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Grain Market Insider: July 25, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • After trading both sides of unchanged in the overnight session, the corn market succumbed to “turn around Tuesday”, as the market consolidated following choppy trade in the wheat market.

  • Despite lower crop ratings and a strong soybean meal market, soybeans consolidated from yesterday’s gains and followed soybean oil lower, although the November contract was able to close 17 cents off the day’s low.

  • Choppy trade in the wheat markets with no new headlines of Russian attacks on Ukrainian grain facilities led the complex to close mixed. Chicago showed small gains, while both K.C. and Minneapolis contracts settled mixed with front months weaker and deferred months stronger.

  • To see the current 5-Day Mean Temperature Forecast and 5-day precipitation forecast 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 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. 

  • Corn futures saw consolidative trade on Tuesday as the market took a pause with choppy trade, as the wheat market led over the direction of the corn trade. Despite trading lower on the day, corn futures traded near the top end of the trading range towards the close on favorable price action.

  • The USDA released weekly crop ratings on Monday afternoon. U.S. crop was rated 57% good to excellent, which was unchanged with last week and slightly below expectations. The rating was 4% below last year’s 61% good to excellent rating for the week.

  • Hot weather forecasts support the market as high temperatures pushing into the 100-degree range will work into the Corn Belt. The excessive heat could impact yield with 68% of the corn crop in the silking stage. These high temperatures arrive in the key pollination window for many corn acres. Temperatures are expected to moderate next week.

  • The wheat market is leading the corn market direction. Chicago wheat prices had a volatile session, but close above key resistance. The ongoing conflict in the Ukraine and the improved technical picture could trigger additional strength in the wheat market, which could spill over into the corn market, triggering additional short covering in the corn market.

Above: In mid-July the corn market was oversold and posted a double bottom at 474. Since then, it has rallied significantly toward the 50-day moving average. While the market has upward momentum, it may run into resistance near the 50-day MA. If the market closes above the 50-day MA, it could signal a change in trend to higher, though heavy resistance remains up towards 595 – 625 and it would need further bullish news to break through. Below the market, key support lies near the recent 474 low. 

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 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, but came back significantly from the overnight lows. Soybean meal ended higher, while soybean oil was mixed with the two front months closing higher and the deferred months lower.

  • The lows earlier in the day were partially a result of palm oil, which ended the day 2.3% lower, which then dragged down soybean oil. Soybean oil recovered on news that the number one veg oil importer, India, would import 46% more edible oils in July than the previous month.

  • With the Black Sea grain deal ended and the fighting between Russia and Ukraine escalating, exporting sunflower meal and oil out of the region will be difficult, which should give support to soybean meal and oil, as India and other countries appear to be stocking up.

  • The USDA released their Crop Progress report yesterday afternoon, which showed the soybean crop’s good to excellent rating slip by 1 point to 54% after heat and periods of dryness. 70% of the crop is blooming and 35% are setting pods, both figures are ahead of the yearly average. Missouri and Michigan received good to excellent ratings of only 27% and 33%, and the upcoming hot and dry forecast could significantly impact yields.

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. To fill the gap, the market will need additional bullish news to continue higher and trade through the heavy resistance area of 1490 – 1505. If not, and prices retreat, initial support below the market is near 1400 with further support being in the 1350 – 1390 area.

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

Wheat

Market Notes: Wheat

  • According to the USDA, the winter wheat crop is 68% harvested, still behind the average of 77% complete. Additionally, the spring wheat crop condition declined 2% from last week, now seen at 49% good to excellent.

  • After trading both sides of unchanged, Chicago wheat posted small gains today. For the second day in a row, December Chicago wheat closed above the 200 day moving average, which it has not closed above since November 2022 (though it did trade above that level on June 26th).

  • The market may have taken a bit of a breather today, with no headlines of new Russian attacks. The grain warehouses and infrastructure that were recently damaged along the Danube River does raise the question as to how much grain Ukraine will be able to export though. After the attacks, 30 vessels are said to be stranded along the river.

  • Russia’s internal wheat prices are said to be surging, but they remain the world’s cheapest source of wheat, now seen at $242 per metric ton.

  • Russia’s Deputy Foreign Minister, Sergei Vershinin, stated that there are currently no talks in regard to resuming the Black Sea Grain initiative. Since the closure of the deal, Ukraine has asked the European Union for an increased volume of shipments via alternative routes / methods. Several surrounding nations still have a ban on Ukrainian grain imports, however.

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. Though the market is becoming overbought, further uncertainty or bullish input could push prices towards resistance near February’s high of 807-1/2. 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: K.C. wheat continues to be volatile and is testing the upper end of the trading range established back in May. With heavy resistance remaining near 920, the market will need additional bullish input to push higher and test the 966 – 991 range.  Below the market, initial support is near 830 – 842, with further support near 763 – 778.

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

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.

  • Grain Market Insider sees an active opportunity to sell a portion of your 2024 spring wheat crop. So far this year we have seen some of the volatility from the 2023 crop, with its challenges from late planting and now dryness, be carried over to the 2024 crop. We are now at that time of year where there are typically more headwinds to prices than tailwinds, and to begin getting some early sales on the books. Now that the market has rallied to within 15 cents of the June high where there is significant overhead resistance, Insider recommends making a sale on a portion of your 2024 spring wheat production by using either SEPT ’24 Minneapolis Wheat futures contracts or a SEPT ’24 HTA contract, so basis can be set a later, more advantageous time. While $8 prices are not the $9 or $10+ that we have seen in recent years, and weather and geopolitical disruptions can still shock the market higher, they still represent historically good prices to begin making sales.

Above: The September contract has rallied in excess of 100 cents from the July low and is showing signs of being overbought, while pushing into the 889 – 940 resistance area. If the market cannot push higher, initial support may be found near 865 – 845 and again around 800.

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

Other Charts / Weather

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Grain Market Insider: July 24, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Rising tensions in the Black Sea region and hot weather led to short covering and nearly 6% gains in the December corn futures.

  • A hot and dry week ahead and Russian attacks on the Danube River lead traders to add weather and war premium to prices.

  • Higher crude oil and sharply higher Malaysian palm oil helped lead soybean oil to gain more than 3% and gave additional support to soybeans and meal which were up 1.6% and 0.76% respectively in the November and December contracts.

  • Reports of Russian attacks damaging grain infrastructure along the Danube River in Ukraine led to short covering in the Chicago contracts with a limit up close in the September contract, while K.C. and Minneapolis were not far behind in the rally.

  • The US dollar continued its rally for the fifth day in a row as traders expect the Fed to raise short-term interest rates 0.25% at this week’s meeting. The dollar is also thought to be gaining support on thoughts that the EU recovery may be stymied by additional, potentially unnecessary rate hikes in that region. Nevertheless, the grain markets so far are overcoming any bearish influence a rising dollar may have.

  • To see the current 7-day precipitation forecast and 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

  • 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 added weather and war premium as wheat futures traded limit higher, fueling strong double-digit gains in the corn market.

  • Russian attacks of Ukraine ports on the Danube River triggered a short covering rally in the corn and wheat markets, and the market added war premium on the potential of additional escalation in the Black Sea region. 

  • Demand remains a concern. Weekly export inspections for corn were within expectations at 300,000 MT. Overall export shipment pace is still disappointing and trending down 33% below last year’s levels with the marketing year ending on August 30.

  • Above average temperature and limited rainfall supported the corn market, but the market may shift its focus to the early August weather forecast, which is looking toward overall cooler temperatures and average rainfall for the majority of the corn belt. 

  • USDA is expected to see weekly crop ratings improve to 58% good/excellent for corn on this week’s crop ratings, up 1% from last week’s estimates. This will make four consecutive weeks of improved corn crop ratings as July weather has been more favorable.

Above: In mid-July the corn market was oversold and posted a double bottom at 474. Since then, it has rallied significantly toward the 50-day moving average. While the market has upward momentum, it may run into resistance near the 50-day MA. If the market closes above the 50-day MA, it could signal a change in trend to higher, though heavy resistance remains up towards 595 – 625 and it would need further bullish news to break through. Below the market, key support lies near the recent 474 low. 

Money Corn Managed Money Funds net position as of Tuesday, July 18. Net position in Green versus price in Red. Managers net bought 16,126 contracts between July 11 – 18, bringing their total position to a net short 46,926 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. 

  • The soybean complex traded higher today, led by a strong meal and sharply higher soybean oil, as the market priced in additional weather and war premium to prices.

  • US export inspections released this morning for the week ending July 20 were on the high side of expectations at 283,000 mt, and 77% higher than last week, though still behind the pace needed to reach the USDA’s goal. This brings the annual total to 50,177 mt, which is down 5% from the same time last year.

  • Adding further support to the market, the USDA reported a flash sale to China totaling 121,000 tonnes of soybeans for the 23/24 marketing year. The last reported sale of soybeans to China was June 30, nearly one month ago.

  • There were reports of a Russian drone attack on Ukrainian Danube River ports. The attack reportedly lasted over 4 hours, destroying one grain storage facility, and injuring 4 workers. The Danube River remains a key artery for grain exports following the closure of the Black Sea corridor, and reports of the attack likely added bullish support to world veg oil prices and soybean oil, because Ukraine is a key sunflower meal and oil exporter.

  • Weather is also a factor for soybeans, and this week warm dry temperatures will continue to stress the crop throughout much of the Midwest. There are better rain chances in the 6-10 day forecast, however.

  • Seasonal maintenance for crush facilities has slowed crush pace somewhat, which has tightened soybean meal supplies and been supportive to meal basis values and prices.

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. To fill the gap, the market will need additional bullish news to continue higher and trade through the heavy resistance area of 1490 – 1505. If not, and prices retreat, initial support below the market is near 1400 with further support being in the 1350 – 1390 area.

