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11-16 Corn Higher, Beans and Wheat lower in a “Risk Off” Day for Commodities

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Corn futures managed to hang onto gains today as the rest of the grain complex fell lower. Strong weekly export sales helped provide underlying support.  

  • New forecasts for South America showing much needed precipitation in western and central Brazil this weekend and into the end of the month sparked liquidation in soybeans today.

  • Soybean meal and soybean oil followed the commodity trend lower today. WTI crude oil shed over 4% as well, which added to the momentum lower for soybean oil.

  • Poor weekly export sales and pressure from outside markets pushed all three wheats lower today.

  • To see the updated US Drought Monitor and the Brazil 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. 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 saw positive money flow on Thursday, supported by a better-than-expected Export Sales report for last week. Dec corn futures finished 4 cents higher, but 9 1/2 cents off the session low, despite strong selling pressure in the grain and crude oil markets.

  • USDA reported weekly exports sales of 1.808 MMT (71.2 mb) for the current marketing year last week.  This was larger than market expectations and brings total sales for the 2023-24 marketing year to 21,098 MMT, up 33% versus last year. Mexico was the top buyer of U.S. corn last week at 41.8 mb.

  • Crude oil prices traded over 4% lower during the session on Thursday. The drop in crude oil prices could be a limiting factor and margins for ethanol production could tighten, slowing this key domestic demand.

  • Some improving forecast for Brazil helped weigh on soybean prices for the session. Corn futures traded independently from both soybeans and wheat on the day. While Brazil forecast is staying dry overall, a weather wildcard will be Argentina. After two years of drought, conditions are improved, which could lead to price limiting production from the South American country.

  • Despite the positive price action on Thursday, Dec corn futures are looking to test key resistance at the $4.80 price level. This price point has been a cap overtop the corn market since the start of November.

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 may be poised to test the August high. Looking back, since last May, nearby soybeans have been in a range from 1435 up top to 1251 down below. Last summer, Grain Market Insider did make two sales recommendations in the 1310 – 1360 price window versus Nov ’23. Given that those sales recommendations were made and given that now is not the time of year to be making many sales, if any, Grain Market Insider is content to hold tight on any further sales recommendations until later this fall or early winter. The focus for strategy right now is to be on the lookout for any call option buying opportunities. If you end up harvesting more bushels than you can store this fall, consider protecting any sold bushels with July or Aug ’24 call options. 

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

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

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

  • Soybeans ended the day lower following a new forecast for South America, which features better chances of rain for Argentina and northern and central Brazil that is expected to begin on Sunday and last until at least the end of the month. Export sales were strong, but were overshadowed by the weather.

  • Both soybean meal and oil ended the day lower as well, with a sharp selloff in crude oil which saw prices break support and drop below 73 dollars a barrel. Soybean meal may encounter pressure down the road as Argentina’s soy crop is being planted in better conditions than the previous year, which could allow them to export more soybean meal next year.

  • For the week ending November 9, the USDA reported an increase of 144.0 mb of soybean export sales for 23/24, a marketing year high. Last week’s export shipments of 73.2 mb were above the 30.6 mb needed each week to meet the USDA’s expectations. Primary destinations were to China, the Netherlands, and Bangladesh.

  • Following a string of sales recently to both China and unknown, another flash sale was reported this morning of 220,000 mt of soybeans for delivery to unknown destinations for 23/24. Since last week, China and unknown destinations have purchased well over 100 mb of soybeans. President Biden and Chinese President Xi met and reportedly had a “productive meeting”.

Above: January soybeans closed sharply higher following a gap higher open on Nov. 13. The development is bullish, though resistance remains between 1385 and 1410, and the market may seek to fill the gap left from 1349 ¾. If the market can close above 1410, it would be poised to make a run toward 1490 – 1505. If not, initial support below the market rests between 1336 and the 50-day moving average near 1317.

Wheat

Market Notes: Wheat

  • The markets took a risk off posture today, with many commodities trading lower. All three US wheat futures classes posted losses with KC leading the way down. Paris milling wheat futures offered no support either, with losses of around two Euros per metric ton.

  • The USDA reported a dismal increase of 6.5 mb of wheat export sales for 23/24. Each week, 14.8 mb needs to be exported to reach their goal of 700 mb for 23/24, but last week’s shipments totaled only 11.4 mb.

  • Adding to pressure in the wheat market is the Australian harvest, with yields so far better than anticipated. However, according to the Australian government, their wheat production will still be over a third lower than last year’s record harvest due to the hot and dry weather this season.

