market Insider wants to take advantage of this value area and recommend purchasing call options. Purchasing call options now will give you confidence to make sales against anticipated production for the 2024 crop, which is yet to be planted, and they will also help to protect those future sales in the event prices continue to rally further.

  • 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 had a rough start to the new year as they gapped lower on the open and continued to work lower throughout the day. Soybean meal closed lower, but soybean oil managed a higher close despite a loss in crude oil. Improved Brazilian weather has been a bearish factor.

  • Today’s export inspections report showed inspections for soybeans at 35 mb, which was in line with expectations but a bit soft compared to previous weeks. Total inspections for 23/24 are now at 855 mb, which is down 18% from the previous year, and the USDA is estimating soybean exports for 23/24 at 1.755 bb.

  • The latest forecast for Brazil features significant rains in the northern region of the country where the majority of the crop is grown and is also the area in greatest need of rains. There have been reports of farmers in the central region harvesting the poor soybeans early so that their second crop corn can be planted in time.

  • Estimates for South American crop sizes are beginning to fall by private analysts due to the dry and hot weather. StoneX is now pegging the Brazilian soybean crop at 152.8 mmt which is down from 161.9 mmt last month. Some of these losses may be made up by the good conditions in Argentina. The USDA will update their estimates in the WASDE report next Friday.

Above: After posting a high of 1398 ½ in November, soybeans found support around 1292. Overhead, nearby resistance remains near 1350 and again around 1400. If the market breaks support at 1292, it runs the risk of testing 1250.

Wheat

Market Notes: Wheat

  • All three US wheat futures classes posted losses with the heaviest being double-digits lower in the Chicago contracts. Weakness stemmed from corn and soybeans, but also from the US Dollar Index, which continued to rise throughout the session. At the time of this writing, it is up 0.85 at 102.18. To add to pressure, Matif wheat futures lost 1.50 to 1.75 Euros per mt, keeping it in a sideways to lower pattern.

  • US wheat inspections at 10.1 mb bring the total 23/24 inspections to 354 mb. That is down 19% from last year, and inspections are behind the pace needed to meet the USDA’s goal. This may have also factored into today’s weakness.

  • According to Ukraine officials, their nation has exported 13 mmt of cargo via their own Black Sea corridor since the export deal with Russia ended in July. In the face of danger and attacks on infrastructure, 430 vessels are reported to have been accepted for loading in ports since that time.

  • In the Red Sea the US Navy sank three Houthi ships due to their attacks on the US. Iran subsequently sent a war ship into that region. A further increase in tensions could affect wheat (and the grain markets as a whole), but so far it seems to be largely old news to traders that has already been priced in.

  • As a reminder, on Friday, January 12, the winter wheat seedings report will be released alongside the USDA’s Supply and Demand report. The former will offer the first estimate of 2024 US wheat acreage.

Chicago Wheat Action Plan Summary

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

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

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

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

Above: After rallying to 649 ½, Chicago wheat became overbought and turned lower after the December 8 USDA report. Since then, the market has found nearby support near 600. Nearby resistance remains overhead near 650, with additional resistance between 660 and 665. If the market breaks nearby support, it may test the 50-day moving average, and then support near 556.

KC Wheat Action Plan Summary

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

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

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

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

Above: March KC wheat has been consolidating since early December and closing over the 50-moving average signals that the market may be moving higher. If so, overhead resistance remains between 675 – 680, around the December high. To the downside, initial support remains near 625, with the next area of support around 595 and 575.

Mpls Wheat Action Plan Summary

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

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

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

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

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

Other Charts / Weather

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12-29 End of Day: Year End Trade Sees Markets Pressed Lower to Close out the Year

ByGrain Market Insider

FROM ALL OF US AT TOTAL FARM MARKETING, HAVE A HAPPY AND PROSPEROUS NEW YEAR!
The CME and Total Farm Marketing offices will be closed Monday, January 1, in observance of New Year’s Day.

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • The lack of fresh bullish news and beneficial rain falling in the driest areas of Brazil this weekend, and into the new year, gave traders fuel to press existing short positions and corn prices lower on relatively light volume.  

  • Soft weekly export sales and more favorable Brazilian weather, with rain currently falling with more expected this weekend and into the new year, weighed heavily on soybeans as funds likely pared long positions to close the year.

  • Soybean meal and oil closed in opposite directions, with meal lower on continued pressure from higher anticipated Argentine production, and bean oil higher on a rise in palm oil prices due to lower production and Malaysian flooding.

  • Weak weekly export sales and the cancellation of an Egyptian purchase pressed the wheat markets lower into mid-morning before they recovered most of their losses going into the close.

  • To see the updated US 6-10 day temperature and precipitation outlooks, and 1 week precipitation forecasts for both Brazil and Argentina, courtesy of NWS and NOAA, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

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

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

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

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

  • Corn futures ended the year with selling pressure as funds pushed their short position with the lack of overall bullish news, and friendlier weather forecasts for Brazil on a light volume trading day. March corn closed 3 cents lower on the session and was 1 ¾ cents lower on the week.

  • Friday was the last trading session for the year. The March ‘24 corn contract traded 146 ¾ cents lower on the year from closing on 12/30/22 at 618. Prices have been impacted over the year by a growing corn supply, overall demand concerns with competition from global exporters, and a better-than-expected harvest this past fall.

  • Weekly corn export sales were within expectations for last week. Exporters sold 1.242 MMT (48.9 mb) of corn last week with Mexico again the top buyer of U.S. corn. Total corn sales commitments now total 1.158 billion bushels, up 375 from a year ago.