Soybeans Managed Money Funds net position as of Tuesday, July 18. Net position in Green versus price in Red. Money Managers net bought 13,066 contracts between July 11 – 18, bringing their total position to a net long 95,814 contracts.

Wheat

Market Notes: Wheat

  • September Chicago wheat closed limit up (60 cents higher) today after headlines reported that Russia attacked the Danube River area in Ukraine. Destruction of grain and infrastructure was significant; after the closure of the Black Sea corridor, this was one of the key remaining methods for Ukraine to export grain. Reportedly, they planned for 2-3 mmt of grain exports per month via the Danube River, but that amount may now be severely limited if possible.

  • Weekly wheat inspections of 13.2 mb bring the 23/24 total inspections to 79 mb, still down 17% from last year. So far, wheat inspections are behind the pace needed to meet the USDA’s 725 mb export goal.

  • Paris milling wheat futures also settled sharply higher, with the front month September gaining 17.50 Euros per ton. This contract is approaching the 200-day moving average, around 267, which it has not traded above since November of 2022.

  • Though it has taken a back seat to the war news, the US Dollar Index continues to claw back from the recent low. At this week’s FOMC meeting, the Fed is expected to issue a 25 basis point interest rate increase; this could affect the US Dollar, which may in turn affect wheat.

  • The Taiwan Flour Miller’s Association is tendering for 108,000 mt of wheat to be sourced from the US.

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 are off their recent highs, 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: In June, when September wheat posted a bearish reversal it left significant resistance near 730 – 770. Rising tensions in the Black Sea have triggered a rally which is testing this area, and the market will need additional bullish input to rally beyond and test the 800 level. If prices do retreat, support below the market may be found around 650 – 610, and again near 570, the May low.  

Chicago Wheat Managed Money Funds net position as of Tuesday, July 18. Net position in Green versus price in Red. Money Managers net sold 2,290 contracts between July 11 – 18, bringing their total position to a net short 54,418 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.

  • 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: KC wheat continues to be volatile and trade within the broad 736 – 919 range established back in May. Momentum favors higher prices, though heavy resistance remains between 890 – 920 and the market will need additional bullish input to push higher. Below the market, initial support remains near 778 – 763 with key support around the May low of 736.

K.C. Wheat Managed Money Funds net position as of Tuesday, July 18. Net position in Green versus price in Red. Money Managers net sold 1,934 contracts between July 11 – 18, bringing their total position to a net long 12,650 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.

  • Grain Market Insider sees an active opportunity to sell a portion of your 2024 spring wheat crop. So far this year we have seen some of the volatility from the 2023 crop, with its challenges from late planting and now dryness, be carried over to the 2024 crop. We are now at that time of year where there are typically more headwinds to prices than tailwinds, and to begin getting some early sales on the books. Now that the market has rallied to within 15 cents of the June high where there is significant overhead resistance, Insider recommends making a sale on a portion of your 2024 spring wheat production by using either SEPT ’24 Minneapolis Wheat futures contracts or a SEPT ’24 HTA contract, so basis can be set a later, more advantageous time. While $8 prices are not the $9 or $10+ that we have seen in recent years, and weather and geopolitical disruptions can still shock the market higher, they still represent historically good prices to begin making sales.

Above: The September contract has rallied nearly 100 cents from the July low and is showing signs of being overbought while pushing into the 889 – 940 resistance area. If the market cannot push higher, initial support may be found near 865 – 845 and again around 800. 

Minneapolis Wheat Managed Money Funds net position as of Tuesday, July 18. Net position in Green versus price in Red. Money Managers net bought 2,304 contracts between July 11 – 18, bringing their total position to a net long 6,587 contracts.

Other Charts / Weather

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Grain Market Insider: July 21, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Corn closed lower as traders likely took profits ahead of the weekend. Hefty losses in wheat also added pressure throughout the session.

  • The soybean market closed mixed, with Old Crop higher and New Crop slightly lower.

  • Soybean oil closed higher likely following crude, and soybean meal, like soybeans, saw higher trade in the nearby contracts with slightly lower trade in the deferred contracts.

  • Wheat prices were unable to shake off weakness in the overnight trade as all three classes posted double-digit losses but still managed to hang onto weekly gains.

  • To see the current 6-10 Day Temperature and Precipitation Outlooks courtesy of the Climate Prediction Center, and maps showing the percentage of crops in drought, courtesy of the USDA and US Drought Monitor, 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. 

  • Corn futures saw additional profit taking to end the week as prices traded between the 100-day and 50-day moving averages. Selling pressure in the wheat market and expiration of August options influenced the corn market to end the week. Despite Friday’s weakness, December corn futures still traded 22-1/2 cents higher on the week.

  • Weather forecasts are still a main focus. Forecasts of above-normal temperatures with limited rainfall are likely to promote some crop stress next week. The market will be focusing on those forecasts going into August to monitor the length of the heat.

  • Talk of improved Brazilian producers selling corn may have limited the upside. With more grain movement in Brazil, export premiums to purchasers dropped sharply, making Brazilian corn cheaper on the world market versus US supplies.

  • Next week the corn market will watch crop conditions score closely on Monday afternoon, and the long-range forecast to see if the overall dry conditions are reflected in the weekly crop conditions.

Above: In mid-July the corn market was oversold and posted a double bottom at 474. Since then, it has rallied significantly toward the 50-day moving average. While the market has upward momentum, it may run into resistance near the 50-day MA. If the market closes above the 50-day MA, it could signal a change in trend to higher, though heavy resistance remains up towards 595 – 625 and it would need further bullish news to break through. Below the market, key support lies 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 front months August and September closing higher but deferred contracts lower. Soybean meal followed the same pattern with the two front months higher and the rest lower, while soybean oil maintained its gains ending higher.

  • November soybean ended the week with a 31-cent gain, December meal was 7.50 higher on the week, and December soybean oil ended up 2.04. The withdrawal of Russia from the Black Sea grain deal supported soy products this week as Ukraine exports a large amount of sunflower meal and oil.

  • Brazil’s record soybean crop is being exported in large numbers that were higher than previous estimates. Exports are seen at 97.5 mmt which is up 0.5% from the previous estimate, and total production for 2023 is seen at 156.5 mmt. The domestic crush estimate was raised by 0.6% to 53.5 mmt.

  • In the US, weather forecasts are mixed. DTN forecasts are calling for drier and warmer temperatures to come, while NOAA released a 30-day forecast yesterday that points to improved conditions into August. It is a long way out to predict, but traders may be looking at that forecast as a reason to ease up on buying.

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. To fill the gap, the market will need additional bullish news to continue higher and trade through the heavy resistance area of 1490 – 1505. If not, and prices retreat, initial support below the market is near 1400 with further support being in the 1350 – 1390 area.

Wheat

Market Notes: Wheat

  • Wheat posted sharp losses today despite new Russian attacks on Ukraine for the fourth day in a row. Additionally, it has been reported that Russia is practicing seizing ships in the Black Sea. On the other side of the coin, Russia’s ambassador in Washington DC did state that Russia is not planning to attack civilian ships in the Black Sea.

  • The International Grains Council lowered its estimate of world wheat production due to declines in Argentina. Overall global grain production was increased, however, to an estimated 2.297 billion tons.

  • The US Dollar Index is continuing to climb higher, which likely added to pressure on wheat futures today.

  • Paris milling wheat futures were sharply lower in tandem with US markets. From a technical perspective, Paris futures are losing momentum and have a gap under the market; both of these things would point to continued downside.

  • Egypt is reported to have over five months of wheat reserves. But the Ukraine war has greatly affected their economy. They reportedly will be signing a $100 million load deal to fund future grain purchases.

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 are off their recent highs, 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: In June, when September wheat posted a bearish reversal it left significant resistance near 730 – 770. Rising tensions in the Black Sea have triggered a rally which is testing this area, and the market will need additional bullish input to rally beyond and test the 800 level. If prices do retreat, support below the market may be found around 650 – 610, and again near 570, the May low.  

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: KC wheat continues to be volatile and trade within the broad 736 – 919 range established back in May. Momentum favors higher prices, though heavy resistance remains between 890 – 920 and the market will need additional bullish input to push higher. Below the market, initial support remains near 778 – 763 with key support around the May low of 736.

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.

  • Grain Market Insider recommends selling a portion of your 2024 spring wheat crop. So far this year we have seen some of the volatility from the 2023 crop, with its challenges from late planting and now dryness, be carried over to the 2024 crop. We are now at that time of year where there are typically more headwinds to prices than tailwinds, and to begin getting some early sales on the books. Now that the market has rallied to within 15 cents of the June high where there is significant overhead resistance, Insider recommends making a sale on a portion of your 2024 spring wheat production by using either SEPT ’24 Minneapolis Wheat futures contracts or a SEPT ’24 HTA contract, so basis can be set at a later, more advantageous time. While $8 prices are not the $9 or $10+ that we have seen in recent years, and weather and geopolitical disruptions can still shock the market higher, they still represent historically good prices to begin making sales.

Above: The September contract has rallied nearly 100 cents from the July low and is showing signs of being overbought while pushing into the 889 – 940 resistance area. If the market cannot push higher, initial support may be found near 865 – 845 and again around 800. 

Other Charts / Weather

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Grain Market Insider: July 20, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Despite ongoing military action in Ukraine’s port city of Odesa, outlooks for less threatening August weather led the corn market to consolidation and profit taking.

  • Like corn, a friendlier August forecast helped to pressure the soybean market lower today along with soybean meal, while soybean oil posted gains, helped by higher world veg oil prices and the rising tensions in the Black Sea.

