|

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

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

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

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

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

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

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

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

Corn

Corn Action Plan Summary

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

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

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

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

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

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

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

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

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

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

Soybeans

Soybeans Action Plan Summary

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

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

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

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

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

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

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

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

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

Wheat

Market Notes: Wheat

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

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

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

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

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

Chicago Wheat Action Plan Summary

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

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

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

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

Other Charts / Weather

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

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

|

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

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

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

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

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

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

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

Corn

Corn Action Plan Summary

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

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

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

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

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

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

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

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

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

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

Soybeans

Soybeans Action Plan Summary

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

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

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

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

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

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

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

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

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

Wheat

Market Notes: Wheat

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

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

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

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

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

Chicago Wheat Action Plan Summary

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

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

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

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

Other Charts / Weather

|

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

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

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

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

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

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

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

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

Corn

Corn Action Plan Summary

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

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

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

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

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

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

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

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

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

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

Soybeans

Soybeans Action Plan Summary

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

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

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

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

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

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

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

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

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

Wheat

Market Notes: Wheat

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

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

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

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

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

Chicago Wheat Action Plan Summary

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

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

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

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

Other Charts / Weather

|

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

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

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

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

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

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

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

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

Corn

Corn Action Plan Summary

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

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

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

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

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

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

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

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

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

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

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

Soybeans

Soybeans Action Plan Summary

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

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

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

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

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

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

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

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

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

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

Wheat

Market Notes: Wheat

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

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

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

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

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

Chicago Wheat Action Plan Summary

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

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

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

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

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

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

Other Charts / Weather

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

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

|

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

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

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

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

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

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

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

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

Corn

Corn Action Plan Summary

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

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

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

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

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

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

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

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

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

Soybeans

Soybeans Action Plan Summary

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

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

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

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

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

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

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

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

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

Wheat

Market Notes: Wheat

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

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

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

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

Chicago Wheat Action Plan Summary

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

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

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

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

Other Charts / Weather

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

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

|

11-24 End of Day: “Risk off” trade on low holiday volume pressed the grain markets lower.

ByGrain Market Insider

Happy Thanksgiving from all of us at Total Farm Marketing!
Thursday, November 23, 2023: The CME and Total Farm Marketing offices are closed.
Friday, November 24, 2023: The CME closes at noon, and Total Farm Marketing closes at 1:00.

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • After briefly trading higher March corn reversed and trended lower throughout the session in sympathy with lower soybeans to close just ¾ of a cent off the day’s low.

  • Despite concerning hot and dry Brazilian weather, and a round of large private sales totaling 452k mt to be delivered this marketing year, the soybean market was dragged lower on profit taking with thin holiday trade, lower soybean meal and sharply lower soybean oil.

  • Weak export sales, lower Matif wheat, and carryover weakness from soybeans weighed on the wheat complex that saw lower closing prices in all three classes.

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

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

Corn

Corn Action Plan Summary

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

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

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

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

  • Strong selling pressure across the commodity market triggered risk off trade, pressuring grain futures. December corn futures lost 5 cents on the session, and 3 ¼ cents for the week.

  • Weekly corn export sales were towards the higher end of expectation at 1.432 MMT. Mexico was the top buyer of U.S. corn last week. For the year, corn export sales are up 27% year over year.

  • Over the weekend, the South American weather forecast for Argentina and Brazil will remain a focus. Improvement in some rainfall forecasts have helped pressure soybeans the past couple sessions, but the overall pattern is looking to stay dry. The weather in December going into January will be very key for both soybean and corn markets.

  • December grain options expired during the session, which likely added to the volatility on the session. Prices can move to areas of large open interest, which can trigger price movement.

  • The weak price action to end the week, and the lack of fresh news will likely limit the corn market going into the start of next week.

Above: The nearby contract in corn has rolled from the December contract to the March, and while the chart looks like prices made a significant jump, it is in fact the premium in the March that is being represented on the chart. Upside resistance remains between 500 and 509 ½, while support below the market remains near 460, with the next major area of support near 415.

Soybeans

Soybeans Action Plan Summary

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

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

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

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

  • Soybeans ended the day sharply lower on a day of thin holiday trade volume despite good export sales, a bundle of flash sales this morning, and Brazilian weather that remains hot, dry, and concerning for local producers.

  • For the week ending November 16, the USDA reported an increase of 35.3 mb of soybean export sales in 23/24 and an increase of 0.3 mb for 24/25. This was a good number, but still down 75% from the previous week and 47% from the prior 4-week average. Exports shipments of 61.0 mb were well above the 29.6 mb needed each week to reach the USDA’s estimates but were down 14% from the previous week. Primary destinations were to China, Spain, and Indonesia.