  • Grain markets saw selling pressure as the prospects of beneficial rainfall looks to hit key areas of Brazil over the weekend. The trend is looking to keep a more active weather pattern into January.

  • Longer-term prospects in the corn market are concerned about an early start to the second crop Brazil corn.  A Bloomberg sourced article published today was detailing that due to dry weather, some areas are seeing earlier soybean harvest than expected, which is allowing producers to shift to planting the summer second crop corn.

Above: Since the middle of November, the March corn contract has been rangebound mostly between 495 up top and 470 on the bottom. Overhead resistance lies between 490 and 497, with heavier resistance near 510, and without fresh bullish input, the market runs the risk testing major support near 460.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Front month soybeans continue to be rangebound, largely between 1290 and 1400. At some point, the front month will eventually break out of that range, and if it breaks out to the downside, then the first risk would be 1180. If the breakout occurs to the topside, then the first opportunity would be 1510. The biggest looming catalyst behind a potential downside breakout is the projected record global carryout of soybeans, while the biggest looming catalyst for a potential upside breakout is continued adverse South American weather. Given the uncertainty of which direction the market will go, Grain Market Insider recently recommended adding to sales as the current price level is still historically good. It’s been disappointing how the market has been unable to push higher despite the South American planting disruptions. Because of that, Grain Market Insider’s concern is that, if the weather pattern doesn’t remain adverse, the path of least resistance could be lower. Grain Market Insider will continue to look at additional sales opportunities, as well as potential re-ownership strategies.

  • Grain Market Insider sees a continued opportunity to buy November ’24 1280 soybean calls and November ‘24 1360 soybean calls in equal quantities with a total net spend of approximately 111 cents plus commission and fees. Since the middle of last July, the Nov ’24 contract has been largely rangebound between 1250 and 1320. Today’s settlement of 1265 ¼ is the fourth day in a row with a close above 1250 support and the third day in a row with a stronger closing price. Grain Market Insider wants to take advantage of this value area and recommend purchasing call options. Purchasing call options now will give you confidence to make sales against anticipated production for the 2024 crop, which is yet to be planted, and they will also help to protect those future sales in the event prices continue to rally further.

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

  • Soybeans closed significantly lower to end the year, and while thin holiday trade may have caused a larger sell-off than markets would normally see, improved weather conditions for the majority of Brazil has been a bearish factor. Heavy scattered rains are falling over the country this afternoon in some of the driest areas.

  • At the end of last year, March soybeans closed at 1399 ¾ and today they finished out the year at 1298, marking a loss of over a dollar, but soybeans have still held up better than corn and wheat have. For the month, March soybeans lost 64 ¼ cents, March soybean meal lost $28.20, and March soybean oil lost 3.87 cents.

  • While weather is turning wetter for Brazil, some soybeans that were planted early in the central region were not able to withstand the early drought and heat, and some are being either ripped up or harvested early so that corn or cotton can be planted on time. This could bring some support to prices moving into the new year.

  • Export sales for soybeans were on the soft side at 36.2 mb for 23/24, which was down 51% from the previous week and 38% from the prior 4-week average. Export shipments of 44.7 mb were well above the 26.9 mb needed each week to achieve the USDA’s export estimate. Primary destinations were to China, Japan, and Mexico.

Above: After posting a high of 1398 ½ in November, soybeans found support around 1292. Overhead, nearby resistance remains near 1350 and again around 1400. If the market breaks support at 1292, it runs the risk of testing 1250.

Wheat

Market Notes: Wheat

  • Wheat ended the week on the softer side, with a mostly lower close across the board. However, for the week, March Chicago wheat did gain 11-3/4 cents, and its KC counterpart ended up 19 cents. With markets closed next Monday for the New Year’s holiday, the shortened trading week may bring some added volatility.

  • The USDA reported an increase of 10.2 mb of wheat export sales for 23/24 and an increase of 1.5 mb for 24/25. Shipments last week at 12.6 mb were below the 16.8 mb pace needed per week to reach the USDA export goal of 725 mb for 23/24.

  • Egypt cancelled an international wheat tender according to GASC (their state grain buyer). No purchase was made, but the reasoning for the cancelation was not given. However, it is believed that the offers may have been too high priced.

  • Despite news of one of the worst Russian strikes against Ukraine so far, it did not seem to affect the wheat market. At this point, it is likely that only a disruption to actual vessels or trade routes would factor in war premium. In the face of the risks, President Zelensky of Ukraine said that they have exported 12 million tons of cargo via their own corridor since Russia withdrew from the Black Sea Grain Initiative.

  • According to the Buenos Aires Grain Exchange, Argentina’s wheat crop is now 70.9% harvested, compared with 65.2% last week. The production estimate was unchanged at 14.7 mmt. For reference, last year 12.2 mmt of wheat was collected.

  • The USDA reported that as of December 26, about 30% of the US winter wheat production area is experiencing drought conditions. This compares to last year when 69% of the crop was experiencing drought.

Chicago Wheat Action Plan Summary

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

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

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

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

Above: After rallying to 649 ½, Chicago wheat became overbought and turned lower after the December 8 USDA report. Since then, the market has found nearby support near 600. Nearby resistance remains overhead near 650, with additional resistance between 660 and 665. If the market breaks nearby support, it may test the 50-day moving average, and then support near 556.