  • Weak demand and escalating tensions between Russia and Ukraine combined to create a mixed close in the wheat complex, with Minneapolis and nearby KC contracts closing higher, while Chicago contracts settled mixed.

  • Trading over 100 for the first time since July 12, and with its largest gain since May, the US Dollar index futures traded higher today, possibly adding some negativity to today’s grain markets.

  • To see the current Drought Monitor, and August US Temperature and Precipitation outlooks courtesy of NOAA, 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. 

  • Corn futures consolidated on the session as disappointing price action in the wheat market limited the potential in the corn market on the day. Prices traded towards the top of yesterday’s range, holding on to some of the gains.

  • Weather forecasts are still a main focus. Buying support was limited as early long-range projections for the month of August turned temperatures to a normal to below-normal range and precipitation to normal to above-normal to start August and longer-term into the fall.

  • Ongoing military action by Russia against the city of Odesa and its port helped support overnight price action, but as prices failed to push through yesterday’s highs, the market saw some profit taking.

  • Weekly export sales saw old crop sales of 9.3 MB and new crop sales of 19.4 MB. New crop sales were above expectations for the week, but overall export performance is still behind pace to reach the adjusted USDA export targets.

  • August grain options expire on Friday, and with the recent price strength, the market may be poised for some volatility as those options are set to be exited, expired, or be transitioned into futures positions.

Above: In mid-July the corn market was oversold and posted a double bottom at 474. Since then, it has rallied significantly toward the 50-day moving average. While the market has upward momentum, it may run into resistance near the 50-day MA. If the market closes above the 50-day MA, it could signal a change in trend to higher, though heavy resistance remains up towards 595 – 625 and it would need further bullish news to break through. Below the market, key support lies 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 higher in the August contract but lower in all deferred contracts with soybean meal lower and soybean oil higher. Pressure came from a new longer-term weather forecast that is showing lower temperatures and increased rain chances.

  • With Russia’s withdrawal from the Black Sea grain deal, less sunflower meal and oil will be exported out of that region which has given other veg oils a boost. Palm oil closed 3.9% higher today along with soybean oil.

  • Net sales of soybeans were sluggish again with 4.7 mb for 22/23, which was up 58% from the previous week but down 43% from the prior 4-week average. Net sales for 23/24 were 27.9 mb, and exports of 8.8 mb were down 29% from the previous week and 15% from the prior 4-week average.

  • Brazil’s soy exports to China were up 32% on the year as China capitalizes on the cheaper Brazilian soybeans. As a result, China, the world’s biggest importer of soy, has been largely absent from US purchases, having booked only 70 mb of US beans to date.

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. To fill the gap, the market will need additional bullish news to continue higher and trade through the heavy resistance area of 1490 – 1505. If not, and prices retreat, initial support below the market is near 1400 with further support being in the 1350 – 1390 area.

Wheat

Market Notes: Wheat

  • The USDA reported an increase of 6.3 mb of wheat export sales for 23/24, with exports running behind the pace needed to meet the USDA’s estimate; 14.3 mb are needed each week and last week shipments were only 8.7 mb.

  • In addition to the recent attacks on Ukrainian ports, Russia has said that they have also planted mines in sea lanes. With the closure of the corridor and increased Russian hostility, Ukraine may still try to move some grain via river and rail. The question is, how much can they export with these methods?

  • Poland, along with four other EU nations, has vowed to extend the restrictions on importing Ukrainian grain into those countries. The import ban was originally put in place to protect profitability for their farmers, as an influx of supply from Ukraine would lead to lower domestic prices. Poland’s current ban expires in September.

  • Based on satellite imagery, Refinitiv Commodities Research has increased their estimate of US 23/24 winter wheat production by 1% to 46.8 mmt. Spring wheat production, however, was lowered 2% to 14.5 mmt.

  • September Chicago wheat’s 200-day moving average is at 746-1/2. Today that contract traded just above that level before backing off, indicating that it may be acting as an area of resistance.  

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 are off their recent highs, 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: In June, when September wheat posted a bearish reversal it left significant resistance near 730 – 770. Rising tensions in the Black Sea have triggered a rally which is testing this area, and the market will need additional bullish input to rally beyond and test the 800 level. If prices do retreat, support below the market may be found around 650 – 610, and again near 570, the May low.  

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: KC wheat continues to be volatile and trade within the broad 736 – 919 range established back in May. Momentum favors higher prices, though heavy resistance remains between 890 – 920 and the market will need additional bullish input to push higher. Below the market, initial support remains near 778 – 763 with key support around the May low of 736.

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.

  • Grain Market Insider recommends selling a portion of your 2024 spring wheat crop. So far this year we have seen some of the volatility from the 2023 crop, with its challenges from late planting and now dryness, be carried over to the 2024 crop. We are now at that time of year where there are typically more headwinds to prices than tailwinds, and to begin getting some early sales on the books. Now that the market has rallied to within 15 cents of the June high where there is significant overhead resistance, Insider recommends making a sale on a portion of your 2024 spring wheat production by using either SEPT ’24 Minneapolis Wheat futures contracts or a SEPT ’24 HTA contract, so basis can be set at a later, more advantageous time. While $8 prices are not the $9 or $10+ that we have seen in recent years, and weather and geopolitical disruptions can still shock the market higher, they still represent historically good prices to begin making sales.

Above: The September contract has rallied nearly 100 cents from the July low and is showing signs of being overbought while pushing into the 889 – 940 resistance area. If the market cannot push higher, initial support may be found near 865 – 845 and again around 800. 

Other Charts / Weather

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Grain Market Insider: July 19, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • A continued hot and dry forecast, and the addition of more war premium due to rising tensions in the Black Sea, led December corn to close above its 100-day moving average.

  • Soybeans closed higher for the fifth day in a row as concerns increase over hot and dry conditions for the remainder of July and the closure of the Black Sea corridor.

  • Soybean oil likely gained strength in reaction to damage at an Odesa veg oil terminal in Ukraine, while December soybean meal posted a bearish reversal on the daily chart, closing lower on the day after making new highs for the move.

  • Increased tensions in the Black Sea region led to more short covering in Chicago wheat which traded limit up at one point in the session, like KC, and led the wheat complex to a strong close for all three classes.

  • To see the current US 6 – 10 day and 8 – 14 day Temperature and Precipitation outlooks courtesy of NOAA, 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 added weather and war premium to its value for another session on Wednesday, as prices pushed through resistance, triggering strong money flow into the corn market. 

  • Increasing tensions in the Black Sea region helped trigger short covering. A second attack on the Odesa port in Ukraine may have damaged some wheat supplies, and an announcement by the Russian Defense ministry regarding ship traffic in the region to be treated as military supply ships triggered a limit higher move during the day in wheat futures, helping support corn prices as well.

  • Weather forecasts have turned significantly drier over the next couple weeks, and temperatures are moving to a warmer trend. Weather models have moved potential rainfall out of the forecast or pushed the potential further south on maps.

  • Technically, the corn market traded through the 100-day moving average on Dec futures and may be targeting the 200-day moving average at $5.75. The strong close will likely lead to additional buying and short covering in the market.

  • Demand remains a concern and the USDA will release weekly export sales on Thursday morning. Expectations for corn export sales to stay at a slow pace, which will now be limited by the recent price rally.

Above: In mid-July the corn market was oversold and posted a double bottom at 474. Since then, it has rallied significantly toward the 50-day moving average. While the market has upward momentum, it may run into resistance near the 50-day MA. If the market closes above the 50-day MA, it could signal a change in trend to higher, though heavy resistance remains up towards 595 – 625 and it would need further bullish news to break through. Below the market, key support lies 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. 

  • Grain Market Insider sees an active opportunity to sell a portion of your 2023 soybeans. The USDA shocked the market with bearish expectations for the 2023 soybean crop’s supply and demand. Demand was lowered for both 2022 and 2023 crop years, with an added 25 mbu of 2022 inventory carried over to 2023. The net result being a current ending stocks estimate of 300 mbu for the 2023 crop, a full 50% higher than trade expectations. While the key part of the growing season is still ahead, and production concerns remain, that could turn the market higher again, continued favorable forecasts and improving crop conditions may lead the market to further price erosion. With the very dry conditions that many of you continue to experience, and the tremendous uncertainty that brings to what you’ll have for bushels this fall, we understand if there’s hesitancy to sell anything here. If you are worried about committing physical bushels with a cash sale, consider selling futures or buying put options.

  • 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 higher along with both corn and wheat but slipped from their earlier highs. Soybean meal had early gains but ended only slightly higher in the front two months and lower in the deferred contracts, while soybean oil gained over 3% in Aug.

  • Today marks the fifth consecutively higher close for soybeans in a market that is mainly being driven by weather which is forecast to be hot and dry over at least the next two weeks, along with the cancellation of the grain deal which will impact sunflower meal and oil exports out of Ukraine.

  • The forecast analysis released today is expecting hot and dry conditions over the next 10 days, and early August is expected to produce much of the same weather. Late August is more difficult to forecast due to tropical cyclones and cooler air out of Canada, and this period will be critical for pod filling.

  • Brazilian soy exports reached 8.8 mmt in July compared to 7.0 mmt the same month a year ago as demand from China picks up, and Brazil maintains the competitive advantage with prices far below offers from the US.

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. To fill the gap, the market will need additional bullish news to continue higher and trade through the heavy resistance area of 1490 – 1505. If not, and prices retreat, initial support below the market is near 1400 with further support being in the 1350 – 1390 area.

Wheat

Market Notes: Wheat

  • Both September Chicago and KC wheat briefly traded limit up at 60 cents higher, 730-3/4  and 887-1/4,  before closing just below. News broke mid-morning that Russia stated as of July 20th any Black Sea vessel en route to Ukraine would be considered carriers of military cargo. With the recent closure of the export corridor, this further heightens tensions and is adding war premium to the market.

