|

Grain Market Insider: October 26, 2023

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • The corn market drifted lower for a fifth consecutive session despite yet again strong export sales, which are now running 24% ahead of last year’s pace.

  • Soybeans closed lower in spite of impressive export sales and no change to the worrisome Brazilian weather outlook for the next two weeks.

  • Wheat managed to close higher across all three classes in the face of lower corn and soybean prices and a higher US dollar.

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

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

Corn

Corn Action Plan Summary

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

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

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

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

  • The weak price action theme continued to pressure the corn market on Thursday. Harvest pressure outweighed positive export sale numbers as December corn lost 3/4 cent on the session and traded lower for the fifth consecutive session.

  • The USDA released a strong weekly export sales report for corn on Thursday morning. Last week, U.S. exporters added 1,351,100 MT (53.2 mb) of sales on the books for the 2023-24 marketing year.  Shipments were disappointing at 483,700 MT (19.0 mb), but this is typically a window dominated by soybean exports. Corn sales commitments now total 690 mb in 2023-24 and are up 24% from a year ago and slightly ahead of the pace needed to reach the USDA export target.

  • South American weather is forecasted to stay dry and hot for areas of Brazil, and areas of Argentina are seeing signs of last year’s drought persist. While South American weather is still in its early stages, the corn market is lacking any true weather premium.

  • The cash market will likely give direction to the futures market. Basis has improved and should stay supported as rain/snow moves across the Corn Belt through the weekend, slowing harvest. Corn harvest was 59% complete last week.

  • Managed money funds still hold a large short position in the corn market, short last week a net 108,870 contracts. News has been quiet to push funds out of their short positions as harvest ramps up, and U.S. corn supplies are looking to be at multi-year highs.

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

Soybeans

Soybeans Action Plan Summary

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

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

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

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

  • Soybeans ended the day lower despite strong export sales, a new sale reported today, and dryness in South America. Pressure came from lower soy products with soybean oil lower, along with lower crude and other veg oils, and soybean meal down slightly for the day in the deferred contracts.

  • Soybean export sales were impressive for the week ending October 19, with the USDA reporting an increase of 50.6 mb in sales for 23/24. Export shipments of 87.6 mb were well above the 33.8 mb needed each week to meet the USDA’s expectations. Primary destinations were to China, Mexico, and Bangladesh.

  • This morning, private exporters reported sales of 110,000 metric tons of soybeans for delivery to China during the 23/24 marketing year. This has been the continuation of a string of sales to China as soybeans out of the PNW get more competitive with the stores South America has left. Exports of soybean meal have also been strong as the US picks up business from Argentina.

  • Something that could have pressured the soy complex today is reports of falling spot prices of soybeans in Brazil. This has caused producers to become much more reluctant sellers as profit margins get tight, while weather forecasts remain dry, causing producers to worry.

Above: In the middle of October, the market pierced the upper end of the 1285 – 1323 resistance area and tested the 50-day moving average, before retreating lower. If the market can maintain a close above resistance at 1334, it would be poised to make a run to test 1370. Otherwise, initial support to the downside may be found near 1300 and again near 1273. Key support for the move remains down near 1250.

Wheat

Market Notes: Wheat

  • In the face of a higher US dollar and lower corn and soybeans, wheat rallied today. This is likely due, in part, to news that Ukraine has temporarily suspended their humanitarian corridor due to Russian threats. It is currently unclear as to how long the route will be closed, but in any case, Ukrainian grain shipments are down about 30% from last year, despite about 40 cargoes of grain making their way out of the country via Ukraine’s corridor.

  • Export sales for wheat were lackluster at 13.4 mb for the 23/24 and 0.6 mb for 24/25. With the USDA estimating 700 mb of 23/24 wheat exports, the shipments last week of just 4.8 mb were well below the 13.9 mb pace needed per week to meet that goal.

  • With funds holding over 100,000 short contracts of Chi wheat, and futures reaching support at these lower levels, part of today’s rally could be technical in nature as the market corrects to the upside. However, the export market will likely need to pick up before wheat sees a strong move higher.

  • According to their agricultural ministry, Russia is expecting a total grain harvest of 140 mmt. That would represent the second largest production on record, with the wheat crop accounting for 93 mmt of that total. For reference, previous estimates were pegged at a 135 mmt total crop, with 90 mmt of that being wheat.

Chicago Wheat Action Plan Summary

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

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

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

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

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

KC Wheat Action Plan Summary

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

  • No new action is recommended for 2024 KC wheat. Currently, July ’24 is trading near a 25-cent premium to the Dec ’23 contract, up from a 60-cent discount last July, as bear spreading due to weak fundamentals has driven the Dec ’23 contract closer to its contract lows, while the July ’24 contract remains more elevated as it tests Feb ’22 lows. The risk for the July ’24 contract is much like that for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July 660 puts to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 800 to take advantage of elevated prices before they eroded further. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

Above: For much of September, December Minneapolis wheat was rangebound, and the breakout to the downside on September 29 set the market up to test support near 665, the May ’21 low. Since then, the market has been consolidating upward, with initial support between 711 and 708. If prices continue higher, initial resistance remains between 745 – 760.

Other Charts / Weather

|

Grain Market Insider: October 25, 2023

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Solid ethanol production numbers didn’t keep the corn market from closing lower for the fourth session in a row. A general lack of bullish news, harvest pressure and continued technical selling pressured the market.

  • Weakness in soybean meal weighed heavily on soybeans, which traded higher in the overnight, but plummeted in the first 30 min. of trading, despite a 126k mt sale to China, before recovering to close within 2 cents of this morning’s opening price.

  • Soybean meal traded lower as traders booked profits and unwinding long meal, short oil positions following beneficial rains that fell in Argentina. Meanwhile, soybean oil traded sharply higher, supported from the same spread action and higher crude and palm oil.

  • Led by the KC contracts, all three wheat classes closed in negative territory following overnight gains as weakness prevails in the export market. Beneficial rains in Argentina, and lower prices in neighboring corn and soybeans also contributed to the pall in the wheat market.

  • To see the current US 5-day precipitation forecast, and the South American GRACE-Based Soil Moisture Drought Indicators courtesy of NASA and the University of Nebraska-Lincoln, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

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

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

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

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

  • The weak price action of the last couple trading sessions continued to pressure the corn market on Wednesday. Harvest pressure and lack of overall news has kept the path lower this week. December corn lost 4 cents on the session and had traded lower four consecutive sessions.

  • Ethanol production last week rose to 1.04 million barrels/day, up slightly from last week. Ethanol stocks remain tight at 21.4 million barrels. Ethanol producers used 100.6 MB of corn last week and are up to 702 MB for the marketing year. This pace is currently trending up 20 mb (3%) over last year.

  • The USDA will release the weekly export sales report on Thursday morning. While soybean sales have improved, corn sales are still lacking. Last week, corn export sales were at 881,000 mt for the 23/24 marketing year.

  • A strong Midwestern storm will be working its way across the Corn Belt over the next few days.  Rainfall with good coverage and a sharp drop in temperature is forecasted into the start of November.  Wetter than normal forecasts may limit harvest progress through the end of the week in some areas.

  • South American weather will likely stay dry and hot for areas of Brazil, and areas of Argentina are seeing signs of last year’s drought persist. While South American weather is still in its early stages, the corn market is lacking any true weather premium.

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

Soybeans

Soybeans Action Plan Summary

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

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

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

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

  • Soybeans ended the day lower pressured by lower soybean meal, but prices did rebound from lows earlier this morning. Soybean oil was higher thanks to support from gains in crude oil, as well as higher world vegetable oils.

  • Following Monday’s impressive export inspections for soybeans, another flash sale was reported today of 126,000 metric tons of beans to China for the 2023/2024 marketing year. The recent increases in purchases by China from the US, along with yesterday’s purchasing agreements that were signed by China, have been supportive.

  • South America is continuing to plant soybeans despite the hot and dry conditions in both Argentina and central and northern Brazil, while southern Brazil remains far too wet. Although the 10-day forecast features more of the same weather pattern, the Rosario Board of Trade acknowledged that this past weekend’s rains helped to alleviate a lot of concern with Argentina’s soybean planting season.

  • Soybeans got support from purchasing agreements that were signed yesterday between Chinese agricultural companies and US commodity exporters at a ceremony held in Des Moines and organized by the US Soybean Export Council. 11 different agreements were made, and now the trade will look to see when these purchases will be announced by the USDA.

Above: In the middle of October, the market pierced the upper end of the 1285 – 1323 resistance area and tested the 50-day moving average, before retreating lower. If the market can maintain a close above resistance at 1334, it would be poised to make a run to test 1370. Otherwise, initial support to the downside may be found near 1300 and again near 1273. Key support for the move remains down near 1250.

Wheat

Market Notes: Wheat

  • A lack of fresh news and pressure from lower corn and soybeans kept wheat on the defensive today. Additionally, Russia remains the world’s cheapest origin for wheat, and the lack of demand is keeping pressure on US exports.

  • While the war rages on in the Black Sea, though it is viewed by many as old news, especially given the developments in the Middle East, Ukraine continues to try to export grain in any way they can, and reportedly their 23/24 exports have reached 8.56 mmt to date. However, that is still down significantly from 12.4 mmt at this time last year.

  • Rumors of Chinese interest in US SRW wheat continue to circulate, but so far there has been no confirmation. There have also not been any flash sales in excess of 100,000 mt, which are reportable on a daily basis. Traders will be watching upcoming export data to see if China has been buying “under the radar”.

  • Adding to pressure in the wheat market are the recent rains in some of the drier areas of South America. Particularly, Argentina received some good moisture in some of the driest areas, and while drought still persists overall, this could be enough to help yields, with some analysts already beginning to increase their production estimates.

  • According to the European Commission, EU soft wheat exports as of October 22nd have reached 9.33 mmt since the season began on July 1st. That represents a 22% decline from 12 mmt for the same time frame last year.

Chicago Wheat Action Plan Summary

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

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

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

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

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

KC Wheat Action Plan Summary

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

  • No new action is recommended for 2024 KC wheat. Currently, July ’24 is trading near a 25-cent premium to the Dec ’23 contract, up from a 60-cent discount last July, as bear spreading due to weak fundamentals has driven the Dec ’23 contract closer to its contract lows, while the July ’24 contract remains more elevated as it tests Feb ’22 lows. The risk for the July ’24 contract is much like that for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July 660 puts to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 800 to take advantage of elevated prices before they eroded further. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

Above: For much of September, December Minneapolis wheat was rangebound, and the breakout to the downside on September 29 set the market up to test support near 665, the May ’21 low. Since then, the market has been consolidating upward, with initial support between 711 and 708. If prices continue higher, initial resistance remains between 745 – 760.

Other Charts / Weather

|

Grain Market Insider: October 24, 2023

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Despite a flash sale totaling 117,000 mt tons of corn for the 23/24 marketing year, December corn settled lower for the third session in a row, pressured by technical selling, continued harvest pressure and weakness in the wheat complex.

  • Sharply higher soybean meal, and higher Board crush more than offset lower soybean oil and led soybeans to rally back and settle higher on the day after making new lows for the week.

  • Soybean oil settled at a new 4-month low amid low RIN values, and weaker crude and palm oil.  Whereas strong export demand for soybean meal continues to support meal prices and crush demand for soybeans, while also potentially generating excess bean oil supply.

