|

Grain Market Insider: August 8, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • A lack of fresh headline news from the Black Sea or word of new export sales kept the corn market in consolidation mode as traders began to even up positions ahead of Friday’s USDA report, which left the market to close in the upper part of the trading range.

  • Despite the favorable weather forecasts and improving crop conditions, November soybeans reversed to close higher after trading nearly 20 cents lower on the day and testing the 100-day moving average.

  • The wheat market was able to shake off earlier losses with Minneapolis leading the way higher, as crop conditions for spring wheat dropped 1% from last week, while two-sided trade led to a mixed close in the Chicago and KC contracts with Chicago contracts mostly higher and KC mostly lower, with relatively minor losses.

  • There were reports of downgrades for ten US banks that weighed on the equity markets, which could have also carried over to the commodity sector with less appetite for risk. Additionally, import/export data out of China was lower than expected, possibly adding some resistance to commodities.

  • To see the current US 6 – 10-day Temperature and Precipitation Outlooks courtesy of the Climate Prediction Center, scroll down to the 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

  • For the 2023 corn crop, Grain Market Insider sees an active opportunity to sell half of the previously recommended DEC ‘23 580 puts. At the end of June, Insider recommended buying DEC ’23 580 puts for approximately 30 cents in premium, plus fees and commission. At the time, the US Drought Monitor was showing dryness across the Midwest and weather forecasts were calling for hot and dry conditions. Since then, forecasts have turned more favorable and DEC ’23 corn has dropped over 100 cents, with the recommended 580 puts gaining nearly 200% in value. The growing season isn’t over yet, and the Drought Monitor still shows dry conditions. Following the recent market drop and pick up in export sales, any further yield loss could rally prices. Insider recommends selling half of the previously recommended DEC ’23 580 puts to lock in gains in case prices rally back and holding the remainder, which will continue to protect any unsold bushels if prices erode further going into harvest.  

  • No action is recommended for New Crop 2023 corn. The future price potential for Dec 23 corn continues to be at the mercy of each new weather forecast. Dryness and dry weather forecasts pushed Dec corn from the May low to the June high with a gain of 137 cents, which was promptly erased and then some by mid-July, leaving the market 149 cents off that June high, with a surprise jump in acres and more favorable forecasts. During the runup in early June, we warned that any change in the forecast to wetter weather could erase all the gains as corn didn’t have much of a bullish fundamental story without a supply side shock fueled by lower yields. Overall, our thought process has not changed from a month ago and with the tremendous uncertainty, and subsequent volatility still in front of us, we continue to recommend holding the Strangle options position, comprised of the previously bought Dec 610 calls and Dec 580 puts. A turn back to wetter weather and we wouldn’t be surprised to see sub-500 corn again, and if dry weather persists, we wouldn’t be surprised to see corn prices north of 700. Under either of these scenarios the Strangle will benefit and doesn’t require trying to outguess the weather.  

  • No Action is currently recommended for 2025 corn. 2025 markets are very illiquid right 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. 

  • The corn market traded on both sides of unchanged today to settle in the upper end of the day’s range, with no new flash export sales reported or news from the Black Sea to move the market significantly in either direction. With the USDA’s August Supply and Demand report slated for Friday, the market continues to consolidate as traders begin to square positions ahead of its release.

  • The USDA raised crop condition ratings 2% from last week to 57% good to excellent. While improvements were seen in Illinois and the Dakotas, states like Kansas, Minnesota, and Michigan remain below 50% g/e.

  • DTN kicked off their digital yield tour on Monday and estimated the national corn yield at 177 bpa, close to the USDA’s July yield estimate of 177.5. The tour is set to conclude on Friday with details from a different region each day.

  • China’s imports and exports for the month of July fell by 12.4% and 14.5% respectively versus last year, which was faster than expected. The slowdown may indicate a slowing economy and could lead to fewer ag imports.

Above: Since mid-July, the market retraced about 62% of the prior down move, hit resistance around the 50-day moving average, and turned lower. The market is approaching oversold status on the stochastic indicator with key support near the September contract’s 474 low. If the market receives more bullish input and turns back higher, heavy resistance lies near 555 – 565.

2023/24 Corn condition percent good-excellent (red) versus the 5-year average (green) and last year (pink).

Soybeans

Soybeans Action Plan Summary

  • No new action is being recommended for Old Crop. Any remaining old crop bushels should be getting priced into this rally. We won’t have any “New Alerts” for 2022 Soybeans (Cash, Calls, or Puts) as we have moved focus onto 2023 and 2024 Crop Year Opportunities. 

  • No action is recommended for 2023 soybeans. The USDA injected a lot of volatility into this market beginning with a much lower-than-expected planted acreage estimate, followed by a much larger-than-expected 300mb carryout estimate in its July WASDE. While demand has been weak, we have a bona fide weather market during a crucial period for soybeans and there is little wiggle room for lost yield in this year’s crop. While a drier forecast can still maintain upside potential, plenty of time remains for rain to come and push prices lower, much like in 2012, when July was dry. Then the pattern changed in August, and decent rain fell in parts of the western Corn Belt and IL, sending Nov ’12 soybeans down 20%. For now, Insider may not consider suggesting any additional sales until after harvest. Although, we will continue to monitor the market for any upside opportunities in the coming weeks.

  • No Action is currently recommended for 2025 Soybeans. 2025 markets are very illiquid right 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.

  • Soybeans began the day lower but finished higher after trading below the 100-day moving average. Front month soybean meal ended the day lower with deferred months higher, while soybean oil was weak following a decline in palm oil.

  • Lower prices earlier in the day were partially caused by weak economic data out of China that saw their July exports declining by the largest amount since February 2020. China has been an active buyer of US soybeans over the last week and another sale of 4.9 mb was announced yesterday for the 23/24 marketing year.

  • Yesterday’s Crop Progress report showed soybean ratings improving after the recent rains. The good to excellent rating rose by 2 points, above the average trade guess, to 54%. Illinois showed the highest improvement with an increase of 12 points to 58% after the significant rainfall totals.

  • 66% of the soybean crop is setting pods which is ahead of the 5-year average, but yield numbers are still up in the air. The USDA’s most recent estimate was 52 bpa and they will release a revised estimate in the report on Friday, while DTN’s Digital Yield Tour has pegged yields at 51 bpa.

Above: The market posted a bullish reversal on 8/08 after trading through 1350 support and trending lower since 7/27. Additionally, the fact that the market is showing signs of being oversold is supportive to prices. If prices continue to the upside, resistance can be found near 1400 and again around 1450. If not, support below the market may be found between 1318 and the psychological 1300 level. 

2023/24 Soybeans condition percent good-excellent (red) versus the 5-year average (green) and last year (pink).

Wheat

Market Notes: Wheat

  • After a two-sided trade today, wheat managed a mostly positive close. Early weakness, which affected most commodities, likely came from Chinese trade data which showed that their economic activity may be slowing. Their imports and exports in July were lower than expected.

  • The USDA rated the US spring wheat crop 41% good to excellent. This is a 1% drop from last week, and it is possible the USDA will lower production in Friday’s report due to recent declines in condition.

  • Though it has been mentioned before, it is worth reiterating that India’s wheat crop could be below 100 mmt. With their domestic usage usually around 108 mmt, this would reinforce the talk that they are looking to import 9 mmt of Russian wheat. Despite recent price increases, Russian wheat is still the world’s cheapest.

  • SovEcon increased their estimate of Russian wheat exports for 23/24 to 48.1 mmt, an all-time high, versus 47.2 mmt previously. There is some question about the logistics though, as this assumes Russia will have no problems exporting the wheat due to the war. In addition, IKAR increased the Russian 2023 wheat crop estimate to 88 mmt (vs 86.5 mmt previously).

Chicago Wheat Action Plan Summary

  • No new action is recommended for 2023 New Crop. The wheat market has seen a great amount of volatility in recent weeks and has primarily been a follower of corn, which has been driven by weather.  Although demand remains weak, the closure of the Black Sea corridor, and the continued supply uncertainty, which that brings to the market, still leaves many supply questions unanswered. While Grain Market Insider will continue to monitor the downside for any violation of major support following the recent sales recommendation, it may be after harvest or near the end of summer before we consider recommending any additional sales for the 2023 crop.

  • No action is currently recommended for 2024 Chicago wheat. Since the middle of June, price volatility has risen with updated USDA reports, changing weather forecasts, and current events in the Black Sea.  While prices continue to be volatile, plenty of time remains to market the 2024 crop. The war continues in the Black Sea region, major exporting countries’ stocks are at 11-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties. For now, after recommending making a sale for the 2024 crop, and while keeping an eye on the market to see if any major support is broken, Grain Market Insider would need to see prices north of 800 before considering recommending any additional sales.

  •  No Action is currently recommended for 2025 Chicago Wheat. 2025 markets are very illiquid right 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.

Above: Since testing the June high on 7/25, the market has retreated and support near 620 has held. September wheat is oversold and appears to be consolidating at the lower end of the 622 – 777 range. If the market breaks out to the downside, psychological support could be found near 600 with key support near 573, while heavy resistance remains above the market around 777 – 808.

KC Wheat Action Plan Summary

  • We continue to look for better prices before making any 2023 sales. As harvest winds down and more becomes known about this year’s crop with some reports of better-than-expected yields, questions remain about the world wheat supply. The war continues in the Black Sea region, Ukraine’s export capabilities remain uncertain, and dryness continues in key production areas of the world. With world supplies currently seen at 11-year lows, we continue to target 950 – 1000 in the July futures as a potential level to suggest the next round of New Crop sales.

  • No action is currently recommended for the 2024 crop.  Demand and supply concerns out of the Black Sea continue to dominate the market right now, and Insider suggested making a sale as prices closed below 817 to protect from further downside erosion due to a potential change in trend with cheap supplies continuing to flow from Russia and Ukraine hampering US export demand. While prices continue to be volatile, plenty of time remains to market the 2024 crop. The war continues in the Black Sea region, major exporting countries’ stocks are at 11-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties. For now, after recommending making a sale for the 2024 crop, Grain Market Insider would need to see prices north of 850 before considering recommending any additional sales, while also keeping an eye on the market to see if any major support is broken.

  • No Action is currently recommended for 2025 KC Wheat. 2025 markets are very illiquid right 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.

Above: September K.C. wheat has retreated following the key reversal on 7/25 and is poised to test the 735 – 745 support area, which coincides with this year’s lows.  Additionally, the market is showing signs of being oversold, and is considered supportive if prices reverse higher.  If prices do reverse to the upside, overhead resistance lies near 830.

2023/24 Winter wheat percent harvested (red) versus the 5-year average (green) and last year (purple).

Mpls Wheat Action Plan Summary

  • No action is currently recommended for the 2023 New Crop. Weather has been a dominant feature to price volatility this growing season with continued dryness concerns in not only the US, but also Canada and Australia. As we enter harvest season, there isn’t a strong likelihood of higher prices until after harvest, although both weather and geopolitical events can change suddenly to move prices higher. Insider will consider making sales suggestions if prices improve, while also continuing to watch the downside for any further violations of support.

  • No action is currently recommended for the 2023 New Crop. Weather dominates the market right now, and though much of the growing season remains, Grain Market Insider suggested making a sale as prices closed below 822 to protect from further downside erosion due to a potential trend change.  Seasonally, there isn’t a strong likelihood of higher prices until after harvest, although both weather and geopolitical events can change suddenly to shock the market higher. Insider will consider making sales suggestions if prices improve through this growing season, while also continuing to watch the downside for any further violations of support.

  • No Action is currently recommended for the 2025 Minneapolis wheat crop. 2025 markets are very illiquid right 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.

Above: Following the bearish reversal on 7/25, the market has retreated and is oversold, which could be supportive if prices reverse higher. For now, support below the market may be found near the psychological support level of 800, while resistance remains above the market near 950.

2023/24 Spring wheat condition percent good-excellent (red) versus the 5-year average (green) and last year (pink).

Other Charts / Weather

|

Grain Market Insider: August 7, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Favorable precipitation across much of the Midwest, and rising tensions between Russia and Ukraine created a tug-of-war between market bulls and bears, with the corn market finishing near the middle of its range but on the negative side of unchanged.

  • Solid rains through much of the Midwest weighed heavily on the soybean market as concerns for crop stress were eased for now.

  • Both soybean meal and oil followed soybeans lower on the day, soybean oil had added pressure come from lower palm oil prices which approached 6-week lows on rising Malaysian supplies.

  • Reports of Ukrainian attacks on Russian ports and an oil tanker sparked all three wheat classes to trade higher in today’s session as the rising tensions raised concern about the risks of commercial shipping through the region.

  • To see the current U.S. 7-day precipitation forecast and 8 – 14-day Temperature and Precipitation Outlooks courtesy of the Climate Prediction Center, scroll down to the 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

  • For the 2023 corn crop, Grain Market Insider sees an active opportunity to sell half of the previously recommended DEC ‘23 580 puts. At the end of June, Insider recommended buying DEC ’23 580 puts for approximately 30 cents in premium, plus fees and commission. At the time, the US Drought Monitor was showing dryness across the Midwest and weather forecasts were calling for hot and dry conditions. Since then, forecasts have turned more favorable and DEC ’23 corn has dropped over 100 cents, with the recommended 580 puts gaining nearly 200% in value. The growing season isn’t over yet, and the Drought Monitor still shows dry conditions. Following the recent market drop and pick up in export sales, any further yield loss could rally prices. Insider recommends selling half of the previously recommended DEC ’23 580 puts to lock in gains in case prices rally back and holding the remainder, which will continue to protect any unsold bushels if prices erode further going into harvest.  

  • No action is recommended for New Crop 2023 corn. The future price potential for Dec 23 corn continues to be at the mercy of each new weather forecast. Dryness and dry weather forecasts pushed Dec corn from the May low to the June high with a gain of 137 cents, which was promptly erased and then some by mid-July, leaving the market 149 cents off that June high, with a surprise jump in acres and more favorable forecasts. During the runup in early June, we warned that any change in the forecast to wetter weather could erase all the gains as corn didn’t have much of a bullish fundamental story without a supply side shock fueled by lower yields. Overall, our thought process has not changed from a month ago and with the tremendous uncertainty, and subsequent volatility still in front of us, we continue to recommend holding the Strangle options position, comprised of the previously bought Dec 610 calls and Dec 580 puts. A turn back to wetter weather and we wouldn’t be surprised to see sub-500 corn again, and if dry weather persists, we wouldn’t be surprised to see corn prices north of 700. Under either of these scenarios the Strangle will benefit and doesn’t require trying to outguess the weather.  

  • No Action is currently recommended for 2025 corn. 2025 markets are very illiquid right 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. 

  • Corn futures were choppy as the market weighed the support from the wheat market, but non-threatening weather forecasts, and strong selling in the soybean market limited any upside potential. December corn futures still managed to post a new low for this move and has traded negative 8 out of the last 9 sessions.

