|

Grain Market Insider: July 11, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • The corn market continues to hover and consolidate around the $5.00 December level as traders prepare for tomorrow’s July USDA report.

  • Lower than expected crop conditions and anticipation of a 200 mbu haircut to 2023 soybean production in tomorrow’s USDA report kept traders on the buy side of the soybean market today.

  • Soybean meal added support to soybeans as it followed through on yesterday’s strength to settle higher on the day, while soybean oil likely saw some profit taking from being overbought and settled lower in sympathy with lower palm oil.

  • A slow winter wheat harvest and deteriorating spring wheat conditions added to the bullishness in the wheat market as all three wheat classes closed higher on the day.

  • The grain markets may have gotten an extra boost of support as the US Dollar traded lower for the third day in a row, breaking through support and settling near 2-month lows.

  • To see the current NOAA US 6 – 10 day Temperature and Precipitation outlooks, 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. 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.

  • Corn prices consolidated again around the $5.00 price level as futures were firmer on Tuesday. December corn traded around the $5.00 area for the seventh consecutive session as traders square positions before Wednesday’s USDA report.

  • The USDA will release the July Supply/Demand report on Wednesday at 11:00 CST. Expectations are for corn yield to drop to 176.6 bushels/acre, down 4.9 bushels/acres from the June report. Despite the yield drop, the additional acres and possible demand adjustment will likely keep new crop corn carryover near 2.250 billion bushels on the report.

  • Improved weather across the Corn Belt was reflected in the weekly USDA crop rating released on Monday afternoon. The USDA crop ratings on Monday afternoon gained 4% to 55% good/excellent, slightly above analyst expectations. Nebraska saw the largest improvement, gaining 12% week over week. Illinois gained 6% in the good/excellent category but is still well behind the 5-year average at 39% good/excellent.

  • The weather forecast will limit any near-term rally and rainfall chances and above-normal temperature should help additional crop recovery in some areas and stabilize the crop into pollination.

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. 

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. 

  • No action is being recommended for New Crop 2023 soybeans. No action is being recommended for New Crop 2023 soybeans. While changing weather forecasts will continue to dominate price action, a potentially much lower than anticipated 2023 carryout looms over the market due to low crop condition ratings and a reduced planted acreage estimate. Grain Market Insider is still eyeing a rally to the 1400 – 1450 area before considering any additional 2023 cash sales. Yet given the time of year and how fast prices can change direction, we’re willing to change that plan at a moment’s notice. In view of the current crop conditions and carryout situation and that we recently recommended making a cash sale, we suggest holding tight on further cash sales for now. 

  • 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 rated the US soybean crop as of Sunday, July 9, at 51% good to excellent, a 1% increase from last week, but also 1% below trade expectations and 11% below year-ago levels. Although soybean crop conditions improved, they remain at their lowest levels since 2012.

  • The average trade guess for 2022 ending stocks on tomorrow’s USDA WASDE report is 232 mbu, up 2 mbu versus the June estimate of 230 mbu, largely due to reduced demand. For 2023, due to much reduced acres, the average estimate for ending stocks is 203 mbu with a 51.3 bpa, versus a 350 mbu estimate last month.

  • The trade estimates Brazil’s soybean production to come in at 156.2 mmt in Wednesday’s USDA report, up slightly from the June estimate of 156 mmt. For Argentina’s production, the average trade guess is 23.6 mmt, 1.4 mmt lower than in June.

  • South American basis is improving which is allowing US soybeans to be more competitive in the world market, though they remain above SA offers.

  • It has been rumored that China bought 10-14 cargoes of US soybeans off the PNW for October delivery for their reserves.

  • Over the next 10 days, Minnesota, the Dakotas, Wisconsin, and northern Iowa are all expected to be mostly dry, with decent rain expected through eastern Nebraska, southern Iowa and Missouri, and into Illinois and the eastern Corn Belt.