  • Ukraine has reportedly began repairing railroads, presumably damaged in the war. This repair work will allow for cargo to be transported to three Black Sea ports near Odesa. These shipments would then be shipped on Ukraine’s humanitarian corridor that was created after Russia left the Black Sea Grain Initiative.

  • France is seeing heavy rains and flooding, which may impact the 2024 soft wheat crop, according to FranceAgriMer. France has seen the highest total rainfall ever (for 26 consecutive days) from October 18 to November 12. President Macron is said to be visiting some of the affected areas.

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.

  • No new action is recommended for 2024 KC wheat. Back in July, the July ’24 contract tested the 870 range, while Dec ‘23 was testing the 930 level. Since then, fund positioning and weak demand fundamentals have driven both the nearby old crop contracts and July ’24 prices lower, with nearby old crop prices now in the low to mid 600s, while July ’24 retains about a 15 cent premium. The risk for the July ’24 contract remains the same as for the nearby old crop contracts, in that the market needs fresh bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July 660 puts to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 800 to take advantage of elevated prices before they eroded further. If the market receives the needed impetus to move prices back toward 750 – 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

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

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

Above: 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

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11-15 Corn and Beans Lower, and Wheat Follows as Traders Take Profits

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Profit taking, triggered by the prospect of much needed rain in Brazil over the weekend, led to a bearish reversal and a lower close in the corn market after it posted a new high for the recent move up.

  • Despite impressive record NOPA crush numbers for October, nearby soybeans sold off and settled lower with a bearish reversal, while the deferred months remained firm, on talk of rain in Brazil’s two week forecast.

  • Soybean meal posted a bearish key reversal and closed lower after making a new high today. The selloff may have triggered some profit taking and certainly weighed on nearby soybeans. Even though bean oil settled off its high of the day, it still posted a solid close following the rally in palm oil.

  • The lack of fresh bullish news and a general risk off attitude in other markets carried over to the wheat market, contributing to its weakness. Although nearby KC and Minneapolis settled unchanged to slightly firmer, the wheat complex was mostly lower to close the day, after trading on both sides of unchanged.

  • To see the US 7-day precipitation forecast, Brazil’s 2-week precipitation forecast, and the South American GRACE-Based Drought Indicators, courtesy of NOAA, NWS, CPC, NASA and the NDM, 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 failed to push through resistance early in the session and reversed over during the day.  Dec corn lost 7 1/2 cents on the session. The weak price action saw the daily chart post a bearish reversal, which could lead to additional technical selling on Thursday.

  • Brazil’s weather forecast is looking for some possible rain chances this weekend into early next week. The prospect of rain triggered profit taking in the grain markets. Longer term models are keeping the current dry and hot forecast in place, but the Brazil crops could see some temporary relief.

  • Argentia weather is improving, which should support corn and soybean production this season. After two year of drought, Argentina crop coming back to full production would greatly limit the impact of a possible loss in Brazil bushels.

  • The USDA will release the weekly export sales report on Thursday morning. Expectations are for sales to range between 900,000 – 1.55 MMT of new sales last week. The USDA announced a flash 124,000 MT (4.8 mb) for corn to Japan this morning for the current marketing year.

  • Daily ethanol production for the week averaged 1.047 million barrels. This was up 0.5% from last week and up 3.6% from last year. Ethanol stocks were 20.954 million barrels. This was the lowest since December 24, 2021. Last week, corn used for ethanol was estimated at 103.92 million bushels, and the overall trend for corn usage stays friendly compared to USDA forecasts.

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 may be poised to test the August high. Looking back, since last May, nearby soybeans have been in a range from 1435 up top to 1251 down below. Last summer, Grain Market Insider did make two sales recommendations in the 1310 – 1360 price window versus Nov ’23. Given that those sales recommendations were made and given that now is not the time of year to be making many sales, if any, Grain Market Insider is content to hold tight on any further sales recommendations until later this fall or early winter. The focus for strategy right now is to be on the lookout for any call option buying opportunities. If you end up harvesting more bushels than you can store this fall, consider protecting any sold bushels with July or Aug ’24 call options. 

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

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

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

  • Soybeans were bear spread today, with the front months ending the day lower, with November 2024 ending slightly higher. January took out yesterday’s high this morning and reached 13.98-1/2, but has struggled to get above the 14-dollar mark.

  • NOPA soybean crush numbers were very impressive today, with October 2023 crush at 187.775 mb, which was an all-time high for any month and way above the average trade guess of 187.237 mb. Soybean oil stocks came in below expectations at 1.099 billion bushels and this was the sixth straight monthly fall, signaling the still strong demand.