  • In addition to the statement by Russia, it was reported that a Russian missile attack destroyed 60,000 tons of grain in the port city of Odesa, Ukraine. This added fuel to the fire, with more support for the wheat rally.

  • The US Dollar index is beginning to trend higher again and is back above the 100 level (at the time of writing). By some technical indicators it could also be considered oversold, meaning that it could be due for a correction higher, which may lead to more pressure on the already struggling export market down the road.

  • Paris milling wheat futures gapped higher, with the front month September contract gaining 19.25 Euros per metric ton. This is a massive jump and is likely tied to the Russia / Ukraine news as well and is the highest close for that contract since April.

  • Aside from today’s headlines, US Midwest weather looks warm and dry for the next week or two, which should provide support to the grain markets as a whole. The second week of the forecast also brings hotter temperatures, with the potential for 90 degrees and higher in many spots.

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 have fallen off their recent highs, 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: September wheat rallied nearly 200 cents from the May low to its June high when it encountered heavy resistance and posted a bearish reversal. While prices have been relatively range bound recently, heavy resistance remains near 730 – 770, the June high, with nearby resistance around 690 – 700. If prices fall back, support below the market may be found between 650 – 610, and again near 570, the May low. 

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 expected to fall to 16-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 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: Balancing both production and demand concerns, the September contract continues to trade within the 736 – 919 range established in May. The recent downturn in the market has established heavy resistance above the market between 890 – 920, with initial support coming in between 778 – 763 and key support near the May low of 736.

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.

  • Grain Market Insider recommends selling a portion of your 2024 spring wheat crop. So far this year we have seen some of the volatility from the 2023 crop, with its challenges from late planting and now dryness, be carried over to the 2024 crop. We are now at that time of year where there are typically more headwinds to prices than tailwinds, and to begin getting some early sales on the books. Now that the market has rallied to within 15 cents of the June high where there is significant overhead resistance, Insider recommends making a sale on a portion of your 2024 spring wheat production by using either SEPT ’24 Minneapolis Wheat futures contracts or a SEPT ’24 HTA contract, so basis can be set at a later, more advantageous time. While $8 prices are not the $9 or $10+ that we have seen in recent years, and weather and geopolitical disruptions can still shock the market higher, they still represent historically good prices to begin making sales.

Above: In the month of June, the September contract rallied towards the 200-day moving average and into resistance between 889 and 940, the April and December highs respectively. The market has since retreated and slowly climbed back, and it will need additional bullish news to be able to trade through the recent highs. Should the market fall back, initial support may be found between 805 – 845 with further downside support between 770 and 730. 

Other Charts / Weather

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Grain Market Insider: July 18, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Short covering, triggered by a warmer and drier forecast and the escalation of tensions in the Black Sea region drove December prices to close above yesterday’s highs.

  • Like corn, the soybean market surged higher, aided by soybean meal and a much warmer and drier forecast.  Soybean oil on the other hand closed with a 56-point loss and weighed on crush margins, which lost 8 -1/2 cents in the December contracts.

  • The addition of war premium and the closure of the Black Sea export corridor likely sparked some short covering and led the wheat complex mostly higher with the exception of September Minneapolis, which closed lower.

  • To see the current US Drought Monitor and maps showing the current US 8 – 14 day Temperature and Precipitation outlook courtesy of NOAA, 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. In the month of June, December corn experienced a 137-cent high to low, swing primarily on weather and production concerns. Since then, planted acreage figures have increased by about 2 mil. acres and pushed the current 2023 carryout estimate north of 2.2 billion bushels, which hasn’t been seen since the 2018/19 crop year. When Dec corn was trading over 620, Grain Market Insider recommended making a cash sale and buying Dec 580 puts to cover more downside. The Dec 580 puts, paired with the previously recommended Dec 610 calls, yielded a combination of options commonly known as a Strangle, which benefits from dramatic market moves either up or down. Considering crop conditions continue to be low with over 60% of the crop experiencing drought, changing weather can still affect final production and rally prices, at which point the 610 calls should gain in value and protect any already sold bushels if the market makes new highs.

  • No action is currently recommended for 2024 corn.  So far this year the market has seen an extreme amount of volatility with drought, less than stellar crop conditions, and supply and demand estimates that currently put 2023 ending stocks north of 2.2 billion bushels, which would carry over into the 2024 crop year. While growing conditions can still change in the weeks ahead, we are at the time of year when there are more headwinds to rising prices than tailwinds. Grain Market Insider recently recommended making a sale on your 2024 crop, and we currently see no present opportunity to recommend any additional sales at this time. We’ll be watching for another opportunity to suggest adding to early sales levels between now and the beginning of September. 

  • The corn market added weather and war premium to its value on Tuesday as prices pushed through resistance, triggering strong money flow into the corn market.

  • Technically, the corn market traded through Monday’s reversal high, which likely triggered additional buying and short covering in the market.  The strong close has the corn market looking at the 100-day moving average as the next level of resistance.

  • The USDA released its weekly crop ratings, and the US corn crop was rated 55% good/excellent, up 2% from last week and above market expectations. The corn crop improved, supported by recent rainfall in areas of the Corn Belt.

  • Weather forecasts have turned significantly drier over the next couple weeks, and temperatures are moving to a warmer trend. Despite recent rainfall, 64% of the corn crop is in drought, and needs timely rainfall, and the warmer, drier conditions are timed with the pollination timetable, which could limit potential yield.

  • Russia officially leaving the Ukrainian Grain Export deal and the attack on the Odessa port in the Ukraine added additional buying strength to the corn and wheat markets on the session.

Above: Favorable weather and an estimated 2023 carryout north of 2 bil bushels pushed the market through support that was in place since January 2021 and posted a double bottom at 474. This, and the fact that the market is oversold, is supportive if reversal action occurs. In that event, initial resistance could be found between 502 – 538, with heavy resistance up towards 595 – 625.  Below the market there may not be much support above 390 – 415, the November ’20 lows, if the corn market falls below the recent low of 474.

Above: 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. 

  • Grain Market Insider sees an active opportunity to sell a portion of your 2023 soybeans. The USDA shocked the market with bearish expectations for the 2023 soybean crop’s supply and demand. Demand was lowered for both 2022 and 2023 crop years, with an added 25 mbu of 2022 inventory carried over to 2023. The net result being a current ending stocks estimate of 300 mbu for the 2023 crop, a full 50% higher than trade expectations. While the key part of the growing season is still ahead, and production concerns remain, that could turn the market higher again, continued favorable forecasts and improving crop conditions may lead the market to further price erosion. With the very dry conditions that many of you continue to experience, and the tremendous uncertainty that brings to what you’ll have for bushels this fall, we understand if there’s hesitancy to sell anything here. If you are worried about committing physical bushels with a cash sale, consider selling futures or buying put options.

  • 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 higher but slipped from their early highs which exceeded the 14-dollar mark and reached the highest levels since January of this year. The rally in soybean meal has been a major catalyst for moving soybeans higher, but soybean oil ended lower.

  • Yesterday’s crop progress showed the soy crop improving more than the average trade guess with an increase of 4 points for a good to excellent rating of 55%. While an improvement, it is the second lowest rating since 2012, and only 20% of the crop is setting pods.

  • Soybean meal has been rallying due to Argentina’s shrinking soy crop which is estimated at 21 mmt (4 mmt below the last USDA estimate), and Argentina is the largest exporter of soybean meal.

  • With forecasts looking very dry and warm over the next two weeks, weather premium has been added to the market. Crop conditions improved over the past three weeks, but a two-week period of dry weather could easily send ratings back lower.

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. To fill the gap, the market will need additional bullish news to continue higher and trade through the heavy resistance area of 1490 – 1505. If not, and prices retreat, initial support below the market is near 1400 with further support being in the 1350 – 1390 area.

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

Wheat

Market Notes: Wheat

  • Wheat posted sharp gains, perhaps on a delayed reaction to the news of the cancellation of the Black Sea grain corridor. Additionally, some more war premium could be factored in after it was reported that Russia launched a new round of attacks on the port city of Odessa in Ukraine.

  • Yesterday’s Crop Progress report showed that spring wheat condition improved 4% to 51% good to excellent. This may have limited the upside today for MPLS futures, relative to the gains in Chicago and KC.

  • US winter wheat harvest at 56% complete, continues to lag behind the average pace of 69% complete for this time of year.

  • UkrAgroConsult increased their estimate of Russian 23/24 wheat exports to 47 mmt (up 2 mmt). The weaker Russian Ruble may be a contributing factor. Additionally, their estimate of the 2023 Russian wheat harvest was increased by 0.4 mmt to 85.2 mmt.

  • Argentina’s wheat planting area estimate has been reduced by Bolsa de Rosario to 5.4 million hectares due to dry conditions. Production was also revised down to 15.6 mmt.  

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 have fallen off their recent highs, 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: September wheat rallied nearly 200 cents from the May low to its June high when it encountered heavy resistance and posted a bearish reversal. While prices have been relatively range bound recently, heavy resistance remains near 730 – 770, the June high, with nearby resistance around 690 – 700. If prices fall back, support below the market may be found between 650 – 610, and again near 570, the May low. 

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 expected to fall to 16-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 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: Balancing both production and demand concerns, the September contract continues to trade within the 736 – 919 range established in May. The recent downturn in the market has established heavy resistance above the market between 890 – 920, with initial support coming in between 778 – 763 and key support near the May low of 736.

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

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.