  • On top of the relatively strong export sales, two new flash sales were reported today with 129,000 mt of soybeans for delivery to China during the 23/24 marketing year and 323,400 mt for delivery to unknown destinations for the 23/24 year.

  • In South America, Argentina has been faring better than Brazil as far as precipitation amounts, and although Brazil has received scattered showers, it has seen anywhere near the soaking rains that have been needed. According to Agroconsult, the Brazilian soybean production for 23/24 has been revised lower to 161.38 mmt from 163.25 mmt.

Above: On November 15, January soybeans posted a bearish reversal after coming within 11 cents of the August high.  Since then, prices have traded lower and filled the gap left from 1349 ¾. For now, heavy resistance remains between 1400 and 1410, with support below the market between 1336 and the 50-day moving average near 1318.

Wheat

Market Notes: Wheat

  • US wheat futures closed with losses in all three classes alongside a lower close in Paris milling wheat futures. Weakness may have in part stemmed from sharply lower soybeans pulling the grain complex down.

  • The USDA reported an increase of only 6.3 mb of wheat export sales for 23/24 and 0.9 mb for 24/25. Shipments of 11.0 mb last week were below the 14.9 mb pace needed per week to meet the USDA 23/24 export goal of 700 mb.

  • News outlets have reported that Russia is setting a grain export quota in the amount of 24 mmt that will run from February 15 to the end of June. This will include wheat, corn, barley, and rye. Interestingly, Russia has also issued a durum wheat export ban from December 1 to May 31.

  • China’s wheat imports this year are up 38% compared to last year, at a record 10.8 mmt. With the price of US wheat falling, it will be interesting to see if China makes any more purchases from the US. Additionally, Chinese food group COFCO is said to have purchased Canadian durum wheat for the first time to be processed into flour.

  • According to the Buenos Aires Grain Exchange, Argentina has harvested 27% of their wheat crop. While weather in that country has recently improved, it was probably too little too late for wheat. The BAGE is expecting a 14.7 mmt harvest.

  • In India, wheat sowing is being hindered by dry soil conditions. Therefore, and despite near record high internal prices, India may shift wheat to planting other crops including chickpeas and sorghum. As of November 17, Indian farmers have planted 8.6 million hectares of wheat, down 5.5% from last year.

Chicago Wheat Action Plan Summary

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

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

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

Above: After testing resistance at the upper end of the recent range near 660, the market has retreated and broken through 625 support.  Without fresh bullish input, March ’24 runs the risk of retreating further and testing 575 support. 

Mpls Wheat Action Plan Summary

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

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

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

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

Above: On November 15, nearby Minneapolis wheat rolled from the December contract to the March. While it appears that prices made a significant move, it is in fact the premium in March that is being represented on the chart. Nearby resistance remains near 755 with heavy resistance above the market near the September high of 791. Below the market initial support lies near 721 with major support down near 669, the May ’21 low.

Other Charts / Weather

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

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

|

11-22 End of Day: Markets Mostly Lower on Changing SA Forecasts and Thanksgiving Position Squaring

ByGrain Market Insider

Happy Thanksgiving from all of us at Total Farm Marketing!
Thursday, November 23, 2023: The CME and Total Farm Marketing offices are closed.
Friday, November 24, 2023: The CME closes at noon, and Total Farm Marketing closes at 1:00.

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • After trading higher to start the day, the corn market shed its earlier gains in a tight 6-cent range and closed lower on the day as prices continued to consolidate with traders squaring positions in preparation for closed markets on Thursday and a thinly traded, shortened session on Friday.

  • Profit taking ahead of the Thanksgiving holiday on a more variable South American forecast led the soybean complex lower as traders covered long positions from the recent rally.

  • Soybean meal and oil both closed lower alongside soybeans as traders with long meal positions likely booked profits in front of the holiday. While soybean oil, with its relatively neutral fund position, followed crude oil lower.

  • Early strength from fresh Russian attacks on Odesa port facilities, and a large private sale totaling 110k mt of wheat to China for 23/24, faded as selling pressure from neighboring soybeans weighed on the wheat complex. Minneapolis contracts led the charge lower with KC following suit, while Chicago contracts remained firm.

  • The markets will be closed this evening and Thursday for Thanksgiving. They will reopen at 8:30 am Friday morning, with an early close at 12:05 pm for the CME Group and 12:15 pm for the MGEX.