Above: The USDA’s Stocks and Acreage estimate came in well below expectations and gave the market a solid push to the upside. The market has now fallen back and is struggling to continue higher without additional bullish input. If the market can rebound, resistance above the market continues to rest between 1500 – 1550, while support below the market could be found between 1340 and 1300 with further support near 1270.

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

Wheat

Market Notes: Wheat

  • Yesterday afternoon’s USDA Crop Progress report kept winter wheat condition unchanged at 40% good to excellent, with harvest still well behind at 46% complete versus the average of 59%.

  • Spring wheat conditions declined 1% to 47% good to excellent. The northern Plains could use some more rain to help this crop, but little is in this week’s forecast. Canda’s crop is also in a similar situation where more moisture is needed.

  • According to CONAB, as of July 1st, Brazil’s wheat crop is 79.6% planted, with Argentina’s reported to be 81.4% planted.

  • Japan is tendering for 60,000 mt of feed wheat. While it is possible this may stir up some US export business, Russia continues to offer cheap wheat FOB exports at $235-$240 per ton. However, interior Russian wheat prices are said to have recently rallied.

  • Paris milling wheat futures posted gains for the first time in three sessions, which offered some support to the US market today. Additionally, the US Dollar continues to fade off of recent highs, allowing more upside potential for wheat futures.

  • Daily stochastic indicators show that Chicago wheat is technically oversold and is close to a crossover signal. Barring any surprises in tomorrow’s USDA report, this would indicate that it could be due for more of a correction to the upside.

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.

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.

  • 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. 

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

Other Charts / Weather

|

Grain Market Insider: July 10, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Consolidation ahead of Wednesday’s USDA WASDE report continues as traders square positions in the corn market, with prices not veering far from $5.00 in the December contract.

  • Sharply higher soybean oil prices and anticipation of lower production and ending stocks numbers in Wednesday’s upcoming USDA report drove the soybean market higher.

  • Higher Malaysian palm oil prices which were up 2.32% in the overnight added to the bullish sentiment in soybean oil, which closed up 248 points (4.75%). December soybean meal with $2.60 in gains and the strong bean oil market drove Board Crush in the December contracts to a 5-1/4 cent gain, adding support to soybeans.

  • Despite better than expected wheat export inspections, overall exports lag last year’s and weighed on prices with Paris Milling Wheat futures adding pressure to the Winter Wheats, while Minneapolis was able to close on the positive side, possibly in anticipation of lower crop conditions in this afternoon’s report.

  • The US dollar slid lower for the third day in a row and is trading near the June lows.  If the dollar breaks further, it could add support to commodities.

  • To see the current US 7 day precipitation forecast and NOAA US 8 – 14 day Temperature and Precipitation outlooks, 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. 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.

  • Corn prices continue to consolidate around the $5.00 price levels as futures were firmer to start the week. December corn traded around the $5.00 area for the sixth consecutive session as traders begin to square positions before Wednesday’s USDA report.

  • The USDA will release the July Supply/Demand report on Wednesday at 11:00 CST.  Expectations are for corn yield to drop to 176.3 bushels/acre, down 5.2 bushels/acres from the June report. Despite the yield drop, the additional acres and possible demand adjustment will likely keep new crop corn carryover near 2.250 billion bushels on the report.

  • Demand remains a concern as weekly export inspections were 341,000 mt last week, below trade expectations. This total is down 50% from last week and year-over-year, export inspections lagged last year by 32%.

  • Weather forecast will limit any near-term rally and rainfall chances and above normal temperatures should help additional crop recovery in some area and stabilize the crop into pollination.

  • Improved weather across the Corn Belt has analysts looking for improvement in the corn crop.  USDA crop ratings on Monday afternoon are expected to rise 2% to 53% good/excellent.  Rainfall reduced the areas of corn acres in drought from 70% to 67% week over week.

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. 