  • A strong US dollar and unconfirmed rumors of Chinese interest in US wheat continue to plague the wheat market as all three classes closed lower on the day, with Chicago and Minneapolis giving up any gains made from Monday’s rally.

  • To see the current U.S. 3 – 4 week Temperature and Precipitation Outlooks, courtesy of NOAA, NWS, and the CPC, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

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

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

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

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

  • Harvest pressure, weakness in the wheat market and technical selling pressure pushed corn futures lower on the session. December corn futures lost 6 ¼ cents in weak price action on Tuesday.

  • Corn harvest has reached 59% complete according to the USDA weekly Crop Progress report. This was in line with analysts’ expectations and 5% above the 5-year average.

  • A strong Midwestern storm will be working its way across the Corn Belt over the next few days.  Rainfall with good coverage and a sharp drop in temperature is forecasted into the start of November.  Wetter than normal forecasts may limit harvest progress through the end of the week in some areas.

  • South American weather will likely stay dry and hot for areas of Brazil, but Argentina could see some overall improvement. While South American weather is still in its early stages, the corn market is lacking any true weather premium.

  • The weak price action on Tuesday is concerning as December corn closed under the support of $4.85, and March under $5.00. The soft close and downward momentum could lead to additional long liquidation in corn futures on Wednesday.

Above: The corn market has largely been rangebound since the beginning of August, with only minor short covering moving the market higher until recently. With the market trading up to 509 ½ and failing, the next resistance level now sits at that recent high, with further resistance near the July 31 high of 516 ¼. If the market retreats, initial support below the market remains between 475 – 480 and then near 460.

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

Soybeans

Soybeans Action Plan Summary

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

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

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

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

  • Soybeans began the day lower, but ended with gains thanks to big support from soybean meal. Continued drought in Argentina impacted their production and export of soybean meal, with the US able to pick up some of that export business. Soybean oil was lower today with lower crude and veg oils.

  • Soybeans also got support from purchasing agreements that were signed today between Chinese agricultural companies and US commodity exporters at a ceremony held in Des Moines and organized by the US Soybean Export Council. 11 different agreements were made, and now trade will look to see when these purchases will be announced by the USDA.

  • Yesterday’s Crop Progress report showed soybeans at 76% harvested as producers rush to get work complete before more rain falls. This is up from the 5-year average pace of 67%. The central and western Corn Belt are forecast to receive significant rain over the next 7 days.

  • South American weather is coming more into focus as planting continues in poor conditions. The new 10-day forecast is showing an extended trend of hot and dry conditions in Argentina and Brazil apart from southern Brazil. Many producers are already replanting due to the dryness.

Above: In the middle of October, the market pierced the upper end of the 1285 – 1323 resistance area and tested the 50-day moving average, before retreating lower. If the market can maintain a close above resistance at 1334, it would be poised to make a run to test 1370. Otherwise, initial support to the downside may be found near 1300 and again near 1273. Key support for the move remains down near 1250.

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

Wheat

Market Notes: Wheat

  • With US winter wheat now 77% planted and emergence at 53%, crop ratings are expected to be released next week. Expectations are for conditions to be better than last year due to the improved soil moisture levels in the southern Plains. Traders look for a rating of 45%-49% in the good to excellent category.

  • According to the ag ministry, Ukraine is estimated to have shipped about 700,000 mt of ag goods through the humanitarian corridor since it was opened. Officials believe that it is possible, however, to transport between 2.0-2.5 mmt per month on those shipping lanes. Grain also continues to leave the country via the Danube River.

  • Matif wheat futures closed in the red for the third time in the past four sessions. This pressured the US market today, as did the US Dollar Index, making a big move higher. As of this writing, the dollar is up 0.75 at 106.28. This historically high level does not help the export market, especially as Russian wheat offers are still said to be dirt cheap around $235 per mt.

  • Consultancy group, APK-Inform, reduced their estimate of Ukraine’s grain harvest to 53.4 mmt versus 54.2 previously. The wheat output forecast was unchanged at 21.5 mmt, so the revision came down to a lower corn harvest projection.

  • There continues to be talk that China is looking to purchase more US wheat, though there have not been any announced sales over the reportable level of 100,000 mt. However, there is some chatter that China will try to stimulate their economy – if true this could lead to more import demand for commodities.

Chicago Wheat Action Plan Summary

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

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

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

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

Above: After its push lower on Sept. 29, December wheat has slowly regained its value and is trading in the same 570 – 618 range it did prior to its break lower. For the market to push through the top side of the range, more bullish input will be needed. If so, the market would be poised to test the 645 – 664 area. If not and the market retreats, initial support could be found near 568 and then down between 547 and 540.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 K.C. wheat crop. The Dec ’23 contract has been in a downtrend since making highs in late July and continues to search for support while trading about 40 cents off the contract lows from July ’21. With weak U.S. export demand, driven by cheap Russian exports, being the dominant headwind, the market is in need of bullish input to stabilize and rally prices back higher. If a bullish catalyst were to enter the market and push prices towards 750 it may signal that a fall low is in place, which would line up with the historical tendency for prices to appreciate into winter and early spring. Earlier this year, Grain Market Insider made a sales recommendation in the late May rally around 1170. With that sale, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales north of 700, and again around 750 – 800.  If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 K.C. wheat. Currently, July ’24 is trading at an 18-cent premium to the Dec ’23 contract, up from a 60-cent discount last July, as bear spreading due to weak fundamentals has driven the Dec ’23 contract closer to its contract lows, while the July ’24 contract remains more elevated as it tests Feb ’22 lows. The risk for the July ’24 contract is much like that for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode, and in mid-August, Grain Market Insider recommended purchasing July 660 puts to prepare for this possibility. Also, back in July, Grain Market Insider recommended a sale near 800 to take advantage of elevated prices before they eroded further. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: Since the end of September, K.C. wheat has been consolidating with initial support just below the market near the September 12 low of 655. If the market retreats lower and breaks through 655, the next levels of support come in around 630 and 575. Initial resistance to the upside may be found near 690 – 700 and again around 722.

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

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

Mpls Wheat Action Plan Summary

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

  • No new action is currently recommended for 2024 Minneapolis wheat.  In the last three months, the Sep ’24 contract has gone from a 60 – 80 discount to Dec ’23, to a nearly 60-cent premium. Weak fundamentals led bear spreading to drive Dec ’23 in search of new contract lows, while Sep ’24 remains nearly 30 cents off its low from last June. The risk for the Sep ’24 contract is much like that of Dec ’23.  The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July K.C. 660 puts (for their greater liquidity, and correlation to Minneapolis pricing) to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 815 to take advantage of elevated prices. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further. Grain Market Insider will then be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: For much of September, December Minneapolis wheat was rangebound, and the breakout to the downside on September 29 set the market up to test support near 665, the May ’21 low. Since then, the market has been consolidating upward, with initial support between 711 and 708. If prices continue higher, initial resistance remains between 745 – 760.

Other Charts / Weather

|

Grain Market Insider: October 23, 2023

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Lackluster export inspections failed to support the corn market in a general “risk off” environment as traders took profits from last week’s rally and liquidated long positions.

  • Harvest pressure and follow through technical selling from Friday’s selloff, weighed heavily on soybeans as they closed within ½ cent of last Monday’s close.

  • Firm demand for soybean meal kept that market from experiencing the deep losses of soybean oil, which was dragged lower by softer palm oil and sharply lower crude oil.

  • Continued rumors of China’s interest in purchasing US wheat, and concerns about global supplies of high protein wheat may be the supporting factor in the wheat complex that was led higher by Minneapolis contracts. While Minneapolis and KC both closed higher on the day, Chicago closed mixed, likely with short covering adding support to the front month contracts.

  • To see the current U.S. 6 – 10 day Temperature and Precipitation Outlooks, as well as the South American 1-week precipitation forecasts, courtesy of NOAA, NWS, and the CPC, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

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

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

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

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

  • Technical selling pressure stayed in the corn market on additional long liquidation after prices failed on Friday after last week’s price rally. The markets in general showed a “risk-off” type trade as weakness was seen in many commodity and equity markets. December corn was 5 ¼ cents lower to 490 ¼.

  • Weekly export inspections for corn were lackluster at 17.2 mb, though within expectations. Softer corn exports are expected in this window as soybeans shipments are the focus of US exporters. Regardless, corn export numbers were short of the needed weekly pace to reach the USDA’s 2.025 billion bushel export target.

  • The corn harvest is expected to reach 59% complete on Monday afternoon’s Crop Progress report.  This would be up from 43% last week, but rains across the Corn Belt last week may have slowed harvest progress.

  • Cash basis on corn has improved, which could be signaling a potential fall low is placed for corn futures. The cash market has been supported by producers being slow sellers, and improved demand by end users reflecting decent margins and looking for corn supplies.

  • Harvest pressure likely kicked in as prices pushed through the $5.00 level last week, only to retreat quickly. A wetter forecast could help support prices as harvest pace could be limited this week.

Above: The corn market has largely been rangebound since the beginning of August, with only minor short covering moving the market higher until recently. With the market trading up to 509 ½ and failing, the next resistance level now sits at that recent high, with further resistance near the 20-day moving average and the July 31 high of 516 ¼. If the market retreats, initial support below the market remains between 475 – 480 and then near 460.

Corn Managed Money Funds net position as of Tuesday, Oct.17. Net position in Green versus price in Red. Managers net bought 3,821 contracts between Oct. 11 – 17, bringing their total position to a net short 108,870 contracts.

Soybeans

Soybeans Action Plan Summary

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

  • No action is recommended for the 2024 crop. Nov ’24 continues to trade at a discount to Nov ’23. That discount was over 90 cents in late summer yet has stabilized lately to around the 10-20 cent range.  Since July, the Nov ’24 contract has largely traded between 1250 and 1320, so this contract is currently testing the bottom end of that range. To date, Grain Market Insider has not recommended any sales for next year’s soybean crop. First sales targets will probably be early winter at the soonest. Currently, Grain Market Insider’s focus is also on watching for any opportunities to recommend buying call options.

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

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

  • Soybeans ended the day lower, along with both soybean meal and oil, on harvest pressure and follow through technical selling. On Thursday and Friday, soybeans tested the 100-day moving average and failed both times. The 40, 100, and 200-day moving averages have all converged around the 13.20 level in November, which is acting as heavy resistance.

  • Weekly export inspections came in very strong again, totaling 90.3 mb of soybeans for the week ending October 19, 2023. Total inspections are now 290 mb, which is up 3% from the previous year. China has become a more active buyer out of the PNW, as Brazil runs low on soybeans and deals with low water levels in the Amazonian rivers.

  • Planting progress for Brazil’s 23/24 soybean crop is estimated to be 29.84% complete, which is far below the 37.6% planted at this time last year, as heat and drought has caused some to wait for better conditions. There have also been reports of many producers re-planting their soy crop.

  • Crop progress will be released later today, and expectations are that the soy crop will be reported as at least halfway complete, but the 7-day forecast is expected to be very wet for the central and western Corn Belt, which could delay further progress.

Above: In the middle of October, the market pierced the upper end of the 1285 – 1323 resistance area and tested the 50-day moving average, before retreating lower. If the market can maintain a close above resistance at 1334, it would be poised to make a run to test 1370. Otherwise, initial support to the downside may be found near 1300 and again near 1273. Key support for the move remains down near 1250.