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

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

Corn

Corn Action Plan Summary

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

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

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

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

  • Weakness in the soybean market and technical selling pressured corn futures lower on the session. December corn lost 1 ¼ cents for the day. After early session strength, corn prices failed at overhead resistance, which triggered some selling pressure before the Thanksgiving Day break.

  • Corn futures still lack overall news to push one direction or another. December futures have been holding and trading around the 470 level for the month of November.

  • December grain options expire on Friday, which could lead to volatile trade going into the weekend. Prices can move to areas of large open interest, and for December corn the 470 call and put strike seems to be holding the largest number of open contracts.

  • This morning, the USDA reported a flash sale of 128,000 mt of corn to unknown destinations for the current marketing year. The announced daily sales are encouraging, but remain small in size, and failed to move the market. Weekly export sales will be released on Friday with the Thanksgiving Day holiday tomorrow.

  • Over the weekend, the South American weather forecast for Argentina and Brazil will remain a focus. Improvement in some rainfall forecasts have helped pressure soybeans the past couple days, but the overall pattern is looking to stay dry. The weather in December going into January will be very key for both soybean and corn markets.

Above: The nearby contract in corn has rolled from the December contract to the March, and while the chart looks like prices made a significant jump, it is in fact the premium in the March that is being represented on the chart. Upside resistance remains between 500 and 509 ½, while support below the market remains near 460, with the next major area of support near 415.

Soybeans

Soybeans Action Plan Summary

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

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

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

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

  • The wheat market had a mixed close with small gains in Chicago, but losses in KC and Minneapolis futures. Early strength stemmed from a new Russian attack on Odesa in Ukraine as well as a USDA announcement that 110,000 mt of wheat was sold to China for the 23/24 marketing year. However, strength faded in tandem with soybean futures pulling the grain complex lower.

  • Funds still hold a large net short wheat position. Short covering may become more of a factor if there is more friendly news to drive wheat higher. 

  • From July 1 to November 19, EU soft wheat exports have declined 19% year over year to 11.6 mmt. This compares with 14.3 mmt last year. Additionally, there are concerns about weather in parts of Europe with too much rain causing issues, especially in France.

  • A UN agency has stated that Ukraine may be unable to meet wheat demand, both domestic and export, if Russian infrastructure attacks continue. According to the UN human rights office, since mid-July there have been 31 attacks on Ukrainian grain production and export facilities. To add to the problem, eastern European farmers are said to be protesting the import of grain from Ukraine. Nearly 300 trucks are blocking cargo traffic at one border crossing.

Above: On November 15, January soybeans posted a bearish reversal after coming within 11 cents of the August high.  Since then, prices have traded lower and filled the gap left from 1349 ¾. For now, heavy resistance remains between 1400 and 1410, with support below the market between 1336 and the 50-day moving average near 1318.

Wheat

Market Notes: Wheat

  • The wheat market had a mixed close with small gains in Chicago, but losses in KC and Minneapolis futures. Early strength stemmed from a new Russian attack on Odesa in Ukraine as well as a USDA announcement that 110,000 mt of wheat was sold to China for the 23/24 marketing year. However, strength faded in tandem with soybean futures pulling the grain complex lower.

  • Funds still hold a large net short wheat position. Short covering may become more of a factor if there is more friendly news to drive wheat higher. 

  • From July 1 to November 19, EU soft wheat exports have declined 19% year over year to 11.6 mmt. This compares with 14.3 mmt last year. Additionally, there are concerns about weather in parts of Europe with too much rain causing issues, especially in France.

  • A UN agency has stated that Ukraine may be unable to meet wheat demand, both domestic and export, if Russian infrastructure attacks continue. According to the UN human rights office, since mid-July there have been 31 attacks on Ukrainian grain production and export facilities. To add to the problem, eastern European farmers are said to be protesting the import of grain from Ukraine. Nearly 300 trucks are blocking cargo traffic at one border crossing.

Chicago Wheat Action Plan Summary

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

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

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

Above: After testing resistance at the upper end of the recent range near 660, the market has retreated and broken through 625 support.  Without fresh bullish input, March ’24 runs the risk of retreating further and testing 575 support. 

Mpls Wheat Action Plan Summary

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

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

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

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

Above: On November 15, nearby Minneapolis wheat rolled from the December contract to the March. While it appears that prices made a significant move, it is in fact the premium in March that is being represented on the chart. Nearby resistance remains near 755 with heavy resistance above the market near the September high of 791. Below the market initial support lies near 721 with major support down near 669, the May ’21 low.