  • This afternoon, President Biden and Chinese President Xi will meet in San Francisco for the Asia-Pacific Economic Cooperation summit, and leading up to the meeting, China has been an active buyer of US soybeans. Since last week, China and unknown destinations have purchased over 100 mb of soybeans from the US.

  • Weather in central and northern Brazil remains very hot and dry, with talk of an increased chance for rain over the next 7-days, but southern Brazil continues to receive too much rain. Trade has been watching South American weather closely, but Argentinian weather has improved recently, which would add a large amount of soybean meal back to the market if their soy production returns to its typical production of 45 mmt, rather than the meager 25 mmt in last year’s drought.

Above: January soybeans closed sharply higher following a gap higher open on Nov. 13. The development is bullish, though resistance remains between 1385 and 1410, and the market may seek to fill the gap left from 1349 ¾. If the market can close above 1410, it would be poised to make a run toward 1490 – 1505. If not, initial support below the market rests between 1336 and the 50-day moving average near 1317.

Wheat

Market Notes: Wheat

  • A risk off session led to a lower close for the wheat market. Lower corn, soybeans, crude oil, and Matif wheat futures, in addition to a higher US dollar, all offered weakness to US wheat futures. A lack of fresh bullish news may have also played a part in today’s softness.

  • According to the Ukrainian Grain Association, their wheat exports are down 32% from last year. Although this statement may sound like a broken record, it bears repeating:  Russia continues to dominate the wheat export market, and that is keeping a lid on futures prices, as US exports have fallen to the lowest level in 52 years.

  • The US Plains may see some shower activity over the next five days or so. While rain totals are not expected to be heavy, it is still expected to bring relief to some of the drier areas.

  • Kazakhstan’s wheat production estimate has been reduced by 5.6% to 13.0 mmt due to heavy rain and delays to harvest.

  • The drought in Brazil is causing more shipping delays than expected, with low Amazon River levels, and grain exports are being re-routed South. While this is mainly impacting corn and soybeans at this point, it could have repercussions for the grain markets as a whole.

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.

  • No new action is recommended for 2024 KC wheat. Back in July, the July ’24 contract tested the 870 range, while Dec ‘23 was testing the 930 level. Since then, fund positioning and weak demand fundamentals have driven both the nearby old crop contracts and July ’24 prices lower, with nearby old crop prices now in the low to mid 600s, while July ’24 retains about a 15 cent premium. The risk for the July ’24 contract remains the same as for the nearby old crop contracts, in that the market needs fresh bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July 660 puts to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 800 to take advantage of elevated prices before they eroded further. If the market receives the needed impetus to move prices back toward 750 – 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

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

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

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

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

Above: 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

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

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

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11-14 Chicago and KC Wheat Post Losses Despite Gains Across the Grain Complex

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Another 102k bu of private sale to Mexico reported by the USDA, and short covering triggered by strength in soybeans helped the corn market to extend the gains from yesterday’s rally and settle higher on the day, following choppy back and forth trade.

  • After drifting lower overnight on profit taking, the soybean market regained upward momentum and support from strong soybean oil prices, rebounding meal, and the weak US dollar, to close the day just 1 ¾ cents off the high in a 23 cent range.

  • Soybean meal came back from a lower open to close higher alongside soybean oil, which also followed through on yesterday’s gains with support from higher palm and crude oil. The move also pushed January Board crush margins higher, showing a 10 ¾ cent improvement.

  • The sharp drop in the US dollar was no match for the sellers in the wheat market, as the complex settled the day mixed with Minneapolis the strong leg of the three, while Chicago and KC closed lower on the day, following two sided trade.

  • A better than expected report on the Consumer Price Index triggered massive selling in the US dollar, which traded to fresh 2-month lows on the possibility that the Federal Reserve may refrain from further rate hikes. The lower dollar likely lent support across the commodity sector.

  • To see the US 5-day precipitation forecast, the 8 – 14 day Temperature and Precipitation Outlooks, and the Brazil and Argentina average temperatures and 1-week precipitation forecasts, courtesy of NOAA, NWS, and the CPC, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. 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:

  • Another strong close in the soybean market and short covering in the corn market helped push prices higher for the second consecutive day. December corn added 1 cent to $4.78 ¼. 

  • Price action could be deemed disappointing after the strong start to the week on Monday. The true lack of follow-through on Tuesday is reflective of the bearish overall tone in the corn market.  Resistance over the December contract is $4.80, which was tested and held during Monday’s trade.