Soybean Managed Money Funds net position as of Tuesday, Oct. 17. Net position in Green versus price in Red. Money Managers net sold 4,150 contracts between Oct. 11 – 17, bringing their total position to a net short 1,984 contracts.

Wheat

Market Notes: Wheat

  • Weekly wheat export inspections were disappointing at 6.2 mb. Total 23/24 inspections have now reached 254 mb, which is down 27% from last year, and are running below the pace needed to meet the USDA’s 700 mb export goal.

  • Argentina has had significant drought conditions, but they have recently received good rains as well. Much more will be needed to improve crops and soil moisture, but at this point any precipitation is welcomed. General concern about global production remains, especially of higher protein wheat, which may account for Minneapolis futures rallying more than Chicago or KC today.

  • Australia’s wheat crop, according to some private estimates, could now be as high as 26-28 mmt, while the USDA is projecting a 24.5 mmt harvest. The increased production may be a result of recent rains that have eased the drought and helped to stabilize the crop or even increase yields.

  • According to Ukraine’s agriculture ministry, their wheat harvest at 22.3 mmt is up 15% year on year. However, their exports of wheat total only 4.1 mmt, which is down 6.7% year on year. Recently there has not been much talk surrounding the Black Sea, but it is being reported that up to 20 vessels have safely traveled via their humanitarian corridor since it was opened. It is unclear, though, what the contents and size of the ships has been.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. The Dec ’23 contract has been in a downtrend since making highs in late July but has found support near 541 following the September 29 Production report and has since been rangebound between 541 and 581 ½. With weak U.S. export demand driven by cheap Russian exports being the dominant headwind, it appears that prices may be finding value in the current trading range. If a bullish catalyst were to enter the market and push prices over 616, it may signal that a fall low is in place, which would line up with the historical tendency for prices to appreciate into the winter months. If you are a newer subscriber, Grain Market Insider made sales recommendations in the late June rally around 720, and again earlier this fall near 604. With those two sales, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales in the 600 – 650 range. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. Currently, July ’24 is trading at a 68-cent premium to the Dec ’23 contract as bear spreading, due to fund positioning and weak fundamentals, has driven the Dec ’23 contract closer to 550, while the July ’24 contract remains near 625. The risk for the July ’24 contract remains the same as for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for this possibility, and back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward June’s highs, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: After its push lower on Sept. 29, December wheat has slowly regained its value and is trading in the same 570 – 618 range it did prior to its break lower. For the market to push through the top side of the range, more bullish input will be needed. If so, the market would be poised to test the 645 – 664 area. If not and the market retreats, initial support could be found near 568 and then down between 547 and 540.

Chicago Wheat Managed Money Funds net position as of Tuesday, Oct. 17. Net position in Green versus price in Red. Money Managers net sold 72 contracts between Oct. 11 – 17, bringing their total position to a net short 104,407 contracts.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 K.C. wheat crop. The Dec ’23 contract has been in a downtrend since making highs in late July and continues to search for support while trading about 40 cents off the contract lows from July ’21. With weak U.S. export demand, driven by cheap Russian exports, being the dominant headwind, the market is in need of bullish input to stabilize and rally prices back higher. If a bullish catalyst were to enter the market and push prices towards 750 it may signal that a fall low is in place, which would line up with the historical tendency for prices to appreciate into winter and early spring. Earlier this year, Grain Market Insider made a sales recommendation in the late May rally around 1170. With that sale, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales north of 700, and again around 750 – 800.  If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 K.C. wheat. Currently, July ’24 is trading at an 18-cent premium to the Dec ’23 contract, up from a 60-cent discount last July, as bear spreading due to weak fundamentals has driven the Dec ’23 contract closer to its contract lows, while the July ’24 contract remains more elevated as it tests Feb ’22 lows. The risk for the July ’24 contract is much like that for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode, and in mid-August, Grain Market Insider recommended purchasing July 660 puts to prepare for this possibility. Also, back in July, Grain Market Insider recommended a sale near 800 to take advantage of elevated prices before they eroded further. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: Since the end of September, K.C. wheat has been consolidating with initial support just below the market near the September 12 low of 655. If the market retreats lower and breaks through 655, the next levels of support come in around 630 and 575. Initial resistance to the upside may be found around 700 and again near 722.

K.C. Wheat Managed Money Funds net position as of Tuesday, Oct. 17. Net position in Green versus price in Red. Money Managers net sold 1,081 contracts between Oct. 11 – 17, bringing their total position to a net short 26,951 contracts.

Mpls Wheat Action Plan Summary

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

  • No new action is currently recommended for 2024 Minneapolis wheat.  In the last three months, the Sep ’24 contract has gone from a 60 – 80 discount to Dec ’23, to a nearly 60-cent premium. Weak fundamentals led bear spreading to drive Dec ’23 in search of new contract lows, while Sep ’24 remains nearly 30 cents off its low from last June. The risk for the Sep ’24 contract is much like that of Dec ’23.  The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July K.C. 660 puts (for their greater liquidity, and correlation to Minneapolis pricing) to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 815 to take advantage of elevated prices. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further. Grain Market Insider will then be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: For much of September, December Minneapolis wheat was rangebound, and the breakout to the downside on September 29 set the market up to test support near 665, the May ’21 low. Since then, the market has been consolidating upward, with initial support between 711 and 708. If prices continue higher, initial resistance remains between 745 – 760.

Minneapolis Wheat Managed Money Funds net position as of Tuesday, Oct. 17. Net position in Green versus price in Red. Money Managers net sold 2,223 contracts between Oct. 11 – 17, bringing their total position to a net short 25,729 contracts. 

Other Charts / Weather

|

Grain Market Insider: October 20, 2023

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • December corn futures ran into a technical buzzsaw to end the week. After trading to the 100-day moving average this morning, futures reversed and closed below the pivotal $5 level.

  • November soybean futures gravitated back toward the $13 level to end the week after trading to and running into resistance at the 100-day moving average again today.

  • Despite losses in soybean futures, soybean meal and soybean oil futures managed to hang onto gains to end the week.

  • After trading higher to start the day, wheat prices found selling pressure to end the trading session and closed lower like both corn and soybeans.

  • To see the current U.S. 7-day precipitation forecast, as well as the South American GRACE-Based Root Zone Soil Moisture Drought Indicator courtesy of NASA and the University of Nebraska-Lincoln, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. The supportive USDA Supply and Demand report from October 12 had Dec ’23 corn testing that 500 psychological price level, yet so far Dec ’23 has been unable to close above it. That 500 level remains an important resistance area for the trend, and without a close over it, the market remains at risk of continuing to trend sideways to lower, and worst-case scenarios could entail sideways-to-lower trends into the late November to early January window. If Dec ’23 can close above 500, it may aim to test the next resistance near 547. Otherwise, the first support on the downside is the August low of 461. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. So, for now, the thought process is to hold tight on any further sales recommendations until later this fall or early winter, with the objective of seeking out better pricing opportunities. If the market has not turned around by early winter, then Grain Market Insider may sit tight on the next sales recommendations until spring. If you end up harvesting more bushels than you can store this fall and must move them, consider protecting those sold bushels with either July or September ’24 call options.

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

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

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

  • Today after a break just above the 100-day moving average (around 5.09) December corn settled back below the five-dollar level at the close. The grain markets as a whole saw reversals into negative territory to end the session. This is despite the continued dryness in Brazil, uncertainty on the war in Israel, and crude oil in an uptrend. After the recent move higher and above some resistance levels, a combination of profit taking, and stops being triggered could explain today’s decline.

  • US corn harvest should be able to make some good progress over the next few days before potential delays next week as a storm system moves through. Nationally, harvest should surpass the halfway mark on Monday’s Crop Progress report.

  • Rumors continue to circulate that China is looking to purchase US corn out of the PNW. Ukraine prices are more competitive, but logistical issues could cause China to turn to the US. The war in Ukraine, though largely old news, is still a factor in global trade. Last night, President Biden made an address and is looking for congress to approve $105 billion in aid for both Ukraine and Israel.

  • According to the Buenos Aires Grain Exchange, Argentina’s corn planted area as of October 19 will remain unchanged at 7.3 million hectares for 23/24. Additionally, 19.9% of the corn crop is planted, up 0.5% from last week.

  • The International Grains Council lowered their 23/24 world grain stockpiles to 582 mmt, vs 588 mmt in September. Corn stocks were reduced from 289 mmt to 283 mmt in part due to a smaller production estimate.

Above: The corn market has largely been rangebound since the beginning of August, with only minor short covering moving the market higher until recently.  With the market moving above 490, and now 500, the next resistance level in the range is near the 20-day moving average and the July 31 high of 516 ¼. If the market retreats, initial support below the market remains between 475 – 480 and then near 460.

Soybeans

Soybeans Action Plan Summary

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

  • No action is recommended for the 2024 crop. Nov ’24 continues to trade at a discount to Nov ’23. That discount was over 90 cents in late summer yet has stabilized lately to around the 10-20 cent range.  Since July, the Nov ’24 contract has largely traded between 1250 and 1320, so this contract is currently testing the bottom end of that range. To date, Grain Market Insider has not recommended any sales for next year’s soybean crop. First sales targets will probably be early winter at the soonest. Currently, Grain Market Insider’s focus is also on watching for any opportunities to recommend buying call options.

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

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

  • Soybeans began the day higher but slipped throughout the day for a lower close. This was the second consecutive day that November soybeans reached the 100-day moving average without being able to move or close above it. Soybean meal ended the day lower and soybean oil was higher.

  • Overall, news for soybeans over the course of this week was good between export inspections, crush numbers, export sales, and South American weather. For the week, Nov beans gained 22 cents, Dec meal gained 33.90, and Dec bean oil lost 0.99.

  • Some analysts are estimating that Brazil will produce another massive soybean crop this year with guesses between 162-164 mmt, but so far, the weather has been too dry, causing planting to be delayed, and the overall weather pattern doesn’t offer much moisture at this point.

  • In the US, this week has been mostly dry giving producers an opportunity to get a good chunk of harvest complete before more rains fall again in the coming week. Despite some reports of “better than expected” yields, a prominent crop scout has called the final bean yield at just 49.3 bpa, below the USDA’s last estimate of 49.6 bpa.

Above: Front month soybeans have pierced the upper end of the 1285 – 1323 resistance area and are testing close in resistance at the 50-day moving average. If the market can maintain upward momentum, it would be poised to make a run to test mid-September prices around 1370. Otherwise, to the downside initial support may be found near 1300 and again near 1273. Key support for the move remains down near 1250.

Wheat

Market Notes: Wheat

  • Despite strong gains earlier in the session, US wheat futures closed in negative territory across the board. Wheat was not alone, with lower closes in corn and soybeans too. This is despite a positive close in Paris milling wheat futures, as well as uncertainty over production in the southern hemisphere and any war premium that might be factored in.

  • Brazil’s 23/24 wheat crop is now estimated at 10.5 mmt, which is 5.9% below the previous projection. This is attributed to continued dryness that seems to be getting worse. Some areas of the Amazon River are at the lowest levels in over a century, and if the Amazon basin remains dry, it will keep the central and northern parts of Brazil dry as well.

  • Argentina is receiving some much-needed rains. However, the precipitation will not be a “drought buster” and more will be needed to help their crops. Currently, their wheat crop is rated 47% poor to very poor. That represents a 5% decline in condition since last week’s rating, according to the Buenos Aires Grain Exchange.