Corn Managed Money Funds net position as of Monday, July 3. Net position in Green versus price in Red. Money Managers net sold 52,845 contracts between June 27 – July 3, bringing their total position to a net short 18,209 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 being recommended for New Crop 2023 soybeans. No action is being recommended for New Crop 2023 soybeans. While changing weather forecasts will continue to dominate price action, a potentially much lower than anticipated 2023 carryout looms over the market due to low crop condition ratings and a reduced planted acreage estimate. Grain Market Insider is still eyeing a rally to the 1400 – 1450 area before considering any additional 2023 cash sales. Yet given the time of year and how fast prices can change direction, we’re willing to change that plan at a moment’s notice. In view of the current crop conditions and carryout situation and that we recently recommended making a cash sale, we suggest holding tight on further cash sales for now. 

  • 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 finished the day solidly on the positive side with additional support coming from both soybean meal and oil.

  • Export inspections for the week ending July 6 came in at 8.754 mbu, about 900 mbu lower than last week, bringing the total for the year to 1.825 bil. bu, and 5% behind last year at this time. Although the number was within expectations, it remains well below the 22 mbu needed per week to meet the USDA’s goal.

  • Friday’s COT report still show the funds long the soybean complex, although they did reduce their soybean holdings by an estimated 10,000 contracts to 89,000.  For soybean meal and oil, the funds are reportedly long 53,000 meal and 43,000 oil.

  • China has adopted new regulations to require imported soybeans to be quarantined in specific warehouses prior to entering the domestic market.

  • The average trade guess for 2022 ending stocks is up 5 mil bu. at 235 mbu. versus the USDA’s June estimate of 230, largely due to reduced export demand. As for 2023, due to 4 million fewer planted acres, the average trade estimate is 206 mil. bu with a 51.4 bpa compared to 49.5 last year.

  • The trade estimates Brazil’s soybean production to come in at 156.2 mmt in Wednesday’s USDA report, up slightly from the June estimate of 156 mmt.  For Argentina’s production, the average trade guess is 23.6 mmt, 1.4 mmt lower than in June.

Above: The USDA’s Stocks and Acreage estimate came in well below expectations and gave the market a solid push to the upside. The market has now fallen back and is struggling to continue higher without additional bullish input. If the market can rebound, resistance above the market continues to rest between 1500 – 1550, while support below the market could be found between 1340 and 1300 with further support near 1270.

COT – Soybeans Managed Money Funds net position as of Monday, July 3. Net position in Green versus price in Red.  Money Managers net sold 10,338 contracts between June 27 – July 3, bringing their total position to a net long 89,142 contracts.

Wheat

Market Notes: Wheat

  • After starting higher this morning, wheat could not hold onto those gains and traded lower for the rest of the session. Some pressure may be coming from the European markets, where Paris milling wheat futures closed lower for the third session in a row.

  • Wheat export inspections of 15.4 mb bring the 23/24 total inspections to 56 mb; this is down 21% from this time a year ago.

  • Funds are said to remain net short Chicago wheat by about 56,000 contracts. If Wednesday’s WASDE report is friendly this could trigger some short covering.

  • Next week the Black Sea Grain Initiative will expire – so far there has not been any new agreement reached. Turkey is reportedly trying to broker a deal to extend the corridor again, however Russia seems adamant that they have no reason to extend the deal.

  • According to their Agriculture Ministry, Russia’s wheat export tax is set to increase to 2,990 Rubles per ton next week, up from 2,610 Rubles.

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.

COT – Chicago Wheat Managed Money Funds net position as of Monday, July 3. Net position in Green versus price in Red. Money Managers net sold 1,838 contracts between June 27 – July 3, bringing their total position to a net short 54,006 contracts.

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.

K.C. Wheat Managed Money Funds net position as of Monday, July 3. Net position in Green versus price in Red. Money Managers net bought 1,341 contracts between June 27 – July 3, bringing their total position to a net long 13,760 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.

  • 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. 

Minneapolis Wheat Managed Money Funds net position as of Monday, July 3. Net position in Green versus price in Red. Money Managers net sold 1,009 contracts between June 27 – July 3, bringing their total position to a net long 1992 contracts. 