KC Wheat Action Plan Summary

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

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

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

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

Above: March KC wheat has been consolidating since early December and closing over the 50-moving average signals that the market may be moving higher. If so, overhead resistance remains between 675 – 680, around the December high. To the downside, initial support remains near 625, with the next area of support around 595 and 575.

Mpls Wheat Action Plan Summary

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

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

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

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

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

Other Charts / Weather

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

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

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12-28 End of Day: Corn and Beans Lower; Wheat Higher on Thin Volume

ByGrain Market Insider

FROM ALL OF US AT TOTAL FARM MARKETING, HAVE A HAPPY AND PROSPEROUS NEW YEAR!
The CME and Total Farm Marketing offices will be closed Monday, January 1, in observance of New Year’s Day.

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Despite strong ethanol production numbers, the corn market continued to drift lower following Tuesday’s runup, as it settled just above the session lows on light holiday volume and two sided trade.

  • Forecasts for additional rainfall in the driest areas of Brazil weighed on the soybean complex that experienced choppy two sided trade, with thin volume on both sides of unchanged.

  • Both soybean meal and oil closed lower, along with soybeans. The prospect of normal crops in Argentina continue to weigh on meal, while weaker crude and veg oils add resistance to bean oil. The combination has pressured soybeans and reduced March Board crush margins nearly 40 cents since the start of December.

  • Reports of a Panama-flagged ship striking a Russian mine as it traveled to a Ukrainian Danube River grain terminal may have sparked the rally in the wheat complex. All three classes settled in the upper third of their respective ranges, regaining most, if not all, of yesterday’s losses.

  • The US dollar traded to a fresh 5 month low before reversing to settle higher on the day. Market expectations that the Federal Reserve will begin reducing rates before other central banks is the driving force behind the lower trend. A lower dollar typically makes US exports more competitive and could provide a level of underlying support.

  • To see the updated US Drought Monitor and the 1 week total precipitation forecasts for Brazil and Argentina, courtesy of NWS and NOAA, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

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

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

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

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

  • March corn futures saw both sides of unchanged on relatively light volume in today’s session before settling near the day’s lows, as traders continue to square positions ahead of the year-end. With Brazilian weather forecasts turning more favorable, the corn market may need a boost in export demand or some other supply concern to turn prices back higher.

  • Ethanol average daily production for the week ending December 22 averaged 1.107 million barrels. This was above trade estimates and the highest since 2017. Ethanol stocks also rose to 23.517 million barrels, an increase of 611,000 from last week and the highest since 2021.

  • Refinitiv Commodities Research (RCR) released its latest estimate of the 23/24 Brazilian corn crop at 118 mmt, which is down about 1% from its last estimate and from the USDA’s current 129 mmt estimate. They cite planting delays of the first corn crop and soybean crop and unfavorable weather conditions. These delays will ultimately delay planting and hurt yields of the safrinha crop, which accounts for 75% of Brazil’s production.

  • There were reports of a Panama-flagged ship hitting a Russian mine in the Black Sea as it was heading to a Danube River port to load grain. According to the Reuters article, two individuals were injured in the attack.

  • The USDA will release weekly export sales on Friday morning. Expectations for new sales last week to range from 600,000 to 1,400,000 mt for the week.

Above: Since the middle of November, the March corn contract has been rangebound mostly between 495 up top and 470 on the bottom. Overhead resistance lies between 490 and 497, with heavier resistance near 510, and without fresh bullish input, the market runs the risk testing major support near 460.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Front month soybeans continue to be rangebound, largely between 1290 and 1400. At some point, the front month will eventually break out of that range, and if it breaks out to the downside, then the first risk would be 1180. If the breakout occurs to the topside, then the first opportunity would be 1510. The biggest looming catalyst behind a potential downside breakout is the projected record global carryout of soybeans, while the biggest looming catalyst for a potential upside breakout is continued adverse South American weather. Given the uncertainty of which direction the market will go, Grain Market Insider recently recommended adding to sales as the current price level is still historically good. It’s been disappointing how the market has been unable to push higher despite the South American planting disruptions. Because of that, Grain Market Insider’s concern is that, if the weather pattern doesn’t remain adverse, the path of least resistance could be lower. Grain Market Insider will continue to look at additional sales opportunities, as well as potential re-ownership strategies.

  • Grain Market Insider sees a continued opportunity to buy November ’24 1280 soybean calls and November ‘24 1360 soybean calls in equal quantities with a total net spend of approximately 111 cents plus commission and fees. Since the middle of last July, the Nov ’24 contract has been largely rangebound between 1250 and 1320. Today’s settlement of 1265 ¼ is the fourth day in a row with a close above 1250 support and the third day in a row with a stronger closing price. Grain Market Insider wants to take advantage of this value area and recommend purchasing call options. Purchasing call options now will give you confidence to make sales against anticipated production for the 2024 crop, which is yet to be planted, and they will also help to protect those future sales in the event prices continue to rally further.

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

  • Soybeans ended the day lower in a day of mixed trade that was caused by volatility from thinly traded markets. While prices were higher earlier this morning, soybeans and both soybean meal and oil slipped later in the day on news of rainfall in Brazil, along with a more favorable forecast.

  • The last regular trading day for January soybeans was today, as the delivery period will begin tomorrow. For the month, January beans are set to lose around 37 cents depending on tomorrow’s close. Both January meal and oil are set to have losses on the month as well.

  • Central and northern Brazil received heavy scattered showers throughout the day, but temperatures are forecast to be warmer in the short term. January is expected to be wet for the driest parts of central and northern Brazil, and the forecast for Argentina remains favorable.