  • Increased tensions in the Black Sea region over the weekend triggered buying strength in the wheat market, which provided spillover strength in corn futures, limiting downside potential.

  • Good precipitation fell across a large portion of the Corn Belt over the weekend, which pressured the soybean market and limited the upside in corn. The extended forecasts are still not threatening as temperatures are looking to remain seasonal and precipitation average to above average across the Corn Belt.

  • The USDA will release weekly crop ratings on Monday afternoon, expectations are for a 1% gain for the good/excellent category for corn to 56% G/E.

  • Weekly export inspections were lackluster at 14.8 mb. This total is down 33% from last year’s levels with only 3 weeks remaining in the current marketing year.

Above: Since mid-July, the market retraced about 62% of the prior down move, hit resistance around the 50-day moving average, and turned lower. The market is approaching oversold status on the stochastic indicator with key support near the September contract’s 474 low. If the market receives more bullish input and turns back higher, heavy resistance lies near 555 – 565.

Above: Money Corn Managed Money Funds net position as of Tuesday, Aug. 1. Net position in Green versus price in Red. Managers net sold 9,862 contracts between July 25 – Aug. 1, bringing their total position to a net long 16,741 contracts.

Soybeans

Soybeans Action Plan Summary

  • No new action is being recommended for Old Crop. Any remaining old crop bushels should be getting priced into this rally. We won’t have any “New Alerts” for 2022 Soybeans (Cash, Calls, or Puts) as we have moved focus onto 2023 and 2024 Crop Year Opportunities. 

  • No action is recommended for 2023 soybeans. The USDA injected a lot of volatility into this market beginning with a much lower-than-expected planted acreage estimate, followed by a much larger-than-expected 300mb carryout estimate in its July WASDE. While demand has been weak, we have a bona fide weather market during a crucial period for soybeans and there is little wiggle room for lost yield in this year’s crop. While a drier forecast can still maintain upside potential, plenty of time remains for rain to come and push prices lower, much like in 2012, when July was dry. Then the pattern changed in August, and decent rain fell in parts of the western Corn Belt and IL, sending Nov ’12 soybeans down 20%. For now, Insider may not consider suggesting any additional sales until after harvest. Although, we will continue to monitor the market for any upside opportunities in the coming weeks.

  • No Action is currently recommended for 2025 Soybeans. 2025 markets are very illiquid right 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.

  • Soybeans ended the day lower, along with both soy products, after heavy rains fell throughout the Midwest this weekend with more forecast into the month. November beans seemed to find support at the 100-day moving average.

  • The Crop Progress report will be released later today, and expectations are for the good to excellent rating to be steady to 1 point higher. Last week, that rating sat at 52%, but after the recent rains it is possible that the ratings will have improved even more.

  • The prices of soy products have not been falling as much as the prices of soybeans, so crush incentives remain profitable which is good for domestic demand. There were 11 soybean deliveries against the expiring August soybean futures but none against soybean meal or oil.

  • Corn didn’t decline by as much as soybeans percentage-wise today as soybeans are not as sensitive to the escalation of the Russian and Ukrainian war, and the rains received so far this month, along with those forecasts to come, are far more likely to help with soybean yields rather than some of the corn crop, which has already taken damage from the heat and drought.

Above: On 7/27 the market posted a bearish reversal, turning the market lower. Since then, September soybeans have consolidated and found support just above 1360 with further support near the June low around 1350. If prices break out to the upside, heavy resistance remains in the 1490 – 1505 area. If not, and prices trade through 1350, additional support could be found near 1318.

Above: Soybeans Managed Money Funds net position as of Tuesday, August 1. Net position in Green versus price in Red. Money Managers net sold 26,246 contracts between July 25 – August 1, bringing their total position to a net long 94,493 contracts.

Wheat

Market Notes: Wheat

  • All three US wheat futures classes, as well as Matif wheat futures, closed higher today on increased aggression in the Black Sea region. News outlets have reported that Ukraine bombed two key bridges used for supplying Russian troops, as well as a Russian oil tanker. Headlines also suggest that Russia may have launched some type of chemical projectile near the Zaporizhzhia Oblast region.

  • Weekly wheat export inspections of 10.1 mb bring the 23/24 total inspections to 111 mb, which is down 15% from last year.

  • A Turkish grain elevator suffered an explosion. However, this is believed to be an isolated incident caused by a grain dust explosion and not related to the war.

  • The wheat market may also be getting some strength from talk that India’s crop could be below 100 mmt. Previous estimates were around 105 mmt, and there is talk that India may be working with Russia to import 9 mmt of wheat, an indication that they need supply. India is also said to be considering eliminating their wheat import tax.

  • Flooding continues to be an issue in northeastern China, where much of their agricultural land is. Crop damage could be significant and may result in China needing to import more grain down the road.

Chicago Wheat Action Plan Summary

  • No new action is recommended for 2023 New Crop. The wheat market has seen a great amount of volatility in recent weeks and has primarily been a follower of corn, which has been driven by weather.  Although demand remains weak, the closure of the Black Sea corridor, and the continued supply uncertainty, which that brings to the market, still leaves many supply questions unanswered. While Grain Market Insider will continue to monitor the downside for any violation of major support following the recent sales recommendation, it may be after harvest or near the end of summer before we consider recommending any additional sales for the 2023 crop.

  • No action is currently recommended for 2024 Chicago wheat. Since the middle of June, price volatility has risen with updated USDA reports, changing weather forecasts, and current events in the Black Sea.  While prices continue to be volatile, plenty of time remains to market the 2024 crop. The war continues in the Black Sea region, major exporting countries’ stocks are at 11-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties. For now, after recommending making a sale for the 2024 crop, and while keeping an eye on the market to see if any major support is broken, Grain Market Insider would need to see prices north of 800 before considering recommending any additional sales.

  •  No Action is currently recommended for 2025 Chicago Wheat. 2025 markets are very illiquid right 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.

Above: Since testing the June high on 7/25, the market has retreated and support near 620 has held. September wheat is oversold and appears to be consolidating at the lower end of the 622 – 777 range. If the market breaks out to the downside, psychological support could be found near 600 with key support near 573, while heavy resistance remains above the market around 777 – 808.

Above: Chicago Wheat Managed Money Funds net position as of Tuesday, August 1. Net position in Green versus price in Red. Money Managers net sold 10,093 contracts between July 25 – August 1, bringing their total position to a net short 50,428 contracts.

KC Wheat Action Plan Summary

  • We continue to look for better prices before making any 2023 sales. As harvest winds down and more becomes known about this year’s crop with some reports of better-than-expected yields, questions remain about the world wheat supply. The war continues in the Black Sea region, Ukraine’s export capabilities remain uncertain, and dryness continues in key production areas of the world. With world supplies currently seen at 11-year lows, we continue to target 950 – 1000 in the July futures as a potential level to suggest the next round of New Crop sales.

  • No action is currently recommended for the 2024 crop.  Demand and supply concerns out of the Black Sea continue to dominate the market right now, and Insider suggested making a sale as prices closed below 817 to protect from further downside erosion due to a potential change in trend with cheap supplies continuing to flow from Russia and Ukraine hampering US export demand. While prices continue to be volatile, plenty of time remains to market the 2024 crop. The war continues in the Black Sea region, major exporting countries’ stocks are at 11-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties. For now, after recommending making a sale for the 2024 crop, Grain Market Insider would need to see prices north of 850 before considering recommending any additional sales, while also keeping an eye on the market to see if any major support is broken.

  • No Action is currently recommended for 2025 KC Wheat. 2025 markets are very illiquid right 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.

Above: September K.C. wheat has retreated following the key reversal on 7/25 and is poised to test the 735 – 745 support area, which coincides with this year’s lows.  Additionally, the market is showing signs of being oversold, and is considered supportive if prices reverse higher.  If prices do reverse to the upside, overhead resistance lies near 830.

Above: K.C. Wheat Managed Money Funds net position as of Tuesday, August 1. Net position in Green versus price in Red. Money Managers net sold 5,912 contracts between July 25 – August 1, bringing their total position to a net long 17,233 contracts.

Mpls Wheat Action Plan Summary

  • No action is currently recommended for the 2023 New Crop. Weather has been a dominant feature to price volatility this growing season with continued dryness concerns in not only the US, but also Canada and Australia. As we enter harvest season, there isn’t a strong likelihood of higher prices until after harvest, although both weather and geopolitical events can change suddenly to move prices higher. Insider will consider making sales suggestions if prices improve, while also continuing to watch the downside for any further violations of support.

  • No action is currently recommended for the 2023 New Crop. Weather dominates the market right now, and though much of the growing season remains, Grain Market Insider suggested making a sale as prices closed below 822 to protect from further downside erosion due to a potential trend change.  Seasonally, there isn’t a strong likelihood of higher prices until after harvest, although both weather and geopolitical events can change suddenly to shock the market higher. Insider will consider making sales suggestions if prices improve through this growing season, while also continuing to watch the downside for any further violations of support.

  • No Action is currently recommended for the 2025 Minneapolis wheat crop. 2025 markets are very illiquid right 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.

Above: Following the bearish reversal on 7/25, the market has retreated and is oversold, which could be supportive if prices reverse higher. For now, support below the market may be found near the psychological support level of 800, while resistance remains above the market near 950.

Above: Minneapolis Wheat Managed Money Funds net position as of Tuesday, August 1. Net position in Green versus price in Red. Money Managers net sold 1,374 contracts between July 25 – August 1, bringing their total position to a net long 7,592 contracts.

Other Charts / Weather

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

|

Grain Market Insider: August 4, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • A Ukrainian drone attack on a Russian port spiked the grain markets higher overnight, and concern over the escalation in tensions gave the corn market strength to close higher on the day breaking its 8-day run of lower closes.

  • Following Monday’s selloff, export sales picked up offering support to the soybean complex, which continued to consolidate today and closed mixed, with soybeans and soybean oil on the positive side of unchanged, while meal was lower on the day. 

  • The wheat markets also rallied initially following the reports of the Ukrainian drone attack, and while the K.C. and Minneapolis contracts closed lower, it’s likely that the attack triggered some short covering in the Chicago contracts to keep prices firm into the close.

  • To see the current U.S. 6 – 10-day Precipitation and Temperature Outlooks courtesy of the Climate Prediction Center, scroll down to the 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

  • For the 2023 corn crop, Grain Market Insider sees an active opportunity to sell half of the previously recommended DEC ‘23 580 puts. At the end of June, Insider recommended buying DEC ’23 580 puts for approximately 30 cents in premium, plus fees and commission. At the time, the US Drought Monitor was showing dryness across the Midwest and weather forecasts were calling for hot and dry conditions. Since then, forecasts have turned more favorable and DEC ’23 corn has dropped over 100 cents, with the recommended 580 puts gaining nearly 200% in value. The growing season isn’t over yet, and the Drought Monitor still shows dry conditions. Following the recent market drop and pick up in export sales, any further yield loss could rally prices. Insider recommends selling half of the previously recommended DEC ’23 580 puts to lock in gains in case prices rally back and holding the remainder, which will continue to protect any unsold bushels if prices erode further going into harvest.  

  • No action is recommended for New Crop 2023 corn. The future price potential for Dec 23 corn continues to be at the mercy of each new weather forecast. Dryness and dry weather forecasts pushed Dec corn from the May low to the June high with a gain of 137 cents, which was promptly erased and then some by mid-July, leaving the market 149 cents off that June high, with a surprise jump in acres and more favorable forecasts. During the runup in early June, we warned that any change in the forecast to wetter weather could erase all the gains as corn didn’t have much of a bullish fundamental story without a supply side shock fueled by lower yields. Overall, our thought process has not changed from a month ago and with the tremendous uncertainty, and subsequent volatility still in front of us, we continue to recommend holding the Strangle options position, comprised of the previously bought Dec 610 calls and Dec 580 puts. A turn back to wetter weather and we wouldn’t be surprised to see sub-500 corn again, and if dry weather persists, we wouldn’t be surprised to see corn prices north of 700. Under either of these scenarios the Strangle will benefit and doesn’t require trying to outguess the weather.  

  • No Action is currently recommended for 2025 corn. 2025 markets are very illiquid right 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. 

  • Corn futures held onto some of the overnight gains, breaking the streak of eight consecutive negative trading sessions. Despite the small gains on Friday, corn futures finished the week down 33 cents for the December futures.

  • Corn futures saw some buying strength on the overnight session as Ukraine military triggered a drone attack against a military vessel in the Russian port of Novorossiysk. This caused the port to be closed for a short time, triggering buying strength in wheat and corn markets.

  • Overall, weather forecasts are still non-threatening for the corn market. Weather models are forecasting the next 10 days to be cooler and wetter than normal for many areas of the Corn Belt.

  • The on-going Brazilian corn harvest will keep fresh supplies of corn on the export market. This week, analysts raised production expectations for the Brazil crop, which will have a large impact on potential U.S. export corn business.

  • The technical picture and price action remains weak in the corn market, as the path of least resistance is lower with December corn, failing to push back above the $5.00 level on Friday. The July $4.81 low in the December contract looks to be the next downside target.

Above: Since mid-July, the market retraced about 62% of the prior down move, hit resistance around the 50-day moving average and turned lower. The market is approaching oversold status on the stochastic indicator with key support near the 474 low. If the market receives more bullish input and turns back higher, heavy resistance lies near 555 – 565.

Soybeans

Soybeans Action Plan Summary

  • No new action is being recommended for Old Crop. Any remaining old crop bushels should be getting priced into this rally. We won’t have any “New Alerts” for 2022 Soybeans (Cash, Calls, or Puts) as we have moved focus onto 2023 and 2024 Crop Year Opportunities. 

  • No action is recommended for 2023 soybeans. The USDA injected a lot of volatility into this market beginning with a much lower-than-expected planted acreage estimate, followed by a much larger-than-expected 300mb carryout estimate in its July WASDE. While demand has been weak, we have a bona fide weather market during a crucial period for soybeans and there is little wiggle room for lost yield in this year’s crop. While a drier forecast can still maintain upside potential, plenty of time remains for rain to come and push prices lower, much like in 2012, when July was dry. Then the pattern changed in August, and decent rain fell in parts of the western Corn Belt and IL, sending Nov ’12 soybeans down 20%. For now, Insider may not consider suggesting any additional sales until after harvest. Although, we will continue to monitor the market for any upside opportunities in the coming weeks.

  • No Action is currently recommended for 2025 Soybeans. 2025 markets are very illiquid right 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.

  • Soybeans ended the day higher, but backed off the highs made in the overnight after Ukraine attacked a Russian warship near a Black Sea port. The attack did little damage, but shut the port down for a few hours and it was the first attack by Ukraine on a Russian port.

  • Soybean meal ended the day lower, while soybean oil caught support from higher crude oil and a jump in Malaysian palm oil. Palm oil futures have fallen for eight days on expectations of record production and huge stocks, but Malaysia is beginning to export that palm oil.