  • Grain Market Insider recommends selling a portion of your 2024 spring wheat crop. So far this year we have seen some of the volatility from the 2023 crop, with its challenges from late planting and now dryness, be carried over to the 2024 crop. We are now at that time of year where there are typically more headwinds to prices than tailwinds, and to begin getting some early sales on the books. Now that the market has rallied to within 15 cents of the June high where there is significant overhead resistance, Insider recommends making a sale on a portion of your 2024 spring wheat production by using either SEPT ’24 Minneapolis Wheat futures contracts or a SEPT ’24 HTA contract, so basis can be set at a later, more advantageous time. While $8 prices are not the $9 or $10+ that we have seen in recent years, and weather and geopolitical disruptions can still shock the market higher, they still represent historically good prices to begin making sales.

Above: In the month of June, the September contract rallied towards the 200-day moving average and into resistance between 889 and 940, the April and December highs respectively. The market has since retreated and slowly climbed back, and it will need additional bullish news to be able to trade through the recent highs. Should the market fall back, initial support may be found between 805 – 845 with further downside support between 770 and 730. 

Above: 2023/24 Spring wheat percent Good to Excellent (red) versus the 5-year average (green) and last year (purple).

Other Charts / Weather

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Grain Market Insider: July 17, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Corn traded lower for most of the day after it gapped higher on the evening’s open following the expiration of the Black Sea Grain Initiative, in a “buy the rumor, sell the fact” type of fashion, as traders likely felt the corridor’s closure was already priced into the market.

  • The soybean market was caught between weak export inspections and NOPA crush demand, and a concerning weather forecast that shows hot and dry conditions in much of the WCB, and the northern and central Plains, two weeks out.

  • Weak demand likely outweighed the anticipated closure of the Black Sea export corridor as all three wheat markets sold off after the morning’s reopening led by the K.C. contracts.

  • The US Dollar continues to trade at its lowest levels in 15 months, which is generally supportive to the commodity sector as a lower USD makes US exports lower on the world market. The financial markets are currently predicting a 96% likelihood of a 0.25% rate increase at next week’s Fed meeting.

  • To see the current US Drought Monitor and maps showing the current US 8 – 14 day Temperature and Precipitation outlook courtesy of NOAA, 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. In the month of June, December corn experienced a 137-cent high to low, swing primarily on weather and production concerns. Since then, planted acreage figures have increased by about 2 mil. acres and pushed the current 2023 carryout estimate north of 2.2 billion bushels, which hasn’t been seen since the 2018/19 crop year. When Dec corn was trading over 620, Grain Market Insider recommended making a cash sale and buying Dec 580 puts to cover more downside. The Dec 580 puts, paired with the previously recommended Dec 610 calls, yielded a combination of options commonly known as a Strangle, which benefits from dramatic market moves either up or down. Considering crop conditions continue to be low with over 60% of the crop experiencing drought, changing weather can still affect final production and rally prices, at which point the 610 calls should gain in value and protect any already sold bushels if the market makes new highs.

  • No action is currently recommended for 2024 corn.  So far this year the market has seen an extreme amount of volatility with drought, less than stellar crop conditions, and supply and demand estimates that currently put 2023 ending stocks north of 2.2 billion bushels, which would carry over into the 2024 crop year. While growing conditions can still change in the weeks ahead, we are at the time of year when there are more headwinds to rising prices than tailwinds. Grain Market Insider recently recommended making a sale on your 2024 crop, and we currently see no present opportunity to recommend any additional sales at this time. We’ll be watching for another opportunity to suggest adding to early sales levels between now and the beginning of September. 

  • Export inspections for the week ending July 13 came in at the lower end of expectations at 14.3 mb. Though the number was an increase from the prior week, they are still light, and year-to-date totals are 33% behind last year, though in line with the updated USDA forecast.

  • Russia terminated the Black Sea Grain Initiative that allowed Ukraine to ship ag goods out through the Black Sea. Russia claims the deal was terminated because their terms in the agreement were not fulfilled.

  • Part of the sell off in the corn market may be, “buy the rumor, sell the fact,” in that the termination of the deal may have already been priced into the market. The USDA, in its latest report, may have already accounted for the closure by forecasting Ukraine’s 23/24 corn exports at only 19.5 mmt, down 30% from 22/23.

  • Since the recent break in prices, China has been an active buyer of South American and Ukrainian corn which is supportive of US prices, in that overall prices may have fallen enough to stimulate demand. Relative to the world market, US prices have become much more competitive since Brazil’s export prices have risen about $1.25 on slow farmer selling. It’s also been reported that China bought 6 or 7 cargoes for July – Sept delivery.

  • The USDA will release its updated estimate for US crop conditions this afternoon with some calling for a 1 – 2% increase in the Good/Excellent ratings from last week’s 55% rating.

Above: Favorable weather and an estimated 2023 carryout north of 2 bil bushels pushed the market through support that was in place since January 2021 and posted a double bottom at 474. This, and the fact that the market is oversold, is supportive if reversal action occurs. In that event, initial resistance could be found between 502 – 538, with heavy resistance up towards 595 – 625.  Below the market there may not be much support above 390 – 415, the November ’20 lows, if the corn market falls below the recent low of 474.

Above: Money Corn Managed Money Funds net position as of Tuesday, July 11. Net position in Green versus price in Red. Managers net sold 44,843 contracts between July 3 – 11, bringing their total position to a net short 63,052 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. 

  • Grain Market Insider sees an active opportunity to sell a portion of your 2023 soybeans. The USDA shocked the market with bearish expectations for the 2023 soybean crop’s supply and demand. Demand was lowered for both 2022 and 2023 crop years, with an added 25 mbu of 2022 inventory carried over to 2023. The net result being a current ending stocks estimate of 300 mbu for the 2023 crop, a full 50% higher than trade expectations. While the key part of the growing season is still ahead, and production concerns remain, that could turn the market higher again, continued favorable forecasts and improving crop conditions may lead the market to further price erosion. With the very dry conditions that many of you continue to experience, and the tremendous uncertainty that brings to what you’ll have for bushels this fall, we understand if there’s hesitancy to sell anything here. If you are worried about committing physical bushels with a cash sale, consider selling futures or buying put options.

  • 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 higher, but backed off their early morning highs that were led by Russia’s exit of the Ukrainian grain deal. The news initially caused soybean oil to rally because Ukraine exports a large amount of sunflower oil, but by the end of the day, excitement wore off and soybean oil closed lower, while soybean meal maintained a higher close.

  • Soybean export inspections were soft today which did not help support futures. Inspections totaled 5.7 mb for the week ending Thursday, July 13. Total inspections for 22/23 are now at 1.833 bb, down 5% from the previous year.

  • NOPA crush numbers for the month of June were released this morning and only 165 mb of soybeans were crushed with 1.690 bil pounds in soybean oil stocks. The number of soybeans crushed was well below expectations of 170 – 173 mb as were oil stocks, which were expected to be closer to 1.8 bil. pounds.

  • The 8 to 14-day forecast is showing drier and warmer conditions, but the rain over the past two weeks should be enough to improve the good to excellent ratings for this week’s Crop Progress report. The extended forecasts for August may give some insight into conditions for pod fill season.

  • China’s economy has been a bearish factor as trade has been concerned over the lack of growth. Today those fears were confirmed after second quarter GDP readings showed a slowing economy, which grew at a lower-than-expected rate of 6.3%. China has been purchasing Brazilian beans, but purchases from the US have been very slow.

Above: The soybean charts have rolled from the August to the September contract where heavy resistance lies between 1390 – 1430 in September. To continue higher, the market continues to need an influx of bullish news to offset the negative influence of the bearish reversal that was posted on July 12. 1490 – 1505 remains the next heavy resistance area should the market break through 1390 – 1430. If not, and prices retreat, initial support below the market is near 1425 with further support being in the 1350 – 1390 area.

Above: Soybeans Managed Money Funds net position as of Tuesday, July 11. Net position in Green versus price in Red. Money Managers net sold 6,394 contracts between July 3 – 11, bringing their total position to a net long 82,748 contracts.

Wheat

Market Notes: Wheat

  • Overnight, wheat traded higher based on news that Russia decided to end the Black Sea Grain Initiative. However, by the end of today’s session, all three US wheat futures classes posted losses. This could perhaps be due to the results of the deal already being “baked in” to prices, with many traders anticipating the corridor being closed.

  • The USDA pegged weekly wheat inspections at 9.3 mb, bringing total 23/24 inspections to 65 mb, down 16% from last year. With the USDA estimating wheat exports at 725 mb, the current pace of exports is below what is needed to meet that number.

  • The US Dollar remains below the 100 mark but may be finding some support after the recent sharp decline. In the long run, a lower US Dollar should help the export market, but if it begins to trend higher again, that will add to pressure on commodities, especially wheat.

  • There is some concern, globally, about spring wheat supply. But here in the US, export demand is low due to other world origins being cheaper and may keep pressure on MPLS futures.

  • According to the National Bureau of Statistics, China’s summer wheat harvest of 146.13 mmt, was 0.9% below last year’s. This is being attributed to the rain damage they received during the growing season.

Chicago Wheat Action Plan Summary

  • No new action is recommended for 2023 New Crop. In the month of June, the September Chicago wheat contract posted a 163-cent range and has largely been a follower of the corn market which has been mostly driven by weather. While demand remains weak, production concerns in parts of the country remain, as does uncertainty surrounding the Black Sea region and the potential for major exporting countries’ inventory to hit 16-year lows. 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 have fallen off their recent highs, 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: September wheat rallied nearly 200 cents from the May low to its June high when it encountered heavy resistance and posted a bearish reversal. This technical formation on the price chart is considered bearish and momentum may be adding to the bearish tone. Support below the market may be found between 650 – 610, while resistance above the market rests between 770 – 810.