  • Next month on the 12th, the USDA will release its January WASDE report, and changes will very likely be made to South American production. Their latest guess for Brazil was at 161 mmt, but many analysts are expecting closer to 155 mmt. The last guess for Argentina was 48 mmt, but that number may rise. For changes in the US, many analysts are expecting the USDA to decrease the export sales number, which would increase the carryout.

Above: After posting a high of 1398 ½ in November, soybeans found support around 1292. Overhead, nearby resistance remains near 1350 and again around 1400. If the market breaks support at 1292, it runs the risk of testing 1250.

Wheat

Market Notes: Wheat

  • Breaking news indicated that a vessel in the Black Sea struck a Russian mine. Two people were reported to be injured. The civilian ship was headed to the Danube River to be loaded with grain and this may have factored some more premium into wheat today, with a higher close in all three futures classes.

  • The US dollar made a new near-term low today at 100.61, before finding some support and heading back into positive territory. From a big picture perspective, the trend is still down, but should be watched closely as today’s reversal may be a signal that a bottom is forming. If it begins to rally, it could offer resistance to the wheat market.

  • The increase in freight costs is not only affecting the US. Russia, despite their cheap wheat export prices, is seeing weaker shipments as well.  According to SovEcon, Russian 23/24 wheat exports are now estimated to be 48.6 mmt versus 48.8 mmt previously. Their November wheat exports at 3.5 mmt, down from last year’s 4.3 mmt.

  • It is possible that with funds still net short a hefty number of wheat contracts, a short covering rally could be triggered by the recent buying interest in the wheat market. The holidays tend to be a choppy time for the markets with lower trade volume. While Chicago wheat is technically neither overbought nor oversold, momentum indicators are pointing higher for the time being.

Chicago Wheat Action Plan Summary

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

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

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

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

Above: After rallying to 649 ½, Chicago wheat became overbought and turned lower after the December 8 USDA report. Since then, the market has found nearby support near 600. Nearby resistance remains overhead near 650, with additional resistance between 660 and 665. If the market breaks nearby support, it may test the 50-day moving average, and then support near 556.

KC Wheat Action Plan Summary

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

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

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

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

Above: Since posting bearish reversals on December 6 and 8, the market has been consolidating while holding support around 625, with close in resistance just overhead at the 50-day moving average. If the market breaks lower, the next area of support may come in around 595 and 575. Resistance above the 50-day moving average remains around 675 – 680.

Mpls Wheat Action Plan Summary

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

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

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

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

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

Other Charts / Weather

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

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

|

12-27 End of Day: Grains Settle Mixed on Light Holiday Volume

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • A more favorable outlook for Brazilian weather, a lower wheat market, and a lack of fresh bullish news led the corn market to end the day lower on light holiday volume, breaking its three day run of higher closes.

  • With support coming from a bullish reversal in soybean oil, soybeans closed mostly higher on the day after trading below unchanged for much of the session on low year-end holiday volume.

  • Soybean meal and oil closed in opposite directions with meal lower on the day and oil higher, though both products rallied off the day’s lows. Position squaring appears to have dominated the product’s trade, as traders look to even up their respective long meal or short oil positions before the year’s end.

  • The falling US dollar failed to ignite any follow through buying in the wheat complex, as all three wheat classes gave up a portion of yesterday’s gains. Chicago, being the weakest of the three, led the way with double digit losses across the board, while old crop KC gained on new crop, likely on improved conditions.

  • The US dollar continued its downtrend and traded to its lowest level since July 27, 2023, on expectations that the Federal Reserve will begin reducing rates before other central banks. The downtrend in the dollar makes US exports more competitive and may provide some level of underlying support.

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

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

Corn

Corn Action Plan Summary

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

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

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

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

  • Today’s lower close in corn marks the end of a three-session rally for the March contract. Without much fresh news to drive the market and a more favorable outlook for Brazil, corn did not find much footing today. Additionally, shortened holiday weeks tend to be a bit choppy with lighter trade volume.

  • Private estimates of the Brazil corn crop are as low as 117 mmt, whereas the USDA is using a figure of 129 mmt. There may be some delays to safrinha planting due to weather issues, but without the crop in the ground, it may be too early to determine if that will significantly impact the crop.

  • According to the CFTC, as of December 19, managed funds added nearly 30,000 short corn contracts to bring their total short position to 180,724. This may be adding some pressure to the market, but also primes it for a short covering rally, provided there is a catalyst to trigger it.

  • China has approved 26 seed companies to sell GMO corn and soybean seed in certain provinces. As China works to become more self-sufficient, it may mean that they import fewer goods and commodities from the US. However, this will be bearish in the long term, and is not necessarily a major concern now. With that said, it has been reported that Chinese corn producers are planning to more than double their GMO corn planting next year versus 670,000 hectares in 2023.

Above: Since the middle of November, the March corn contract has been rangebound mostly between 495 up top and 470 on the bottom. Overhead resistance lies between 490 and 497, with heavier resistance near 510, and without fresh bullish input, the market runs the risk testing major support near 460.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Front month soybeans continue to be rangebound, largely between 1290 and 1400. At some point, the front month will eventually break out of that range, and if it breaks out to the downside, then the first risk would be 1180. If the breakout occurs to the topside, then the first opportunity would be 1510. The biggest looming catalyst behind a potential downside breakout is the projected record global carryout of soybeans, while the biggest looming catalyst for a potential upside breakout is continued adverse South American weather. Given the uncertainty of which direction the market will go, Grain Market Insider recently recommended adding to sales as the current price level is still historically good. It’s been disappointing how the market has been unable to push higher despite the South American planting disruptions. Because of that, Grain Market Insider’s concern is that, if the weather pattern doesn’t remain adverse, the path of least resistance could be lower. Grain Market Insider will continue to look at additional sales opportunities, as well as potential re-ownership strategies.