  • Brazil’s 23/24 soybean crop is now being estimated at a whopping 165.9 mmt compared to 157.3 mmt the previous year.

  • Yesterday, the USDA reported a new sale of 4.9 mb of US soybeans to China, and export sales for last week were an impressive 97 mb of new crop beans, with primary destinations to China and unknown destinations.

Above: On 7/27/23, the market posted a bearish reversal, turning the market lower.  Since then, September soybeans have consolidated and found support just above 1360 with further support near the June low around 1350. If prices break out to the upside, heavy resistance remains in the 1490 – 1505 area.  If not, and prices trade through 1350, additional support could be found near 1318.

Wheat

Market Notes: Wheat

  • Wheat was higher overnight after reports of a Ukrainian drone strike on military vessel in a Russian port. Most of these gains were given up by the close, but did allow Chicago wheat to stop the recent bleeding, with a close in positive territory today. The Minneapolis and Kansas City contracts did not fare as well though, ending with double digit losses.

  • Putin has apparently said that he is willing to re-open the Black Sea grain export deal. The catch is that it would require sanctions to be eliminated and Russia let back into the SWIFT banking program.

  • According to the Foreign Agricultural Service, the EU’s total grain harvest estimate has been reduced to 270.9 mmt, from its previous estimate of 281.3 mmt. Weather extremes have been cited as the main issue affecting production. Wheat production in particular is expected to be 134.6 mmt versus 138 mmt previously.

  • Recent heavy rains in China’s grain growing regions have caused flooding issues that may damage crops and have already displaced thousands of people.

Chicago Wheat Action Plan Summary

  • No new action is recommended for 2023 New Crop. The wheat market has seen a great amount of volatility in recent weeks and has primarily been a follower of corn, which has been driven by weather.  Although demand remains weak, the closure of the Black Sea corridor, and the continued supply uncertainty, which that brings to the market, still leaves many supply questions unanswered. While Grain Market Insider will continue to monitor the downside for any violation of major support following the recent sales recommendation, it may be after harvest or near the end of summer before we consider recommending any additional sales for the 2023 crop.

  • No action is currently recommended for 2024 Chicago wheat. Since the middle of June, price volatility has risen with updated USDA reports, changing weather forecasts, and current events in the Black Sea.  While prices continue to be volatile, plenty of time remains to market the 2024 crop. War continues in the Black Sea region, major exporting countries’ stocks are at 11-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties. For now, after recommending making a sale for the 2024 crop, and while keeping an eye on the market to see if any major support is broken, Grain Market Insider would need to see prices north of 800 before considering recommending any additional sales.

  •  No Action is currently recommended for 2025 Chicago Wheat. 2025 markets are very illiquid right 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.

Above: Since testing the June high on 7/25, the market has retreated and is poised to test support near the 620 – 610 area between the July and June lows respectively. Below the 600 psychological support level, key support may be found near 573.  Heavy resistance remains above the market around 777 – 808.

KC Wheat Action Plan Summary

  • We continue to look for better prices before making any 2023 sales. As harvest winds down and more becomes known about this year’s crop with some reports of better than expected yields, questions remain about the world wheat supply. War continues in the Black Sea region, Ukraine’s export capabilities remain uncertain, and dryness continues in key production areas of the world. With world supplies currently seen at 11 year lows, we continue to target 950 – 1000 in the July futures as a potential level to suggest the next round of New Crop sales.

  • No action is currently recommended for the 2024 crop.  Demand and supply concerns out of the Black Sea continue to dominate the market right now, and Insider suggested making a sale as prices closed below 817 to protect from further downside erosion due to a potential change in trend with cheap supplies continuing to flow from Russia and Ukraine hampering U.S. export demand.   While prices continue to be volatile, plenty of time remains to market the 2024 crop.  War continues in the Black Sea region, major exporting countries’ stocks are at 11-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties.  For now, after recommending making a sale for the 2024 crop, Grain Market Insider would need to see prices north of 850 before considering recommending any additional sales, while also keeping an eye on the market to see if any major support is broken.

  • No Action is currently recommended for 2025 KC Wheat. 2025 markets are very illiquid right 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.

Above: September K.C. wheat has retreated following the key reversal on 7/25 and is poised to test the 735 – 745 support area, which coincides with this year’s lows.  Additionally, the market is showing signs of being oversold, and is considered supportive if prices reverse higher.  If prices do reverse to the upside, overhead resistance lies near 830.

Mpls Wheat Action Plan Summary

  • No action is currently recommended for the 2023 New Crop. Weather has been a dominant feature to price volatility this growing season with continued dryness concerns in not only the U.S., but also Canada and Australia.  As we enter harvest season, there isn’t a strong likelihood of higher prices until after harvest, although both weather and geopolitical events can change suddenly to move prices higher. Insider will consider making sales suggestions if prices improve, while also continuing to watch the downside for any further violations of support.

  • No action is currently recommended for the 2023 New Crop. Weather dominates the market right now, and though much of the growing season remains, Grain Market Insider suggested making a sale as prices closed below 822 to protect from further downside erosion due to a potential trend change.  Seasonally, there isn’t a strong likelihood of higher prices until after harvest, although both weather and geopolitical events can change suddenly to shock the market higher. Insider will consider making sales suggestions if prices improve through this growing season, while also continuing to watch the downside for any further violations of support.

  • No Action is currently recommended for the 2025 Minneapolis wheat crop. 2025 markets are very illiquid right 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.

Above: Following the bearish reversal on 7/25, the market has retreated and is oversold, which could be supportive if prices reverse higher. For now, support below the market may be found near the psychological support level of 800, while resistance remains above the market near 950.

Other Charts / Weather

|

Grain Market Insider: August 3, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Lackluster demand and favorable weather conditions for the next ten days helped to pressure the corn market lower as traders add to their short positions.

  • Strong weekly export sales and low yield estimates from StoneX’s August Survey helped to support the soybean market, with soybean meal following suit. Oil followed a lower palm oil, which was 2.3% weaker overnight.

  • Slow demand, no new headlines from the Black Sea and rumors that Russia would consider reinstating the Black Sea export corridor if his demands were met, all contributed to the negativity in the wheat market today, with K.C. leading Mpls and Chicago lower on the day.

  • After making new highs for the move and being overbought on the stochastic indicators, the U.S. dollar reversed and traded lower on the day. If the trend changes and trades lower, it could be supportive to U.S. grain prices by making them more competitive in the world market.

  • To see the current U.S. 7-day Precipitation Forecast and the 8- 14-day Precipitation and Temperature Outlooks courtesy of the Climate Prediction Center, scroll down to the 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

  • For the 2023 corn crop, Grain Market Insider recommends selling half of your DEC ‘23 580 puts at approximately 87 cents in premium minus fees and commission. At the end of June, Insider recommended buying DEC ’23 580 puts for approximately 30 cents in premium, plus fees and commission. At the time, the US Drought Monitor was showing dryness across the Midwest and weather forecasts were calling for hot and dry conditions. Since then, forecasts have turned more favorable and DEC ’23 corn has dropped over 100 cents, with the recommended 580 puts gaining nearly 200% in value. The growing season isn’t over yet, and the Drought Monitor still shows dry conditions. Following the recent market drop and pick up in export sales, any further yield loss could rally prices. Insider recommends selling half of the previously recommended DEC ’23 580 puts to lock in gains in case prices rally back and holding the remainder, which will continue to protect any unsold bushels if prices erode further going into harvest.  

  • No action is recommended for New Crop 2023 corn. The future price potential for Dec 23 corn continues to be at the mercy of each new weather forecast. Dryness and dry weather forecasts pushed Dec corn from the May low to the June high with a gain of 137 cents, which was promptly erased and then some by mid-July, leaving the market 149 cents off that June high, with a surprise jump in acres and more favorable forecasts. During the runup in early June, we warned that any change in the forecast to wetter weather could erase all the gains as corn didn’t have much of a bullish fundamental story without a supply side shock fueled by lower yields. Overall, our thought process has not changed from a month ago and with the tremendous uncertainty, and subsequent volatility still in front of us, we continue to recommend holding the Strangle options position, comprised of the previously bought Dec 610 calls and Dec 580 puts. A turn back to wetter weather and we wouldn’t be surprised to see sub-500 corn again, and if dry weather persists, we wouldn’t be surprised to see corn prices north of 700. Under either of these scenarios the Strangle will benefit and doesn’t require trying to outguess the weather.  

  • No Action is currently recommended for 2025 corn. 2025 markets are very illiquid right 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. 

  • Corn futures traded lower for the 8th consecutive session, as prices closed below the key $5.00 psychological level as the market is pricing in favorable weather and looking for bullish news.

  • The technical picture and price action remains weak in the corn market, as the path of least resistance is lower with December corn closing under the $5.00 level on Thursday. The July $4.81 low in the December contract looks to be the next downside target.

  • The weather forecast going into the middle of August is tracking potentially cooler than normal temperatures and average to above average rainfall for most of the Corn Belt. This would be favorable weather to help fill out this year’s corn crop.

  • Overall, dry conditions are still a concern as 57% of the crop, down 2% from last week, is affected by drought. The lack of overall moisture keeps the need for timely rainfall, or the crop could see some production losses.

  • Weekly exports sales for corn were uneventful as the USDA reported new sales for last week totaling 4.2 mb of old crop, and 13.7 mb of new crop. These totals were within expectations, but still lacking the demand pace needed to meet USDA targets. Total new crop sales are trending 35% below last year’s levels currently.

Above: Since mid-July, the market retraced about 62% of the prior down move, hit resistance around the 50-day moving average and turned lower. The market is approaching oversold status on the stochastic indicator with key support near the 474 low. If the market receives more bullish input and turns back higher, heavy resistance lies near 555 – 565.

Soybeans

Soybeans Action Plan Summary

  • No new action is being recommended for Old Crop. Any remaining old crop bushels should be getting priced into this rally. We won’t have any “New Alerts” for 2022 Soybeans (Cash, Calls, or Puts) as we have moved focus onto 2023 and 2024 Crop Year Opportunities. 

  • No action is recommended for 2023 soybeans. The USDA injected a lot of volatility into this market beginning with a much lower-than-expected planted acreage estimate, followed by a much larger-than-expected 300mb carryout estimate in its July WASDE. While demand has been weak, we have a bona fide weather market during a crucial period for soybeans and there is little wiggle room for lost yield in this year’s crop. While a drier forecast can still maintain upside potential, plenty of time remains for rain to come and push prices lower, much like in 2012, when July was dry. Then the pattern changed in August, and decent rain fell in parts of the western Corn Belt and IL, sending Nov ’12 soybeans down 20%. For now, Insider may not consider suggesting any additional sales until after harvest. Although, we will continue to monitor the market for any upside opportunities in the coming weeks.

  • No Action is currently recommended for 2025 Soybeans. 2025 markets are very illiquid right 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.

  • The soy complex was higher today with soybean meal following that same trend, but soybean oil was lower in all contracts. While export sales were supportive, the weather forecasts are suppressing rallies.

  • The USDA reported an increase of 3.3 mb of soybean export sales for 22/23, which was down 54% from the previous week and 16% from the prior 4-week average .There was an increase of 96.7 mb for the 23/24 marketing year, and exports were 12.7 mb, which was down 9% from the previous week but up 30% from the prior 4-week average.

  • StoneX released their August Survey results, and estimate final soybean yield at 50.5 bpa, down 1.5 from the USDA’s current estimate. If materialized, this could tighten 23/24 supplies and be supportive to prices.

  • Private exporters reported sales of 134,000 mt of soybeans for delivery to China during the 23/24 marketing year. China and unknown destinations have been active buyers of US soybeans over the past week.

  • The 7-day and 14-day forecasts are showing significant amounts of rain throughout the Corn Belt and northwestern Plains, along with much cooler temperatures from the previous week, with most expectations for the low 80’s. Good weather this month could really make the soybean crop despite dryness earlier in the season.

Above: On 7/27 the market posted a bearish reversal, turning the market lower. Initial support below the market may come in around the 1350 – 1318 level and again near the May low of 1270-3/4. Above the market heavy resistance remains around 1490 – 1505.

Wheat

Market Notes: Wheat

  • The USDA reported an increase of 15.5 mb of wheat export sales for the 23/24 marketing year and an increase of 0.5 mb for 24/25. Total commitments are now 215 mb for 23/24, which is down 29% from this time last year.

  • Putin is reportedly considering a reinstatement of the Black Sea Grain Initiative. However, Russian demands must first be met before they would agree to any new deal.

  • There are rumors that India is looking to import up to 9 mmt of wheat from Russia. Apparently, the Indian government is directly negotiating with the Russian government. If true, this could have big implications for the global wheat trade.

  • Funds are believed to be adding to their next short position in Chicago wheat. This is keeping pressure on the market, along with the fact that Matif wheat was lower for the 8th session in a row.

Chicago Wheat Action Plan Summary

  • No new action is recommended for 2023 New Crop. The wheat market has seen a great amount of volatility in recent weeks and has primarily been a follower of corn, which has been driven by weather.  Although demand remains weak, the closure of the Black Sea corridor, and the continued supply uncertainty, which that brings to the market, still leaves many supply questions unanswered. While Grain Market Insider will continue to monitor the downside for any violation of major support following the recent sales recommendation, it may be after harvest or near the end of summer before we consider recommending any additional sales for the 2023 crop.

  • No action is currently recommended for 2024 Chicago wheat. Since the middle of June, price volatility has risen with updated USDA reports, changing weather forecasts, and current events in the Black Sea.  While prices continue to be volatile, plenty of time remains to market the 2024 crop. War continues in the Black Sea region, major exporting countries’ stocks are at 11-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties. For now, after recommending making a sale for the 2024 crop, and while keeping an eye on the market to see if any major support is broken, Grain Market Insider would need to see prices north of 800 before considering recommending any additional sales.

  •  No Action is currently recommended for 2025 Chicago Wheat. 2025 markets are very illiquid right 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.

Above: Since testing the June high on 7/25, the market has retreated and is poised to test support near the 620 – 610 area between the July and June lows respectively. Below the 600 psychological support level, key support may be found near 573.  Heavy resistance remains above the market around 777 – 808.

KC Wheat Action Plan Summary

  • We continue to look for better prices before making any 2023 sales. As harvest winds down and more becomes known about this year’s crop with some reports of better than expected yields, questions remain about the world wheat supply. War continues in the Black Sea region, Ukraine’s export capabilities remain uncertain, and dryness continues in key production areas of the world. With world supplies currently seen at 11 year lows, we continue to target 950 – 1000 in the July futures as a potential level to suggest the next round of New Crop sales.

  • No action is currently recommended for the 2024 crop.  Demand and supply concerns out of the Black Sea continue to dominate the market right now, and Insider suggested making a sale as prices closed below 817 to protect from further downside erosion due to a potential change in trend with cheap supplies continuing to flow from Russia and Ukraine hampering U.S. export demand.   While prices continue to be volatile, plenty of time remains to market the 2024 crop.  War continues in the Black Sea region, major exporting countries’ stocks are at 11-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties.  For now, after recommending making a sale for the 2024 crop, Grain Market Insider would need to see prices north of 850 before considering recommending any additional sales, while also keeping an eye on the market to see if any major support is broken.