Above: Chicago Wheat Managed Money Funds net position as of Tuesday, July 11. Net position in Green versus price in Red. Money Managers net bought 1,878 contracts between July 3 – 11, bringing their total position to a net short 52,128 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.

  • Patience is warranted for the 2024 crop. With continued issues in the Black Sea region and with major exporting countries’ stocks expected to fall to 16-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 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: Balancing both production and demand concerns, the September contract continues to trade within the 736 – 919 range established in May. The recent downturn in the market has established heavy resistance above the market between 890 – 920, with initial support coming in between 778 – 763 and key support near the May low of 736.

Above: K.C. Wheat Managed Money Funds net position as of Tuesday, July 11. Net position in Green versus price in Red. Money Managers net bought 824 contracts between July 3 – 11, bringing their total position to a net long 14,584 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. With weather dominating the market right now, 2024 prices can be heavily influenced by 2023 carryover estimates and prices. As dryness increases in the spring wheat areas and with major exporting countries’ stocks at 11-year lows, Grain Market Insider would like to see September futures prices in the 800 – 825 range before we would consider suggesting making any sales recommendations, while keeping an eye on the recent lows for any violation of support.

Above: In the month of June, the September contract rallied towards the 200-day moving average and into resistance between 889 and 940, the April and December highs respectively. The market has since retreated and slowly climbed back, and it will need additional bullish news to be able to trade through the recent highs. Should the market fall back, initial support may be found between 805 – 845 with further downside support between 770 and 730. 

Above: Minneapolis Wheat Managed Money Funds net position as of Tuesday, July 11. Net position in Green versus price in Red. Money Managers net bought 2,311 contracts between July 3 – 11, bringing their total position to a net long 4233 contracts.

Other Charts / Weather

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Grain Market Insider: July 14, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • After posting a double bottom on Thursday, December corn broke out of its recent range and surged higher to close the week with a bullish reversal on the weekly chart.

  • The soybean market closed mixed, with Old Crop lower and New Crop higher.  Early strength allowed the market to post a new high for the move before giving way to choppy trade ahead of the weekend, as traders book profits.

  • Bearish reversals in crude and heating oil likely added to the negativity in soybean oil, which bled over to soybeans and December Board Crush, which suffered a 4-1/4 cent loss, while December meal squeezed out a $1.10 gain.

  • Reports of India banning rice exports, continued dryness in the northern Plains, and the possible expiration of the Black Sea grain deal added support to the wheat complex today, with all three classes finishing strong to close out the week.

  • To see maps showing the percentage of crops in drought, courtesy the USDA and US Drought Monitor, 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. In the month of June, December corn experienced a 137-cent high to low, swing primarily on weather and production concerns. Since then, planted acreage figures have increased by about 2 mil. acres and pushed the current 2023 carryout estimate north of 2.2 billion bushels, which hasn’t been seen since the 2018/19 crop year. When Dec corn was trading over 620, Grain Market Insider recommended making a cash sale and buying Dec 580 puts to cover more downside. The Dec 580 puts, paired with the previously recommended Dec 610 calls, yielded a combination of options commonly known as a Strangle, which benefits from dramatic market moves either up or down. Considering crop conditions continue to be low with over 60% of the crop experiencing drought, changing weather can still affect final production and rally prices, at which point the 610 calls should gain in value and protect any already sold bushels if the market makes new highs.

  • Grain Market Inside sees continued opportunity to sell a portion of your 2024 Corn. While the market has seen some extreme volatility in recent weeks, we are entering a time of year when prices tend to have more headwinds than tailwinds to the upside. Also, with the USDA’s surprise acreage jump, continued rain in the forecast and slow demand, the size of the 2023 crop still has the potential to yield a carryout north of 2 billion bushels. A large 2023 carryout in the US, combined with the large corn crop in Brazil, could pose greater headwinds for 2024 prices. With it being the time of year to start getting early sales for next year on the books, and no recent bullish catalyst from the Stocks or Acreage reports, we are suggesting making a sale for the 2024 corn crop using either a DEC ’24 HTA contract or DEC ’24 futures, so the basis can be set at a later more advantageous date. While $5.00 futures is not the $6.00 or $7.00, we’ve become accustomed to the last few years, it’s still historically a good price to be getting some early sales on the books at.

  • Corn showed some muscle to finish near session highs, following through from yesterday. This may in part stem from skepticism of the USDA’s latest numbers.  

  • The 8-14 day weather forecast may also have lent some support to futures today, with an outlook for warmer and drier conditions across much of the Midwest. With 64% of the US corn crop said to still be experiencing drought conditions, fundamental support may be building at these lower price levels.

  • On a bearish note, CONAB increased their estimate of Brazilian corn production to 127.8 mmt from 125.7 mmt previously, which for now, is likely to keep pressure on the export front.

  • Although the US dollar was slightly higher today, it is still well below where it was a week ago. This decline has likely taken some downward pressure off the grain markets and allowed for some breathing room.

Above: Favorable weather and an estimated 2023 carryout north of 2 bil. bushels pushed the market through support that was in place since January 2021 and posted a double bottom at 474. This, and the fact that the market is oversold, is supportive if reversal action occurs. In that event, initial resistance could be found between 502 – 538, with heavy resistance up towards 595 – 625. Below the market there may not be much support above 390 – 415, the November ’20 lows.

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. 

  • Grain Market Insider sees an active opportunity to sell a portion of your 2023 soybeans. The USDA shocked the market with bearish expectations for the 2023 soybean crop’s supply and demand. Demand was lowered for both 2022 and 2023 crop years, with an added 25 mbu of 2022 inventory carried over to 2023. The net result being a current ending stocks estimate of 300 mbu for the 2023 crop, a full 50% higher than trade expectations. While the key part of the growing season is still ahead, and production concerns remain, that could turn the market higher again, continued favorable forecasts and improving crop conditions may lead the market to further price erosion. With the very dry conditions that many of you continue to experience, and the tremendous uncertainty that brings to what you’ll have for bushels this fall, we understand if there’s hesitancy to sell anything here. If you are worried about committing physical bushels with a cash sale, consider selling futures or buying put options.

  • 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. 

  • Led by negativity in the energy markets, weakness in soybean oil weighed on soybeans and likely led to some profit taking and choppy trade after posting a new high for the move.  Both Old and New Crop contracts closed the week in relative unison, with August beans showing a 52-1/2 cent gain, while November posted a 53 cent gain, despite the USDA’s bearish report on Wednesday.

  • Following Wednesday’s surprising USDA report, some are questioning the USDA’s 52 bpa yield estimate with 57% of the US soybean crop experiencing some level of drought, though this is down 3% from last week.

  • China has reportedly been an active buyer of Brazilian soybeans, purchasing 20 – 25 cargoes for May – July 2024 delivery, in addition to US soybeans purchased off the PNW for October delivery.

  • Expectations for Monday’s NOPA soybean crush report are for 170.568 mb of soybeans crushed in June, down 4.1% from May, but expected due to seasonal downtime for maintenance and repairs, and if realized, it would be a record for the month.

  • Updated Consumer Price Index (CPI) and Producer Price Index (PPI) information released this week showed inflation levels are slowing, reducing the possibility of further rate hikes by the Fed, and likely adding early support to prices.

Above: The soybean market is struggling with heavy resistance in the 1490-1505 area and posted a bearish reversal following the July 12 USDA report. The market reversed sharply higher on July 13, but prices need to show continued strength to negate the bearish action from report day. Initial support below the market is near 1425 with further support being in the 1350 – 1390 area.

Wheat

Market Notes: Wheat

  • News reports that India will ban rice exports may have contributed to the strong close in the wheat market. India generally exports a large percentage of the world’s rice, so if they are short on supply, they may turn to wheat as another food staple. Some believe this could mean they will need to import wheat down the road, offering support.

  • Early next week, the Black Sea export corridor deal will expire. As of writing, no agreement on an extension has been reached. Russia has allegedly stated that they will offer an extension, but only in exchange for reduced sanctions on their banking system (namely, being let back into the SWIFT program). Either way, this could mean more volatility for wheat next week.

  • According to the Buenos Aires Grain Exchange, their 23/24 wheat planting estimate for Argentina is unchanged from their last projection at 6.0 mmt.

  • Canada is still too dry, and it is impacting their spring wheat crop. Much like areas of the northern US Plains that are experiencing the same problem.

Chicago Wheat Action Plan Summary

  • No new action is recommended for 2023 New Crop. In the month of June, the September Chicago wheat contract posted a 163-cent range and has largely been a follower of the corn market which has been mostly driven by weather. While demand remains weak, production concerns in parts of the country remain, as does uncertainty surrounding the Black Sea region and the potential for major exporting countries’ inventory to hit 16-year lows. 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 have fallen off their recent highs, 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: September wheat rallied nearly 200 cents from the May low to its June high when it encountered heavy resistance and posted a bearish reversal. This technical formation on the price chart is considered bearish and momentum may be adding to the bearish tone. Support below the market may be found between 650 – 610, while resistance above the market rests between 770 – 810.

KC Wheat Action Plan Summary

  • We continue to look for better prices before making any 2023 sales. While Crop ratings have improved and the Black Sea export corridor remains open, questions remain about the size of the HRW crop, whether Russia will continue to agree to keep the Black Sea corridor open, and what production looks like in Europe and Australia. 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 expected to fall to 16-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 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: Balancing both production and demand concerns, the September contract continues to trade within the 736 – 919 range established in May. The recent downturn in the market has established heavy resistance above the market between 890 – 920, with initial support coming in between 778 – 763 and key support near the May low of 736.