  • Corn harvest is moving into the later stages as the USDA pegged harvest at 88% complete, which was 2% below the analyst expectations, but 2 % faster than the 5-year average. The eastern Corn Belt and Wisconsin looked to be the biggest areas of delay.

  • Weather forecasts stay extremely hot and dry for Brazil grain producing areas into the end of the week, but some potential rains over the weekend into next week. The accuracy of longer-range models is questionable. These forecasted rains will be key and extended models bring warm and dry conditions back through the end of November.

  • Demand will stay in the focus of the market as export sales and shipments are below expectations.  The USDA announced a flash sale of 101,745 mt (4 MB) of corn to Mexico for the current marketing year this morning. These sales are routine, and still are not the totals needed to ease the demand concerns for U.S. corn on the global export market.

Above: Front month corn posted a bullish key reversal after printing a new low for the move on Nov. 13. The market continues to show signs of being oversold, which is supportive to the reversal. If prices can push through overhead resistance near 484, prices could move higher to test 500 – 509 ½. If not, support below the market remains 460, with the next major area of support near 415.

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

Soybeans

Soybeans Action Plan Summary

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

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

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

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

  • Soybeans started off nearly 11 cents lower, but ultimately, finished the day higher thanks to strength in both soy products, strong Chinese demand, and hot and dry South American weather.

  • Yesterday, soybean meal made new contract highs and was briefly limit up. A new high was made today in December, but the biggest gains were in soybean oil after Malaysian palm oil futures surged by 2.7%. India also increased its imports of palm and sunflower oil by 24% and 54% respectively from the previous year.

  • As the meeting between Biden and Chinese President Xi approaches, there has been a sharp increase in the amount of soybeans purchased by China. In the past week, 106 mb of soybeans have been sold to China and unknown destinations with another sale of 7.5 mb reported yesterday.

  • Brazil is reportedly 61% complete with soybean planting, but have endured very dry and hot weather with little relief in the forecast. It is estimated that at least 20% of the crop will be replanted and could be a large factor in non-commercials establishing a net long position recently of over 70,000 contracts.

Above: January soybeans closed sharply higher following a gap higher open on Nov. 13. The development is bullish, though resistance remains overhead between 1385 and 1410, and the market may seek to fill the gap left from 1349 ¾. If the market can close above 1410, it would be poised to make a run toward 1490 – 1505. If not, initial support below the market rests between 1336 and the 50-day moving average near 1317.

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

Wheat

Market Notes: Wheat

  • After a two sided trade, Chicago and KC wheat closed in the red, while Minneapolis held gains. This is despite the sharply lower US Dollar Index, which at the time of writing is down 1.46 at 104.17. This huge move down is a result of today’s Consumer Price Index data that was unchanged for October, with expectations for a 0.1% increase. Additionally, the year on year increase of 3.2% was 0.1% lower than what was anticipated. This data suggests that the Federal Reserve may pause another interest rate increase.

  • According to the USDA, the US winter wheat crop is now 93% planted, which is in line with the average, but down just slightly from last year. Also, 81% of the crop is emerged, but conditions were lowered 3% from last week to 47% good to excellent.

  • The weather conditions in southern Brazil have been far too wet and it is affecting their wheat crop in terms of quality and production. According to CONAB, Brazil’s wheat crop projection comes in at 9.63 mmt – this is a 7.9% decrease from the October estimate. It is also down from the last crop of 10.55 mmt.

  • Although France raised their corn crop estimate to 12.5 mmt (from 12.1 mmt), they kept their soft wheat crop production unchanged at 35.1 mmt. Europe has been too wet overall, but this does not seem to have affected wheat all that much. 

  • The CFTC report was released yesterday, delayed from Friday due to the Veteran’s Day holiday. The data showed that as of November 7th, funds reduced their net short position in Chicago wheat by 9,313 contracts to 92,262. Though nearly a 10% reduction, it remains a hefty, short position that keeps the market primed for a short covering rally if there is friendly news to support it.

Chicago Wheat Action Plan Summary

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

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

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

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

Above: After trading toward the October highs on November 8, the wheat market has been consolidating. If it can press through nearby upside resistance and close above 604 ½, it may then be able to run and test resistance near 618. If the market turns back lower, support below the market may be found between 564 and 554.