  • Grain Market Insider recommends buying November ’24 1280 soybean calls and November ‘24 1360 calls in equal quantities with a total net spend of approximately 111 cents plus commission and fees. Since the middle of last July, the Nov ’24 contract has been largely rangebound between 1250 and 1320.  Today’s settlement of 1265 ¼ is the fourth day in a row with a close above 1250 support and the third day in a row with a stronger closing price. Grain Market Insider wants to take advantage of this value area and recommend purchasing call options. Purchasing call options now will give you confidence to make sales against anticipated production for the 2024 crop, which is yet to be planted, and they will also help to protect those future sales in the event prices continue to rally further.

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

  • Year end trade added to the volatility in the soybean complex, which saw two sided trade on relatively low holiday volume. Soybeans reversed course, ending the day higher after trading lower in the overnight session. Soybean oil lent support to soybeans as it posted a bullish reversal and also closed higher on the day, while meal closed lower, but well off its lows.

  • Overall, Brazilian weather is improving with showers throughout central and northern Brazil and a wet forecast with shower activity set to favor the northeastern areas, though the forecasts have improved, they still need to verify into actual rainfall, which at times has been less than expected.

  • The situation in Argentina has improved considerably from last year, with favorable weather overall and expectations of a normal to possibly above normal crop. The potential increase in Argentina’s production could more than offset the potential losses in Brazil, which is adding resistance to prices.

  • Brazilian crop watcher, Dr. Michael Cordonnier, lowered his estimate of Brazil’s soybean production to 153 mmt, and cited the variable rain amounts and coverage over the past week for his conclusions.

  • In other news, according to China’s Ministry and Agricultural and Rural Affairs, China approved 26 seed companies to produce, distribute, and sell GMO corn and soybean seeds. The move comes as the country attempts to become more self-sufficient in securing its own food supply.

Above: After posting a high of 1398 ½ in November, soybeans found support around 1292. Overhead, nearby resistance remains near 1350 and again around 1400. If the market breaks support at 1292, it runs the risk of testing 1250.

Wheat

Market Notes: Wheat

  • Most of yesterday’s gains in wheat were erased today with lower closes in all three US futures classes. In addition, the spread between the March contracts of Chicago and Kansas City wheat has been narrowing as the conditions in the US southern Plains improve with more moisture.

  • Wheat also saw weakness today, even though the US Dollar Index continues to drop. At the time of this writing, it has broken below the 101 level and is the lowest it has been since July 27. This should make US wheat more attractive to global importers. But Russia continues to be the cheapest origin with FOB values around $240 to $243 per mt.

  • Coceral, a grain trade association, has estimated that EU soft wheat production next year will be 139.4 mmt, up just 0.1 mmt from 2023. This is practically no change and comes even though France may have reduced production due to weather issues that delayed planting; Spain is expected to make up the difference.

  • According to Russia, their 2023 grain harvest is the second largest on record at 142.6 mmt. Of that total, wheat accounted for about 93 mmt. That is down from 104.2 mmt of wheat in 2022, but is still a large amount that is sure to keep Russian prices low and a dominance in terms of the export market.

Chicago Wheat Action Plan Summary

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

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

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

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

Above: After rallying to 649 ½, Chicago wheat became overbought and turned lower after the December 8 USDA report. Since then, the market has found nearby support near 600. Nearby resistance remains overhead near 650, with additional resistance between 660 and 665. If the market breaks nearby support, it may test the 50-day moving average, and then support near 556.

KC Wheat Action Plan Summary

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

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

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

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

Above: Since posting bearish reversals on December 6 and 8, the market has been consolidating while holding support around 625, with close in resistance just overhead at the 50-day moving average. If the market breaks lower, the next area of support may come in around 595 and 575. Resistance above the 50-day moving average remains around 675 – 680.

Mpls Wheat Action Plan Summary

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

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

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

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

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

Other Charts / Weather

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12-26 End of Day: Grains Higher to Start Shortened Holiday Week

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Corn futures followed gains in wheat today as traders returned from the Christmas break. Support also likely came from news of the reopening of two US rail crossings into Mexico, a major buyer of US corn.

  • Soybeans joined corn and wheat futures trading higher today. Traders continue to weigh what damage may have already been done to Brazilian soybeans due to recent dryness with the likely coming benefit from forecast rains over the next two weeks.

  • Wheat futures posted strong gains today as the US dollar continued its recent trend lower, support may have also come from increased tensions in the Black Sea region.

  • To see the updated US 7-day precipitation forecast, and Brazil 1 week forecast total precipitation courtesy of the National Weather Service, Climate Prediction Center., and NOAA, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

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

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

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

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

  • Strong money flow into the grain markets, and commodity markets in general, helped push corn futures higher on the session. March corn gained 7 ¼ cents on the day, led by buying in the wheat and soybean markets.

  • Wheat futures posted strong gains as tensions escalated in the Black Sea region with an attack on a Russian warship at its port in Crimea by the Ukraine military. Typically, Ukraine war news has been brushed off by the markets in general, but with the end of the year approaching, this event triggered short covering in the wheat markets.