Other Charts / Weather

|

11-21 End of Day: SA Weather Supports Beans & Corn; Short Covering Supports Wheat

ByGrain Market Insider

Happy Thanksgiving from all of us at Total Farm Marketing!
Thursday, November 23, 2023: The CME and Total Farm Marketing offices are closed.
Friday, November 24, 2023: The CME closes at noon, and Total Farm Marketing closes at 1:00.

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • For the second day in a row, corn settled higher on the day, as Brazilian weather concerns and support from soybeans continued to ripple through to the corn market.

  • The soybean market closed higher on the day following two-sided trade that briefly dipped below unchanged at midday before bouncing back with support from continued weather concerns in Brazil, slow farmer selling in Argentina, and strength in the soybean oil market.

  • After trading on both sides of unchanged, the wheat complex found support in all three classes near Monday’s lows and ended the day higher.

  • To see the updated Brazil 1-week total accumulated precipitation, courtesy of the National Weather Service, Climate Prediction Center, scroll down to Other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

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

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

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

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

  • Corn ended the day slightly higher for the second consecutively higher close with support from higher soybeans and expectations for dry Brazilian weather. Corn futures remain rangebound, and trade has been relatively quiet ahead of the Thanksgiving holiday.

  • Corn futures have been essentially gridlocked over the past few months as the expectation of large US production in the ballpark of 15.23 billion bushels weighs on prices, but the good domestic and export demand levels have simultaneously kept prices supported.

  • Yesterday afternoon, the USDA released the Crop Progress report which showed the corn harvest at 93% complete which was below the 5-year average by a few points and below the average trade guess. Michigan and Pennsylvania are behind schedule due to late rains with 30% of the crop left to harvest.

  • While no export sales were reported today, a sale of 4.1 mb was reported yesterday to Mexico for the 23/24 year, and yesterday’s export inspections brought total inspections 24% above the previous year. Corn export sales overall are now 33% higher than a year ago.

Above: The nearby contract in corn has rolled from the December contract to the March, and while the chart looks like prices made a significant jump, it is in fact the premium in the March that is being represented on the chart. Upside resistance remains between 500 and 509 ½, while support below the market remains near 460, with the next major area of support near 415.

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

Soybeans

Soybeans Action Plan Summary

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

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

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

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

  • Soybeans ended the day higher after a day of up and down trade that took prices from as much as 21 cents higher, down to only a penny higher, only to rally again into the close. Drier forecasts for Brazilian weather has been supportive. Soybean meal ended the day lower in the front months, while soybean oil was higher.

  • Last Friday, forecasts were calling for significant rains throughout the driest areas of Brazil, but updated forecasts are now only calling for some scattered showers, not the soaking rains that had been expected. In addition, temperatures are expected to remain very hot which would further stress the soy crop.

  • In the US, domestic demand has been strong for soybean crush, and the USDA is estimating that the processing value of soybeans in Illinois is $17.77 a bushel which is high enough to keep processors incentivized to buy soybeans.

  • Brazilian soybean planting for 23/24 is now estimated at 68% complete as of November 16 and has advanced just 7 points from the previous week, way below the pace of 80% from last year. These planting delays are causing some producers to plant cotton instead, and the delays will impact corn planting as well.

Above: On November 15, January soybeans posted a bearish reversal after coming within 11 cents of the August high.  Since then, prices have traded lower and filled the gap left from 1349 ¾. For now, heavy resistance remains between 1400 and 1410, with support below the market between 1336 and the 50-day moving average near 1318.

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

Wheat

Market Notes: Wheat

  • All three wheat classes ended the day higher after finding support down near Monday’s lows. Additional support came early in the day from stronger soybeans and corn, which later gave up much of their gains.

  • The USDA issued its weekly Crop Progress report Monday afternoon, which showed that 95% of the winter wheat crop has been planted versus 98% last year. Emergence came in at 87% versus last year’s 86% and 85% on average. 48% of the crop is in good to excellent condition, up one point from last week and 16% ahead of last year.

  • Ukraine’s Ag Ministry said that the country’s winter wheat crop is 92% planted, and AK-Inform, a crop analyst, raised their forecast for Ukraine’s wheat exports to 13 mmt, which is just above the USDA’s estimate of 12 mmt.

  • US wheat export demand and prices have been greatly affected by low export prices out of Russia and the Black Sea.  Russia continues to be cheapest among world exporters, and the pressure has affected Matif futures as well which are near a five month low.  