Other Charts / Weather

/imge

|

Grain Market Insider: July 7, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Disappointing weekly export sales and a more favorable weather forecast for the Corn Belt continue to add pressure to corn prices.

  • A friendly forecast for rain in the central Midwest, including much of Iowa and Illinois, helped to pressure the soybean complex lower across the board.

  • Percentage losses in soybean meal nearly equaled those of soybeans. Higher energy markets were unable to rescue soybean oil from its losses today, as it followed suit along with lower palm oil prices.

  • Despite a huge break in the US dollar, better than expected yields in France and a meeting between Turkish and Ukrainian leaders to discuss the Black Sea Export deal helped press all three wheat classes lower.

  • Today’s jobs numbers showed fewer than expected US jobs created in June, while also revising the number of jobs created in May down by 33,000. The news may have weighed negatively on commodities with the perception of a slowing economy, even though the US dollar traded sharply lower.

  • To see the current NOAA US 6 – 10 day and 8 – 14 day Temperature and Precipitation outlooks, 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. 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.

  • Selling pressure returned to the corn market to end the week, influenced by weakness across the grain markets and weather models forecasting better rain potential through the weekend.  Dec corn finished ¼ cent lower on the week as prices consolidated this week around the $5.00 level.

  • The USDA weekly export sales are still disappointing overall. The USDA announced new sales of 251,700 MT of old crop and 418,000 MT of new crop sales last week. Weekly exports were 707,500 MT, down 17% from last week and 24% from the four-week average.

  • The USDA announced a flash sale of corn to Mexico this morning. Mexico bought 180,000 MT of corn, which 135,000 MT was for new crop and 45,000 MT for old crop.

  • Brazil shipped just over 1 MMT of corn in the month of June, but U.S. prices continue to struggle on talk of Chinese buying of Brazilian corn as the window for Brazil corn exports is about to rally to its peak over the next few months.

  • Long range forecasts limit corn market rallies as 6-10 day and 8-14 day outlook forecasts from the NOAA are staying cooler and wetter than average.

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. 

  • No action is being recommended for New Crop 2023 soybeans. No action is being recommended for New Crop 2023 soybeans. While changing weather forecasts will continue to dominate price action, a potentially much lower than anticipated 2023 carryout looms over the market due to low crop condition ratings and a reduced planted acreage estimate. Grain Market Insider is still eyeing a rally to the 1400 – 1450 area before considering any additional 2023 cash sales. Yet given the time of year and how fast prices can change direction, we’re willing to change that plan at a moment’s notice. In view of the current crop conditions and carryout situation and that we recently recommended making a cash sale, we suggest holding tight on further cash sales for now. 

  • 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. 

  • An outlook for rain and cool temperatures for much of the northern and central Midwest in the 6 – 10 day forecast led the soybean complex lower, with the hope of reduced crop stress and some much needed moisture.

  • The area of the US soybean crop that is in drought areas dropped 3% to 60%. While this is still a significant area, given the recent rain throughout the Corn Belt, it is expected to drop further.

  • Weekly Export sales came in within expectations, but toward the low end, with net sales of 6.9 mb for 22/23, down 17% from last week’s report and 45% below the 4-week average. On the other hand, 23/24 sales came in above expectations at a friendly 21.8 mb.

  • According to Brazil’s grain exporters association, Anec, Brazil is expected to export 9.4 mil metric tons of soybeans in July, which is down from June’s 13.9 mt total.  For the year, its expected that the country may export a total of 96.3 mil mt, an increase of 17- 18 mmt over last year’s total. 

  • According to OilWorld, an analytical agency based in Germany, world biodiesel production is estimated to grow 8% this year. That is largely due to increases in the US with soybean oil being the primary feedstock, and Indonesia where palm oil is primarily used. The increased use of both feedstocks is supportive to bean oil and soybeans to maintain current world supplies.