  • Managed Money were strong sellers of corn positions in last week’s Commitment of Traders report. Funds added 29,000+ short positions back into the corn market. With the end of the year coming soon, position squaring of some of those short positions could help support corn prices this week.

  • The USDA released weekly export inspection on Tuesday morning. Last week, the U.S. inspected 1.082 MMT (42.6 MB) for corn. Total inspections are running 26% ahead of the previous year and in line with current USDA targets.

  • South American weather is turning more friendly for first crop Brazil corn and Argentina corn production. Argentina corn is returning from two years of drought-stressed crops. The Buenos Aires Grain Exchange stated that only 1% of this year’s Argentina corn crop is rated in poor condition.

Above: After posting bearish reversals on December 6 and 8, the market slowly eroded and traded through 470 support. Without fresh bullish input, the market runs the risk testing major support near 460. If a bullish catalyst does enter the market, overhead resistance comes in between 490 and 497, and again near 510.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Front month soybeans continue to be rangebound, largely between 1290 and 1400. At some point, the front month will eventually break out of that range, and if it breaks out to the downside, then the first risk would be 1180. If the breakout occurs to the topside, then the first opportunity would be 1510. The biggest looming catalyst behind a potential downside breakout is the projected record global carryout of soybeans, while the biggest looming catalyst for a potential upside breakout is continued adverse South American weather. Given the uncertainty of which direction the market will go, Grain Market Insider recently recommended adding to sales as the current price level is still historically good. It’s been disappointing how the market has been unable to push higher despite the South American planting disruptions. Because of that, Grain Market Insider’s concern is that, if the weather pattern doesn’t remain adverse, the path of least resistance could be lower. Grain Market Insider will continue to look at additional sales opportunities, as well as potential re-ownership strategies.

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

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

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

  • Soybeans ended the day higher after volatile trade due to thin holiday markets that saw prices on either side of unchanged. Support came from soybean meal, as well as higher crude oil.

  • Overall, Brazilian weather is improving with showers throughout central and northern Brazil and a wet forecast, but in the central soybean growing state of Mato Grosso, the drought hit hard and the Governor of Rondônia, which is directly North of Mato Grosso, decreed on Sunday a state of emergency due to “the worst drought the state has ever seen”. This will very likely impact production.

  • On the other hand, Argentina has been dealt a favorable hand in terms of weather, and 69% of the crop is planted with just 3% rated poor to very poor. Last season, the country only produced half of its usual production, and this year will likely be above average.

  • Export inspections were strong for soybeans today at 39.3 mb and were on the higher end of analyst expectations. Total inspections for 23/24 are now at 818 mb, which is down 18% from last year, but have been improving.

Above: After posting a high of 1398 ½ in November, soybeans found support around 1292. Overhead, nearby resistance remains near 1350 and again around 1400. If the market breaks support at 1292, it runs the risk of testing 1250.

Wheat

Market Notes: Wheat

  • Wheat was the star of the grain complex today, with solid gains in all three classes and was likely a big reason why corn was higher. March Chicago wheat appears to have broken out of its bull pennant formation to the upside, and the next target would be the 200-day moving average at $6.60.

  • Support for wheat today came from a decline in the US dollar, as well as the re-opening of some major shipping lanes. The two rail lines into Mexico at Eagle Pass and El Paso were re-opened, and shipping issues in the Black Sea region may drive more business to the US.

  • Wheat export inspections were still on the soft side, but improved from recent numbers at 15.8 mb and were on the higher side of analyst expectations. Total wheat inspections for 23/24 are now at 343 mb, which is down 21% from the previous year.

  • Last Friday’s CFTC report saw non-commercials buying back another portion of their short position by 4,497 contracts, which reduced the net short position to 65,032 contracts. With the funds so heavily short, the recent rally could cause more short covering and potentially a squeeze.

Chicago Wheat Action Plan Summary

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

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

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

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

Above: After rallying to 649 ½, Chicago wheat became overbought and turned lower after the December 8 USDA report. Since then, the market has found nearby support near 600. Nearby resistance remains overhead near 650, with additional resistance between 660 and 665. If the market breaks nearby support, it may test the 50-day moving average, and then support near 556.

KC Wheat Action Plan Summary

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

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

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

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

Above: Since posting bearish reversals on December 6 and 8, the market has been consolidating while holding support around 625, with close in resistance just overhead at the 50-day moving average. If the market breaks lower, the next area of support may come in around 595 and 575. Resistance above the 50-day moving average remains around 675 – 680.

Mpls Wheat Action Plan Summary

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

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

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

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

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

Other Charts / Weather

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

ByGrain Market Insider

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

All prices as of 2:00 pm Central Time

Grain Market Highlights

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

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

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

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

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

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

Corn

Corn Action Plan Summary

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

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

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

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

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

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

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

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

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

Above: After posting bearish reversals on December 6 and 8, the market slowly eroded and traded through 470 support. Without fresh bullish input, the market runs the risk testing major support near 460. If a bullish catalyst does enter the market, overhead resistance comes in between 490 and 497, and again near 510.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Front month soybeans continue to be rangebound, largely between 1290 and 1400. At some point, the front month will eventually break out of that range, and if it breaks out to the downside, then the first risk would be 1180. If the breakout occurs to the topside, then the first opportunity would be 1510. The biggest looming catalyst behind a potential downside breakout is the projected record global carryout of soybeans, while the biggest looming catalyst for a potential upside breakout is continued adverse South American weather. Given the uncertainty of which direction the market will go, Grain Market Insider recently recommended adding to sales as the current price level is still historically good. It’s been disappointing how the market has been unable to push higher despite the South American planting disruptions. Because of that, Grain Market Insider’s concern is that, if the weather pattern doesn’t remain adverse, the path of least resistance could be lower. Grain Market Insider will continue to look at additional sales opportunities, as well as potential re-ownership strategies.