KC Wheat Action Plan Summary

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

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

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

Above: On November 7 the December contract posted a bearish reversal, which may indicate lower prices ahead unless bullish information enters the market to turn prices higher. Currently, upside resistance now lies between 735 and 755, with initial support below the market near 703. The next major level of support is near 669, the May ’21 low.

Other Charts / Weather

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

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

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

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

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

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11-13 Sharply Higher Soybeans Lifts Corn and Wheat

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Sharply higher soybeans and Brazilian weather concerns supported the corn market into the close with a bullish reversal and some likely short covering, after making a fresh new low for the move.

  • A slow planting pace due to hot and dry weather in Brazil, along with sharply higher soybean meal, took soybeans to a 35 cent gain on the day, after a 6 ¼ cent gap open Sunday night.

  • Expectations of strong US meal demand due to potentially shrinking South American crops continues to underpin soybean meal, which printed a new contract high as it briefly locked limit up. Meanwhile, spillover strength from soybeans and meal rallied bean oil 1.71 cents off its low to close .34 cents higher on the day.

  • Carryover support from corn and soybeans rallied most of the wheat complex to close in positive territory, except for December Minneapolis. Though the closing gains were minor, the market collectively settled between 6 and 11 cents off the respective lows, and may have triggered some short covering on the rally.

  • To see the US 5-day precipitation forecast, the 8 – 14 day Temperature and Precipitation Outlooks, and the Brazil and Argentina 2-week precipitation forecasts, courtesy of NOAA, NWS, and the CPC, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. 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:

  • It was a strong day in the corn market to start the week, as concerns over Brazil weather and heavy buying in the soybean market spilled over into the corn market, triggering short covering. The strong close and positive price action could lead to some additional follow-through buying going into tomorrow’s session.

  • Weather forecasts stay extremely hot and dry for Brazil grain producing areas for the next 10-days.  Weather models are looking at some potential rains at the end of that time period, but accuracy of longer-range models is questionable. Brazilian corn futures traded sharply higher on the day, trying to encourage producers to plant the important 2nd crop Brazil corn.

  • Weekly corn export inspections were within analysts’ expectations during Monday’s USDA Inspections report.  Last week, U.S. exports shipped 609,000 mt of corn (24 mb), year to date, total inspections are at 6.161 mmt, up 23% over last year.

  • The USDA Crop Progress report will likely show that corn harvest is in the last legs. Last week, the harvest was 81% complete. That total should be closer to the 90% window with just the northern states lagging in harvest.

  • With the bump in prices, rallies may stay limited due to harvest pressure and large supplies available after the completion of a potential near record 2023 corn crop.

Above: Front month corn posted a bullish key reversal after printing a new low for the move on Nov. 13. The market continues to show signs of being oversold, which is supportive to the reversal. If prices can push through overhead resistance near 484, prices could move higher to test 500 – 509 ½. If not, 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 may be poised to test the August high. Looking back, since last May, nearby soybeans have been in a range from 1435 up top to 1251 down below. Last summer, Grain Market Insider did make two sales recommendations in the 1310 – 1360 price window versus Nov ’23. Given that those sales recommendations were made and given that now is not the time of year to be making many sales, if any, Grain Market Insider is content to hold tight on any further sales recommendations until later this fall or early winter. The focus for strategy right now is to be on the lookout for any call option buying opportunities. If you end up harvesting more bushels than you can store this fall, consider protecting any sold bushels with July or Aug ’24 call options. 

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

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

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

  • Soybeans ended the day with big gains thanks to a sharp rally in soybean meal, as export demand heats up. Hot and dry conditions in Brazil have been very supportive, while southern Brazil deals with excessive rains. Soybean oil managed to close slightly higher, along with crude oil.

  • China has become a much more active buyer of US soybeans since Brazil’s stores began getting emptied with China and unknown destinations purchasing nearly 100 mb of soybeans just last week. A flash sale was also reported today of 204,000 metric tons of soybeans for delivery to China during the 23/24 marketing year.

  • Soybean planting in Brazil is now estimated at 57% complete by Safras & Mercado, which is behind last year’s pace of 67%. There are also estimates that 20-25% of Brazilian soybeans will need to be replanted due to the dry conditions.

  • Last week’s WASDE report was slightly bearish, but received a much more negative reaction, which may have been offset today. Yields were increased by 0.3 bpa to 49.9 bpa, which increased production by 25 mb and that went right to increasing the ending stocks to 245 mb.

Above: January soybeans closed sharply higher following a gap higher open on Nov. 13. The development is bullish, though resistance remains overhead between 1385 and 1410, and the market may seek to fill the gap left from 1349 ¾. If the market can close above 1410, it would be poised to make a run toward 1490 – 1505. If not, initial support below the market rests between 1336 and the 50-day moving average near 1317.