  • Ukraine’s total grain exports are down 30% year on year as of October 20 (since the season began on July 1). That reflects 8 mmt exported vs 11.5 at the same time last year. Of that total, wheat exports of 4.1 mmt are down 6.7% year on year. But the majority of the decline is in exports of barley and corn, down 31% and 49% respectively.

  • Australia has been dealing with extreme drought in some regions, likely to affect their final production. However, recent rainfall in some of the southern wheat growing areas may help stabilize the overall crop and even increase yields, despite the declines in the western part of the country. Some analysts are now looking for a 26 mmt Australian crop, vs estimates of 23 mmt just a few weeks ago. For reference, Australia’s 10-year average comes in at 26.4 mmt, and 2019 (a drought year) resulted in only a 14.5 mmt harvest.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. The Dec ’23 contract has been in a downtrend since making highs in late July but has found support near 541 following the September 29 Production report and has since been rangebound between 541 and 581 ½. With weak U.S. export demand driven by cheap Russian exports being the dominant headwind, it appears that prices may be finding value in the current trading range. If a bullish catalyst were to enter the market and push prices over 616, it may signal that a fall low is in place, which would line up with the historical tendency for prices to appreciate into the winter months. If you are a newer subscriber, Grain Market Insider made sales recommendations in the late June rally around 720, and again earlier this fall near 604. With those two sales, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales in the 600 – 650 range. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. Currently, July ’24 is trading at a 68-cent premium to the Dec ’23 contract as bear spreading, due to fund positioning and weak fundamentals, has driven the Dec ’23 contract closer to 550, while the July ’24 contract remains near 625. The risk for the July ’24 contract remains the same as for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for this possibility, and back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward June’s highs, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: After its push lower on Sept. 29, December wheat has slowly regained its value and is trading in the same 570 – 618 range it did prior to its break lower. For the market to push through the top side of the range, more bullish input will be needed. If so, the market would be poised to test the 645 – 664 area. If not and the market retreats, initial support could be found near 568 and then down between 547 and 540.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 K.C. wheat crop. The Dec ’23 contract has been in a downtrend since making highs in late July and continues to search for support while trading about 40 cents off the contract lows from July ’21. With weak U.S. export demand, driven by cheap Russian exports, being the dominant headwind, the market is in need of bullish input to stabilize and rally prices back higher. If a bullish catalyst were to enter the market and push prices towards 750 it may signal that a fall low is in place, which would line up with the historical tendency for prices to appreciate into winter and early spring. Earlier this year, Grain Market Insider made a sales recommendation in the late May rally around 1170. With that sale, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales north of 700, and again around 750 – 800.  If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 K.C. wheat. Currently, July ’24 is trading at an 18-cent premium to the Dec ’23 contract, up from a 60-cent discount last July, as bear spreading due to weak fundamentals has driven the Dec ’23 contract closer to its contract lows, while the July ’24 contract remains more elevated as it tests Feb ’22 lows. The risk for the July ’24 contract is much like that for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode, and in mid-August, Grain Market Insider recommended purchasing July 660 puts to prepare for this possibility. Also, back in July, Grain Market Insider recommended a sale near 800 to take advantage of elevated prices before they eroded further. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: Since the end of September, K.C. wheat has been consolidating with initial support just below the market near the September 12 low of 655. If the market retreats lower and breaks through 655, the next levels of support come in around 630 and 575. Initial resistance to the upside may be found around 700 and again near 722.

Mpls Wheat Action Plan Summary

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

  • No new action is currently recommended for 2024 Minneapolis wheat.  In the last three months, the Sep ’24 contract has gone from a 60 – 80 discount to Dec ’23, to a nearly 60-cent premium. Weak fundamentals led bear spreading to drive Dec ’23 in search of new contract lows, while Sep ’24 remains nearly 30 cents off its low from last June. The risk for the Sep ’24 contract is much like that of Dec ’23.  The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July K.C. 660 puts (for their greater liquidity, and correlation to Minneapolis pricing) to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 815 to take advantage of elevated prices. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further. Grain Market Insider will then be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: For much of September, December Minneapolis wheat was rangebound, and the breakout to the downside on September 29 set the market up to test support near 665, the May ’21 low. Since then, the market has been consolidating upward, with initial support between 711 and 708. If prices continue higher, initial resistance remains between 745 – 760.

Other Charts / Weather

|

Grain Market Insider: October 19, 2023

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Decent export sales, strong domestic demand, and light farmer selling lent support to December corn as it pushed above the 500 mark for the first time in nearly 3 months, which likely spurred short covering into the close.   

  • Like corn, good export sales, solid domestic demand and light farmer selling pushed November beans to gain on the deferred months, and close higher on the day for the fourth day in a row.

  • Soybean meal continued its rally to levels not seen since last July. Technical buying, strong export sales, and dryness in Argentina, the world’s largest soy product exporter, all lent support to the market.  Bean oil, on the other hand, saw sharply lower price action on more long liquidation, with lower palm oil adding to the weakness.

  • Carryover strength from the corn market and higher than expected export sales lent support to all three wheat classes, and likely triggered short covering in the Chicago contracts, which had an estimated fund short position just over 100k contracts going into today.

  • To see the current U.S. 5-day precipitation forecast, the 6 – 10 day Temperature and Precipitation Outlooks, and the 1 week percent of normal precipitation for South America from the 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. The supportive USDA Supply and Demand report from October 12 had Dec ’23 corn testing that 500 psychological price level, yet so far Dec ’23 has been unable to close above it. That 500 level remains an important resistance area for the trend, and without a close over it, the market remains at risk of continuing to trend sideways to lower, and worst-case scenarios could entail sideways-to-lower trends into the late November to early January window. If Dec ’23 can close above 500, it may aim to test the next resistance near 547. Otherwise, the first support on the downside is the August low of 461. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. So, for now, the thought process is to hold tight on any further sales recommendations until later this fall or early winter, with the objective of seeking out better pricing opportunities. If the market has not turned around by early winter, then Grain Market Insider may sit tight on the next sales recommendations until spring. If you end up harvesting more bushels than you can store this fall and must move them, consider protecting those sold bushels with either July or September ’24 call options.

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

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

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

  • Corn prices pushed through technical resistance at the $5.00 level, which triggered additional short covering as the December futures gained 13 cents and closed at its highest price point since July 31.

  • An improved demand tone and cash market basis helped support the front month contract as bull spreading pulled the entire market higher.

  • The USDA released weekly export sales Thursday morning.  Sales for the 2023-24 marketing year were 881,300 mt (34.7 mb). Corn sales commitments now total 637 mb for 23/24 and are up 17% from a year ago, but still lag the overall demand pace needed to reach USDA export targets.  

  • Ethanol margins remain strong, and processors are looking for corn, supporting the cash market.  Strong gasoline demand and tight energy supplies have helped support the ethanol market.

  • Some weather concerns in South America are adding weather premium into prices. Key northern and central areas of Brazil are experiencing hot and dry weather, which is slowing the soybean planting pace. A slow soybean planting pace narrows the window for the second crop of Brazil corn, which could tighten longer-term global supplies.

Above: The corn market has largely been rangebound since the beginning of August, with only minor short covering moving the market higher until recently.  With the market moving above 490, and now 500, the next resistance level in the range is near the 20-day moving average and the July 31 high of 516 ¼. If the market retreats, initial support below the market remains between 475 – 480 and then near 460.

Soybeans

Soybeans Action Plan Summary

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

  • No action is recommended for the 2024 crop. Nov ’24 continues to trade at a discount to Nov ’23. That discount was over 90 cents in late summer yet has stabilized lately to around the 10-20 cent range.  Since July, the Nov ’24 contract has largely traded between 1250 and 1320, so this contract is currently testing the bottom end of that range. To date, Grain Market Insider has not recommended any sales for next year’s soybean crop. First sales targets will probably be early winter at the soonest. Currently, Grain Market Insider’s focus is also on watching for any opportunities to recommend buying call options.

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

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

  • Soybeans ended the day higher and were bull spread, with the majority of gains landing in the front month, which was supported by higher front month soybean meal. Soybean oil closed lower despite higher crude oil and the lowest soybean oil stocks since 2014.

  • Today’s export sales report was friendly and showed increases of 50.4 mb for 23/24, which was up 30% from the previous week and 92% from the prior 4-week average. Last week’s export shipments of 73.1 mb were well above the 34.6 mb needed each week to meet the USDA’s estimates. Primary destinations were to China, Mexico, and Spain.

  • Weather in South America remains a concern as Argentina and northern Brazil deal with very hot and dry conditions over the next 10 days during planting, and only light rain chances next week. Brazil’s main growing area, Mato Grosso, hit temperatures of 105 degrees yesterday. Due to the heat and drought, only 19% of the crop has been planted, rather than the average of 22%.

  • In the US, this week has been mostly dry giving producers an opportunity to get a good chunk of harvest complete before more rains fall again in the coming week. Despite some reports of “better than expected” yields, a prominent crop scout has called the final bean yield at just 49.3 bpa, below the USDA’s last estimate of 49.6 bpa.

Above: Front month soybeans have pierced the upper end of the 1285 – 1323 resistance area and are testing close in resistance at the 50-day moving average. If the market can maintain upward momentum, it would be poised to make a run to test mid-September prices around 1370. Otherwise, to the downside initial support may be found near 1300 and again near 1273. Key support for the move remains down near 1250.

Wheat

Market Notes: Wheat

  • After trading both sides of unchanged throughout the session, US wheat futures had a strong close, with double digit gains in the Chicago front months. This is in the face of a lower close for Paris milling wheat futures, but may have been helped by today’s dip in the US Dollar Index below the 106 level.

  • The USDA reported an increase of 23.3 mb of wheat export sales for 23/24 and an increase of 1.1 mb for 24/25. Additionally, shipments last week at 14.1 mb were above the 13.9 mb pace per week necessary to hit the USDA’s 700 mb export estimate.

  • The rally in the grain markets was a pleasant surprise, given today’s lack of fresh news. However, it may be reflective of new volatility being added back into the market and uncertainty with several global factors. First and foremost, the potential for the war in Israel to develop into a more significant conflict is on the minds of many traders. Tonight, President Biden will give an address in which he is expected to make the case for providing monetary aid for military assistance in both Israel and Ukraine.

  • The International Grains Council increased the world wheat supply by 2 mmt to 785 mmt, though still below 803 mmt last year. This is apparently a result of higher output in the US, Russia, and Ukraine; Australia was lower.