  • China’s Shanghai Securities News stated that the country’s sow herd shrank by 1.68% in June. This being the largest decline in months, suggests that farmers are culling more and more of their sows to cut losses, further reducing their feed demand.

Above: The USDA’s Stocks and Acreage estimate came in well below expectations and gave the market a solid push to the upside. The market has now fallen back and is struggling to continue higher without additional bullish input. If the market can rebound, resistance above the market continues to rest between 1500 – 1550, while support below the market could be found between 1340 and 1300 with further support near 1270.

Wheat

Market Notes: Wheat

  • Despite a sharp drop in the US dollar today, all three classes of US wheat futures posted losses, and despite the lowest US wheat stocks in 16 years, which should also offer support, the wheat market looks weak.

  • The USDA reported an increase of 14.9 mb of wheat export sales for 23/24 and a decrease of 0.1 mb for 24/25.

  • Better than expected yields of French wheat are weighing on both US and Paris futures. So far, the French crop is reported to be about 10% harvested.

  • A meeting between leaders of Ukraine and Turkey to discuss an extension of the Black Sea grain deal took place Friday. They reportedly also discussed a prisoner swap and efforts to end the war. This comes despite Russia insisting they will not extend the agreement that ends on July 17th.

  • From a technical perspective, Chicago wheat futures are at or near oversold levels on daily stochastics. This could mean that a technical correction to the upside is due.

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. 

Other Charts / Weather

/imge

|

Grain Market Insider: July 6, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Driven by updated crop conditions and weather conditions, the corn market traded both sides of unchanged before settling on the positive side in sympathy with soybeans and wheat.

  • Oversold conditions and the unwinding of short corn and long soybean spreads likely added to the short covering bounce in the corn market, as traders covered positions and took profits following the market’s fall from the June highs.

  • A non-threatening forecast and weak demand took the soybean complex lower with December soybean oil leading the way with a 3.5% loss.

  • After making new highs for the move in yesterday’s trade, soybean oil traded through yesterday’s lows as traders booked profits from the recent rally on overbought conditions.

  • Better than expected yields in Illinois and continued low Russian export prices weighed on Chicago and K.C., wheat while Minneapolis was able to maintain small gains.

  • To see the current US Drought Monitor and the NOAA US 7-day precipitation forecast map, 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. 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.

  • Continue to hold current sales levels for the 2024 crop year. The Dec 24 contract is trading weather much like the rest of the market and posted nearly an eighty-cent range between 5/18 and 6/21 as dry conditions affect the ’23 crop and the potential carryout for the 2024 crop year. For now, continue to be patient as Grain Market Insider would like to see prices in the 570 – 600 level before considering making additional sales recommendations for the 2024 crop.

  • Corn futures saw short covering in an oversold market to finish with double digit gains on Thursday. With both weakness in the soybean and wheat trade overall, corn futures were likely the backside of that trade.The market saw a risk off mentality overall, and that meant covering short corn positions.

  • Chinese corn prices have been on the rise since April due to adverse weather, and rumors of China purchasing Brazilian corn for November delivery has helped support global corn prices, aiding the short covering rally.

  • Weather will stay as a focus. The short-term weather forecast is showing some concerns about the northwestern Corn Belt staying on the dry side, bringing concerns regarding overall crop yield.

  • A potential forecast for cooler temperatures next week should only help those areas that did receive recent rainfall, as corn looks to enter the pollination stage in the central Corn Belt.

  • The USDA will release weekly corn export sales numbers on Friday morning. Expectations are for old crop and new crop sales to range from 0-500,000 MT each respectively, as export demand is still lacking overall.

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 has pierced the 490 – 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. 

  • No action is being recommended for New Crop 2023 soybeans. No action is being recommended for New Crop 2023 soybeans. While changing weather forecasts will continue to dominate price action, a potentially much lower than anticipated 2023 carryout looms over the market due to low crop condition ratings and a reduced planted acreage estimate. Grain Market Insider is still eyeing a rally to the 1400 – 1450 area before considering any additional 2023 cash sales. Yet given the time of year and how fast prices can change direction, we’re willing to change that plan at a moment’s notice. In view of the current crop conditions and carryout situation and that we recently recommended making a cash sale, we suggest holding tight on further cash sales for now. 