Wheat

Market Notes: Wheat

  • Wheat closed in positive territory, despite trading lower this morning. Today’s gains in wheat were minimal, and it was likely pulled higher by corn and especially the sharply higher soybean market. If  the wheat export inspections were better, there may have been more of a rally. However, inspections of just 7.6 mb were poor; this brings the total 23/24 inspections to 274 mb, still down 26% from last year.

  • Russia’s wheat FOB export values are said to have risen by about $5-$7 per metric ton. For now, they are still very competitive and getting much of the world’s export business. However, this change could indicate that wheat prices may begin to rise globally. On the other hand, the USDA report last week did result in a 5 mmt increase to Russia’s crop to 90 mmt, so they will likely remain competitive on exports.

  • Although there are problems in Brazil, Argentina’s weather has turned more favorable. According to the Buenos Aires Grain Exchange, Argentina’s wheat production is estimated at 15.4 mmt, with their harvest now 14.4% complete, compared with 9.3% last week.

  • China looks like it will remain the world’s top wheat importer for the second year in a row. On last week’s report, the USDA estimated that China will purchase 12 mmt of wheat for the 23/24 season. Elsewhere, Egypt is struggling with economic issues that are curbing their wheat imports, as a result of their currency losing about half its value since the beginning of 2022.

  • According to FranceAgriMer, as of November 6th, 67% of the French soft wheat crop has been planted. That is behind both the average and last year’s pace. The slowdown is attributed to wet weather and muddy fields. The heavy rainfall they have seen could reduce the planted acreage and lead to an increase in prices. 

Chicago Wheat Action Plan Summary

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

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

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

Above: On November 7 the December contract posted a bearish reversal, which may indicate lower prices ahead unless bullish information enters the market to turn prices higher. Currently, upside resistance now lies between 735 and 755, with initial support below the market near 703. The next major level of support is near 669, the May ’21 low.

Other Charts / Weather

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

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

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

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

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11-10 End of Day: The slide continues for corn and wheat, while beans recover in choppy trade.

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Following yesterday’s bearish USDA report and with the lack of fresh bullish news, traders likely added to existing short positions today, pushing the December contract to its lowest close since September 2021.  

  • After trading on both sides of unchanged and within a penny of yesterday’s low, buying entered the market with support from higher soybean oil and a similar turnaround in meal to help January soybeans close within 2 ¼ cents of the high.

  • Support from higher crude oil and lower than expected Malaysian palm oil stocks helped bean oil recover from its recent lows and support soybeans. Solid underlying export demand for US soybean meal (due to low Argentine supplies) continues to underpin nearby meal futures, which closed just 50 cents lower on the day but firmer versus the deferred contracts.

  • Despite global wheat stocks falling for the fourth year in a row and the lowest stocks to use ratio amongst the world’s major wheat exporters, all three wheat classes continued their slide following yesterday’s USDA report, as global wheat prices appear more affected by Russia’s ability to deliver cheap wheat.

  • To see the US 5-day precipitation forecast, the 6 – 10 day Temperature and Precipitation Outlooks, and the Brazil and Argentina 2-week precipitation forecasts, courtesy of NOAA, NWS, and the CPC, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. 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 pushed to a new nearby low on Friday and additional selling pressure fueled by hedge pressure and lack of overall bullish news weighed on the market. December corn futures lost 4 cents and was down 13 ¼ cents on the week. December corn closed at its lowest level since September of 2021.

  • Hedge pressure stays a major influence on corn prices as the last 20% of harvest gets complete. Talk of producers handling extra supplies is likely pressuring the market as the corn crop is trending larger than expected in certain areas.

  • Thursday’s Crop Production report and corn yield increase of 1.9 bushels/acre reflects the strong end to the harvest this fall. The increase in demand by the USDA was questioned by market analysts as the USDA added 50 mb to export demand, 25 mb to ethanol demand, and 50 mb to feed usage. The new export target for the marketing year is 2.075 billion bushels, a 400+ mb increase over last year. The large supply picture limits any near-term rallies.

  • The USDA data on Thursday showed that global stocks/use is expected to reach 12.5%, matching a 4-year high. Globally, stocks/use ratios of major corn exporters could reach a 6-year high, fueled by record large Brazil and US corn harvests this past growing season. The large supplies will limit price gains due to strong global competition.