  • While many US winter wheat areas have seen some moisture, HRW areas remain dry and could use more to recover from the deficit. This continued lack of moisture and low prices may be leading to some short covering of the fund’s large short positions, supporting in prices.

Chicago Wheat Action Plan Summary

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

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

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

Above: After testing resistance at the upper end of the recent range near 660, the market has retreated and broken through 625 support.  Without fresh bullish input, March ’24 runs the risk of retreating further and testing 575 support. 

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

Above: On November 15, nearby Minneapolis wheat rolled from the December contract to the March. While it appears that prices made a significant move, it is in fact the premium in March that is being represented on the chart. Nearby resistance remains near 755 with heavy resistance above the market near the September high of 791. Below the market initial support lies near 721 with major support down near 669, the May ’21 low.

Other Charts / Weather

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

|

11-20 End of Day: Soybeans Rally Hard Supporting Corn as Wheat Breaks

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Solid export inspections, a 104k mt sale to Mexico, and the prospect of Brazilian replanting brought support to the corn market that traded on both sides of unchanged before settling higher on the day.

  • Soybeans saw action on the bottom side of unchanged before reversing and settling sharply higher in a classic bullish reversal. Meanwhile, soybean meal also followed suit in posting a bullish reversal, and bean oil rallied 118 points with support from higher crude oil.

  • A sharp reversal in soybeans, strength in corn, and a weak US dollar were no match for slow overall US demand and cheap Russian prices, which led all three classes lower on the day.

  • Argentina elected libertarian presidential candidate Javier Milei who is set to take office December 10th.  His policies are generally viewed as supportive to Ag, and may be bearish long term due to added global supplies, but it’s unlikely that farmers will sell much before he takes office which could be supportive near term.

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

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

Corn

Corn Action Plan Summary

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

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

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

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

  • Corn futures ended the day higher after a day of choppy trade that saw prices on either side of unchanged. A flash sale to Mexico, good export inspections, and the prospect of delayed Brazilian corn plantings were all supportive today.

  • This morning, the USDA reported private export sales of 104,000 mt of corn for delivery to Mexico during the 23/24 marketing year. Export sales are currently running 33% above a year ago, with Mexico being the primary buyer.

  • US weekly export inspections were released this morning and showed total corn inspections for 23/24 at 268 mb which is up 24% from the previous year. US corn is currently the cheapest feed grain available in the world right now, and this is allowing the USDA to estimate the 23/24 season’s corn exports 22% higher than last year’s.

  • Brazilian soybean planting is quite behind for this time of year due to the extremely hot temperatures and dryness, and although they are slated to receive rain over the next week, some of the crop will be replanted which would delay their planting of safrinha corn. There have been reports that seed sales in Brazil are below expectations for corn.

Above: The nearby contract in corn has rolled from the December contract to the March, and while the chart looks like prices made a significant jump, it is in fact the premium in the March that is being represented on the chart. Upside resistance remains between 500 and 509 ½, while support below the market remains near 460, with the next major area of support near 415.

Above: Corn Managed Money Funds net position as of Tuesday, November 14. Net position in Green versus price in Red. Managers net bought 5,102 contracts between November 8 – 14, bringing their total position to a net short 163,486 contracts.

Soybeans

Soybeans Action Plan Summary

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

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

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

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

  • Soybeans moved sharply higher today along with both soybean meal and oil. The election of Javier Milei as president in Argentina is having a temporarily bullish effect on prices as farmers may likely hold off on sales until Milei is sworn in on December 10. Technically, soybeans achieved a bullish key reversal today.

  • With Argentina facing inflation above 140%, Milei has said he would move the country’s currency to the US dollar, as well as make sharp cuts in export taxes for agricultural goods. While this may be bearish in the long term, many farmers will presumably wait to sell cash grains until these tax cuts are in place.

  • China has been a main buyer of US soybeans lately, but they have been buying from Brazil in bulk as well. October soy imports from Brazil to China were reported to be up 71% from last year to a whopping 4.8 mmt, while US soy exports to China for October were just over 228,000 mt.

  • While non-commercials continue to hold net short positions in both corn and wheat, they have been growing their long soybean position. As of November 14, funds increased their net long position by 19,315 contracts to 87,913 contracts, they also hold a large net long position of 131,000 contracts in soybean meal.

Above: On November 15, January soybeans posted a bearish reversal after coming within 11 cents of the August high.  Since then, prices have traded lower and filled the gap left from 1349 ¾. For now, heavy resistance remains between 1400 and 1410, with support below the market between 1336 and the 50-day moving average near 1318.