  • There are continued rumors that China has interest in purchasing more US SRW wheat, though none have been reported over the 100,000 mt minimum required for the USDA to report. Apparently, China may also be looking for US corn. Both things are interesting, considering that according to China’s National Bureau of Statistics, they are looking at record grain production this year. It is possible that their economy is on the mend, which could mean more commodity imports are needed.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. The Dec ’23 contract has been in a downtrend since making highs in late July but has found support near 541 following the September 29 Production report and has since been rangebound between 541 and 581 ½. With weak U.S. export demand driven by cheap Russian exports being the dominant headwind, it appears that prices may be finding value in the current trading range. If a bullish catalyst were to enter the market and push prices over 616, it may signal that a fall low is in place, which would line up with the historical tendency for prices to appreciate into the winter months. If you are a newer subscriber, Grain Market Insider made sales recommendations in the late June rally around 720, and again earlier this fall near 604. With those two sales, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales in the 600 – 650 range. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. Currently, July ’24 is trading at a 68-cent premium to the Dec ’23 contract as bear spreading, due to fund positioning and weak fundamentals, has driven the Dec ’23 contract closer to 550, while the July ’24 contract remains near 625. The risk for the July ’24 contract remains the same as for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for this possibility, and back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward June’s highs, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: After its push lower on Sept. 29, December wheat has slowly regained its value and is trading in the same 570 – 618 range it did prior to its break lower. For the market to push through the top side of the range, more bullish input will be needed. If so, the market would be poised to test the 645 – 664 area. If not and the market retreats, initial support could be found near 568 and then down between 547 and 540.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 K.C. wheat crop. The Dec ’23 contract has been in a downtrend since making highs in late July and continues to search for support while trading about 40 cents off the contract lows from July ’21. With weak U.S. export demand, driven by cheap Russian exports, being the dominant headwind, the market is in need of bullish input to stabilize and rally prices back higher. If a bullish catalyst were to enter the market and push prices towards 750 it may signal that a fall low is in place, which would line up with the historical tendency for prices to appreciate into winter and early spring. Earlier this year, Grain Market Insider made a sales recommendation in the late May rally around 1170. With that sale, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales north of 700, and again around 750 – 800.  If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 K.C. wheat. Currently, July ’24 is trading at an 18-cent premium to the Dec ’23 contract, up from a 60-cent discount last July, as bear spreading due to weak fundamentals has driven the Dec ’23 contract closer to its contract lows, while the July ’24 contract remains more elevated as it tests Feb ’22 lows. The risk for the July ’24 contract is much like that for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode, and in mid-August, Grain Market Insider recommended purchasing July 660 puts to prepare for this possibility. Also, back in July, Grain Market Insider recommended a sale near 800 to take advantage of elevated prices before they eroded further. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: Since the end of September, K.C. wheat has been consolidating with initial support just below the market near the September 12 low of 655. If the market retreats lower and breaks through 655, the next levels of support come in around 630 and 575. Initial resistance to the upside may be found around 700 and again near 722.

Mpls Wheat Action Plan Summary

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

  • No new action is currently recommended for 2024 Minneapolis wheat.  In the last three months, the Sep ’24 contract has gone from a 60 – 80 discount to Dec ’23, to a nearly 60-cent premium. Weak fundamentals led bear spreading to drive Dec ’23 in search of new contract lows, while Sep ’24 remains nearly 30 cents off its low from last June. The risk for the Sep ’24 contract is much like that of Dec ’23.  The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July K.C. 660 puts (for their greater liquidity, and correlation to Minneapolis pricing) to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 815 to take advantage of elevated prices. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further. Grain Market Insider will then be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: For much of September, December Minneapolis wheat was rangebound, and the breakout to the downside on September 29 set the market up to test support near 665, the May ’21 low. Since then, the market has been consolidating upward, with initial support between 711 and 708. If prices continue higher, initial resistance remains between 745 – 760.

Other Charts / Weather

|

Grain Market Insider: October 18, 2023

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Double digit gains in soybeans and a 5-year high in weekly ethanol production more than offset any harvest pressure that came into the corn market, as December corn held onto modest gains following choppy trade.

  • Follow through buying from yesterday’s rally faded and then surged into the close as sharply higher soybean meal and another flash sale to China supported the soybean market to end the day with double-digit gains.

  • Soybean meal continues to be supported by demand, driven by the dry Argentine weather and additional technical buying above the 400 support level. Soybean oil, on the other hand, closed lower on the day after failing to trade through the 20-day moving average for the third day in a row.

  • Rising tensions in the Middle East and production concerns in the southern hemisphere led the wheat complex to close higher on the day in all three wheat classes.

  • To see the current U.S. 7-day precipitation forecast, the 8 – 14 day Temperature and Precipitation Outlooks, and the 2 week precipitation forecast for South America from the 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. The supportive USDA Supply and Demand report from October 12 had Dec ’23 corn testing that 500 psychological price level, yet so far Dec ’23 has been unable to close above it. That 500 level remains an important resistance area for the trend, and without a close over it, the market remains at risk of continuing to trend sideways to lower, and worst-case scenarios could entail sideways-to-lower trends into the late November to early January window. If Dec ’23 can close above 500, it may aim to test the next resistance near 547. Otherwise, the first support on the downside is the August low of 461. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. So, for now, the thought process is to hold tight on any further sales recommendations until later this fall or early winter, with the objective of seeking out better pricing opportunities. If the market has not turned around by early winter, then Grain Market Insider may sit tight on the next sales recommendations until spring. If you end up harvesting more bushels than you can store this fall and must move them, consider protecting those sold bushels with either July or September ’24 call options.

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

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

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

  • A buying tone in the grain markets helped lift the corn market higher on the day. Even as harvest pressure limited gains, December corn futures gained 3 cents on the session.

  • The soybean market and soybean meal led the grain markets higher, as some weather concerns are adding weather premium into prices. Key northern and central areas of Brazil are experiencing hot and dry weather, which is slowing the soybean planting pace. A slow soybean planting pace narrows the window for the second crop of Brazil corn, which could tighten longer-term global supplies.

  • Weekly ethanol production rose to a 5-year high last week at 1.035 million barrels/day; this was slightly higher than the previous week’s total. Ethanol stocks slipped to a 9-year low at 21.1 million barrels for the week ending October 13. Ethanol producers used 100.1 mb of corn last week as the yearly pace is 3.9% ahead of last year’s levels.

  • US weather is supporting harvest pace in some regions, but longer-term forecasts may add concern for the corn market in the northern Corn Belt. A potential series of storms going into the end of October could limit the harvest pace and possibly damage the mature crop.

  • The USDA will release the export sales report on Thursday morning. Expectations are for the 23/24 marketing year sales to range from 500,000-1,100,000 mt as corn export demand has improved with freshly harvested supplies.

Above: The corn market has largely been rangebound since the beginning of August, with some minor short covering lifting prices in recent days. Resistance remains between 490 – 516, with initial support between 475 – 480 and then near 460.

Soybeans

Soybeans Action Plan Summary

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

  • No action is recommended for the 2024 crop. Nov ’24 continues to trade at a discount to Nov ’23. That discount was over 90 cents in late summer yet has stabilized lately to around the 10-20 cent range.  Since July, the Nov ’24 contract has largely traded between 1250 and 1320, so this contract is currently testing the bottom end of that range. To date, Grain Market Insider has not recommended any sales for next year’s soybean crop. First sales targets will probably be early winter at the soonest. Currently, Grain Market Insider’s focus is also on watching for any opportunities to recommend buying call options.

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

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

  • After trading on both sides of unchanged, soybeans surged higher to close out the day 14 ¼ cents in the green. This is the first close above 1300 since the end of September, as dryness continues in Argentina and the northern and central parts of Brazil.

  • Soybean meal traded sharply higher, gaining 14 dollars in the December, as technical buying ensued once the 400 level held after being tested midday. Soybean oil was the weak link of the complex that failed to successfully trade through its 20-day moving average, which brought out selling and profit taking from last week’s rally.

  • Northern and central Brazil are expected to remain dry for the rest of October, while southernmost region continues to be wet. Argentina, the world’s largest soybean meal exporter, is expected to see some much needed rain in the next two weeks, but the totals aren’t expected to break the current dryness.

  • This morning the USDA reported a flash sale to China for the 23/24 marketing year totaling 132,000 mt.

  • Abiove came out with its first estimate for Brazil’s 23/24 soybean crop and put it at a record 164.7 mmt, 7 mmt higher than the 22/23 crop. The group also estimated that Brazil would crush 54 mt and export 100 mt of soybeans in 2024.

  • Despite the robust harvest pace, basis levels have been seen rising at river terminals and processors due to slow farmer selling. Strong demand from crushers to maintain their vigorous processing pace and rising river levels on some regional rivers have helped to underpin basis.

Above: Front month soybeans have pierced the upper end of the 1285 – 1323 resistance area and are testing close in resistance at the 50-day moving average. If the market can maintain upward momentum, it would be poised to make a run to test mid-September prices around 1370. Otherwise, to the downside initial support may be found near 1300 and again near 1273. Key support for the move remains down near 1250.

Wheat

Market Notes: Wheat

  • More war premium is being factored into the grain markets, especially wheat, as the tensions rise in the Middle East. President Biden is in Israel to meet with foreign leaders, but following an attack on a hospital in Gaza, his meetings were cancelled.

  • So far in Australia, wheat yields are coming in a little better than what the USDA was estimating despite their drought issues. However, the impact may be minimal, with many analysts still looking for a decline in production of 40% or more. Argentina is also facing the implications of drought that may curb their production. They are expected to get some showers soon, but it will not be enough to reverse the current dry pattern.

  • Paris milling wheat futures closed higher for the fourth time in the past five sessions, with the front month December gaining 4.5 Euros to 240.50 per mt. This may indicate that they are finally breaking out of the sideways pattern, which should also lend support to the US market. Both US and French wheat are on an even playing field, in terms of export price for Nov – Jan, and there are rumors that China may be looking to purchase more US wheat. This is supported by the fact that China’s wheat imports this year so far are at 10.2 mmt, which is up 54% from last year.

  • Wheat harvest in southern Brazil, including the states of Rio Grande do Sul and Parana, has begun to ramp up. However, the southern regions have received too much rain, which has led to quality and disease concerns. According to CONAB, they are looking for Brazilian wheat output at 10.46 mmt. That is down 3.3% from the September projection, as well as down 0.9% from last year.

  • According to China’s National Bureau of Statistics, this year’s grain production may be a record due to rainfall received in the north. Additionally, China’s GDP data came out 0.5% better than expected at 4.9%. This may indicate that their economic situation is improving and that they will import more commodities – this may be in part why US grains rallied today. Conversely, there was also news that China approved new GMO corn and soybean seeds in an effort to become more self-sufficient, which may mean fewer imports in the future.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. The Dec ’23 contract has been in a downtrend since making highs in late July but has found support near 541 following the September 29 Production report and has since been rangebound between 541 and 581 ½. With weak U.S. export demand driven by cheap Russian exports being the dominant headwind, it appears that prices may be finding value in the current trading range. If a bullish catalyst were to enter the market and push prices over 616, it may signal that a fall low is in place, which would line up with the historical tendency for prices to appreciate into the winter months. If you are a newer subscriber, Grain Market Insider made sales recommendations in the late June rally around 720, and again earlier this fall near 604. With those two sales, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales in the 600 – 650 range. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. Currently, July ’24 is trading at a 68-cent premium to the Dec ’23 contract as bear spreading, due to fund positioning and weak fundamentals, has driven the Dec ’23 contract closer to 550, while the July ’24 contract remains near 625. The risk for the July ’24 contract remains the same as for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for this possibility, and back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward June’s highs, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: After its push lower on Sept. 29, December wheat has slowly regained its value and is trading in the same 570 – 618 range it did prior to its break lower. For the market to push through the top side of the range, more bullish input will be needed. If so, the market would be poised to test the 645 – 664 area. If not and the market retreats, initial support could be found near 568 and then down between 547 and 540.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 K.C. wheat crop. The Dec ’23 contract has been in a downtrend since making highs in late July and continues to search for support while trading about 40 cents off the contract lows from July ’21. With weak U.S. export demand, driven by cheap Russian exports, being the dominant headwind, the market is in need of bullish input to stabilize and rally prices back higher. If a bullish catalyst were to enter the market and push prices towards 750 it may signal that a fall low is in place, which would line up with the historical tendency for prices to appreciate into winter and early spring. Earlier this year, Grain Market Insider made a sales recommendation in the late May rally around 1170. With that sale, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales north of 700, and again around 750 – 800.  If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 K.C. wheat. Currently, July ’24 is trading at an 18-cent premium to the Dec ’23 contract, up from a 60-cent discount last July, as bear spreading due to weak fundamentals has driven the Dec ’23 contract closer to its contract lows, while the July ’24 contract remains more elevated as it tests Feb ’22 lows. The risk for the July ’24 contract is much like that for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode, and in mid-August, Grain Market Insider recommended purchasing July 660 puts to prepare for this possibility. Also, back in July, Grain Market Insider recommended a sale near 800 to take advantage of elevated prices before they eroded further. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: Since the end of September, K.C. wheat has been consolidating with initial support just below the market near the September 12 low of 655. If the market retreats lower and breaks through 655, the next levels of support come in around 630 and 575. Initial resistance to the upside may be found around 700 and again near 722.