  • South American weather stays in focus. Current weather models lean toward warm and dry conditions continuing into the end of the year. Forecasts for Brazil and Argentina will likely be the main driver of corn and soybean markets over the next few months.

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

Soybeans

Soybeans Action Plan Summary

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

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

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

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

  • Soybeans ended the day higher after yesterday’s selloff following the USDA report and this morning’s lower open from the overnight session. Soybean meal ended slightly lower but remains near its contract highs. Soybean oil ended higher with support from crude oil and palm oil.

  • The USDA increased the national soybean yield slightly to 49.9 bpa from 49.6 bpa which caused a negative reaction because estimates called for yields to be unchanged, but it was not a large adjustment and increased ending stocks only slightly to a still tight 245 mb.

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

  • While there were no reported flash sales today, flash sales yesterday were reported totaling 1,044,000 mt of soybeans to China for 23/24, and 662,500 mt were reported for delivery to unknown destinations. Export demand has picked up in this window where Brazil is planting soybeans.

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

Wheat

Market Notes: Wheat

  • Today wheat failed to recover, posting a negative close on follow through from yesterday’s WASDE report. At one point in this session, there was a small amount of green on the board but not enough friendly news to keep wheat in positive territory. Traders are likely focused on the fact that Russia’s crop was revised higher and that they continue to dominate the export market.

  • The USDA also raised Ukraine’s exports yesterday. And though they remain below year ago levels, it remains clear that Ukraine continues to do everything in their power to ship grain. Despite a Russian missile said to having hit a merchant ship in the Black Sea earlier this week, there are still said to be about 30 vessels in Ukraine ports waiting to load out.

  • On a bullish note, despite some of the negativity yesterday, global wheat ending stocks (excluding China) at 4.58 bb are the lowest in 15 years. Managed funds also remain short a sizeable amount of wheat, so any spark in the form of friendly news could ignite a fire under the wheat market and force them to cover that short position.

  • One piece of news hindering the wheat market today was that a French vessel loaded with 35,000 mt of wheat is headed for New York. US imports of wheat are expected to rise, according to the USDA, to 145 mb – the highest level in six years. With US wheat exports struggling and imports rising, some friendly news will be needed to help futures break out of the sideways to lower pattern.

  • Yesterday Fed Chairman Powell made comments that seemed to contrast with those after the last FOMC meeting. He now seemed to indicate that the Federal Reserve may in fact remain aggressive with interest rate increases to help curb inflation. This may keep the equity markets volatile for the time being. At the time of writing, the Dow is up over 300 points, taking back yesterday’s losses and more. This uncertainty may spill over into the grain complex as well.

Chicago Wheat Action Plan Summary

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

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

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

Above: On November 7 the December contract posted a bearish reversal, which may indicate lower prices ahead unless bullish information enters the market to turn prices higher. Currently, upside resistance now lies between 735 and 755, with initial support below the market near 703. The next major level of support is near 669, the May ’21 low.

Other Charts / Weather

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

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

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

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

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

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

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

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

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

  • To see the US Drought Monitor and the 1-week Class Change map, courtesy of the NDMC and University of Nebraska, and the Brazil and Argentina 2-week precipitation forecasts, courtesy of NOAA, NWS, and the CPC, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. The Dec ’23 contract’s quick move above 500 on October 19, and then below the 50-day moving average of 485 just three sessions later, on October 24, signals that there is heavy resistance above the market near the 100-day moving average, and prices continue to be at risk of drifting sideways to lower. The next major level of support remains near the August low of 462 for front month corn. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. So, for now, the thought process is to hold tight on any further sales recommendations until later this fall or early winter, with the objective of seeking out better pricing opportunities. If the market has not turned around by early winter, then Grain Market Insider may sit tight on the next sales recommendations until spring. If you end up harvesting more bushels than you can store this fall and must move them, consider protecting those sold bushels with either July or September ’24 call options.

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

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

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

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

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

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

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

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

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

Soybeans

Soybeans Action Plan Summary

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

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

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

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

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

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

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

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

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

Wheat

Market Notes: Wheat

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

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

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

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

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

Chicago Wheat Action Plan Summary

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

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

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

Above: On November 7 the December contract posted a bearish reversal, which may indicate lower prices ahead unless bullish information enters the market to turn prices higher. Currently, upside resistance now lies between 735 and 755, with initial support below the market near 703. The next major level of support is near 669, the May ’21 low.