  • 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, along with both soybean meal and oil after futures became overbought during the past week, and weather forecasts turn wetter in the South over the next week.

  • Brazil’s export group, ANEC, reported that June soy exports rose to 9.44 mmt, which compares with 7 mmt in June of last year. With Brazil taking so much control of the soy export market, US export remain very sluggish.

  • The 10-day forecast is showing rain for Iowa, northern Illinois, the northern Plains, and Great Lakes regions. The northern areas are the hardest pressed for moisture right now and these rains could provide some needed relief.

  • Soy conditions are currently the worst rated for this time of year since 2012 at only 50% good to excellent, falling 1% from the previous week. The decline in ratings came after a week of beneficial rain, so it is unknown what ratings will look like after this week’s rain amounts which are forecasted to be decent but better in the South.

Above: The USDA’s Stocks and Acreage report gave the market a bullish shot in the arm with a much-reduced acreage estimate. If the market can continue to rally beyond the 1450 area, 1500 – 1550 could be its next target. If not, support could be found between 1340 and 1300 with further support near 1270.

Wheat

Market Notes: Wheat

  • Despite the uncertainty in the Black Sea, US wheat futures closed mostly lower today. Not only are there worries about sabotage of Ukrainian nuclear power plant, but overnight Russian missile strikes hit the city of Lviv. Russia is also said to be taking back parts of eastern Ukraine.

  • Better than expected yields of SRW wheat in Illinois may have put pressure on the Chicago market today. Higher yields of French wheat also offered resistance. Reportedly, that crop yield is 5% above the 10 year average.

  • Cheap Russian wheat exports continue to act as the anchor for US futures. Russian FOB values are said to be as low as $232 per metric ton. Additionally, one estimate of Russia’s wheat crop (Agritel) was increased by 2.5 mmt to 85.7 mmt. For reference the USDA is using a figure of 85 mmt.

  • Tunisia is reported to have purchased 100,000 mt of wheat from Russia. The US was not totally left on the sidelines, however. Taiwan flour millers purchased 56,000 mt of US wheat.

  • A Canadian port strike in British Columbia could eventually slow grain movement there, although it is not a major concern so far.

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. 

Other Charts / Weather

|

Grain Market Insider: July 5, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Driven by updated crop conditions and weather conditions, the corn market traded both sides of unchanged before settling on the positive side in sympathy with soybeans and wheat.

  • After trading on both sides of unchanged like corn, November soybeans settled just 1 ¼ cents higher with strength being drawn from a higher soybean oil market, while lower soybean meal added resistance to prices.

  • Soybean oil likely found support from much higher crude and heating oil prices that were 3.2% and 5.1% higher respectively, implying higher demand for bean oil may be ahead.

  • Continued concerns regarding explosives being placed at the Zaporizhzhia nuclear power plant in Ukraine likely supported all three wheat classes to close sharply higher on the day.

  • To see the current US NOAA 6 – 10 day Temperature and Precipitation Outlooks, 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. 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.

  • Continue to hold current sales levels for the 2024 crop year. The Dec 24 contract is trading weather much like the rest of the market and posted nearly an eighty-cent range between 5/18 and 6/21 as dry conditions affect the ’23 crop and the potential carryout for the 2024 crop year. For now, continue to be patient as Grain Market Insider would like to see prices in the 570 – 600 level before considering making additional sales recommendations for the 2024 crop.

  • After trading both sides of unchanged and making a new low for the move. December corn found support below the market on very oversold conditions and a sharply higher wheat market to close unchanged.

  • The USDA released their updated crop ratings for corn Monday afternoon, raising the Good/Excellent rating 1%, to 51%. While the overall rating came in as expected, Illinois’ G/E rating improved 10% to 36%.