  • No Action is currently recommended for 2025 KC Wheat. 2025 markets are very illiquid right 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.

Above: The September K.C. wheat contract posted a bearish reversal on 7/25 after testing heavy resistance near 920.  Since then, prices have retreated, with support below the market near 763 – 778. Should prices reverse higher, heavy resistance remains in the 920 – 930 area.

Mpls Wheat Action Plan Summary

  • No action is currently recommended for the 2023 New Crop. Weather has been a dominant feature to price volatility this growing season with continued dryness concerns in not only the U.S., but also Canada and Australia.  As we enter harvest season, there isn’t a strong likelihood of higher prices until after harvest, although both weather and geopolitical events can change suddenly to move prices higher. Insider will consider making sales suggestions if prices improve, while also continuing to watch the downside for any further violations of support.

  • No action is currently recommended for the 2023 New Crop. Weather dominates the market right now, and though much of the growing season remains, Grain Market Insider suggested making a sale as prices closed below 822 to protect from further downside erosion due to a potential trend change.  Seasonally, there isn’t a strong likelihood of higher prices until after harvest, although both weather and geopolitical events can change suddenly to shock the market higher. Insider will consider making sales suggestions if prices improve through this growing season, while also continuing to watch the downside for any further violations of support.

  • No Action is currently recommended for the 2025 Minneapolis wheat crop. 2025 markets are very illiquid right 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.

Above: Following the bearish reversal on 7/25, the market has retreated and is oversold, which could be supportive if prices reverse higher. For now, support below the market may be found near the psychological support level of 800, while resistance remains above the market near 950.

Other Charts / Weather

|

Grain Market Insider: August 2, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Reports of additional Russian drone attacks on Ukrainian Danube River grain terminals spiked the markets higher in the overnight session, but the news was shrugged off since the terminals remain functional.

  • After trading higher in the overnight session, favorable weather forecasts and continued demand concerns dominated the trade to reverse the corn market and close in negative territory for the 7th consecutive day.

  • A friendly weather forecast for the next 10 days weighed on prices and led soybeans to post losses in excess of 100 cents over the last week.

  • Despite the closure of the Black Sea corridor and Russian attacks on Danube River terminals, the fact that other nations are working with Ukraine to increase their export capacity via land routes continues to weigh on the three wheat markets.

  • The Fitch credit rating agency lowered the U.S.’ credit rating to AA+ from AAA due to growing debt and the possibility of a slowing economy. The surprise move led to a “risk-off” mood possibly adding downward pressure to the grain markets.

  • To see the current Monthly Drought Outlook and the 6 – 10-day Precipitation and Temperature Outlooks courtesy of the Climate Prediction Center, scroll down to the 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 Old Crop. The market had a nearly 140-cent swing from the May low to the June high and back on weather. Use any remaining bounces in the market to price what Old Crop bushels you may have, if any. We won’t have any “New Alerts” for 2022 Corn (Cash, Calls, or Puts) as we have moved focus onto 2023 and 2024 Crop Year Opportunities.

  • No action is recommended for New Crop 2023 corn. The future price potential for Dec 23 corn continues to be at the mercy of each new weather forecast. Dryness and dry weather forecasts pushed Dec corn from the May low to the June high with a gain of 137 cents, which was promptly erased and then some by mid-July, leaving the market 149 cents off that June high, with a surprise jump in acres and more favorable forecasts. During the runup in early June, we warned that any change in the forecast to wetter weather could erase all the gains as corn didn’t have much of a bullish fundamental story without a supply side shock fueled by lower yields. Overall, our thought process has not changed from a month ago and with the tremendous uncertainty, and subsequent volatility still in front of us, we continue to recommend holding the Strangle options position, comprised of the previously bought Dec 610 calls and Dec 580 puts. A turn back to wetter weather and we wouldn’t be surprised to see sub-500 corn again, and if dry weather persists, we wouldn’t be surprised to see corn prices north of 700. Under either of these scenarios the Strangle will benefit and doesn’t require trying to outguess the weather.  

  • No Action is currently recommended for 2025 corn. 2025 markets are very illiquid right 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. 

  • Even with a surge in overnight prices after the most recent attack by Russia on Ukraine export infrastructure, corn futures failed to hold gains, reversing to close lower on the session as weather forecasts and demand concerns drive the market sentiment.

  • December corn futures had a 26 cent trading range on the session, closing just above the psychological $5.00 level, but at the bottom of the trading range.  The weak technical picture will likely keep selling pressure in the market in the near term.

  • The weather forecasts are non-threatening as August weather is expected to stay cooler than normal with average to above average rainfall. This forecast will help fill the recently pollinated corn crop.

  • Demand will be the focus on Thursday morning with the release of USDA’s weekly export sales report. Expectations are for corn sales to range from 150,000MT-500,000 MT for old crop, and 200,000-700,000 MT for new crop for last week.no Export demand is still well behind last year’s levels at this time.

  • Outside markets added to selling pressure as the credit rating agency, Fitch, lowered the U.S. credit rating from AAA to AA+, sending a “risk-off” trade across equity and commodity markets on Wednesday.

Above: Since mid-July, the market retraced about 62% of the prior down move, hit resistance around the 50-day moving average and turned lower. The market appears to be correcting from being overbought and broke through the 520 support level.  Key support lies near the 474 low, and should the market turn back higher, heavy resistance lies near 555 – 565.

Soybeans

Soybeans Action Plan Summary

  • No new action is being recommended for Old Crop. Any remaining old crop bushels should be getting priced into this rally. We won’t have any “New Alerts” for 2022 Soybeans (Cash, Calls, or Puts) as we have moved focus onto 2023 and 2024 Crop Year Opportunities. 

  • No action is recommended for 2023 soybeans. The USDA injected a lot of volatility into this market beginning with a much lower-than-expected planted acreage estimate, followed by a much larger-than-expected 300mb carryout estimate in its July WASDE. While demand has been weak, we have a bona fide weather market during a crucial period for soybeans and there is little wiggle room for lost yield in this year’s crop. While a drier forecast can still maintain upside potential, plenty of time remains for rain to come and push prices lower, much like in 2012, when July was dry. Then the pattern changed in August, and decent rain fell in parts of the western Corn Belt and IL, sending Nov ’12 soybeans down 20%. For now, Insider may not consider suggesting any additional sales until after harvest. Although, we will continue to monitor the market for any upside opportunities in the coming weeks.

  • No Action is currently recommended for 2025 Soybeans. 2025 markets are very illiquid right 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.

  • Soybeans ended the day lower after trading slightly higher overnight, while soybean meal ended lower and soybean oil was bull spread, with front months higher and deferred contracts lower despite a sharp decline in crude oil.

  • Soybeans have lost over $1.10 in the past 7 days as weather shifted from hot and dry to a forecast of cool and wet, with temperatures expected to be in the low 80’s and above normal rains for the entire Corn Belt and northwestern Plains.

  • Due to the upcoming El Nino pattern, northern Brazil may experience drier than normal conditions next year, which could impact their total production and support prices, but the same pattern may show Argentina receiving more rains.

  • The current USDA yield estimate for the soy crop is 52.0 bpa, and while that number seemed far away a few weeks ago, it may be achievable if these August forecasts hold up. Illinois, Minnesota, North Dakota, and Michigan all had some of the worst good to excellent ratings last week, but all four states are forecast to get higher than normal rains over the next two weeks.

Above: On 7/27 the market posted a bearish reversal, turning the market lower. Initial support below the market may come in around the 1350 – 1318 level and again near the May low of 1270-3/4. Above the market heavy resistance remains around 1490 – 1505.

Wheat

Market Notes: Wheat

  • Wheat was higher overnight after a new round of Russian attacks hit Danube River terminals in Ukraine. However, this was not enough to sustain a rally; all three US wheat futures classes closed lower in tandem with Paris milling wheat.

  • Slovakia is planning to increase the capacity of railway transport for Ukrainian grain. Funding was reportedly approved for two projects to increase the amount that can be transported through these lanes.

  • The US credit rating was lowered from AAA to AA+ due to large amounts of debt and the possibility of a slowing economy. This put pressure on the financial markets today, some of which may have spilled over into commodities. Additionally, the US Dollar Index continues to trend higher, likely limiting the upside in wheat.

  • Egypt’s wheat tender resulted in a purchase of 300,000 mt from Russia and 60,000 mt from Romania. Russia continues to dominate exports – another negative factor affecting the market. In addition to Egypt, recent tenders by Algeria and Tunisia have also been fulfilled by Russia.

  • Kazakhstan’s grain union is estimating their wheat crop at 14.5 mmt, which would allow for exports of about 8.5-9.0 mmt in 23/24.

Chicago Wheat Action Plan Summary

  • No new action is recommended for 2023 New Crop. The wheat market has seen a great amount of volatility in recent weeks and has primarily been a follower of corn, which has been driven by weather.  Although demand remains weak, the closure of the Black Sea corridor, and the continued supply uncertainty, which that brings to the market, still leaves many supply questions unanswered. While Grain Market Insider will continue to monitor the downside for any violation of major support following the recent sales recommendation, it may be after harvest or near the end of summer before we consider recommending any additional sales for the 2023 crop.No action is currently recommended for 2024 Chicago wheat. Since the middle of June, price volatility has risen with updated USDA reports, changing weather forecasts, and current events in the Black Sea.  While prices continue to be volatile, plenty of time remains to market the 2024 crop. War continues in the Black Sea region, major exporting countries’ stocks are at 11-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties. For now, after recommending making a sale for the 2024 crop, and while keeping an eye on the market to see if any major support is broken, Grain Market Insider would need to see prices north of 800 before considering recommending any additional sales.

  •  No Action is currently recommended for 2025 Chicago Wheat. 2025 markets are very illiquid right 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.

Above: Since testing the June high on 7/25, the market has retreated and is poised to test support near the 620 – 610 area between the July and June lows respectively. Below the 600 psychological support level, key support may be found near 573.  Heavy resistance remains above the market around 777 – 808.

KC Wheat Action Plan Summary

  • We continue to look for better prices before making any 2023 sales. As harvest winds down and more becomes known about this year’s crop with some reports of better than expected yields, questions remain about the world wheat supply. War continues in the Black Sea region, Ukraine’s export capabilities remain uncertain, and dryness continues in key production areas of the world. With world supplies currently seen at 11 year lows, we continue to target 950 – 1000 in the July futures as a potential level to suggest the next round of New Crop sales.

  • Grain Market Insider sees an active opportunity to sell a portion of your 2024 K.C. Wheat crop. Weather and supply concerns from the Black Sea have dominated the market, and recent news of rising tensions in the Black Sea region pushed the market higher. With little follow-through to the upside on talk that Ukrainian supplies should still be able to enter the world market, prices have retreated below the 817 support level. Closing below that 817 support signals that the uptrend from the recent July low may have ended, which poses the risk that a change in trend could erode prices further.  First, prices could drop to the July low of 758-1/2. If support there doesn’t hold, there is a risk that prices could further erode to the 740 – 724 level near the April low. Although making a sale in a down market may be uncomfortable, it’s important at times to have a Plan B with the objective of trying to avoid having to sell bushels at even lower prices in the future if a downtrend takes hold.  Insider recommends making a sale on a portion of your 2024 K.C. wheat production by using either JUL ’24 K.C. Wheat futures or a JUL ’24 HTA contract, so basis can be set at a later, more advantageous time.  

  • No Action is currently recommended for 2025 KC Wheat. 2025 markets are very illiquid right 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.

Above: The September K.C. wheat contract posted a bearish reversal on 7/25 after testing heavy resistance near 920. Since then prices have retreated, with support below the market near 763 – 778. Should prices reverse higher, heavy resistance remains in the 920 – 930 area. 

Mpls Wheat Action Plan Summary

  • No action is currently recommended for the 2023 New Crop. Weather has been a dominant feature to price volatility this growing season with continued dryness concerns in not only the U.S., but also Canada and Australia.  As we enter harvest season, there isn’t a strong likelihood of higher prices until after harvest, although both weather and geopolitical events can change suddenly to move prices higher. Insider will consider making sales suggestions if prices improve, while also continuing to watch the downside for any further violations of support.

  • No action is currently recommended for the 2023 New Crop. Weather dominates the market right now, and though much of the growing season remains, Grain Market Insider suggested making a sale as prices closed below 822 to protect from further downside erosion due to a potential trend change.  Seasonally, there isn’t a strong likelihood of higher prices until after harvest, although both weather and geopolitical events can change suddenly to shock the market higher. Insider will consider making sales suggestions if prices improve through this growing season, while also continuing to watch the downside for any further violations of support.

  • No Action is currently recommended for the 2025 Minneapolis wheat crop. 2025 markets are very illiquid right 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.

Above: September Mpls wheat’s rally of nearly 180 cents to test last winter’s highs culminated in a bearish reversal on 7/25 after the contract became mildly overbought. Prices have since retreated and are testing the 865 – 845 initial support area where both the 50-day and 100-day moving averages converge. Further support below the market may be near 800.  If more bullish input is received, the market could turn higher again to retest the heavy resistance area near 950.

Other Charts / Weather

|

Grain Market Insider: August 1, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Carryover weakness from the wheat market and a cooler, wetter forecast kept the pressure on the corn market with follow through selling as traders extract more weather premium.

  • Lower good/excellent crop ratings helped to incentivize the soybean market to consolidate from Monday’s sharply lower close in classic turnaround Tuesday fashion.

  • Record soybean oil use for biofuel production reported for the month of May in Monday’s EIA report gave support to the oil leg of the soybean complex, while soybean meal also consolidated from Monday’s losses.

  • Reports that Ukraine is discussing using Croatian ports to export grain likely pressured the wheat complex lower, while a 7% drop in spring wheat’s good/excellent crop condition ratings limited the losses for the Minneapolis contracts.

  • The U.S. dollar continued its rally today as it tested the 50-day and 100-day moving averages for the first time since early July, likely adding some downward pressure to commodities.

  • To see the current Monthly temperature and precipitation outlooks courtesy of the Climate Prediction Center, scroll down to the 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 Old Crop. The market had a nearly 140-cent swing from the May low to the June high and back on weather. Use any remaining bounces in the market to price what Old Crop bushels you may have, if any. We won’t have any “New Alerts” for 2022 Corn (Cash, Calls, or Puts) as we have moved focus onto 2023 and 2024 Crop Year Opportunities.