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. With weather dominating the market right now, 2024 prices can be heavily influenced by 2023 carryover estimates and prices. As dryness increases in the spring wheat areas and with major exporting countries’ stocks at 11-year lows, Grain Market Insider would like to see September futures prices in the 800 – 825 range before we would consider suggesting making any sales recommendations, while keeping an eye on the recent lows for any violation of support.

Above: In the month of June, the September contract rallied towards the 200-day moving average and into resistance between 889 and 940, the April and December highs respectively. The market has since retreated and slowly climbed back, and it will need additional bullish news to be able to trade through the recent highs. Should the market fall back, initial support may be found between 805 – 845 with further downside support between 770 and 730. 

Other Charts / Weather

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Grain Market Insider: July 13, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • US corn export sales last week for both Old and New Crop were above trade expectations and the largest since March. This friendly news helped corn erase nearly all of yesterday’s losses.

  • A drier long-range forecast and the fact that 57% of the crop remains in drought conditions helped to rally the soybean complex higher today, surpassing yesterday’s losses.

  • Wheat markets followed corn and soybean prices higher. Spring wheat producing areas experiencing drought now total 25%, rainfall looks limited for these areas over the next week.

  • The US Dollar Index continued its move lower, falling to its lowest level since April 2022. A weaker US dollar is supportive to commodities.

  • To see the US 7-day precipitation forecast courtesy of NOAA, 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. In the month of June, December corn experienced a 137-cent high to low, swing primarily on weather and production concerns. Since then, planted acreage figures have increased by about 2 mil. acres and pushed the current 2023 carryout estimate north of 2.2 billion bushels, which hasn’t been seen since the 2018/19 crop year. When Dec corn was trading over 620, Grain Market Insider recommended making a cash sale and buying Dec 580 puts to cover more downside. The Dec 580 puts, paired with the previously recommended Dec 610 calls, yielded a combination of options commonly known as a Strangle, which benefits from dramatic market moves either up or down. Considering crop conditions continue to be low with over 60% of the crop experiencing drought, changing weather can still affect final production and rally prices, at which point the 610 calls should gain in value and protect any already sold bushels if the market makes new highs.

  • Grain Market Inside sees continued opportunity to sell a portion of your 2024 Corn. While the market has seen some extreme volatility in recent weeks, we are entering a time of year when prices tend to have more headwinds than tailwinds to the upside. Also, with the USDA’s surprise acreage jump, continued rain in the forecast and slow demand, the size of the 2023 crop still has the potential to yield a carryout north of 2 billion bushels. A large 2023 carryout in the US, combined with the large corn crop in Brazil, could pose greater headwinds for 2024 prices. With it being the time of year to start getting early sales for next year on the books, and no recent bullish catalyst from the Stocks or Acreage reports, we are suggesting making a sale for the 2024 corn crop using either a DEC ’24 HTA contract or DEC ’24 futures, so the basis can be set at a later more advantageous date. While $5.00 futures is not the $6.00 or $7.00, we’ve become accustomed to the last few years, it’s still historically a good price to be getting some early sales on the books at.

  • Buyers returned to the corn market on Thursday, as prices finished with strong double-digit gains. Spillover support from the soybean market, and a short squeeze in the July futures, with expiration on Friday, helped triggered the buying support.

  • Weekly exports sales reported this morning for corn were slightly above market expectations.  The USDA reported Old Crop sales of 18.4 mb and New Crop sales of 19.4 mb. Numbers are still overall disappointing as Old Crop sales need to average 26.5 mb weekly to hit the USDA export sales target of 1.650 billion bushels for the 2022-23 marketing year.

  • The strong price action with December corn pushing back over the $5.00 price level and closing above the 10-day moving average could likely set up additional buying strength on Fridays open. The key to today’s price movement will be follow-through to end the week.

  • Traders are questioning final yield projections, as 64% of the corn crop is still experiencing some form of drought, down 3% from last week. In addition, the fungal disease, Tar Spot, is now being found in six states. The spread of this disease will be watched by the market.

  • The U.S. Dollar Index has broken through the 100-basis point level and traded to its lowest level since April 2022 on the prospects that Fed interest rate hikes may be coming to an end.  The weaker dollar has helped trigger some money flow into the commodity and equity markets.

Above: The USDA added a bearish 4 million acres to its planted acreage estimate on June 30. The September contract is now extremely oversold and consolidating in the 480 – 505 support level that has been in place since January 2021. The oversold condition of the market would be considered supportive to higher prices if reversal action occurs; if not, there may not be much support until 390 – 415. Overhead lies strong resistance between 595 and 625. 

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. 

  • Grain Market Insider sees an active opportunity to sell a portion of your 2023 soybeans. The USDA shocked the market with bearish expectations for the 2023 soybean crop’s supply and demand. Demand was lowered for both 2022 and 2023 crop years, with an added 25 mbu of 2022 inventory carried over to 2023. The net result being a current ending stocks estimate of 300 mbu for the 2023 crop, a full 50% higher than trade expectations. While the key part of the growing season is still ahead, and production concerns remain, that could turn the market higher again, continued favorable forecasts and improving crop conditions may lead the market to further price erosion. With the very dry conditions that many of you continue to experience, and the tremendous uncertainty that brings to what you’ll have for bushels this fall, we understand if there’s hesitancy to sell anything here. If you are worried about committing physical bushels with a cash sale, consider selling futures or buying put options.

  • 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, along with soybean meal and oil, saw big gains today that surpassed yesterday’s losses after the USDA increased the 22/23 carryout to 255 mb and announced a 23/24 carryout of 300 mb, 50% larger than the 200 mb figure that was expected.

  • Today’s gains were largely fueled by the fact that 57% of the US soybean crop is experiencing drought conditions with a drier long range forecast for the north central Midwest, and a sharply lower US dollar.

  • This morning, the USDA announced that private exporters reported a sale of 315,704 metric tons of soybeans for delivery to Mexico during the 2023/2024 marketing year. 

  • Chinese customs data shows that soybean imports in June totaled 10.27 mmt, representing a 24.5% increase versus last June, and year over year imports have risen 13.6% to 52.575 mmt, mostly on large purchases of cheap Brazilian soybeans. Chinese demand may be slowing in the second half of the year though, as hog herds begin to shrink due to the lack of profitability and less feed is needed, according to a Chinese consultant, Sitonia Consulting.

  • Anec reports that Brazil’s soybean exports are seen reaching 10.45 mmt in July, with soybean meal exports reaching 2.5 mmt for the same period. This compares to just 7 mmt of soybeans and 2.07 mmt of meal exported for the same time last year.

Above: The soybean market is struggling with heavy resistance in the 1490-1505 area and posted a bearish reversal following the July 12 USDA report. The market reversed sharply higher on July 13, but prices need to show continued strength to negate the bearish action from report day. Initial support below the market is near 1425 with further support being in the 1350 – 1390 area.

Wheat

Market Notes: Wheat

  • The USDA reported an increase of 14.5 mb of wheat export sales for 23/24. The USDA is projecting 725 mb of exports in 23/24, and commitments now total 184 mb (down 29% from last year).

  • Despite a negative report yesterday, all three US wheat futures classes rebounded today and closed in positive territory. It may have been a case of “follow the leader” though, as corn and soybean futures led the charge higher.

  • The US Dollar Index continues to decline, breaking below the 100 level today. This is most likely tied to yesterday’s CPI and today’s PPI data, which showed easing inflation. There is thought that the Fed may be close to the end of raising interest rates, and this might be putting some risk premium back into financial and commodity markets.

  • In the face of a negative report yesterday, global wheat ending stocks (minus China) are still at an 11-year low.

  • Matif wheat closed a little higher, gaining about 1.50 – 2.00 euros. Support may be building for wheat (both US and abroad) at these lower levels. Additionally, there is still uncertainty surrounding the impending expiration of the Black Sea Grain Initiative. Putin reportedly asked for an extension if Russia is let back into the SWIFT banking program.

Chicago Wheat Action Plan Summary

  • No new action is recommended for 2023 New Crop. In the month of June, the September Chicago wheat contract posted a 163-cent range and has largely been a follower of the corn market which has been mostly driven by weather. While demand remains weak, production concerns in parts of the country remain, as does uncertainty surrounding the Black Sea region and the potential for major exporting countries’ inventory to hit 16-year lows. 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. Price volatility has risen in the last couple of weeks due to the changing weather forecasts and current events in the Black Sea. While prices have fallen off their recent highs, plenty of time remains to market next year’s crop. War continues in the Black Sea region, major exporting countries’ stocks expected to fall to 16-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties.  For now, after recently 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: September wheat rallied nearly 200 cents from the May low to its June high when it encountered heavy resistance and posted a bearish reversal. This technical formation on the price chart is considered bearish and momentum may be adding to the bearish tone. Support below the market may be found between 650 – 610, while resistance above the market rests between 770 – 810.

KC Wheat Action Plan Summary

  • We continue to look for better prices before making any 2023 sales. While Crop ratings have improved and the Black Sea export corridor remains open, questions remain about the size of the HRW crop, whether Russia will continue to agree to keep the Black Sea corridor open, and what production looks like in Europe and Australia. 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 expected to fall to 16-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 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: Balancing both production and demand concerns, the September contract continues to trade within the 736 – 919 range established in May. The recent downturn in the market has established heavy resistance above the market between 890 – 920, with initial support coming in between 778 – 763 and key support near the May low of 736.

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.

  • We continue to hold on pricing the 2024 crop. With the September ‘24 contract about 60 cents from its May 22 low, continued issues in the Black Sea region and major exporting countries’ stocks expected to fall to 16-year lows, we are entering the time frame where we would consider suggesting making sales recommendations while also keeping an eye on the recent lows for any violation of support. 