  • Although the current crop conditions have improved, they continue to be the lowest since 2012, with some feeling that current conditions imply a yield closer to 171.5 bpa. This would suggest a crop size of 14.75 billion bushels based on the updated USDA acreage numbers and imply a 300 mil. bu increase to carryout based on current USDA usage. 

  • Corn used in ethanol production for the month of May was weak and only came in at 437.5 mil. bu, bringing this year’s total used to 3.835 bil bu, which is down 4% from the USDA’s current estimate of down 4%. At this point in the marketing year, it seems unlikely that usage will reach USDA estimates without any adjustments lower.

  • Cooler temperatures are expected to move through the Midwest in the next 24 – 36 hours.  While normal to slightly below normal temperatures are expected this weekend, with above average rain in the southwest Corn Belt and 1 – 1.5 inches of rain expected in IL and IN.

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 has broken through the 490 – 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.

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 being recommended for New Crop 2023 soybeans. No action is being recommended for New Crop 2023 soybeans. While changing weather forecasts will continue to dominate price action, a potentially much lower than anticipated 2023 carryout looms over the market due to low crop condition ratings and a reduced planted acreage estimate. Grain Market Insider is still eyeing a rally to the 1400 – 1450 area before considering any additional 2023 cash sales. Yet given the time of year and how fast prices can change direction, we’re willing to change that plan at a moment’s notice. In view of the current crop conditions and carryout situation and that we recently recommended making a cash sale, we suggest holding tight on further cash sales for now. 

  • 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 mixed today with the July contract fading lower as its in the delivery process. While November closed slightly higher as trade seems to be focusing less on the recent acreage report and more on upcoming weather which should be wet over the next 7 days.

  • Crop progress was released late on Monday and showed soybean conditions declining surprisingly, despite the very beneficial rains that fell over the Corn Belt last week. Soybeans are now at 50% good to excellent and 29% poor to very poor. 24% of the crop is blooming and 4% is setting pods, both below average.

  • News today was relatively quiet, and the market is trying to find direction. After Friday’s Stocks and Acreage reports and Monday’s Crop Progress report, there is a lot of data for traders to digest. The next USDA supply and demand report on July 12 may help the market to find direction.

  • Palm oil reserves in Malaysia may rise to a four-month high. June inventory grew 11% from the previous month to 1.86 million tons. Down the road, El Nino could have an impact on palm oil production, however.

Above: The USDA’s Stocks and Acreage report gave the market a bullish shot in the arm with a much-reduced acreage estimate. If the market can continue to rally beyond the 1450 area, 1500 – 1550 could be its next target. If not, support could be found between 1340 and 1300 with further support near 1270.

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

Wheat

Market Notes: Wheat

  • Wheat posted strong gains today, seemingly on concern about the situation in the Black Sea. Explosives have reportedly been planted at the Zaporizhzhia nuclear power plant in Ukraine. Both Russia and Ukraine are blaming each other, and naturally this is causing an increase in tensions and concern for the welfare of the region.  

  • Aside from the nuclear plant, there is also question as to whether the Black Sea export corridor will be renewed on July 18th. There continues to be talk out of Russia that they will not renew the agreement, but traders have heard that story before.

  • Monday’s crop progress report showed spring wheat condition down 2% from last week, now at 48% good to excellent. This also was supportive to the wheat market today. As for winter wheat, condition was left unchanged at 40% G/E, but harvest pace is still well behind at only 37% complete versus 46% on average.

  • Argentina is planting wheat, with the Argentina Secretariat of Agriculture saying that 23/24 will have 6.1 million hectares planted. For the 23/24 marketing year, Argentina wheat production may increase to 18 – 19 mmt versus 12.6 mmt in 22/23.

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.

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.