Above: Soybean Managed Money Funds net position as of Tuesday, November 14. Net position in Green versus price in Red. Money Managers net bought 19,315 contracts between November 8 – 14, bringing their total position to a net long 87,913 contracts.

Wheat

Market Notes: Wheat

  • The wheat complex started the holiday week continuing last week’s slide lower with all three classes closing lower on the day and KC printing its lowest price since July ’21.

  • The USDA released its weekly export inspections report today with a total of 13 mb of wheat inspected for export. The total was not only in line with trade expectations, it also met the average weekly total needed to reach the USDA’s current export goal.  

  • Low export prices out of Russia are nothing new and continue to weigh on the US export pace and prices. IKAR reported that Russian export prices remained steady at $230/mt FOB last week, while SovEcon reported that last week’s Russian grain exports dropped 9% from the previous week and totaled 810k mt.

  • Though there is nothing confirmed, there has been talk of another attempt at a sanctioned grain export corridor for Ukraine that could increase their exports and lower insurance costs. So far, the Ukrainian Danube River corridor is working, with the river ports handling 27.6 mmt in the first 10 months of the year.

  • Wet weather in southern Brazil is not just affecting corn and soybeans. Conab lowered its estimate for Brazil’s wheat crop to 9.63 mmt, down 7.9% from October’s estimate and 8.7% less than last year’s 10.55 mmt record crop.

Chicago Wheat Action Plan Summary

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

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

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

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

Above: The nearby contract in corn has rolled from the December to the March, and while the chart looks like prices made a significant jump, it is in fact the premium in the March that is being represented on the chart. Upside resistance remains between 604 ½ and 618, while support below the market may be found between 564 and 554.

Above: Chicago Wheat Managed Money Funds net position as of Tuesday, November 14. Net position in Green versus price in Red. Money Managers net bought 2,991 contracts between November 8 – 14, bringing their total position to a net short 89,271 contracts.

KC Wheat Action Plan Summary

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

  • Grain Market Insider sees a continued opportunity to sell half of your July ‘24 660 KC Wheat puts at approximately 61 cents in premium minus fees and commission. Back in August, Grain Market Insider recommended buying July ’24 660 KC wheat puts for approximately 30 cents in premium, plus commission and fees, to protect the downside for both KC wheat and Minneapolis wheat (KC puts were recommended for Minneapolis due to KC wheat’s greater liquidity and high correlation to Minneapolis wheat). At the time, US export demand was very weak, and July KC wheat had just broken through long-term support near 738. The breaking of 738 support increased the risk of the market retreating further. Since then, July ’24 KC wheat has broken through the Sep ’21 low and nearly 100 cents, with the July ’24 KC wheat 660 puts gaining nearly 200% in value. Though US export demand remains weak, plenty of time remains to market the ’24 crop, and the Drought Monitor still shows dry conditions in the HRW and HRS growing areas. Following the recent market drop, any increase in demand or threat of yield loss could rally prices. Insider recommends selling half of the previously recommended July ’24 660 KC wheat puts to lock in gains in case prices rally back, and holding the remaining puts, which will continue to protect any unsold bushels if prices erode further.

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

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

Above: After testing resistance at the upper end of the recent range near 660, the market has retreated and broken through 625 support.  Without fresh bullish input, March ’24 runs the risk of retreating further and testing 575 support. 

Above: KC Wheat Managed Money Funds net position as of Tuesday, November 14. Net position in Green versus price in Red. Money Managers net sold 3,370 contracts between November 8 – 14, bringing their total position to a net short 37,449 contracts.

Mpls Wheat Action Plan Summary

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

  • Grain Market Insider sees a continued opportunity to sell half of your July ‘24 660 KC wheat puts at approximately 61 cents in premium minus fees and commission. Back in August, Grain Market Insider recommended buying July ’24 660 KC wheat puts for approximately 30 cents in premium, plus commission and fees, to protect the downside for both KC wheat and Minneapolis wheat (KC puts were recommended for Minneapolis due to KC wheat’s greater liquidity and high correlation to Minneapolis wheat). At the time, US export demand was very weak, and July KC wheat had just broken through long-term support near 738. The breaking of 738 support increased the risk of the market retreating further. Since then, July ’24 KC wheat has broken through the Sep ’21 low and nearly 100 cents, with the July ’24 KC wheat 660 puts gaining nearly 200% in value. Though US export demand remains weak, plenty of time remains to market the ’24 crop, and the Drought Monitor still shows dry conditions in the HRW and HRS growing areas. Following the recent market drop, any increase in demand or threat of yield loss could rally prices. Grain Market Insider recommends selling half of the previously recommended July ’24 660 KC wheat puts to lock in gains in case prices rally back, and holding the remaining puts, which will continue to protect any unsold bushels if prices erode further.