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

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

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

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

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

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

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

Above: After posting a high of 1398 ½ in November, soybeans found support around 1292. Overhead, nearby resistance remains near 1350 and again around 1400. If the market breaks support at 1292, it runs the risk of testing 1250.

Wheat

Market Notes: Wheat

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

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

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

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

Chicago Wheat Action Plan Summary

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

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

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

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

Above: After rallying to 649 ½, Chicago wheat became overbought and turned lower after the December 8 USDA report. Since then, the market has found nearby support near 600. Nearby resistance remains overhead near 650, with additional resistance between 660 and 665. If the market breaks nearby support, it may test the 50-day moving average, and then support near 556.

KC Wheat Action Plan Summary

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

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

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

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

Above: Since posting bearish reversals on December 6 and 8, the market has been consolidating while holding support around 625, with close in resistance just overhead at the 50-day moving average. If the market breaks lower, the next area of support may come in around 595 and 575. Resistance above the 50-day moving average remains around 675 – 680.

Mpls Wheat Action Plan Summary

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

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

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

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

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

Other Charts / Weather

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

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

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

ByGrain Market Insider

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

All prices as of 2:00 pm Central Time

Grain Market Highlights

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

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

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

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

  • To see the updated US Drought Monitor, 5-day precipitation forecast, and Brazil’s 2-week precipitation forecast, courtesy of the NDMC, National Weather Service, and NOAA, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

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

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

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

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

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

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

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

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

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

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

Above: After posting bearish reversals on December 6 and 8, the market slowly eroded and traded through 470 support. Without fresh bullish input, the market runs the risk testing major support near 460. If a bullish catalyst does enter the market, overhead resistance comes in between 490 and 497, and again near 510.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Front month soybeans continue to be rangebound, largely between 1290 and 1400. At some point, the front month will eventually break out of that range, and if it breaks out to the downside, then the first risk would be 1180. If the breakout occurs to the topside, then the first opportunity would be 1510. The biggest looming catalyst behind a potential downside breakout is the projected record global carryout of soybeans, while the biggest looming catalyst for a potential upside breakout is continued adverse South American weather. Given the uncertainty of which direction the market will go, Grain Market Insider recently recommended adding to sales as the current price level is still historically good. It’s been disappointing how the market has been unable to push higher despite the South American planting disruptions. Because of that, Grain Market Insider’s concern is that, if the weather pattern doesn’t remain adverse, the path of least resistance could be lower. Grain Market Insider will continue to look at additional sales opportunities, as well as potential re-ownership strategies.

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

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

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

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

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

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

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

Above: After posting a high of 1398 ½ in November, soybeans found support around 1292. Overhead, nearby resistance remains near 1350 and again around 1400. If the market breaks support at 1292, it runs the risk of testing 1250.

Wheat

Market Notes: Wheat

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

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

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

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

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

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

Chicago Wheat Action Plan Summary

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

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

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

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

Above: After rallying to 649 ½, Chicago wheat became overbought and turned lower after the December 8 USDA report. Since then, the market has found nearby support near 600. Nearby resistance remains overhead near 650, with additional resistance between 660 and 665. If the market breaks nearby support, it may test the 50-day moving average, and then support near 556.

KC Wheat Action Plan Summary

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

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

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

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

Above: Since posting bearish reversals on December 6 and 8, the market has been consolidating while holding support around 625, with close in resistance just overhead at the 50-day moving average. If the market breaks lower, the next area of support may come in around 595 and 575. Resistance above the 50-day moving average remains around 675 – 680.

Mpls Wheat Action Plan Summary

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

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

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

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

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

Other Charts / Weather

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

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

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

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

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

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

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

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

  • To see the updated US 6 – 10 day temperature and precipitation outlooks, and the GRACE-Based Root Zone Drought Indicators for the US, Brazil, and Argentina, courtesy of the National Weather Service, and NASAGRACE in partnership with the NDMC, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

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

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

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

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

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

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

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

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

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

Above: After posting bearish reversals on December 6 and 8, the market slowly eroded and traded through 470 support. Without fresh bullish input, the market runs the risk testing major support near 460. If a bullish catalyst does enter the market, overhead resistance comes in between 490 and 497, and again near 510.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Front month soybeans continue to be rangebound, largely between 1290 and 1400. At some point, the front month will eventually break out of that range, and if it breaks out to the downside, then the first risk would be 1180. If the breakout occurs to the topside, then the first opportunity would be 1510. The biggest looming catalyst behind a potential downside breakout is the projected record global carryout of soybeans, while the biggest looming catalyst for a potential upside breakout is continued adverse South American weather. Given the uncertainty of which direction the market will go, Grain Market Insider recently recommended adding to sales as the current price level is still historically good. It’s been disappointing how the market has been unable to push higher despite the South American planting disruptions. Because of that, Grain Market Insider’s concern is that, if the weather pattern doesn’t remain adverse, the path of least resistance could be lower. Grain Market Insider will continue to look at additional sales opportunities, as well as potential re-ownership strategies.