Mpls Wheat Action Plan Summary

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

  • No new action is currently recommended for 2024 Minneapolis wheat.  In the last three months, the Sep ’24 contract has gone from a 60 – 80 discount to Dec ’23, to a nearly 60-cent premium. Weak fundamentals led bear spreading to drive Dec ’23 in search of new contract lows, while Sep ’24 remains nearly 30 cents off its low from last June. The risk for the Sep ’24 contract is much like that of Dec ’23.  The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July K.C. 660 puts (for their greater liquidity, and correlation to Minneapolis pricing) to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 815 to take advantage of elevated prices. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further. Grain Market Insider will then be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: For much of September, December Minneapolis wheat was rangebound, and the breakout to the downside on September 29 set the market up to test support near 665, the May ’21 low. Since then, the market has been consolidating upward, with initial support between 711 and 708. If prices continue higher, initial resistance remains between 745 – 760.

Other Charts / Weather

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

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

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

|

Grain Market Insider: October 17, 2023

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Harvest pressure and resistance just above the market continue to weigh on the corn market with the December contract seeing choppy trade before settling just 1 ¼ cents off the low of the day.

  • Following through on Monday’s strength and with support from soybean meal, November soybeans punched through the 1300 level for the first time this month before falling back but still settling near the upper third of the range.

  • Soybean meal gained on oil today as spread traders likely took profits from long oil/short meal positions. December meal traded over 400 for the first time in a month before settling back below, as basis remains firm from strong export demand.

  • After trading on both sides of unchanged, the wheat complex settled near their respective lows of the day on continued demand concerns. SovEcon lowered its estimate of the Russian wheat crop by 0.2 mmt but still kept it well above the USDA’s current estimate. EU soft wheat exports remain behind year ago levels.

  • To see the current U.S. 7-day precipitation forecast, the 8 – 14 day Temperature and Precipitation Outlooks, and the average temperatures for South America from the 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. The supportive USDA Supply and Demand report from October 12 had Dec ’23 corn testing that 500 psychological price level, yet so far Dec ’23 has been unable to close above it. That 500 level remains an important resistance area for the trend, and without a close over it, the market remains at risk of continuing to trend sideways to lower, and worst-case scenarios could entail sideways-to-lower trends into the late November to early January window. If Dec ’23 can close above 500, it may aim to test the next resistance near 547. Otherwise, the first support on the downside is the August low of 461. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. So, for now, the thought process is to hold tight on any further sales recommendations until later this fall or early winter, with the objective of seeking out better pricing opportunities. If the market has not turned around by early winter, then Grain Market Insider may sit tight on the next sales recommendations until spring. If you end up harvesting more bushels than you can store this fall and must move them, consider protecting those sold bushels with either July or September ’24 call options.

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

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

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

  • Harvest pressure limited the corn market on the session, despite positive money flow into the soybean market, and the lack of fresh news kept corn buyers on the sidelines. December corn lost 1 cent on the session.

  • As of Sunday, the USDA saw corn harvest move to 45% complete, slightly below expectations, and limited by rainfall the second half of last week. With over half of the harvest to go, the market stayed pressured expecting additional fresh supplies.

  • Soybean futures tried to provide some support with double-digit gains and an increase in weather premium due to difficult conditions for some South American soybeans that helped lift the market but only could provide minimal support for the corn market.

  • Corn futures are trading in a range, bound between $4.90 and $4.80 in the short term. The market is looking for some news in either direction to trigger some price movement.

Above: The corn market has largely been rangebound since the beginning of August, with some minor short covering lifting prices in recent days. Resistance remains between 490 – 516, with initial support between 475 – 480 and then near 460.

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

Soybeans

Soybeans Action Plan Summary

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

  • No action is recommended for the 2024 crop. Nov ’24 continues to trade at a discount to Nov ’23. That discount was over 90 cents in late summer yet has stabilized lately to around the 10-20 cent range.  Since July, the Nov ’24 contract has largely traded between 1250 and 1320, so this contract is currently testing the bottom end of that range. To date, Grain Market Insider has not recommended any sales for next year’s soybean crop. First sales targets will probably be early winter at the soonest. Currently, Grain Market Insider’s focus is also on watching for any opportunities to recommend buying call options.

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

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

  • Soybeans ended the day higher and briefly broke above the 13-dollar mark. Support came from strong gains in soybean meal, while soybean oil was slightly lower. The trend has been higher since last week’s bullish WASDE report, with dry South American weather adding to the support.

  • Yesterday’s Crop Progress report showed the soybean harvest reaching 62% completion which is 10 points above the average pace as many producers get soybeans wrapped up ahead of corn. Iowa is 74% complete and Illinois 61% done. Crop ratings also improved by 1 point to 53%.

  • Yesterday’s NOPA crush report also bled into the bullishness of today after it was reported that 165.456 mb of soybeans were crushed in September, creating a new record high. Soybean oil stocks are also at their lowest levels since 2014 at a time when demand is increasing for use in biodiesels.

  • Attention is beginning to shift to South American weather and planting. Slight showers are forecast for the dry areas of Argentina and Brazil later in the week, but so far planting has not gotten off to a good start with conditions either too dry or too wet.

Above: October 12 soybeans were shocked higher and traded into the resistance area of 1285 – 1323. If the market can maintain upward momentum, it would be poised to make a run to test mid-September prices around 1370. Otherwise, initial support below the market remains near 1250, with key support coming in between 1180 – 1200.

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

Wheat

Market Notes: Wheat

  • Wheat closed mostly lower. Bear spreading was a noted feature in the Chicago contracts, as traders sold the nearby months and bought the deferred. This may be a reflection of the supply concerns down the road in South America and Australia caused by drought. It is noted, however, that there are better prospects for rain in Argentina this weekend which should bring some relief, though more will be needed.

  • Yesterday afternoon’s Crop Progress report indicated that US winter wheat planting was 68% complete, in line with the average pace, and 39% was emerged versus 43% on average. Elsewhere, Ukraine’s agriculture ministry is reporting that 65.2% of their 3.3 million hectares of winter grains are planted.  Of that total, 3.02 million is reported to be winter wheat, with the rest made up of mostly barley and rapeseed.

  • In Russia, Sov Econ slightly lowered their wheat crop estimate, but it is still higher than what the USDA is using. And the fact that Russia continues to offer cheap wheat to the world will keep US exports and futures prices under pressure for some time to come.  

  • South American weather is becoming more of a concern for corn and soybeans, as well as wheat. Central and northern Brazil are seeing continued dryness with certain areas along the Amazon River said to be at the lowest levels in over 100 years. And as long as the Amazon River basin remains dry, central Brazil should also remain dry. This has some analysts thinking that Brazil’s wheat production could be down by about 3.3% even though the planted area is 12.1% above last year.

  • India is reportedly dealing with its own weather problems and wheat supply concerns, which had internal wheat prices at an eight-month high. They will potentially need to increase imports down the road. China seems to be doing the same with rumors continuing to swirl that the country is looking to purchase more US soft wheat.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. The Dec ’23 contract has been in a downtrend since making highs in late July but has found support near 541 following the September 29 Production report and has since been rangebound between 541 and 581 ½. With weak U.S. export demand driven by cheap Russian exports being the dominant headwind, it appears that prices may be finding value in the current trading range. If a bullish catalyst were to enter the market and push prices over 616, it may signal that a fall low is in place, which would line up with the historical tendency for prices to appreciate into the winter months. If you are a newer subscriber, Grain Market Insider made sales recommendations in the late June rally around 720, and again earlier this fall near 604. With those two sales, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales in the 600 – 650 range. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. Currently, July ’24 is trading at a 68-cent premium to the Dec ’23 contract as bear spreading, due to fund positioning and weak fundamentals, has driven the Dec ’23 contract closer to 550, while the July ’24 contract remains near 625. The risk for the July ’24 contract remains the same as for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for this possibility, and back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward June’s highs, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: December wheat has been consolidating since the break on September 29. The market’s previous range of 570 – 618 is an area of resistance which will need more bullish input to rally through. If the market retreats lower, support below the market resides between 540 – 533.

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

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 K.C. wheat crop. The Dec ’23 contract has been in a downtrend since making highs in late July and continues to search for support while trading about 40 cents off the contract lows from July ’21. With weak U.S. export demand, driven by cheap Russian exports, being the dominant headwind, the market is in need of bullish input to stabilize and rally prices back higher. If a bullish catalyst were to enter the market and push prices towards 750 it may signal that a fall low is in place, which would line up with the historical tendency for prices to appreciate into winter and early spring. Earlier this year, Grain Market Insider made a sales recommendation in the late May rally around 1170. With that sale, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales north of 700, and again around 750 – 800.  If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 K.C. wheat. Currently, July ’24 is trading at an 18-cent premium to the Dec ’23 contract, up from a 60-cent discount last July, as bear spreading due to weak fundamentals has driven the Dec ’23 contract closer to its contract lows, while the July ’24 contract remains more elevated as it tests Feb ’22 lows. The risk for the July ’24 contract is much like that for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode, and in mid-August, Grain Market Insider recommended purchasing July 660 puts to prepare for this possibility. Also, back in July, Grain Market Insider recommended a sale near 800 to take advantage of elevated prices before they eroded further. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: Since the end of September, K.C. wheat has been consolidating with initial support just below the market near the September 12 low of 655. If the market retreats lower and breaks through 655, the next levels of support come in around 630 and 575. Initial resistance to the upside may be found around 700 and again near 722.

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

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

Mpls Wheat Action Plan Summary

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

  • No new action is currently recommended for 2024 Minneapolis wheat.  In the last three months, the Sep ’24 contract has gone from a 60 – 80 discount to Dec ’23, to a nearly 60-cent premium. Weak fundamentals led bear spreading to drive Dec ’23 in search of new contract lows, while Sep ’24 remains nearly 30 cents off its low from last June. The risk for the Sep ’24 contract is much like that of Dec ’23.  The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July K.C. 660 puts (for their greater liquidity, and correlation to Minneapolis pricing) to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 815 to take advantage of elevated prices. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further. Grain Market Insider will then be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: For much of September, December Minneapolis wheat was rangebound, and the breakout to the downside on September 29 set the market up to test support near 665, the May ’21 low. Since then, the market has been consolidating, and while support below the market remains near 665, initial support may also be found near 700. If prices turn higher, initial resistance remains between 745 – 760.