  • No action is recommended for New Crop 2023 corn. The future price potential for Dec 23 corn continues to be at the mercy of each new weather forecast. Dryness and dry weather forecasts pushed Dec corn from the May low to the June high with a gain of 137 cents, which was promptly erased and then some by mid-July, leaving the market 149 cents off that June high, with a surprise jump in acres and more favorable forecasts. During the runup in early June, we warned that any change in the forecast to wetter weather could erase all the gains as corn didn’t have much of a bullish fundamental story without a supply side shock fueled by lower yields. Overall, our thought process has not changed from a month ago and with the tremendous uncertainty, and subsequent volatility still in front of us, we continue to recommend holding the Strangle options position, comprised of the previously bought Dec 610 calls and Dec 580 puts. A turn back to wetter weather and we wouldn’t be surprised to see sub-500 corn again, and if dry weather persists, we wouldn’t be surprised to see corn prices north of 700. Under either of these scenarios the Strangle will benefit and doesn’t require trying to outguess the weather.  

  • No Action is currently recommended for 2025 corn. 2025 markets are very illiquid right 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. 

  • December corn futures closed the day lower, posting a new low for this most recent move as selling pressure in the wheat market and the prospects of improving August weather kept sellers active.

  • Short term weather models are keeping temperature cool with mixed rain forecasts, which should help fill out the recently pollinated corn crop.

  • USDA weekly crop rating saw a drop of 2% good/excellent to 55% good/excellent. Northern and western states saw the biggest impacts of the heat on crop conditions, while late in the week rainfall helped support central and eastern crops. Illinois has improved its crop ratings for five consecutive weeks.

  • Crude oil is trading over $80.00 a barrel, and with lower corn prices, ethanol margins should be improved, which should help support the corn market.

  • The corn market is weak technically, with psychological support likely at the $5.00 level, but if weather forecasts are realized, and the market lacks bullish news, a test of the July $4.81 low for December futures could be a possible target.

Above: Since mid-July, the market retraced about 62% of the prior down move, hit resistance around the 50-day moving average and turned lower. The market appears to be correcting from being overbought and broke through the 520 support level.  Key support lies near the 474 low, and should the market turn back higher, heavy resistance lies near 555 – 565.

2023/24 Corn condition percent good-excellent (red) versus the 5-year average (green) and last year (pink).

Soybeans

Soybeans Action Plan Summary

  • No new action is being recommended for Old Crop. Any remaining old crop bushels should be getting priced into this rally. We won’t have any “New Alerts” for 2022 Soybeans (Cash, Calls, or Puts) as we have moved focus onto 2023 and 2024 Crop Year Opportunities. 

  • No action is recommended for 2023 soybeans. The USDA injected a lot of volatility into this market beginning with a much lower-than-expected planted acreage estimate, followed by a much larger-than-expected 300mb carryout estimate in its July WASDE. While demand has been weak, we have a bona fide weather market during a crucial period for soybeans and there is little wiggle room for lost yield in this year’s crop. While a drier forecast can still maintain upside potential, plenty of time remains for rain to come and push prices lower, much like in 2012, when July was dry. Then the pattern changed in August, and decent rain fell in parts of the western Corn Belt and IL, sending Nov ’12 soybeans down 20%. For now, Insider may not consider suggesting any additional sales until after harvest. Although, we will continue to monitor the market for any upside opportunities in the coming weeks.

  • No Action is currently recommended for 2025 Soybeans. 2025 markets are very illiquid right 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.

  • Soybeans began the day lower on August forecasts showing wetter and cooler weather, but ultimately ended the day higher, thanks to gains made in both soybean meal and oil. Yesterday’s crop progress report may have added support.

  • The Crop Progress reports showed soybean ratings declining more than the average guess with good to excellent ratings falling 2 points to 52%. 83% of the crop is blooming and 50% is setting pods. If forecasts hold up for August, soybean ratings could easily improve.

  • Monday’s EIA report showed soybean oil use for biofuel production was a record 1.141 bil. lbs. in May, which was up 23% from April’s numbers and a 33% increase from May 2022. Year to date usage also increased 13% from year ago levels to 7.6 bil. lbs.

  • There has been some export activity in soybeans, which has been supportive over the past few days, and another new crop sale was announced as sold to China on Monday of 4.9 mb. The one-week total of new soybean sales to China and unknown destinations is now 70.5 mb.

  • Census crush will be released today, and the average trade guess is 175.5 mb for June, which would compare to 189.3 mb in May. Despite the slip, domestic demand has been stout, thanks to profitable crush margins.

Above: On 7/27 the market posted a bearish reversal, turning the market lower. Initial support below the market may come in around the 1350 – 1318 level and again near the May low of 1270-3/4. Above the market heavy resistance remains around 1490 – 1505.

2023/24 Soybeans percent planted (red) versus the 5-year average (green).

Wheat

Market Notes: Wheat

  • While there have not been any major new headlines regarding the Black Sea conflict, Ukraine is said to be talking about using Croatian ports for exports of grain. There is still much uncertainty though, given last week’s Russian attacks on the river terminals.

  • The Crop Progress report said winter wheat harvest is 80% complete. It also showed a 7% drop in spring wheat condition to 42% good to excellent, versus 70% at this time last year. This is likely why MPLS futures had more support today compared with Chi and KC.

  • According to CONAB, as of July 22, 97.9% of Brazil’s wheat crop has been planted. Argentina is said to have 96.4% of their wheat crop planted as of July 26, according to Bolsa de Cereales.

  • The weather bureau in Australia said that the El Nino weather pattern remains likely to bring hotter and drier weather. This could reduce rain in the eastern part of the country, threatening the wheat crop.

  • Algeria finalized a tender for 700-800 metric tons of milling wheat for fall shipment. However, this is likely to be sourced from Russia as they continue to dominate the export market with cheap offers.

Chicago Wheat Action Plan Summary

  • No new action is recommended for 2023 New Crop. The wheat market has seen a great amount of volatility in recent weeks and has primarily been a follower of corn, which has been driven by weather.  Although demand remains weak, the closure of the Black Sea corridor, and the continued supply uncertainty, which that brings to the market, still leaves many supply questions unanswered. While Grain Market Insider will continue to monitor the downside for any violation of major support following the recent sales recommendation, it may be after harvest or near the end of summer before we consider recommending any additional sales for the 2023 crop.No action is currently recommended for 2024 Chicago wheat. Since the middle of June, price volatility has risen with updated USDA reports, changing weather forecasts, and current events in the Black Sea.  While prices continue to be volatile, plenty of time remains to market the 2024 crop. War continues in the Black Sea region, major exporting countries’ stocks are at 11-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties. For now, after recommending making a sale for the 2024 crop, and while keeping an eye on the market to see if any major support is broken, Grain Market Insider would need to see prices north of 800 before considering recommending any additional sales.

  •  No Action is currently recommended for 2025 Chicago Wheat. 2025 markets are very illiquid right 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.

Above: Since testing the June high on 7/25, the market has retreated and is poised to test support near the 620 – 610 area between the July and June lows respectively.  Key support may be found below the 600 psychological support level near 573.  Heavy resistance remains above the market around 777 – 808.

KC Wheat Action Plan Summary

  • We continue to look for better prices before making any 2023 sales. As harvest winds down and more becomes known about this year’s crop with some reports of better than expected yields, questions remain about the world wheat supply. War continues in the Black Sea region, Ukraine’s export capabilities remain uncertain, and dryness continues in key production areas of the world. With world supplies currently seen at 11 year lows, we continue to target 950 – 1000 in the July futures as a potential level to suggest the next round of New Crop sales.

  • Grain Market Insider sees an active opportunity to sell a portion of your 2024 K.C. Wheat crop. Weather and supply concerns from the Black Sea have dominated the market, and recent news of rising tensions in the Black Sea region pushed the market higher. With little follow-through to the upside on talk that Ukrainian supplies should still be able to enter the world market, prices have retreated below the 817 support level. Closing below that 817 support signals that the uptrend from the recent July low may have ended, which poses the risk that a change in trend could erode prices further.  First, prices could drop to the July low of 758-1/2. If support there doesn’t hold, there is a risk that prices could further erode to the 740 – 724 level near the April low. Although making a sale in a down market may be uncomfortable, it’s important at times to have a Plan B with the objective of trying to avoid having to sell bushels at even lower prices in the future if a downtrend takes hold.  Insider recommends making a sale on a portion of your 2024 K.C. wheat production by using either JUL ’24 K.C. Wheat futures or a JUL ’24 HTA contract, so basis can be set at a later, more advantageous time.  

  • No Action is currently recommended for 2025 KC Wheat. 2025 markets are very illiquid right 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.

Above: The September K.C. wheat contract posted a bearish reversal on 7/25 after testing heavy resistance near 920.  Prices have become over bought and retreated.  Support below the market is near 763 – 778. Should prices reverse higher, heavy resistance remains in the 920 – 930 area.

2023/24 Winter wheat percent harvested (red) versus the 5-year average (green) and last year (purple).

Mpls Wheat Action Plan Summary

  • No action is currently recommended for the 2023 New Crop. Weather has been a dominant feature to price volatility this growing season with continued dryness concerns in not only the U.S., but also Canada and Australia.  As we enter harvest season, there isn’t a strong likelihood of higher prices until after harvest, although both weather and geopolitical events can change suddenly to move prices higher. Insider will consider making sales suggestions if prices improve, while also continuing to watch the downside for any further violations of support.

  • No action is currently recommended for the 2023 New Crop. Weather dominates the market right now, and though much of the growing season remains, Grain Market Insider suggested making a sale as prices closed below 822 to protect from further downside erosion due to a potential trend change.  Seasonally, there isn’t a strong likelihood of higher prices until after harvest, although both weather and geopolitical events can change suddenly to shock the market higher. Insider will consider making sales suggestions if prices improve through this growing season, while also continuing to watch the downside for any further violations of support.

  • No Action is currently recommended for the 2025 Minneapolis wheat crop. 2025 markets are very illiquid right 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.

Above: September Mpls wheat’s rally of nearly 180 cents to test last winter’s highs culminated in a bearish reversal on 7/25 after the contract became mildly overbought. Prices have since retreated and are testing the 865 – 845 initial support area where both the 50-day and 100-day moving averages converge. Further support below the market may be near 800.  If more bullish input is received, the market could turn higher again to retest the heavy resistance area near 950.

2023/24 Spring wheat condition percent good-excellent (red) versus the 5-year average (green) and last year (pink).

Other Charts / Weather

|

Grain Market Insider: July 31, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Good weekend rains, an improving weather forecast and a Brazilian safrinha harvest that is moving along, all weighed heavily on the corn market.

  • Despite strong export inspections, soybeans closed sharply lower as traders moved to extract weather premium following better than expected weekend rains and a more favorable forecast ahead.

  • Soybean meal and oil also closed sharply lower on the day, with December meal down 2.4%, while soybean oil was down 3.9%, pressured from weaker palm oil.

  • Spillover weakness from the corn market and an agreement to use Croatia’s ports to export Ukrainian grain, far outweighed the positive influence of export inspections that were above the 14 mb/week needed to reach the USDA’s forecast.

  • To see the current 8–14-day temperature and precipitation outlooks courtesy of the Climate Prediction Center, scroll down to the 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 Old Crop. The market had a nearly 140-cent swing from the May low to the June high and back on weather. Use any remaining bounces in the market to price what Old Crop bushels you may have, if any. We won’t have any “New Alerts” for 2022 Corn (Cash, Calls, or Puts) as we have moved focus onto 2023 and 2024 Crop Year Opportunities.

  • No action is recommended for New Crop 2023 corn. The future price potential for Dec 23 corn continues to be at the mercy of each new weather forecast. Dryness and dry weather forecasts pushed Dec corn from the May low to the June high with a gain of 137 cents, which was promptly erased and then some by mid-July, leaving the market 149 cents off that June high, with a surprise jump in acres and more favorable forecasts. During the runup in early June, we warned that any change in the forecast to wetter weather could erase all the gains as corn didn’t have much of a bullish fundamental story without a supply side shock fueled by lower yields. Overall, our thought process has not changed from a month ago and with the tremendous uncertainty, and subsequent volatility still in front of us, we continue to recommend holding the Strangle options position, comprised of the previously bought Dec 610 calls and Dec 580 puts. A turn back to wetter weather and we wouldn’t be surprised to see sub-500 corn again, and if dry weather persists, we wouldn’t be surprised to see corn prices north of 700. Under either of these scenarios the Strangle will benefit and doesn’t require trying to outguess the weather.  

  • No action is currently recommended for 2024 corn. In 2012, the best pricing opportunities for Dec 2013 corn were during the 2012 summer runup. Despite the significant yield losses to the 2012 crop, and the fear of running out of corn, the Dec 2013 contract peaked in the summer of 2012, and by January 2, 2013, the price was already down about 12% from the high. We continue to watch the calendar for 2024 corn as this 2023 summer volatility could provide some additional opportunities to get some good early sales on the books in the event of a 2013-type repeat. Insider recently recommended making a sale on your 2024 crop, and we’ll be watching for another opportunity to suggest adding to prior early sales levels between now and the beginning of September. 

  • The corn market broke apart technically and saw strong selling pressure triggered by weekend rains and August forecast that should allow for good overall development of the corn crop.

  • The entire grain complex was under pressure on the day, corn futures opened with a price gap lower on the overnight session and the selling pressure was maintained as market prices dropped through key moving averages. Dec corn posted its lowest close since July 18. The weak technical picture and lack of bullish news may have Dec corn poised to retest the July lows near $4.80.   

  • Weekly export inspections were within trade expectations at 20.6 mb. Total inspection for old crop exports is still running 33% behind last year, but equal to the pace to reach the USDA target with one month left in the marketing year.

  • Brazilian corn harvest continues to progress, analyst estimate that this year’s Brazil corn harvest is near 50% complete, which is running nearly 20% behind last yeas pace.  The influence of the fresh Brazil supplies pressures global corn prices.

Above: Since mid-July, the market retraced about 62% of the prior down move, hit resistance around the 50-day moving average and turned lower. The market appears to be correcting from being overbought and broke through the 520 support level.  Key support lies near the 474 low, and should the market turn back higher, heavy resistance lies near 555 – 565.

Corn Managed Money Funds net position as of Tuesday, July 25. Net position in Green versus price in Red. Managers net bought 73,529 contracts between July 18 – 25, bringing their total position to a net long 26,603 contracts.

Soybeans

Soybeans Action Plan Summary

  • No new action is being recommended for Old Crop. Any remaining old crop bushels should be getting priced into this rally. We won’t have any “New Alerts” for 2022 Soybeans (Cash, Calls, or Puts) as we have moved focus onto 2023 and 2024 Crop Year Opportunities. 

  • No action is recommended for 2023 soybeans. The USDA injected a lot of volatility into this market beginning with a much lower-than-expected planted acreage estimate, followed by a much larger-than-expected 300mb carryout estimate in its July WASDE. While demand has been weak, we have a bona fide weather market during a crucial period for soybeans and there is little wiggle room for lost yield in this year’s crop. While a drier forecast can still maintain upside potential, plenty of time remains for rain to come and push prices lower, much like in 2012, when July was dry. Then the pattern changed in August, and decent rain fell in parts of the western Corn Belt and IL, sending Nov ’12 soybeans down 20%. For now, Insider may not consider suggesting any additional sales until after harvest. Although, we will continue to monitor the market for any upside opportunities in the coming weeks.