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

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

Above: The nearby contract in corn has rolled from the December to the March, and while the chart looks like prices made a significant jump, it is in fact the premium in the March that is being represented on the chart. Nearby resistance remains near 755 with heavy resistance above the market near the September high of 791. Below the market initial support lies near 721, with major support down near 669, the May ’21 low.

Above: Minneapolis Wheat Managed Money Funds net position as of Tuesday, November 14. Net position in Green versus price in Red. Money Managers net bought 3,272 contracts between November 8 – 14, bringing their total position to a net short 27,726 contracts. 

Other Charts / Weather

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

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

|

11-17 Markets Close the Week Softer in Anticipation of SA Rain

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • After giving up yesterday’s gains, the corn market settled lower on the day alongside soybeans and wheat, as the markets extract weather premium on the prospect of beneficial rainfall in Brazil.

  • For the third day in a row, soybeans settled in the red as beneficial weather in Argentina may increase soybean plantings, and Brazil continues to see forecasts for much needed rainfall for its soybean crop.

  • Soybean meal and oil once again settled in opposite directions, with lower meal outweighing the gains in bean oil in influence on soybeans. 

  • Despite cuts to Argentina’s wheat crop, the wheat complex continued its slide southward, as weakness from neighboring corn and beans weighed on prices.

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

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. Since the beginning of August, the corn market has traded sideways largely between 470 and 500. October’s brief breakout to 509 ½ and the subsequent failure to stay above the 50-day moving average indicates there is significant resistance in that price range. The failure of November’s USDA report to provide a bullish influence on the market puts the market at risk of drifting sideways to lower without a bullish catalyst. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. So, for now, the thought process is to hold tight on any further sales recommendations until later this fall or early winter, with the objective of seeking out better pricing opportunities. If the market has not turned around by early winter, then Grain Market Insider may sit tight on the next sales recommendations until spring. If you end up harvesting more bushels than you can store this fall and must move them, consider protecting those sold bushels with either July or September ’24 call options.

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

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

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

  • Corn futures gave back yesterday’s gains and then some, as sellers stepped back into the corn market, fueled by a wetter near-term forecast in Brazil and improving weather in Argentina. December corn lost 7 ¾ cents on the session, but managed improving 3 cents on the week over last week overall.

  • Improved chances of rainfall in Brazil weighed on soybean prices, and with wheat futures seeing additional selling pressure, the negative tone weighed on corn futures as well.

  • The corn market has been supported by an improving demand tone. Ethanol grind has been ahead of expectations, and export sales have been more active. Weekly export sales last week were above expectations, and currently total export sales are 40% of the USDA export target. The 5-year average is 39%, so sales are back on track so far.

  • The Buenos Aires Grain Exchange cut its forecast for corn planting estimates and raised their soybean planting totals. The exchange lowered its planting estimate to 7.1 million hectares, down .2 million from their last estimate. The return of rainfall in Argentina is allowing for land to be planted into soybeans, shifting away from corn and wheat.

  • The corn market still struggles to find its footing as late harvest is triggering corn bushel movement and the hedge pressure limits potential for a strong near-term rally.

Above: The nearby contract in corn has rolled from the December to the March, and while the chart looks like prices made a significant jump, it is in fact the premium in the March that is being represented on the chart. Upside resistance remains between 500 and 509 ½, while support below the market remains 460, with the next major area of support near 415.

Soybeans

Soybeans Action Plan Summary

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

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

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

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

  • Soybeans ended the day lower for a third consecutive day and have lost 55 cents since the recent high was posted on Wednesday. The recent rally in soybeans was caused by dry South American weather, and this recent sell off has been caused by wetter South American forecasts.

  • Argentina has been receiving more favorable weather lately and is in a good place to be planting soybeans, and it is being reported that planted acreage for beans will increase by 500k acres. In Brazil, rain chances are improved, but still limited until Thanksgiving, and afterwards, it is expected to dry out again.

  • With the prospect of a larger Argentinian soy crop next year, soybean meal has begun slipping from its recent highs. A large portion of their rally has been due to increased export demand, and that will likely change next year. Soybean oil has trended slightly higher, but is under pressure from crude oil.

  • Yesterday’s export sales report featured a very large increase of 144.0 mb of soybeans for 23/24, which was a marketing year high and was in large part due to the big and consistent purchases from China over the past two weeks. In addition, a new sale to China was reported yesterday of 8.1 mb.