Other Charts / Weather

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

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

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

|

Grain Market Insider: October 16, 2023

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • The corn market followed through on Friday’s small losses and sold off in the day session after trading higher early on Sunday evening. Low export inspections, that came in well below expectations and at a marketing year low, added to the pall of the market.

  • Record September crush from today’s NOPA crush report and a marketing year high for export inspections kept the soybean market supported through the day, though neighboring corn and wheat likely added resistance.

  • Today’s sharp gains in soybean oil are likely due to the record crush numbers and lower than expected bean oil stocks that imply that much of the crushing activity is for oil, and that demand from the biofuel sector remains strong. While on the flip side, the resulting excess meal production weighed on meal prices, producing only modest gains near unchanged.

  • While export inspections were in line with expectations, they still fell below the pace required to meet the USDA’s estimates, and are 28% behind year ago levels, versus the USDA’s forecast of an 8% decline. This in addition to higher Russian wheat production estimates dragging on the wheat complex, which had a strong start overnight trade but finished on the weak side. Minneapolis contracts settled in the green, with Chicago and K.C. lower.

  • To see the current U.S. 5-day precipitation forecast, the 6 – 10 day Temperature and Precipitation Outlooks, and the 1 week precipitation forecasts for South America from the 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. Last week’s supportive USDA Supply and Demand report had Dec ’23 corn testing that 500 psychological price level, yet so far Dec has been unable to close over that resistance. That 500 level remains an important resistance for the trend, and without a close over it, the market remains at risk of continuing to trend sideways-to-lower. The worst-case scenarios from a timing perspective, could entail sideways-to-lower into the late November to early January window. If Dec ’23 can reverse the slide of the last two days and close over 500, the next resistance would be 547. First support on the downside is the August low of 461. If you’re new to Grain Market Insider and were not a subscriber during this summer’s rally, Grain Market Insider did recommend making sales into that rally when Dec ’23 was around 624. So, for now, the thought process is to hold tight on any further sales recommendations until later this fall or early winter, with the objective of seeking out better pricing opportunities. If the market has not turned around by early winter, then Grain Market Insider may sit tight on the next sales recommendations until next spring. If you end up harvesting more bushels than you can store this fall and must move them, consider protecting those sold bushels with either July or September ’24 call options.

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

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

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

  • Corn futures failed to find any traction to start the week as prices consolidated at the top of last week’s trading range.  Dec corm lost 3 ¼ cents to $4.90 on the session. The grain market lacked any true momentum to start the week.

  • Weekly export inspections released by the USDA on Monday morning saw soft action last week at 435,000 mt (17.1 mb), which was below market expectations. Total inspections for the marketing year are at 155 mb, up 19% year-over-year, but still behind pace to reach the USDA target for the marketing year at 2.025 billion bushels.

  • Demand news overall has helped support prices with an uptick in activity. USDA announced a flash sale of 200,000 mt (7.87 mb) to Mexico on the overnight, as Mexico has remained active in the corn export market with routine purchases.

  • Despite end of week rainfall, US corn harvest is expected to move to 46% complete on the weekly USDA crop progress report. Weather forecasts give a window for some progress again early this week, but good rainfall over the weekend may limit some field activity.

  • Harvest pressure still limits the corn market with less than 50% of the harvest completed. Potential rallies in the corn market are limited by producer selling.

Above: The corn market has largely been rangebound since the beginning of August, with some minor short covering lifting prices in recent days. Resistance remains between 490 – 516, with initial support between 475 – 480 and then near 460.

Corn Managed Money Funds net position as of Tuesday, Oct.10. Net position in Green versus price in Red. Managers net bought 46,742 contracts between Oct. 4 – 10, bringing their total position to a net short 112,691 contracts.

Soybeans

Soybeans Action Plan Summary

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

  • No action is recommended for the 2024 crop. Nov ’24 continues to trade at a discount to Nov ’23. That discount was over 90 cents in late summer yet has stabilized lately to around the 10-20 cent range.  Since July, the Nov ’24 contract has largely traded between 1250 and 1320, so this contract is currently testing the bottom end of that range. To date, Grain Market Insider has not recommended any sales for next year’s soybean crop. First sales targets will probably be early winter at the soonest. Currently, Grain Market Insider’s focus is also on watching for any opportunities to recommend buying call options.

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

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

  • Soybeans closed higher today after trading lower earlier in the day. Support came from the NOPA crush report which saw soybean oil stocks lower than expected. Export inspections today were supportive as well. Both soybean meal and oil finished the day higher.

  • Weekly soybean inspections came in at an impressive 2,011,589 tons which was well above the high end of the trade guesses. This comes as a larger number of soybeans are getting shipped out of the PNW to China and other countries with Brazilian soybean supplies tight.

  • Today’s NOPA crush report saw 165.456 million bushels of soybeans crushed in September, above the average trade guess of 161.683 mb and a new record for September. Soybean oil stocks came in at 1.108 billion pounds which is the lowest soybean oil stocks number since December 2014 and below the average trade guess.

  • For the week ending October 10, non-commercial traders were sellers of 2,831 contracts of soybeans reducing their net long position to 2,170 contracts. In the wake of the bullish WASDE report last Thursday, it is more likely that those funds began buying and increased their net long position since the report which showed soybean yields at just 49.6 bpa and ending stocks at 220 mb.

Above: October 12 soybeans were shocked higher and traded into the resistance area of 1285 – 1323. If the market can maintain upward momentum, it would be poised to make a run to test mid-September prices around 1370. Otherwise, initial support below the market remains near 1250, with key support coming in between 1180 – 1200.

Soybean Managed Money Funds net position as of Tuesday, Oct. 10. Net position in Green versus price in Red. Money Managers net sold 2,835 contracts between Oct. 4 – 10, bringing their total position to a net long 2,166 contracts.

Wheat

Market Notes: Wheat

  • Although it was a relatively quiet session, wheat closed mostly negative. This may be due in part to IKAR increasing their estimate of Russian grain production to 141.6 mmt. Despite this increase that should keep Russia competitive on exports, there are rumors that China is looking to potentially buy more US wheat after last week’s 181,000 mt purchase. China is expecting heavy rains over the next week or so in their grain regions, and this has the potential to affect their corn and wheat crops.

  • Weekly wheat inspections of 13 mb bring the total 23/24 inspections to 248 mb. That is down 28% from last year, and so far, inspections are running behind the pace needed to meet the USDA’s export estimate of 700 mb.

  • Argentina is already struggling with drought that will affect their crops, and as long as the Amazon basin stays dry, central Brazil should remain dry as well. While central and northern Brazil are experiencing dry conditions, southern Brazil remains too wet. Additionally, with Australia having their own drought problems, there is talk that in 2024, wheat stocks of the major exporting countries will be the lowest in 16 years, which should be bullish for the market.

  • From a technical standpoint, even though December Chicago wheat has closed over the 21-day moving average for the second day since the end of July, significant resistance remains at the six dollar level. Aside from the negative influence of last week’s report, the uncertainty in the Middle East could also affect the wheat market as the conflict ramps up given that wheat is more of a staple in that part of the world.

  • According to the Ukrainian government, since July, Russia has destroyed about 300,000 mt of grain during their attacks on port infrastructure and vessels.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. The Dec ’23 contract has been in a downtrend since making highs in late July but has found support near 541 following the September 29 Production report and has since been rangebound between 541 and 581 ½. With weak U.S. export demand driven by cheap Russian exports being the dominant headwind, it appears that prices may be finding value in the current trading range. If a bullish catalyst were to enter the market and push prices over 616, it may signal that a fall low is in place, which would line up with the historical tendency for prices to appreciate into the winter months. If you are a newer subscriber, Grain Market Insider made sales recommendations in the late June rally around 720, and again earlier this fall near 604. With those two sales, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales in the 600 – 650 range. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. Currently, July ’24 is trading at a 68-cent premium to the Dec ’23 contract as bear spreading, due to fund positioning and weak fundamentals, has driven the Dec ’23 contract closer to 550, while the July ’24 contract remains near 625. The risk for the July ’24 contract remains the same as for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for this possibility, and back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward June’s highs, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: December wheat has been consolidating since the break on September 29. The market’s previous range of 570 – 618 is an area of resistance which will need more bullish input to rally through. If the market retreats lower, support below the market resides between 540 – 533.

Chicago Wheat Managed Money Funds net position as of Tuesday, Oct. 10. Net position in Green versus price in Red. Money Managers net sold 5,547 contracts between Oct. 4 – 10, bringing their total position to a net short 104,335 contracts.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 K.C. wheat crop. The Dec ’23 contract has been in a downtrend since making highs in late July and continues to search for support while trading about 40 cents off the contract lows from July ’21. With weak U.S. export demand, driven by cheap Russian exports, being the dominant headwind, the market is in need of bullish input to stabilize and rally prices back higher. If a bullish catalyst were to enter the market and push prices towards 750 it may signal that a fall low is in place, which would line up with the historical tendency for prices to appreciate into winter and early spring. Earlier this year, Grain Market Insider made a sales recommendation in the late May rally around 1170. With that sale, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales north of 700, and again around 750 – 800.  If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 K.C. wheat. Currently, July ’24 is trading at an 18-cent premium to the Dec ’23 contract, up from a 60-cent discount last July, as bear spreading due to weak fundamentals has driven the Dec ’23 contract closer to its contract lows, while the July ’24 contract remains more elevated as it tests Feb ’22 lows. The risk for the July ’24 contract is much like that for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode, and in mid-August, Grain Market Insider recommended purchasing July 660 puts to prepare for this possibility. Also, back in July, Grain Market Insider recommended a sale near 800 to take advantage of elevated prices before they eroded further. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: Since the end of September, K.C. wheat has been consolidating with initial support just below the market near the September 12 low of 655. If the market retreats lower and breaks through 655, the next levels of support come in around 630 and 575. Initial resistance to the upside may be found around 700 and again near 722.

K.C. Wheat Managed Money Funds net position as of Tuesday, Oct. 10. Net position in Green versus price in Red. Money Managers net sold 2,043 contracts between Oct. 4 – 10, bringing their total position to a net short 25,870 contracts.

Mpls Wheat Action Plan Summary

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

  • No new action is currently recommended for 2024 Minneapolis wheat.  In the last three months, the Sep ’24 contract has gone from a 60 – 80 discount to Dec ’23, to a nearly 60-cent premium. Weak fundamentals led bear spreading to drive Dec ’23 in search of new contract lows, while Sep ’24 remains nearly 30 cents off its low from last June. The risk for the Sep ’24 contract is much like that of Dec ’23.  The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July K.C. 660 puts (for their greater liquidity, and correlation to Minneapolis pricing) to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 815 to take advantage of elevated prices. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further. Grain Market Insider will then be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

Above: For much of September, December Minneapolis wheat was rangebound, and the breakout to the downside on September 29 set the market up to test support near 665, the May ’21 low. Since then, the market has been consolidating, and while support below the market remains near 665, initial support may also be found near 700. If prices turn higher, initial resistance remains between 745 – 760.

Minneapolis Wheat Managed Money Funds net position as of Tuesday, Oct. 10. Net position in Green versus price in Red. Money Managers net sold 2,520 contracts between Oct. 4 – 10, bringing their total position to a net short 23,506 contracts.