Above: The September contract rallied out of its congestion area on the Front Month Continuous chart towards the 200-day moving average and into resistance between 889 and 940, the April and December highs respectively.  With the market off those highs, it will need additional bullish news to be able to trade through them. Should the market continue to fall, support may be found between 770 and 730. 

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Grain Market Insider: July 12, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • A carryout projection of 2.262 billion bushels for the 23/24 crop year pushed traders into sell mode, sending DEC ‘23 corn prices to levels not seen since September 2021.

  • The USDA’s carryout estimates for 22/23 and 23/24 crops far exceeded the upper end of trade expectations and sent the soybean complex lower, creating a bearish reversal following today’s report.

  • The drag of the bearish soybean numbers pulled both soybean meal and oil lower, but had the effect of being friendly to DEC Board Crush, which traded 7-cents higher following the report.

  • Higher 23/24 production estimates and carryout projections from today’s USDA report sent the wheat markets lower, with Chicago leading the way down with losses nearing 28 cents in the September contract.

  • The June Consumer Price Index report was released today and showed a 0.2% increase versus an expected increase of 0.3%, reducing the chances of further rate hikes. The US Dollar Index tumbled on the news, which is supportive to commodities, though today’s USDA report outweighed any positive reaction in the grain markets.

  • To see the current NOAA US 8 – 14 day Temperature and Precipitation outlooks, scroll down to the Other Charts/Weather Section.

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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. December corn rallied 139 cents from its May 18 low to its high on June 21 on weather and production concerns. The market is currently off that high on poor export sales figures and a forecast that shows increased chances of rain in the next couple of weeks. When Dec corn was trading over 620, Grain Market Insider recommended making a cash sale and buying Dec 580 puts to cover more downside. The Dec 580 puts, paired with the previously recommended Dec 610 calls, yields a combination of options commonly known as a Strangle, which benefits from dramatic market moves either up or down. Considering it is still early in the season, with drought and crop production uncertainty it is too soon to know if the market high is in or not. Either way, the Strangle position is prepared. If conditions improve from here and prices make new lows, unsold bushels will be protected with the 580 puts. If it doesn’t rain again and prices skyrocket to new highs, already sold bushels will be protected by the 610 calls.

  • Grain Market Inside recommends selling New Crop 2024 Corn. While the market has seen some extreme volatility in recent weeks, we are entering a time of year when prices tend to have more headwinds than tailwinds to the upside. Also, with last week’s surprise acreage jump, continued rain in the forecast and slow demand, the size of the 2023 crop still has the potential to yield a carryout north of 2 billion bushels. A large 2023 carryout in the US, combined with the large corn crop in Brazil, could pose greater headwinds for 2024 prices. With it being the time of year to start getting early sales for next year on the books, and no recent bullish catalyst from the Stocks or Acreage reports, we are suggesting making a sale for the 2024 corn crop using either a DEC ’24 HTA contract or DEC ’24 futures, so the basis can be set at a later more advantageous date. While $5.00 futures is not the $6.00 or $7.00, we’ve become accustomed to the last few years, it’s still historically a good price to be getting some early sales on the books at.

  • The corn market saw strong selling pressure with double digit losses on the session after the USDA WASDE report triggered selling. December corn closed 17-¾ cents lower and established a new low for the move. December corn traded to its lowest point since September 2021.

  • The USDA lowered the potential corn yield to 177.5 bushels/acres (-4.0 bu/acre), just above market expectations, but did not adjust the demand side of the balance sheet to establish a new carry out projection of 2.262 billion bushels for the 2023-24 marketing year. This total was in line with analysts’ expectations.

  • The USDA lowered old crop export demand by 75 million bushels, and traders in the market pressured corn prices feeling that a projected new crop export demand of 2.100 billion bushels, up 450 mb from 2022-23 projections, will be difficult to reach at current corn price levels.

  • The weak price action with corn futures trading near the bottom end of the range on the close will likely trigger additional selling pressure in upcoming sessions.

  • The weather stays negative price as a beneficial rain system moved across key areas of the Corn Belt on Wednesday. Forecasts are still looking at an active weather pattern for the majority of the corn belt through the end of July.

Above: The USDA added a bearish 4 million acres to its planted acreage estimate on June 30. The September contract is now extremely oversold and consolidating in the 480 – 505 support level that has been in place since January 2021. The oversold condition of the market would be considered supportive to higher prices if reversal action occurs; if not, there may not be much support until 390 – 415. Overhead lies strong resistance between 595 and 625. 

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. 

  • Grain Market Insider recommends selling a portion of your 2023 soybeans today. The USDA shocked the market with bearish expectations for the 2023 soybean crop’s supply and demand. Demand was lowered for both 2022 and 2023 crop years, with an added 25 mbu of 2022 inventory carried over to 2023.  The net result being a current ending stocks estimate of 300 mbu for the 2023 crop, a full 50% higher than trade expectations. While the key part of the growing season is still ahead, and production concerns remain, that could turn the market higher again, continued favorable forecasts and improving crop conditions may lead the market to further price erosion.  With the very dry conditions that many of you continue to experience, and the tremendous uncertainty that brings to what you’ll have for bushels this fall, we understand if there’s hesitancy to sell anything here. If you are worried about committing physical bushels with a cash sale, consider selling futures or buying put options.

  • 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. 

  • The USDA surprised the market by adding 25 mb to the 22/23 carryout versus an expected 2 mb (255 mb actual carryout vs 232 mb expected), and only dropping 50 mb from the 23/24 carryout numbers from last June to 300 mb, with an estimated yield of 52 bpa. Trade expectations were about 200 mb for 23/24 carryout with a 51.3 bpa yield.

  • South American production for 22/23 was left unchanged in today’s report with Brazil’s crop estimated at 156 mmt versus 156.2 mmt expected, and Argentina’s crop estimated at 25 mmt versus 23.6 mmt expected.

  • Also in today’s USDA report, global ending stocks for the 22/23 season came in above expectations, as well with an increase of 1.6 mmt to 103 mmt. For 23/24, global stocks were estimated to decrease 2.3 mmt from June to 121 mmt, which is still a record.

  • The USDA reported this morning that private exporters reported sales of 105,000 metric tons of soybean cake and meal for delivery to unknown destinations for the 23/24 marketing year.  There has been no confirmation yet of China’s rumored purchase of 10 – 14 cargoes of US soybeans off the PNW for October delivery for their reserves. 

  • Additionally, as of June 29, China has bought just 1.72 mmt of 23/24 US soybeans versus 7.77 mmt for the same time last year.

Above: The soybean market is struggling with heavy resistance in the 1490-1505 area and posted a bearish reversal following the July 12 USDA report. The market reversal is a bearish development and could lead to further price erosion without other bullish information.  Initial support below the market is near 1425 with further support being in the 1350 – 1390 area.

Wheat

Market Notes: Wheat

  • The USDA estimated 23/24 all wheat production at 1.739 bb versus expectations of 1.677 bb, and 1.665 on the June report. 22/23 wheat carryout was estimated at 580 mb versus expectations of 583 mb. 23/24 carryout came in at 592 mb when the trade was looking for 565 mb.

  • The USDA estimated the winter wheat yield at 46.9 bpa, up 2.0 bu from last month’s projection, and for reference, last year’s average yield was 47.0 bpa.

  • Aside from today’s WASDE report, weather looks like it will still be a factor for the spring wheat crop. The next 7 days look mostly dry for the northern US Plains and Canadian Prairies.

  • Recent Russian drone attacks on the Ukraine port of Odessa are leading to increased tensions and concern that the Black Sea export corridor will not be renewed next week.

  • The sharply lower US Dollar Index was not enough to outweigh the negative results of today’s report. Down the road, however, if it continues to trend lower, it may benefit the export market.

Chicago Wheat Action Plan Summary

  • No new action is recommended for 2023 New Crop. In the month of June, the September Chicago wheat contract posted a 163-cent range and has largely been a follower of the corn market which has been mostly driven by weather. While demand remains weak, production concerns in parts of the country remain, as does uncertainty surrounding the Black Sea region and the potential for major exporting countries’ inventory to hit 16-year lows. 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. Price volatility has risen in the last couple of weeks due to the changing weather forecasts and current events in the Black Sea. While prices have fallen off their recent highs, plenty of time remains to market next year’s crop. War continues in the Black Sea region, major exporting countries’ stocks expected to fall to 16-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties.  For now, after recently 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: September wheat rallied nearly 200 cents from the May low to its June high when it encountered heavy resistance and posted a bearish reversal. This technical formation on the price chart is considered bearish and momentum may be adding to the bearish tone. Support below the market may be found between 650 – 610, while resistance above the market rests between 770 – 810.

KC Wheat Action Plan Summary

  • We continue to look for better prices before making any 2023 sales. While Crop ratings have improved and the Black Sea export corridor remains open, questions remain about the size of the HRW crop, whether Russia will continue to agree to keep the Black Sea corridor open, and what production looks like in Europe and Australia. 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 expected to fall to 16-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 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: Balancing both production and demand concerns, the September contract continues to trade within the 736 – 919 range established in May. The recent downturn in the market has established heavy resistance above the market between 890 – 920, with initial support coming in between 778 – 763 and key support near the May low of 736.

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.

  • We continue to hold on pricing the 2024 crop. With the September ‘24 contract about 60 cents from its May 22 low, continued issues in the Black Sea region and major exporting countries’ stocks expected to fall to 16-year lows, we are entering the time frame where we would consider suggesting making sales recommendations while also keeping an eye on the recent lows for any violation of support. 

Above: The September contract rallied out of its congestion area on the Front Month Continuous chart towards the 200-day moving average and into resistance between 889 and 940, the April and December highs respectively.  With the market off those highs, it will need additional bullish news to be able to trade through them. Should the market continue to fall, support may be found between 770 and 730. 

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