  • No action is recommended for 2024 crop. Grain Market Insider continues to monitor any developments for the 2024 crop, though it may not be until after harvest or toward year’s end before we will consider recommending any 2024 crop sales. 

  • Soybeans ended the day sharply lower with large losses in soybean meal and oil. Weather forecasts over the weekend turned cooler and wetter for the next 7 days and potentially longer, which was likely the main pressuring factor.

  • Exports were surprisingly active today considering the price action with 132,000 mt sold to China and 183,300 mt of soy cake and meal sold to the Philippines. There have been friendly underlying fundamentals that are being overshadowed by the current forecasts.

  • Soybean inspections totaled 12.1 mb for the week ending Thursday, July 27 which puts total inspections for 22/23 at 1.856 bb, which is down 6% from the previous year. Brazil is maintaining their lead in soy exports, but the US should become more competitive later this year.

  • Apart from updated weather forecasts adding pressure to prices, November soybeans are in a bearish ascending wedge pattern which would put the next downside target area near 12.55, but the overnight trade also left a gap on the chart above the market at 13.79 which the market may look to fill.

Above: On 7/27 the market posted a bearish reversal, turning the market lower. Initial support below the market may come in around the 1350 – 1318 level and again near the May low of 1270-3/4. Above the market heavy resistance remains around 1490 – 1505.

Soybean Managed Money Funds net position as of Tuesday, July 25. Net position in Green versus price in Red. Money Managers net bought 24,925 contracts between July 18 – 25, bringing their total position to a net long 120,739 contracts.

Wheat

Market Notes: Wheat

  • All three US wheat markets closed sharply lower alongside Paris milling wheat futures. This is the fourth consecutive lower close for Chicago wheat. A lack of follow through attacks in Ukraine put the market on the defensive. News that Ukraine launched a drone strike on Moscow was not enough to trigger a rally either.

  • Weekly wheat inspections of 21.4 mb bring the 23/24 total inspections to 101 mb, which is down 5% from last year. Currently, the USDA is estimating wheat exports at 725 mb.

  • According to SovEcon, Russia’s wheat harvest is now projected to be 87.1 mmt. Previously, the estimate was 86.8 mmt, and this revision higher may have also offered weakness to wheat today. 

  • Possibly adding more pressure to the market was the spring wheat tour last week that found yields higher than expected.

  • As of last Tuesday, the CFTC said the funds were still short 40,000 contracts of Chicago wheat. Given market action at the end of last week and to begin this week, it is likely they are adding to short positions.

Chicago Wheat Action Plan Summary

  • No new action is recommended for 2023 New Crop. The wheat market has seen a great amount of volatility in recent weeks and has primarily been a follower of corn which has been driven by weather.  Although demand remains weak, the recent closure of the Black Sea corridor, and continued weather concerns in the northern Plains, Canada, Europe, and Russia, still leave many supply questions unanswered. While Grain Market Insider will continue to monitor the downside for any violation of major support following the recent sales recommendation, it may be after harvest or near the end of summer before we consider recommending any additional sales for the 2023 crop.

  • No action is currently recommended for 2024 Chicago wheat. Since the middle of June, price volatility has risen with updated USDA reports, changing weather forecasts, and current events in the Black Sea.  While prices continue to be volatile, plenty of time remains to market the 2024 crop. War continues in the Black Sea region, major exporting countries’ stocks are at 11-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties. For now, after recommending making a sale for the 2024 crop, and while keeping an eye on the market to see if any major support is broken, Grain Market Insider would need to see prices north of 800 before considering recommending any additional sales.

  •  No Action is currently recommended for 2025 Chicago Wheat. 2025 markets are very illiquid right 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.

Above: Since testing the June high on 7/25, the market has retreated and is poised to test support near the 620 – 610 area between the July and June lows respectively.  Key support may be found below the 600 psychological support level near 573.  Heavy resistance remains above the market around 777 – 808.

Chicago Wheat Managed Money Funds net position as of Tuesday, July 25. Net position in Green versus price in Red. Money Managers net bought 14,086 contracts between July 18 – 25, bringing their total position to a net short 40,332 contracts.

KC Wheat Action Plan Summary

  • We continue to look for better prices before making any 2023 sales.  While crop conditions have improved and there are reports of better-than-expected US yields, questions remain about the world wheat supply with the closure of the Black Sea corridor, dryness in Russia, the Canadian Prairies/Northern US Plains, and Europe. With world supplies currently seen at 11-year lows, we continue to target 950 – 1000 in the July futures as a potential level to suggest the next round of New Crop sales.

  • Grain Market Insider recommends selling a portion of your 2024 K.C. Wheat crop today. Weather and supply concerns from the Black Sea have dominated the market and recent news of rising tensions in the Black Sea region pushed the market higher. With little follow-through to the upside on talk that Ukrainian supplies should still be able to enter the world market, prices have retreated below the 817 support level. Closing below that 817 support signals that the uptrend from the recent July low may have ended, which poses the risk that a change in trend could erode prices further.  First, prices could drop to the July low of 758-1/2. If support there doesn’t hold, there is a risk that prices could further erode to the 740 – 724 level near the April low. Although making a sale in a down market may be uncomfortable, it’s important at times to have a Plan B with the objective of trying to avoid having to sell bushels at even lower prices in the future if a downtrend takes hold.  Insider recommends making a sale on a portion of your 2024 K.C. wheat production by using either JUL ’24 K.C. Wheat futures or a JUL ’24 HTA contract, so basis can be set at a later, more advantageous time. 

  • No Action is currently recommended for 2025 KC Wheat. 2025 markets are very illiquid right 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.

Above: The September K.C. wheat contract posted a bearish reversal on 7/25 after testing heavy resistance near 920.  Prices have become over bought and retreated.  Support below the market is near 763 – 778. Should prices reverse higher, heavy resistance remains in the 920 – 930 area.

K.C. Wheat Managed Money Funds net position as of Tuesday, July 25. Net position in Green versus price in Red. Money Managers net bought 10,495 contracts between July 18 – 25, bringing their total position to a net long 23,145 contracts.

Mpls Wheat Action Plan Summary

  • No new action for 2022 Old Crop MINNEAPOLIS Wheat. The market had a nearly 116-cent swing from the May low to the June high and back on weather. While weather and geopolitical events can still affect Old Crop prices, the marketing year for Old Crop is quickly winding down, and any additional upside opportunities may be more difficult to come by before New Crop harvest. Use any remaining bounces in the market to price what Old Crop bushels you may have, if any. We won’t have any “New Alerts” for the 2022 crop (Cash, Calls, or Puts) as we have moved focus onto 2023 and 2024 Crop Year opportunities.

  • No action is currently recommended for the 2023 New Crop. Weather dominates the market right now, and though much of the growing season remains, Grain Market Insider suggested making a sale as prices closed below 822 to protect from further downside erosion due to a potential trend change.  Seasonally, there isn’t a strong likelihood of higher prices until after harvest, although both weather and geopolitical events can change suddenly to shock the market higher. Insider will consider making sales suggestions if prices improve through this growing season, while also continuing to watch the downside for any further violations of support.

  • No action is recommended for the 2024 crop. This year has been marked with volatility from adverse weather to geopolitical disruptions and has given us historically good prices to begin making early sales. While prices continue to be volatile, plenty of time remains to market the 2024 crop. War continues in the Black Sea region, major exporting countries’ stocks are at 11-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties.  For now, after recommending making a sale for the 2024 crop, Grain Market Insider will continue to consider making sales recommendations if prices improve while also keeping an eye on the downside should prices break support. 

Above: September Minn. wheat’s rally of nearly 180 cents to test last winter’s highs culminated in a bearish reversal after the contract became mildly overbought.  Prices have since retreated and may test the 865 – 845 initial support area, with further support near 800.  If more bullish input is received, the market could turn higher again to retest the heavy resistance area near 950.

Minneapolis Wheat Managed Money Funds net position as of Tuesday, July 25. Net position in Green versus price in Red. Money Managers net bought 2,379 contracts between July 18 – 25, bringing their total position to a net long 8,966 contracts. 

Other Charts / Weather

|

Grain Market Insider: July 28, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • The corn market traded on both sides of unchanged, but settled near the lower end of the range, and below most major moving averages as traders began to focus on more favorable weather ahead.

  • Despite another round of flash sales totaling 33 mb, soybeans closed lower on the day as slow 23/24 export demand, down 60% from year ago levels, weighs on prices.

  • Weakness from soybean meal also carried over to pressure the soybean market lower, as meal saw follow through selling following yesterday’s bearish reversal, while New Crop prices for soybean oil saw gains on reports of increased usage for biofuel.

  • All three wheat markets closed weaker, though mid-range, after trading on both sides of unchanged.  The market spiked higher momentarily, possibly on rumors of explosions at a Russian port, but settled back lower on a lack of confirmation.

  • To see the current 8–14-day temperature and precipitation outlooks courtesy of the Climate Prediction Center, scroll down to the other Charts/Weather Section.

  • To see the current 1–7-day precipitation outlook courtesy of the Weather Prediction Center, scroll down to the 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 Old Crop. The market had a nearly 140-cent swing from the May low to the June high and back on weather. Use any remaining bounces in the market to price what Old Crop bushels you may have, if any. We won’t have any “New Alerts” for 2022 Corn (Cash, Calls, or Puts) as we have moved focus onto 2023 and 2024 Crop Year Opportunities.

  • No action is recommended for New Crop 2023 corn. The future price potential for Dec 23 corn continues to be at the mercy of each new weather forecast. Dryness and dry weather forecasts pushed Dec corn from the May low to the June high with a gain of 137 cents, which was promptly erased and then some by mid-July, leaving the market 149 cents off that June high, with a surprise jump in acres and more favorable forecasts. Now, the threat of dry weather and heightened tensions in the Black Sea region has rallied Dec corn sharply off that July 13 low. During the runup in early June, we warned that any change in the forecast to wetter weather could erase all the gains, as corn didn’t have much of a bullish fundamental story without a supply side shock fueled by lower yields. Overall, our thought process has not changed from a month ago and with the tremendous uncertainty, and subsequent volatility still in front of us, we continue to recommend holding the Strangle options position, comprised of the previously bought Dec 610 calls and Dec 580 puts. A turn back to wetter weather and we wouldn’t be surprised to see sub-500 corn again, and if dry weather persists, we wouldn’t be surprised to see corn prices north of 700. Under either of these scenarios the Strangle will benefit and doesn’t require trying to outguess the weather.

  • No action is currently recommended for 2024 corn. In 2012, the best pricing opportunities for Dec 2013 corn were during the 2012 summer runup. Despite the significant yield losses to the 2012 crop, and the fear of running out of corn, the Dec 2013 contract peaked in the summer of 2012, and by January 2, 2013, the price was already down about 12% from the high. We continue to watch the calendar for 2024 corn as this 2023 summer volatility could provide some additional opportunities to get some good early sales on the books in the event of a 2013-type repeat. Insider recently recommended making a sale on your 2024 crop, and we’ll be watching for another opportunity to suggest adding to prior early sales levels between now and the beginning of September. 

  • Friday saw selling pressure in the corn market, as the market moved past the hot weather and focused on a more friendly overall forecast. Price broke through key support levels, closing below the 40, 50, and 100-day moving averages on the day. December corn traded 6 cents lower on the week, but a disappointing 40 cents off the week’s high of $5.72-¼.

  • Friday morning started with rain on the radar, which saw moderately good coverage from western Illinois through the Ohio River valley. Additional forecasts are looking for more precipitation to build on Friday night into Saturday.

  • Argentina saw good producer movement in their latest “Pesos for Maize” program, providing incentive for producers to sell grain. The three-day program netted nearly 100 mb of sales for the export market. U.S. corn exports still struggle to be competitive versus cheaper Brazil and competitive Argentina corn prices.

  • The wheat market saw additional long liquidation as prices have fallen off the most recent highs and global wheat prices are keeping U.S. wheat at a competitive disadvantage. The weakness in wheat spilled over into the corn market.

  • Weekend weather will be closely watched. With the weak price action on Friday, a wet forecast will likely bring additional selling pressure to start the week.

Above: Since mid-July, the market retraced about 62% of the prior down move, hit resistance around the 50-day moving average and turned lower. The market appears to be correcting from being overbought, and if it breaks through the 520 support level, there may not be much support above the 474 low. Should the market turn back higher, heavy resistance lies near 555 – 565.

Soybeans

Soybeans Action Plan Summary

  • No new action is being recommended for Old Crop. Any remaining old crop bushels should be getting priced into this rally. We won’t have any “New Alerts” for 2022 Soybeans (Cash, Calls, or Puts) as we have moved focus onto 2023 and 2024 Crop Year Opportunities. 

  • No action is recommended for 2023 soybeans. The USDA injected a lot of volatility into this market beginning with a much lower-than-expected planted acreage estimate, followed by a much larger-than-expected 300mb carryout estimate in its July WASDE. While demand has been weak, we have a bona fide weather market during a crucial period for soybeans and there is little wiggle room for lost yield in this year’s crop. While a drier forecast can still maintain upside potential, plenty of time remains for rain to come and push prices lower, much like in 2012, when July was dry. Then the pattern changed in August, and decent rain fell in parts of the western Corn Belt and IL, sending Nov ’12 soybeans down 20%. For now, Insider may not consider suggesting any additional sales until after harvest. Although, we will continue to monitor the market for any upside opportunities in the coming weeks.

  • No action is recommended for 2024 crop. Grain Market Insider continues to monitor any developments for the 2024 crop, though it may not be until after harvest or toward year’s end before we will consider recommending any 2024 crop sales. 

  • Soybeans ended the day lower with front month August posting significant losses while deferred months were down, but not by as much. Soybean meal ended lower by over 2%, but soybean oil was bear spread with the two front months closing lower while deferred months were higher. Some of the extreme price action in the August contracts could be because they will be entering the delivery phase with the first notice day for delivery on long position holders being Monday, July 31.

  • Today, pressure came from overnight scattered showers in the Midwest and more favorable forecasts for August with more rain and more forgiving temperatures. August will be a critical time for soybean yields and weather will be a large focus for many traders.

  • Soybeans have gotten some friendly news this week with three flash sales to unknown destinations, but prices were unable to hold. With current 23/24 sales 60% behind last year’s pace, it is possible that Nov soybeans met with resistance after coming very close to the contract highs and spurred selling.

  • While Brazil is dominating global exports, the US will become more competitive in October, which could explain the recent sales for 23/24. Even with poor exports, domestic demand has been firm with profitable crush margins.

Above:

Add Comment Below Following the market’s roll from the August to September contract, it rallied to and tested the 1490 – 1505 heavy resistance level on the Continuous chart and posted a bearish reversal on 7/28. If the trend turns lower, initial support may be found near 1390 – 1410, with further support coming in near 1350.

