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

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

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

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

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

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

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

  • To see the November US Drought Monitor and weekly change maps, courtesy of the NDMC and the University of Nebraska, and the South American 1-week forecast precipitation maps for South America, courtesy of the NWS, and CPC, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

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

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

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

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

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

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

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

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

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

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

Soybeans

Soybeans Action Plan Summary

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

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

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

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

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

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

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

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

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

Wheat

Market Notes: Wheat

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

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

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

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

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

Chicago Wheat Action Plan Summary

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

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

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

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

Other Charts / Weather

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

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

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

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

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

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

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

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

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

  • To see the November US Temperature and Precipitation Outlooks, and the South American 1-week total precipitation for South America, courtesy of the NWS, CPC, and NOAA, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

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

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

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

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

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

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

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

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

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

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

Soybeans

Soybeans Action Plan Summary

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

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

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

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

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

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

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

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

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

Wheat

Market Notes: Wheat

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

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

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

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

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

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

Chicago Wheat Action Plan Summary

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

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

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

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

Other Charts / Weather

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

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

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

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

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

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

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

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

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

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

Corn

Corn Action Plan Summary

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

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

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

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

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

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

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

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

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

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

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

Soybeans

Soybeans Action Plan Summary

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

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

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

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

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

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

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

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

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

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

Wheat

Market Notes: Wheat

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

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

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

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

Chicago Wheat Action Plan Summary

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

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

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

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

Other Charts / Weather

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

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

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

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

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

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

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

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

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

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

Corn

Corn Action Plan Summary

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

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

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

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

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

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

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

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

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

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

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

Soybeans

Soybeans Action Plan Summary

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

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

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

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

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

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

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

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

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

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

Wheat

Market Notes: Wheat

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

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

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

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

Chicago Wheat Action Plan Summary

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

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

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

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

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

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

Other Charts / Weather

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

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

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

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Grain Market Insider: October 27, 2023

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

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

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

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

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

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

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

Corn

Corn Action Plan Summary

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

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

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

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

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

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

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

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

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

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

Soybeans

Soybeans Action Plan Summary

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

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

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

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

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

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

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

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

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

Wheat

Market Notes: Wheat

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

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

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

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

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

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

Chicago Wheat Action Plan Summary

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

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

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

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

Other Charts / Weather

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

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

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Grain Market Insider: October 26, 2023

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

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

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

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

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

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

Corn

Corn Action Plan Summary

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

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

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

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

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

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

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

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

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

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

Soybeans

Soybeans Action Plan Summary

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

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

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

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

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

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

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

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

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

Wheat

Market Notes: Wheat

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

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

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

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

Chicago Wheat Action Plan Summary

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

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

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

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

Other Charts / Weather

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Grain Market Insider: October 25, 2023

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

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

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

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

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

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

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

Corn

Corn Action Plan Summary

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

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

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

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

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

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

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

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

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

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

Soybeans

Soybeans Action Plan Summary

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

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

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

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

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

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

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

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

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

Wheat

Market Notes: Wheat

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

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

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

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

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

Chicago Wheat Action Plan Summary

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

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

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

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

Other Charts / Weather

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Grain Market Insider: October 24, 2023

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

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

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

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

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

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

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

Corn

Corn Action Plan Summary

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

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

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

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

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

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

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

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

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

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

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

Soybeans

Soybeans Action Plan Summary

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

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

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

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

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

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

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

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

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

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

Wheat

Market Notes: Wheat

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

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

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

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

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

Chicago Wheat Action Plan Summary

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

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

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

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

Other Charts / Weather

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Grain Market Insider: October 23, 2023

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

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

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

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

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

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

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

Corn

Corn Action Plan Summary

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

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

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

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

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

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

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

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

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

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

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

Soybeans

Soybeans Action Plan Summary

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

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

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

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

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

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

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

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

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

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

Wheat

Market Notes: Wheat

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

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

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

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

Chicago Wheat Action Plan Summary

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

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

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

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

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

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

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Grain Market Insider: October 20, 2023

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

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

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

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

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

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

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

Corn

Corn Action Plan Summary

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

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

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

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

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

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

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

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

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

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

Soybeans

Soybeans Action Plan Summary

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

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

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

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

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

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

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

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

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

Wheat

Market Notes: Wheat

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

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

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

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

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

Chicago Wheat Action Plan Summary

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

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

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

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

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

KC Wheat Action Plan Summary

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

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

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

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

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

Mpls Wheat Action Plan Summary

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

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

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

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

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

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