Other Charts / Weather

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

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

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

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

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

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

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

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

  • To see the US 7-day precipitation forecast, and the South American 1-week precipitation forecast as a percent of normal, courtesy of NOAA, NWS, and the CPC, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. The Dec ’23 contract’s quick move above 500 on October 19, and then below the 50-day moving average of 485 just three sessions later, on October 24, signals that there is heavy resistance above the market near the 100-day moving average, and prices continue to be at risk of drifting sideways to lower. The next major level of support remains near the August low of 462 for front month corn. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. So, for now, the thought process is to hold tight on any further sales recommendations until later this fall or early winter, with the objective of seeking out better pricing opportunities. If the market has not turned around by early winter, then Grain Market Insider may sit tight on the next sales recommendations until spring. If you end up harvesting more bushels than you can store this fall and must move them, consider protecting those sold bushels with either July or September ’24 call options.

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

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

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

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

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

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

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

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

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

Soybeans

Soybeans Action Plan Summary

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

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

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

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

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

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

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

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

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

Wheat

Market Notes: Wheat

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

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

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

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

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

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

Chicago Wheat Action Plan Summary

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

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

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

Above: On November 7 the December contract posted a bearish reversal, which may indicate lower prices ahead unless bullish information enters the market to turn prices higher. Currently, upside resistance now lies between 735 and 755, with initial support below the market near 703. The next major level of support is near 669, the May ’21 low.

Other Charts / Weather

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

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

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

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

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

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

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

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

  • To see the US 8 – 14 day Temperature and Precipitation Outlooks, courtesy of the NWS, and CPC, and the South American GRACE-Based Root Zone Soil Moisture Drought Indicator, courtesy of NASA and the NDMC, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. The Dec ’23 contract’s quick move above 500 on October 19, and then below the 50-day moving average of 485 just three sessions later, on October 24, signals that there is heavy resistance above the market near the 100-day moving average, and prices continue to be at risk of drifting sideways to lower. The next major level of support remains near the August low of 462 for front month corn. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. So, for now, the thought process is to hold tight on any further sales recommendations until later this fall or early winter, with the objective of seeking out better pricing opportunities. If the market has not turned around by early winter, then Grain Market Insider may sit tight on the next sales recommendations until spring. If you end up harvesting more bushels than you can store this fall and must move them, consider protecting those sold bushels with either July or September ’24 call options.

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

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

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

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

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

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

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

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

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

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

Soybeans

Soybeans Action Plan Summary

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

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

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

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

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

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

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

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

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

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

Wheat

Market Notes: Wheat

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

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

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

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

Chicago Wheat Action Plan Summary

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

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

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

Above: On November 7 the December contract posted a bearish reversal, which may indicate lower prices ahead unless bullish information enters the market to turn prices higher. Currently, upside resistance now lies between 735 and 755, with initial support below the market near 703. The next major level of support is near 669, the May ’21 low.

Other Charts / Weather

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

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

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

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

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

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

  • To see the US 6 – 10 day Temperature and Precipitation Outlooks, and the South American 1-week forecast precipitation maps as a percent of normal, courtesy of the NWS, and CPC, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. The Dec ’23 contract’s quick move above 500 on October 19, and then below the 50-day moving average of 485 just three sessions later, on October 24, signals that there is heavy resistance above the market near the 100-day moving average, and prices continue to be at risk of drifting sideways to lower. The next major level of support remains near the August low of 462 for front month corn. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. So, for now, the thought process is to hold tight on any further sales recommendations until later this fall or early winter, with the objective of seeking out better pricing opportunities. If the market has not turned around by early winter, then Grain Market Insider may sit tight on the next sales recommendations until spring. If you end up harvesting more bushels than you can store this fall and must move them, consider protecting those sold bushels with either July or September ’24 call options.

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

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

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

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

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

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

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

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

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

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

Soybeans

Soybeans Action Plan Summary

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

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

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

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

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

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

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

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

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

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

Wheat

Market Notes: Wheat

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

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

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

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

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

Chicago Wheat Action Plan Summary

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

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

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

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

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

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

Other Charts / Weather

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

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

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

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

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

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

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

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

  • To see the US 7-day precipitation forecast,  the South American 7-day total accumulated precipitation and 1-week forecast precipitation maps, courtesy of the NWS, and CPC, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

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

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

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

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

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

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

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

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

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

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

Soybeans

Soybeans Action Plan Summary

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

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

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

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

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

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

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

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

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

Wheat

Market Notes: Wheat

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

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

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

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

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

Chicago Wheat Action Plan Summary

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

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

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

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

Other Charts / Weather

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

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

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

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

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