Wheat

Market Notes: Wheat

  • Wheat traded both sides of unchanged, but struggled to hold onto any gains. All three US futures classes closed lower, alongside Paris milling wheat futures, which were lower for the fourth session in a row.

  • The spring wheat crop tour in North Dakota came up with a final yield of 47.4 bpa. This compares with the USDA’s projected yield of 47, last year’s yield of 49.1 and the average of 40 bpa.

  • The Buenos Aires Grain Exchange kept their 23/24 wheat crop planted area unchanged at 6.0 million hectares.

  • There is some concern starting to develop about the wheat crop in the dry areas of Australia. In Canada, the spring wheat crop could be affected by dry conditions, and here in the U.S., 43% of spring wheat and 47% of winter wheat are said to be experiencing drought.

  • The US Dollar Index continues to trend higher after bottoming in mid-July. This is keeping pressure on the export market, and thus, futures.

Chicago Wheat Action Plan Summary

  • No new action is recommended for 2023 New Crop. The wheat market has seen a great amount of volatility in recent weeks and has primarily been a follower of corn which has been driven by weather.  Although demand remains weak, the recent closure of the Black Sea corridor, and continued weather concerns in the northern Plains, Canada, Europe, and Russia, still leave many supply questions unanswered. While Grain Market Insider will continue to monitor the downside for any violation of major support following the recent sales recommendation, it may be after harvest or near the end of summer before we consider recommending any additional sales for the 2023 crop.

  • No action is currently recommended for 2024 Chicago wheat. Since the middle of June, price volatility has risen with updated USDA reports, changing weather forecasts, and current events in the Black Sea.  While prices continue to be volatile, plenty of time remains to market the 2024 crop. War continues in the Black Sea region, major exporting countries’ stocks are at 11-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties. For now, after recommending making a sale for the 2024 crop, and while keeping an eye on the market to see if any major support is broken, Grain Market Insider would need to see prices north of 800 before considering recommending any additional sales.

  •  No Action is currently recommended for 2025 Chicago Wheat. 2025 markets are very illiquid right 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.

Above: Rising tensions in the Black Sea have fed the rally that tested the June high.  Prices have become overbought and retreated.  New bullish input will likely be needed to turn prices back higher and test the heavy resistance area of 777 – 807-1/2 between the recent high and the February high.   If prices do retreat, initial support may be found near 690 – 700, and again around 610 – 650.

KC Wheat Action Plan Summary

  • We continue to look for better prices before making any 2023 sales.  While crop conditions have improved and there are reports of better-than-expected US yields, questions remain about the world wheat supply with the closure of the Black Sea corridor, dryness in Russia, the Canadian Prairies/Northern US Plains, and Europe. With world supplies currently seen at 11-year lows, we continue to target 950 – 1000 in the July futures as a potential level to suggest the next round of New Crop sales.

  • Patience is warranted for the 2024 crop. With continued issues in the Black Sea region and with major exporting countries’ stocks at 11-year lows, we are willing to be patient with further sales of New Crop HRW wheat. We are targeting just below the 900 level on the upside while keeping an eye on recent lows for any violation of support.

  • No Action is currently recommended for 2025 KC Wheat. 2025 markets are very illiquid right 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.

Above: The September K.C. wheat contract posted a bearish reversal on 7/25 after testing heavy resistance near 920.  Prices have become over bought and retreated.  Support below the market is near 830 – 842, with further support near 763 – 778.  Should prices reverse higher, heavy resistance remains in the 920 – 930 area.

Mpls Wheat Action Plan Summary

  • No new action for 2022 Old Crop MINNEAPOLIS Wheat. The market had a nearly 116-cent swing from the May low to the June high and back on weather. While weather and geopolitical events can still affect Old Crop prices, the marketing year for Old Crop is quickly winding down, and any additional upside opportunities may be more difficult to come by before New Crop harvest. Use any remaining bounces in the market to price what Old Crop bushels you may have, if any. We won’t have any “New Alerts” for the 2022 crop (Cash, Calls, or Puts) as we have moved focus onto 2023 and 2024 Crop Year opportunities.

  • No action is currently recommended for the 2023 New Crop. Weather dominates the market right now, and though much of the growing season remains, Grain Market Insider suggested making a sale as prices closed below 822 to protect from further downside erosion due to a potential trend change.  Seasonally, there isn’t a strong likelihood of higher prices until after harvest, although both weather and geopolitical events can change suddenly to shock the market higher. Insider will consider making sales suggestions if prices improve through this growing season, while also continuing to watch the downside for any further violations of support.

  • No action is recommended for the 2024 crop. This year has been marked with volatility from adverse weather to geopolitical disruptions and has given us historically good prices to begin making early sales. While prices continue to be volatile, plenty of time remains to market the 2024 crop. War continues in the Black Sea region, major exporting countries’ stocks are at 11-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties.  For now, after recommending making a sale for the 2024 crop, Grain Market Insider will continue to consider making sales recommendations if prices improve while also keeping an eye on the downside should prices break support. 

Above: September Minn. wheat’s rally of nearly 180 cents to test last winter’s highs culminated in a bearish reversal after the contract became mildly overbought.  Prices have since retreated and may test the 865 – 845 initial support area, with further support near 800.  If more bullish input is received, the market could turn higher again to retest the heavy resistance area near 950.

Other Charts / Weather

|

Grain Market Insider: July 27, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Corn futures closed mixed with nearby months lower and deferred contracts higher, as rainfall chances increased for this coming weekend across the I-states compared to early week forecasts.

  • Despite a daily flash sale of soybeans to unknown destinations this morning, soybeans, soybean meal and soybean oil all closed lower on the day.

  • A Russian submarine attack on a Ukrainian port overnight was not enough to rally the entire wheat complex. Chicago wheat posted losses; Kansas City wheat closed mixed, while spring wheat closed higher across the board.

  • A potential bullish reversal in the US Dollar Index today could have aided in the general weakness across the commodity complex.

  • To see the current 1–7-day precipitation outlook courtesy of the Weather Prediction Center, scroll down to the 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 Old Crop. The market had a nearly 140-cent swing from the May low to the June high and back on weather. Use any remaining bounces in the market to price what Old Crop bushels you may have, if any. We won’t have any “New Alerts” for 2022 Corn (Cash, Calls, or Puts) as we have moved focus onto 2023 and 2024 Crop Year Opportunities.

  • No action is recommended for New Crop 2023 corn. The future price potential for Dec 23 corn continues to be at the mercy of each new weather forecast. Dryness and dry weather forecasts pushed Dec corn from the May low to the June high with a gain of 137 cents, which was promptly erased and then some by mid-July, leaving the market 149 cents off that June high, with a surprise jump in acres and more favorable forecasts. Now, the threat of dry weather and heightened tensions in the Black Sea region has rallied Dec corn sharply off that July 13 low. During the runup in early June, we warned that any change in the forecast to wetter weather could erase all the gains, as corn didn’t have much of a bullish fundamental story without a supply side shock fueled by lower yields. Overall, our thought process has not changed from a month ago and with the tremendous uncertainty, and subsequent volatility still in front of us, we continue to recommend holding the Strangle options position, comprised of the previously bought Dec 610 calls and Dec 580 puts. A turn back to wetter weather and we wouldn’t be surprised to see sub-500 corn again, and if dry weather persists, we wouldn’t be surprised to see corn prices north of 700. Under either of these scenarios the Strangle will benefit and doesn’t require trying to outguess the weather.

  • No action is currently recommended for 2024 corn. In 2012, the best pricing opportunities for Dec 2013 corn were during the 2012 summer runup. Despite the significant yield losses to the 2012 crop, and the fear of running out of corn, the Dec 2013 contract peaked in the summer of 2012, and by January 2, 2013, the price was already down about 12% from the high. We continue to watch the calendar for 2024 corn as this 2023 summer volatility could provide some additional opportunities to get some good early sales on the books in the event of a 2013-type repeat. Insider recently recommended making a sale on your 2024 crop, and we’ll be watching for another opportunity to suggest adding to prior early sales levels between now and the beginning of September. 

  • Corn futures saw mixed to mostly lower trade on Thursday, as improved rainfall forecasts and ongoing concerns regarding demand had sellers in control in the market.

  • Weather models are forecasting improved rain chances into the weekend across Iowa, Illinois, and into Indiana, as potential storm clusters could build overtop of the heat ridge.

  • Weekly export sales were lackluster, as the USDA reported new sales of 12.4 mb of old crop and 13.2 mb of new crop sales last week. These totals were within market expectations.  China remains inactive in the U.S. corn export market.

  • An above normal temperature forecast is still of concern into next week in large areas on the Corn Belt. The overall lack of moisture and heat may potentially stress the crop as the majority of the crop has moved into the pollination and ear fill stages.

  • The USDA reported that 59% of U.S. corn acres are experiencing drought. This was a 4% increase week over week. This will likely increase with the current forecast in next week’s report.

Above: In mid-July the corn market was oversold and posted a double bottom at 474. Since then, it has rallied and retraced about 62% of the prior down move toward the 50-day moving average.  While the short-term trend remains up, the market is consolidating and becoming overbought.  More bullish news will be needed for the market to forge through the recent highs toward the 595 – 625 resistance area.  Below the market, nearby support may be found near 520, with key support near the recent 474 low.

Soybeans

Soybeans Action Plan Summary

  • No new action is being recommended for Old Crop. Any remaining old crop bushels should be getting priced into this rally. We won’t have any “New Alerts” for 2022 Soybeans (Cash, Calls, or Puts) as we have moved focus onto 2023 and 2024 Crop Year Opportunities. 

  • No action is recommended for 2023 soybeans. The USDA injected a lot of volatility into this market beginning with a much lower-than-expected planted acreage estimate, followed by a much larger-than-expected 300mb carryout estimate in its July WASDE. While demand has been weak, we have a bona fide weather market during a crucial period for soybeans and there is little wiggle room for lost yield in this year’s crop. While a drier forecast can still maintain upside potential, plenty of time remains for rain to come and push prices lower, much like in 2012, when July was dry. Then the pattern changed in August, and decent rain fell in parts of the western Corn Belt and IL, sending Nov ’12 soybeans down 20%. For now, Insider may not consider suggesting any additional sales until after harvest. Although, we will continue to monitor the market for any upside opportunities in the coming weeks.

  • No action is recommended for 2024 crop. Grain Market Insider continues to monitor any developments for the 2024 crop, though it may not be until after harvest or toward year’s end before we will consider recommending any 2024 crop sales. 

  • Soybeans began the day higher and were 13 cents away from the Nov contract high in the overnight, but ultimately closed lower along with lower soybean meal and oil despite a flash sale and decent export sales.

  • A private sale of 256,000 metric tons of new crop soybeans was reported to unknown destinations, which makes the third flash sale in the past two days. All three sales were to unknown destinations and were for the 23/24 marketing year. It is possible that the purchaser is China.

  • Today’s export sales report showed soybean exports at 27 mb, which was in line with expectations. Old crop commitments were at 1.939 bill, down 11% from last year’s pace, which is more than the USDA forecast of down 8%.

  • Weather forecasts may have added some pressure to the soy complex today. While the next week is still slated to be hot and dry, forecasts for the second week and beyond are showing lower temperatures and better chances for rain into the crucial pod fill timeframe.

Above: The soybean charts rolled from the August to the September contract on 7/17 with the 75-cent discount to the September represented by the 52 cent gap on the chart between 7/14 and 7/17.  Since the roll the September contract has rallied to fill the gap and is poised to test the 1490 – 1505 resistance area of the recent highs.  If prices retreat, initial support below the market is near 1400 with further support being in the 1350 – 1390 area.

Wheat

Market Notes: Wheat

  • On today’s export sales report, the USDA reported wheat export sales of 8.6 mb for 23/24.

  • After a two-sided trade, Chicago wheat closed the session with losses, KC was mixed, but MPLS posted gains. This could be due to the mounting concern about the spring wheat crop in Canda. While they might be getting some rain soon, that moisture may be too late to help the crop much.

  • A Russian submarine fired missiles overnight, attacking the Odessa port in Ukraine. The wheat market did not seem to care much about this news though. It is worth noting that NATO said they will be increasing surveillance in the Black Sea with aircraft and drones.

  • Argentina is still dry – it remains to be seen how that will impact their wheat planted acreage. Elsewhere, Agritel is estimating French soft wheat production up 1.1 mmt from last year at 34.8 mmt. This is a 1.3% increase from the five-year average.

  • The spring wheat tour’s second day in North Dakota resulted in a yield estimate of 45.7 bpa. This is down 2 bpa from last year for the same area, and the USDA is projecting North Dakota yield at 47 bpa).

Chicago Wheat Action Plan Summary

  • No new action is recommended for 2023 New Crop. The wheat market has seen a great amount of volatility in recent weeks and has primarily been a follower of corn which has been driven by weather.  Although demand remains weak, the recent closure of the Black Sea corridor, and continued weather concerns in the northern Plains, Canada, Europe, and Russia, still leave many supply questions unanswered. While Grain Market Insider will continue to monitor the downside for any violation of major support following the recent sales recommendation, it may be after harvest or near the end of summer before we consider recommending any additional sales for the 2023 crop.

  • No action is currently recommended for 2024 Chicago wheat. Since the middle of June, price volatility has risen with updated USDA reports, changing weather forecasts, and current events in the Black Sea.  While prices continue to be volatile, plenty of time remains to market the 2024 crop. War continues in the Black Sea region, major exporting countries’ stocks are at 11-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties. For now, after recommending making a sale for the 2024 crop, and while keeping an eye on the market to see if any major support is broken, Grain Market Insider would need to see prices north of 800 before considering recommending any additional sales.

  •  No Action is currently recommended for 2025 Chicago Wheat. 2025 markets are very illiquid right 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.

Above: Rising tensions in the Black Sea have fed the rally that tested the June high.  Prices have become overbought and retreated.  New bullish input will likely be needed to turn prices back higher and test the heavy resistance area of 777 – 807-1/2 between the recent high and the February high.   If prices do retreat, initial support may be found near 690 – 700, and again around 610 – 650.

KC Wheat Action Plan Summary

  • We continue to look for better prices before making any 2023 sales.  While crop conditions have improved and there are reports of better-than-expected US yields, questions remain about the world wheat supply with the closure of the Black Sea corridor, dryness in Russia, the Canadian Prairies/Northern US Plains, and Europe. With world supplies currently seen at 11-year lows, we continue to target 950 – 1000 in the July futures as a potential level to suggest the next round of New Crop sales.

  • Patience is warranted for the 2024 crop. With continued issues in the Black Sea region and with major exporting countries’ stocks at 11-year lows, we are willing to be patient with further sales of New Crop HRW wheat. We are targeting just below the 900 level on the upside while keeping an eye on recent lows for any violation of support.

  • No Action is currently recommended for 2025 KC Wheat. 2025 markets are very illiquid right 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.