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

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

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

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

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

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

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

Above: After posting a high of 1398 ½ in November, soybeans found support around 1292. Overhead, nearby resistance remains near 1350 and again around 1400. If the market breaks support at 1292, it runs the risk of testing 1250.

Wheat

Market Notes: Wheat

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

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

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

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

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

Chicago Wheat Action Plan Summary

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

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

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

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

Above: After rallying to 649 ½, Chicago wheat became overbought and turned lower after the December 8 USDA report. Since then, the market has found nearby support near 600. Nearby resistance remains overhead near 650, with additional resistance between 660 and 665. If the market breaks nearby support, it may test the 50-day moving average, and then support near 556.

KC Wheat Action Plan Summary

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

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

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

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

Above: Since posting bearish reversals on December 6 and 8, the market has been consolidating while holding support around 625, with close in resistance just overhead at the 50-day moving average. If the market breaks lower, the next area of support may come in around 595 and 575. Resistance above the 50-day moving average remains around 675 – 680.

Mpls Wheat Action Plan Summary

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

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

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

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

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

Other Charts / Weather

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

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

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

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

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

  • To see the updated US 5-day precipitation forecast, 6 – 10 day temperature and precipitation outlooks, and Brazil’s and Argentina’s 2 week precipitation forecast, courtesy of the National Weather Service, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

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

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

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

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

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

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

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

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

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

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

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Front month soybeans continue to be rangebound, largely between 1290 and 1400. At some point, the front month will eventually break out of that range, and if it breaks out to the downside, then the first risk would be 1180. If the breakout occurs to the topside, then the first opportunity would be 1510. The biggest looming catalyst behind a potential downside breakout is the projected record global carryout of soybeans, while the biggest looming catalyst for a potential upside breakout is continued adverse South American weather. Given the uncertainty of which direction the market will go, Grain Market Insider recently recommended adding to sales as the current price level is still historically good. It’s been disappointing how the market has been unable to push higher despite the South American planting disruptions. Because of that, Grain Market Insider’s concern is that, if the weather pattern doesn’t remain adverse, the path of least resistance could be lower. Grain Market Insider will continue to look at additional sales opportunities, as well as potential re-ownership strategies.

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

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

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

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

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

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

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

Above: After posting a high of 1398 ½ in November, soybeans found support around 1292. Overhead, nearby resistance remains near 1350 and again around 1400. If the market breaks support at 1292, it runs the risk of testing 1250.

Wheat

Market Notes: Wheat

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

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

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

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

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

Chicago Wheat Action Plan Summary

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

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

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

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

Above: After rallying to 649 ½, Chicago wheat became overbought and turned lower after the December 8 USDA report. Since then, the market has found nearby support near 600. Nearby resistance remains overhead near 650, with additional resistance between 660 and 665. If the market breaks nearby support, it may test the 50-day moving average, and then support near 556.

KC Wheat Action Plan Summary

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

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

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

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

Above: Following bearish reversals on December 6th and December 8th, the market has shown that there is significant overhead resistance above 680. The market is also showing signs of being oversold following the recent runup, which adds upward resistance and could add pressure if the market continues lower. Below the market, initial support comes in near 630, with further support remaining around 595 and 575. 

Mpls Wheat Action Plan Summary

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

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

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

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

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

Other Charts / Weather

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

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

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

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

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

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

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

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

  • To see the updated US 6 – 10 day temperature and precipitation outlooks, as well as the Brazil and Argentina 1 week total accumulated precipitation, courtesy of the National Weather Service, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

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

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

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

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

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

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

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

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

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

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

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

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Front month soybeans continue to be rangebound, largely between 1290 and 1400. At some point, the front month will eventually break out of that range, and if it breaks out to the downside, then the first risk would be 1180. If the breakout occurs to the topside, then the first opportunity would be 1510. The biggest looming catalyst behind a potential downside breakout is the projected record global carryout of soybeans, while the biggest looming catalyst for a potential upside breakout is continued adverse South American weather. Given the uncertainty of which direction the market will go, Grain Market Insider recently recommended adding to sales as the current price level is still historically good. It’s been disappointing how the market has been unable to push higher despite the South American planting disruptions. Because of that, Grain Market Insider’s concern is that, if the weather pattern doesn’t remain adverse, the path of least resistance could be lower. Grain Market Insider will continue to look at additional sales opportunities, as well as potential re-ownership strategies.

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

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

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

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

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

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

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

Above: After posting a high of 1398 ½ in November, soybeans found support around 1292. Overhead, nearby resistance remains near 1350 and again around 1400. If the market breaks support at 1292, it runs the risk of testing 1250.

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

Wheat

Market Notes: Wheat

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

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

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

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

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

Chicago Wheat Action Plan Summary

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

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

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

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

Above: After rallying to 649 ½, Chicago wheat became overbought and turned lower after the December 8 USDA report. Since then, the market has found nearby support near 600. Nearby resistance remains overhead near 650, with additional resistance between 660 and 665. If the market breaks nearby support, it may test the 50-day moving average, and then support near 556.

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

KC Wheat Action Plan Summary

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

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

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

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

Above: Following bearish reversals on December 6th and December 8th, the market has shown that there is significant overhead resistance above 680. The market is also showing signs of being oversold following the recent runup, which adds upward resistance and could add pressure if the market continues lower. Below the market, initial support comes in near 630, with further support remaining around 595 and 575. 

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

Mpls Wheat Action Plan Summary

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

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

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

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

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

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

Other Charts / Weather

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

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