Other Charts / Weather

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

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

|

Grain Market Insider: October 13, 2023

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • The failure to trade above 500 resistance in the December corn contract likely led to profit taking from yesterday’s gains, despite decent export sales that put the total commitments up 14% over last year, but still behind the USDA’s forecast of a 22% increase.

  • Soybean oil traded sharply higher on higher crude oil that showed 5.6% gains from greater Middle East uncertainty. While the strength in bean oil led to a 14 ½ cent gain in December Board crush margins, it didn’t spill over to support meal or soybeans, which succumbed to profit taking from yesterday’s gains and ahead of any potential headline risk over the coming weekend.

  • The wheat complex closed the day mixed with Chicago higher, while both Minneapolis and KC finished lower. With a reasonably large short fund position, Chicago contracts may be seeing short covering ahead of potential headline risk over the weekend, whereas Minneapolis and KC likely saw profit taking in the wake of Thursday’s strong performance off of neutral to bearish domestic USDA supply and demand numbers.

  • To see the current U.S. 7-day precipitation forecast and 8 – 14 day Temperature and Precipitation Outlooks from the 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. In the last couple weeks Dec ’23 corn has seen a bump from a low of 467 ¾ to a high of 499. Since mid-August, the psychological 500 level has served as market resistance on the front month. Without any more bullish input, the market remains at risk of sideways to lower price action. In years without bullish fundamental tailwinds at this time of year, the worst case scenarios have seen prices trend slowly lower into anywhere from late November to early January. If you’re new to Grain Market Insider and were not a subscriber during this summer’s rally, Grain Market Insider did recommend making sales into that rally when Dec ’23 was around 624. So for now, the thought process is to hold tight on any further sales recommendations until later this fall or early winter, with the objective of seeking out better pricing opportunities. If the market has not turned around by early winter, then Grain Market Insider may sit tight on the next sales recommendations until next spring. If you end up harvesting more bushels than you can store this fall and must move them, consider protecting those sold bushels with either July or September ’24 call options.

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

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

Grain Market Insider has issued the following number of corn recommendations:
• 2023: 1 Cash/2 Call/2 Put
• 2024: 2 Cash/0 Call/0 Put
• 2025: 0 Cash/0 Call/0 Put

  • The corn market saw some end-of-the-week profit taking, as it faded off the top end of the Thursday price range. December corn closed 2 ¾ cents lower but finished the week with a small 1 ¼ cent gain.

  • The USDA released weekly export sales on Friday morning. Corn sales last week were above expectations at 910,000 mt (35.8 mb) and 87,400 mt (3.4 mb) for 2024-25. Total sales commitments for 23/24 are at 602 mb, up 14% from last year’s levels, but still behind the pace needed to reach the USDA export target of 2.025 billion bushels.

  • A strong move higher in crude oil prices helped limit corn selling pressure. Ethanol margins remain positive and have been helping support the corn market.

  • On Thursday, the USDA lowered expected corn yield to 173.0 bushels/acre and reduced corn carryout 2.111 billion bushels for the 23/24 marketing year. The friendly report has corn prices challenging resistance over top prices at 498 ¾. This is a key technical barrier and if broken could allow prices to push higher on short covering.

  • Harvest pressure limits the market’s upside. Rainfall across the Corn Belt on Friday likely limited harvest progress on Friday. Last week, the corn harvest was 34% complete, and that number should push higher with a strong harvest pace in the front half of the week. The next harvest pace number will be released in Monday’s USDA Crop Progress report.

Above: The corn market has largely been rangebound since the beginning of August, with some minor short covering lifting prices in recent days. Resistance remains between 490 – 516, with initial support between 475 – 480 and then near 460.

Soybeans

Soybeans Action Plan Summary

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

  • No action is recommended for the 2024 crop. Nov ’24 continues to trade at a discount to Nov ’23. That discount was over 90 cents in late summer yet has stabilized lately to around the 10-20 cent range.  Since July, the Nov ’24 contract has largely traded between 1250 and 1320, so this contract is currently testing the bottom end of that range. To date, Grain Market Insider has not recommended any sales for next year’s soybean crop. First sales targets will probably be early winter at the soonest. Currently, Grain Market Insider’s focus is also on watching for any opportunities to recommend buying call options.

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

Grain Market Insider has issued the following number of soybean recommendations:
• 2023: 2 Cash/0 Call/0 Put
• 2024: 0 Cash/0 Call/0 Put
• 2025: 0 Cash/0 Call/0 Put

  • Soybeans ended the day lower following a higher start due to likely end-of-week profit taking and some weakness in soybean meal. Soybean oil closed higher thanks to big gains in crude oil. For the week, November soybeans gained 14-1/4 cents, December meal gained 17.90, and soybean oil lost 0.97.

  • The big bullish news of the week was the WASDE report which saw the national yield at just 49.6 bpa, down from the USDA’s last guess of 50.1 bpa. Ending stocks remained at a very tight 220 mb, and world ending stocks fell much further than anticipated. If exports increase through the end of the year, the soybean market could be poised to rally.

  • Today’s export sales report was very supportive, with soybean sales at 1.057 mmt, above the upper end of trade estimates, and total soy exports at 1.44 mmt. In addition, daily sales totaling 117,300 mt of soybeans were reported for delivery to unknown destinations for 23/24, and 100,000 mt of soybean cake and meal were reported for delivery to unknown destinations for 23/24.

  • With soybeans out of the PNW becoming more competitive, China appears to have stepped up its U.S. purchases. Offers out of the PNW are reportedly 30 cents cheaper than Brazilian offers for November and with Brazil’s soybean supplies running low, now is the window for the U.S. to increase exports. 

Above: October 12 soybeans were shocked higher and traded into the resistance area of 1285 – 1323. If the market can maintain upward momentum, it would be poised to make a run to test mid-September prices around 1370. Otherwise, initial support below the market remains near 1250, with key support coming in between 1180 – 1200.

Wheat

Market Notes: Wheat

  • Overall wheat had a mixed close today. Chicago futures finished higher alongside Matif wheat, however, Minneapolis and KC contracts posted losses. This may be a delayed reaction to yesterday’s report which wasn’t necessarily bullish for wheat on the U.S. numbers alone. However, the reduction in global production is lending a helping hand to the market.

  • The USDA reported an increase of 24.0 mb of wheat export sales for 23/24, but last week’s shipments at 12.6 mb were behind the 13.8 mb per week pace needed to meet the USDA’s 23/24 export goal of 700 mb.

  • This morning, private exporters reported sales of 181,000 mt of U.S. SRW wheat for delivery to China during the 23/24 marketing year. This is the second recent sale to China, suggesting that U.S. wheat has become more competitive on the global market.

  • The USDA left the Russian wheat crop unchanged at 85 mmt despite some higher private estimates, and they also kept Argentina’s production unchanged at 16.5 mmt in the face of a 14.8 mmt estimate by the Rosario Grain Exchange. This is also despite the growing concern over drought in that region. Interestingly, the USDA did reduce Australia’s crop for the same reason – drought.

  • December Chicago wheat today closed above the 21-day moving average for the first time since the end of July. From a technical perspective, this may indicate that wheat has a near-term bottom in place.

  • Ukraine’s grain harvest is said to have reached 31% complete with 35.6 mmt of grain collected. Of that total, 22.2 mmt is said to be wheat. Elsewhere, the French soft wheat crop is said to be 17% planted as of October 9th, up from 3% last week, but behind last year’s pace of 19%.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. The Dec ’23 contract has been in a downtrend since making highs in late July, but has found support near 541 following the September 29 Production report and has since been rangebound between 541 and 581 ½. With weak U.S. export demand driven by cheap Russian exports being the dominant headwind, it appears that prices may be finding value in the current trading range. If a bullish catalyst were to enter the market and push prices over 616, it may signal that a fall low is in place, which would line up with the historical tendency for prices to appreciate into the winter months. If you are a newer subscriber, Grain Market Insider made sales recommendations in the late June rally around 720, and again earlier this fall near 604. With those two sales, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales in the 600 – 650 range. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. Currently, July ’24 is trading at a 68-cent premium to the Dec ’23 contract as bear spreading, due to fund positioning and weak fundamentals, has driven the Dec ’23 contract closer to 550, while the July ’24 contract remains near 625. The risk for the July ’24 contract remains the same as for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for this possibility, and back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward June’s highs, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

Grain Market Insider has issued the following number of Chicago wheat recommendations:
• 2023: 1 Cash/0 Call/0 Put
• 2024: 2 Cash/0 Call/1 Put
• 2025: 0 Cash/0 Call/0 Put

Above: December wheat has been consolidating since the break on September 29. The market’s previous range of 570 – 618 is an area of resistance which will need more bullish input to rally through. If the market retreats lower, support below the market resides between 540 – 533.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 K.C. wheat crop. The Dec ’23 contract has been in a downtrend since making highs in late July and continues to search for support while trading about 40 cents off the contract lows from July ’21.  With weak U.S. export demand, driven by cheap Russian exports, being the dominant headwind, the market is in need of bullish input to stabilize and rally prices back higher. If a bullish catalyst were to enter the market and push prices towards 750 it may signal that a fall low is in place, which would line up with the historical tendency for prices to appreciate into winter and early spring. Earlier this year, Grain Market Insider made a sales recommendation in the late May rally around 1170. With that sale, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales north of 700, and again around 750 – 800.  If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 K.C. wheat. Currently, July ’24 is trading at an 18-cent premium to the Dec ’23 contract, up from a 60-cent discount last July, as bear spreading due to weak fundamentals has driven the Dec ’23 contract closer to its contract lows, while the July ’24 contract remains more elevated as it tests Feb ’22 lows. The risk for the July ’24 contract is much like that for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode, and in mid-August, Grain Market Insider recommended purchasing July 660 puts to prepare for this possibility. Also, back in July, Grain Market Insider recommended a sale near 800 to take advantage of elevated prices before they eroded further. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

Grain Market Insider has issued the following number of K.C. wheat recommendations:
• 2023: 0 Cash/0 Call/0 Put
• 2024: 1 Cash/0 Call/1 Put
• 2025: 0 Cash/0 Call/0 Put

Above: Since the end of September, K.C. wheat has been consolidating with initial support just below the market near the September 12 low of 655. If the market retreats lower and breaks through 655, the next levels of support come in around 630 and 575. Initial resistance to the upside may be found around 700 and again near 722.

Mpls Wheat Action Plan Summary

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

  • No new action is currently recommended for 2024 Minneapolis wheat.  In the last three months, the Sep ’24 contract has gone from a 60 – 80 discount to Dec ’23, to a nearly 60-cent premium. Weak fundamentals led bear spreading to drive Dec ’23 in search of new contract lows, while Sep ’24 remains nearly 30 cents off its low from last June. The risk for the Sep ’24 contract is much like that of Dec ’23.  The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July K.C. 660 puts (for their greater liquidity, and correlation to Minneapolis pricing) to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 815 to take advantage of elevated prices. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further. Grain Market Insider will then be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

Grain Market Insider has issued the following number of Minneapolis wheat recommendations:
• 2023: 1 Cash/0 Call/0 Put
• 2024: 1 Cash/0 Call/1 Put
• 2025: 0 Cash/0 Call/0 Put

Above: For much of September, December Minneapolis wheat was rangebound, and the breakout to the downside on September 29 set the market up to test support near 665, the May ’21 low. Since then, the market has been consolidating, and while support below the market remains near 665, initial support may also be found near 700. If prices turn higher, initial resistance remains between 745 – 760.

Other Charts / Weather

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