Above: The September K.C. wheat contract posted a bearish reversal on 7/25 after testing heavy resistance near 920.  Prices have become over bought and retreated.  Support below the market is near 830 – 842, with further support near 763 – 778.  Should prices reverse higher, heavy resistance remains in the 920 – 930 area.

Mpls Wheat Action Plan Summary

  • No new action for 2022 Old Crop MINNEAPOLIS Wheat. The market had a nearly 116-cent swing from the May low to the June high and back on weather. While weather and geopolitical events can still affect Old Crop prices, the marketing year for Old Crop is quickly winding down, and any additional upside opportunities may be more difficult to come by before New Crop harvest. Use any remaining bounces in the market to price what Old Crop bushels you may have, if any. We won’t have any “New Alerts” for the 2022 crop (Cash, Calls, or Puts) as we have moved focus onto 2023 and 2024 Crop Year opportunities.

  • No action is currently recommended for the 2023 New Crop. Weather dominates the market right now, and though much of the growing season remains, Grain Market Insider suggested making a sale as prices closed below 822 to protect from further downside erosion due to a potential trend change.  Seasonally, there isn’t a strong likelihood of higher prices until after harvest, although both weather and geopolitical events can change suddenly to shock the market higher. Insider will consider making sales suggestions if prices improve through this growing season, while also continuing to watch the downside for any further violations of support.

  • No action is recommended for the 2024 crop. This year has been marked with volatility from adverse weather to geopolitical disruptions and has given us historically good prices to begin making early sales. While prices continue to be volatile, plenty of time remains to market the 2024 crop. War continues in the Black Sea region, major exporting countries’ stocks are at 11-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties.  For now, after recommending making a sale for the 2024 crop, Grain Market Insider will continue to consider making sales recommendations if prices improve while also keeping an eye on the downside should prices break support. 

Above: September Minn. wheat’s rally of nearly 180 cents to test last winter’s highs culminated in a bearish reversal after the contract became mildly overbought.  Prices have since retreated and may test the 865 – 845 initial support area, with further support near 800.  If more bullish input is received, the market could turn higher again to retest the heavy resistance area near 950.

Other Charts / Weather

|

Grain Market Insider: July 26, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Beneficial rain in parts MN, WI, and northern IL, a lack of fresh bullish news, and carryover weakness from the wheat market led to weakness and profit taking in the corn market.

  • The soybean market closed wildly mixed with August and September likely getting support from strong crush margins, while November and the deferred contracts were unchanged on weakness from soybean oil and neighboring grain markets.

  • Despite the mixed close in soybeans, strong demand for soybean meal continues to support meal prices, while reports of a 51% increase in Indonesian palm oil exports vs last month weighed on soybean oil.

  • High initial spring wheat yield estimates from the North Dakota spring wheat tour, and no new reports of Russian attacks on Ukrainian grain terminals led to a sharply lower close in all three wheat classes with K.C. leading the way.

  • Some of the general weakness in the markets today could be contributed to the anticipation of today’s .25% interest rate increase by the Federal Reserve. While it has been generally thought that the Fed would pause any further increases after today, the Fed left the door open for another rate hike down the road.

  • To see the current US 6-10 and 8-14 day temperature and precipitation outlooks courtesy of the Climate Prediction Center, scroll down to the 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 Old Crop. The market had a nearly 140-cent swing from the May low to the June high and back on weather. Use any remaining bounces in the market to price what Old Crop bushels you may have, if any. We won’t have any “New Alerts” for 2022 Corn (Cash, Calls, or Puts) as we have moved focus onto 2023 and 2024 Crop Year Opportunities.

  • No action is recommended for New Crop 2023 corn. The future price potential for Dec 23 corn continues to be at the mercy of each new weather forecast. Dryness and dry weather forecasts pushed Dec corn from the May low to the June high with a gain of 137 cents, which was promptly erased and then some by mid-July, leaving the market 149 cents off that June high, with a surprise jump in acres and more favorable forecasts. Now, the threat of dry weather again has rallied Dec corn more than 80 cents off that July 13 low.  During the runup in early June, we warned that any change in the forecast to wetter weather could erase all the gains as corn didn’t have much of a bullish fundamental story without a supply-side shock fueled by lower yields. Overall, our thought process has not changed from a month ago and with the tremendous uncertainty, and subsequent volatility still in front of us, we continue to recommend holding the Strangle options position, comprised of the previously bought Dec 610 calls and Dec 580 puts. A turn back to wetter weather and we wouldn’t be surprised to see sub-500 corn again, and if dry weather persists, we wouldn’t be surprised to see corn prices north of 700. Under either of these scenarios, the Strangle will benefit and doesn’t require trying to outguess the weather.  

  • No action is currently recommended for 2024 corn. In 2012, the best pricing opportunities for Dec 2013 corn were during the 2012 summer runup. Despite the significant yield losses to the 2012 crop, and the fear of running out of corn, the Dec 2013 contract peaked in the summer of 2012, and by January 2, 2013, the price was already down about 12% from the high. We continue to watch the calendar for 2024 corn as this 2023 summer volatility could provide some additional opportunities to get some good early sales on the books in the event of a 2013-type repeat. Insider recently recommended making a sale on your 2024 crop, and we’ll be watching for another opportunity to suggest adding to prior early sales levels between now and the beginning of September. 

  • The corn market likely saw some profit taking following the recent runup and yesterday’s choppy price action since there was little fresh news to help the bull camp push prices higher.  Additionally, pressure from a sharply lower wheat market spilled over into the corn market and helped lead prices lower.

  • Ethanol production for the week ending July 21 in today’s EIA report was friendly at 1.094 mil. barrels/day, 36k b/d above expectations and exceeded the 2018 record of 1.074 mil. b/d.  Corn used for ethanol production reached 110 mb, which is above the pace needed to reach the USDA’s forecast. Despite the strong production numbers, ethanol stocks were steady at 23.2 mil. barrels, suggesting strong gasoline demand.

  • The lack of any reports of new attacks on Ukrainian grain facilities along the Danube River likely contributed to the selling in the corn and wheat markets as participants took out some near-term risk premium. Also in response to the recent attacks on the Danube River facilities, the EU has also pledged to help Ukraine export almost all its grain via road and rail connections through bordering countries.

  • According to Britain’s UN ambassador Barbara Woodward, Russia may have laid new mines in the waters near Ukrainian ports in the Black Sea and that the Russian military may target civilian ships in the area.

  • Parts of Minnesota, Wisconsin, and northern Illinois received between 1.5” – 3” of rain over the last 24 hours.  Michigan and Wisconsin again are expected to receive decent amounts over the next few days, while much less is expected for the rest of the Midwest, with hot temperatures expected in the Western Corn Belt.

Above: In mid-July the corn market was oversold and posted a double bottom at 474. Since then, it has rallied and retraced about 62% of the prior down move toward the 50-day moving average.  While the short-term trend remains up, the market is consolidating and becoming overbought.  More bullish news will be needed for the market to forge through the recent highs toward the 595 – 625 resistance area.  Below the market, nearby support may be found near 520, with key support near the recent 474 low.

Soybeans

Soybeans Action Plan Summary

  • No new action is being recommended for Old Crop. Any remaining old crop bushels should be getting priced into this rally. We won’t have any “New Alerts” for 2022 Soybeans (Cash, Calls, or Puts) as we have moved focus onto 2023 and 2024 Crop Year Opportunities. 

  • No action is recommended for 2023 soybeans. The USDA injected a lot of volatility into this market beginning with a much lower-than-expected planted acreage estimate, followed by a much larger-than-expected 300mb carryout estimate in its July WASDE. While demand has been weak, we have a bona fide weather market during a crucial period for soybeans and there is little wiggle room for lost yield in this year’s crop. While a drier forecast can still maintain upside potential, plenty of time remains for rain to come and push prices lower, much like in 2012, when July was dry. Then the pattern changed in August, and decent rain fell in parts of the western Corn Belt and IL, sending Nov ’12 soybeans down 20%. For now, Insider may not consider suggesting any additional sales until after harvest. Although, we will continue to monitor the market for any upside opportunities in the coming weeks.

  • No action is recommended for 2024 crop. Grain Market Insider continues to monitor any developments for the 2024 crop, though it may not be until after harvest or toward year’s end before we will consider recommending any 2024 crop sales. 

  • Soybeans ended the day mixed with August and September posting significant gains, while the deferred contracts ended relatively unchanged. Soybean meal supported soybeans today with a higher close, while soybean oil ended lower. While August Board Crush was down 32 cents, closing at 249 cents/bu today, soybean crush incentives have also been very high, adding to the support of nearby soybeans.

  • Soybeans also received support from news on the export wire with two soybean sales reported today. The first sale was for 272,000 metric tons sold to unknown destinations for 23/24 and the second sale was for 229,000 metric tons again to unknown destinations for the 23/24 marketing year. The purchaser could have been China stocking up on supplies.

  • Soybean oil was dragged lower by another poor close in palm oil futures, but soybean meal closed higher for the ninth time in the past ten trading days on good export sales and new crop sales that are reportedly 32% higher than a year ago.

  • Weather forecasts are hot and dry into Saturday for most of the Midwest, but some northern states have been receiving rain, and the 2-week forecast is showing precipitation levels closer to normal. Private yield scouts are estimating yields between 50.5 bpa and 51 bpa, below the USDA’s estimate of 52.0 bpa.

Above: The soybean charts rolled from the August to the September contract on 7/17 with the 75-cent discount to the September represented by the 52 cent gap on the chart between 7/14 and 7/17.  Since the roll the September contract has rallied to fill the gap and is poised to test the 1490 – 1505 resistance area of the recent highs.  If prices retreat, initial support below the market is near 1400 with further support being in the 1350 – 1390 area.

Wheat

Market Notes: Wheat

  • Wheat closed sharply lower in all three US futures classes. Ealy weakness may have stemmed from anticipation that the Fed would issue another interest rate increase today. This afternoon it was announced that they did in fact raise rates to help tame inflation, but this also renewed recession fears by leaving the door open for another rate hike.

  • The first day of the spring wheat crop tour in North Dakota resulted in a yield estimate of 48 bushels per acre. While the average is around 40 bpa and last year’s yield was 48.9 bpa.

  • Putin met with African leaders to discuss grain exports to their nations. Meanwhile, Ukraine continues to ask the EU for alternative methods of exporting their grain. So far, there have been no additional headlines of Russian attacks on Ukrainian ports or grain facilities.

  • Russia remains the world’s cheapest source of wheat and is reportedly $50 per ton below that of Baltic or European offers.

  • According to the International Monetary Fund, Russia’s withdrawal from the Black Sea grain deal could result in grain prices increasing by 10-15%.

Chicago Wheat Action Plan Summary

  • No new action is recommended for 2023 New Crop. The wheat market has seen a great amount of volatility in recent weeks and has primarily been a follower of corn which has been driven by weather.  Although demand remains weak, the recent closure of the Black Sea corridor, and continued weather concerns in the northern Plains, Canada, Europe, and Russia, still leave many supply questions unanswered. While Grain Market Insider will continue to monitor the downside for any violation of major support following the recent sales recommendation, it may be after harvest or near the end of summer before we consider recommending any additional sales for the 2023 crop.

  • No action is currently recommended for 2024 Chicago wheat. Since the middle of June, price volatility has risen with updated USDA reports, changing weather forecasts, and current events in the Black Sea.  While prices continue to be volatile, plenty of time remains to market the 2024 crop. War continues in the Black Sea region, major exporting countries’ stocks are at 11-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties. For now, after recommending making a sale for the 2024 crop, and while keeping an eye on the market to see if any major support is broken, Grain Market Insider would need to see prices north of 800 before considering recommending any additional sales.

  •  No Action is currently recommended for 2025 Chicago Wheat. 2025 markets are very illiquid right 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.

Above: Rising tensions in the Black Sea have fed the rally that tested the June high.  Prices have become overbought and retreated.  New bullish input will likely be needed to turn prices back higher and test the heavy resistance area of 777 – 807-1/2 between the recent high and the February high.   If prices do retreat, initial support may be found near 690 – 700, and again around 610 – 650.

KC Wheat Action Plan Summary

  • We continue to look for better prices before making any 2023 sales.  While crop conditions have improved and there are reports of better-than-expected US yields, questions remain about the world wheat supply with the closure of the Black Sea corridor, dryness in Russia, the Canadian Prairies/Northern US Plains, and Europe. With world supplies currently seen at 11-year lows, we continue to target 950 – 1000 in the July futures as a potential level to suggest the next round of New Crop sales.

  • Patience is warranted for the 2024 crop. With continued issues in the Black Sea region and with major exporting countries’ stocks at 11-year lows, we are willing to be patient with further sales of New Crop HRW wheat. We are targeting just below the 900 level on the upside while keeping an eye on recent lows for any violation of support.

  • No Action is currently recommended for 2025 KC Wheat. 2025 markets are very illiquid right 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.

Above: The September K.C. wheat contract posted a bearish reversal on 7/25 after testing heavy resistance near 920.  Prices have become over bought and retreated.  Support below the market is near 830 – 842, with further support near 763 – 778.  Should prices reverse higher, heavy resistance remains in the 920 – 930 area.

Mpls Wheat Action Plan Summary

  • No new action for 2022 Old Crop MINNEAPOLIS Wheat. The market had a nearly 116-cent swing from the May low to the June high and back on weather. While weather and geopolitical events can still affect Old Crop prices, the marketing year for Old Crop is quickly winding down, and any additional upside opportunities may be more difficult to come by before New Crop harvest. Use any remaining bounces in the market to price what Old Crop bushels you may have, if any. We won’t have any “New Alerts” for the 2022 crop (Cash, Calls, or Puts) as we have moved focus onto 2023 and 2024 Crop Year opportunities.

  • No action is currently recommended for the 2023 New Crop. Weather dominates the market right now, and though much of the growing season remains, Grain Market Insider suggested making a sale as prices closed below 822 to protect from further downside erosion due to a potential trend change.  Seasonally, there isn’t a strong likelihood of higher prices until after harvest, although both weather and geopolitical events can change suddenly to shock the market higher. Insider will consider making sales suggestions if prices improve through this growing season, while also continuing to watch the downside for any further violations of support.

  • No action is recommended for the 2024 crop. This year has been marked with volatility from adverse weather to geopolitical disruptions and has given us historically good prices to begin making early sales. While prices continue to be volatile, plenty of time remains to market the 2024 crop. War continues in the Black Sea region, major exporting countries’ stocks are at 11-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties.  For now, after recommending making a sale for the 2024 crop, Grain Market Insider will continue to consider making sales recommendations if prices improve while also keeping an eye on the downside should prices break support. 

Above: September Minn. wheat’s rally of nearly 180 cents to test last winter’s highs culminated in a bearish reversal after the contract became mildly overbought.  Prices have since retreated and may test the 865 – 845 initial support area, with further support near 800.  If more bullish input is received, the market could turn higher again to retest the heavy resistance area near 950.

Other Charts / Weather