Above: On November 15, January soybeans posted a bearish reversal after coming within 11 cents of the August high.  Since then, prices have traded lower and filled the gap left from 1349 ¾. For now, heavy resistance remains between 1400 and 1410, with support below the market between 1336 and the 50-day moving average near 1318.

Wheat

Market Notes: Wheat

  • Wheat continued its slide with all three classes lower on the day. As the complex followed corn and soybeans lower, KC made a fresh contract low, while Chicago held more of its value versus both Minneapolis and KC.

  • Even though the crop benefited from October’s rainfall, the Buenos Aires Grain Exchange lowered its estimate for Argentina’s wheat crop to 14.7 mmt, down from 15.4 mmt, primarily due to frost damage.

  • With EU soft-wheat production seen at 125.8 mmt, a slight increase from last month’s estimate, EU crop analyst Strategie Grains reported that France may see a surplus in wheat and barley for 23/24 crop year.

  • Japan’s Ministry of Agriculture in a regular tender bought 104,677 metric tons of food grade milling wheat from the US, Canada, and Australia.

  • On the weather front, dry conditions continue to be a concern for much of the recently planted HRW wheat crop, which makes Sunday and Monday’s anticipated rain more significant. So far, 42.5% of the Kansas crop is estimated to be under severe drought according to Thursday’s release of the US Drought Monitor.  

Chicago Wheat Action Plan Summary

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

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

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

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

Above: The nearby contract in corn has rolled from the December to the March, and while the chart looks like prices made a significant jump, it is in fact the premium in the March that is being represented on the chart. Upside resistance remains between 604 ½ and 618, while support below the market may be found between 564 and 554.

KC Wheat Action Plan Summary

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

  • Grain Market Insider recommends selling half of your July ‘24 660 KC Wheat puts at approximately 61 cents in premium minus fees and commission. Back in August, Grain Market Insider recommended buying July ’24 660 KC wheat puts for approximately 30 cents in premium, plus commission and fees, to protect the downside for both KC wheat and Minneapolis wheat (KC puts were recommended for Minneapolis due to KC wheat’s greater liquidity and high correlation to Minneapolis wheat). At the time, US export demand was very weak, and July KC wheat had just broken through long-term support near 738. The breaking of 738 support increased the risk of the market retreating further. Since then, July ’24 KC wheat has broken through the September ’21 low and nearly 100 cents, with the July ’24 KC wheat 660 puts gaining nearly 200% in value. Though US export demand remains weak, plenty of time remains to market the ’24 crop, and the Drought Monitor still shows dry conditions in the HRW and HRS growing areas. Following the recent market drop, any increase in demand or threat of yield loss could rally prices. Grain Market Insider recommends selling half of the previously recommended July ’24 660 KC wheat puts to lock in gains in case prices rally back, and holding the remaining puts, which will continue to protect any unsold bushels if prices erode further.

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

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

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

Mpls Wheat Action Plan Summary

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

  • Grain Market Insider recommends selling half of your July ‘24 660 KC Wheat puts at approximately 61 cents in premium minus fees and commission. Back in August, Grain Market Insider recommended buying July ’24 660 KC wheat puts for approximately 30 cents in premium, plus commission and fees, to protect the downside for both KC wheat and Minneapolis wheat (KC puts were recommended for Minneapolis due to KC wheat’s greater liquidity and high correlation to Minneapolis wheat). At the time, US export demand was very weak, and July KC wheat had just broken through long-term support near 738. The breaking of 738 support increased the risk of the market retreating further. Since then, July ’24 KC wheat has broken through the September ’21 low and nearly 100 cents, with the July ’24 KC wheat 660 puts gaining nearly 200% in value.  Though US export demand remains weak, plenty of time remains to market the ’24 crop, and the Drought Monitor still shows dry conditions in the HRW and HRS growing areas. Following the recent market drop, any increase in demand or threat of yield loss could rally prices. Grain Market Insider recommends selling half of the previously recommended July ’24 660 KC wheat puts to lock in gains in case prices rally back, and holding the remaining puts, which will continue to protect any unsold bushels if prices erode further.

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

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

Above: The nearby contract in corn has rolled from the December to the March, and while the chart looks like prices made a significant jump, it is in fact the premium in the March that is being represented on the chart. Nearby resistance remains near 755 with heavy resistance above the market near the September high of 791. Below the market initial support lies near 721, with major support down near 669, the May ’21 low.

Other Charts / Weather

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