  • There continues to be an opportunity to sell 2023 New Crop MINNEAPOLIS Wheat. Weather dominates the market right now, and friendlier forecasts have pushed prices below the 822 support level. Closing below that 822 support signals that the recent uptrend off the May lows may have ended, which poses the risk that the change in trend could erode the price further in the weeks ahead. The first risk being, price drops to the May low of 771, which is where first support comes in. If that level doesn’t hold, then the next risk could be in the 680-710 window. Although making a sale in a down market may be uncomfortable, it’s important at times to have a Plan B with the objective of trying to avoid having to sell bushels at even lower prices in the future if a downtrend takes hold.

  • 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 trading lower, it will need additional bullish news to turn it back around. Should the market continue to fall, support may be found between 770 and 730. 

Other Charts / Weather

|

Grain Market Insider: July 3, 2023

ByGrain Market Insider
The CME and Total Farm Marketing offices will be closed
Tuesday, July 4, in observance of Independence Day

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Marked by low volume as many traders stayed away for an extended July 4th holiday, the corn market failed to hold onto support from the neighboring soybean market as carryover weakness from Friday’s report and weekend rains weighed on prices.

  • Following Friday’s surprise USDA 4 million acre drop in soybeans planted acres, follow through buying in soybeans added to last week’s gains, though the November contract settled in the bottom end of its range.

  • Continued buying from Friday’s limit up close in soybean oil helped to give an additional support to soybeans and Board Crush margins as December bean oil closed 2.1% higher. Soybean meal traded higher in the overnight but sold off throughout the day to close lower, ending in a bearish reversal.

  • News that the EU is considering letting Russia back into the global banking system, along with weak demand and low Russian prices, pressured all three wheat classes to close lower on the day following two-sided trade.

  • To see the current US NOAA July Temperature and Precipitation Outlooks, 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. 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.

  • Continue to hold current sales levels for the 2024 crop year. The Dec 24 contract is trading weather much like the rest of the market and posted nearly an eighty-cent range between 5/18 and 6/21 as dry conditions affect the ’23 crop and the potential carryout for the 2024 crop year. For now, continue to be patient as Grain Market Insider would like to see prices in the 570 – 600 level before considering making additional sales recommendations for the 2024 crop.

  • The corn market was digesting Friday’s bearish USDA corn acre numbers, weather forecast, and technical weakness as prices drifted lower into the close of the session. Price action remains weak as Dec corn failed to push back through the key $5.00 price level on the day.

  • December corn futures posted a new low for the move, pushing past the low established on 5/18. Finishing with a lower range close, the weak price action will likely keep sellers active on Wednesday as long as support price news is lacking in the market.

  • Large areas of the corn belt saw greater than one inch of rainfall over the past few days, which will likely help some areas in need. Many areas of the corn belt are still overall deficient on rainfall totals, and timely rains will be necessary. Forecasts going into next week are still showing a cooler and wetter overall bias.

  • The USDA will release weekly crop progress report late on Monday afternoon, and analysts are expecting corn conditions to improve slightly to 51% good/excellent, up 1% from last week. Illinois will still be a watched state as decent rainfall coverage occurred over the weekend, and ratings should stabilize.

  • The USDA released weekly export inspections on Monday morning and U.S. exporters shipped 643,000 MT of corn last week. This total was higher than last week’s totals, but year-over-year exports are still lagging by 31%.

Above: The USDA’s Stocks and Acreage report added bearish news to the market with its higher acres estimate. Since the last week of June, prices have been racing towards the 490 – 505 support level which has been in place since January 2021. If the market breaks through the 490 area, there may not be much support until 390 – 415. Overhead lies strong resistance between 595 and 625.

Corn Managed Money Funds net position as of Tuesday, June 27. Net position in Green versus price in Red. Money Managers net sold 5,454 contracts between June 20 – June 27, bringing their total position to a net long 52,845 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 being recommended for New Crop 2023 soybeans. Changes in weather forecasts and crop conditions will continue to dominate the market. With having just recommended making a cash sale, and with one of the most volatile USDA report days of the year coming this Friday, we would need to see the market rally to 1400 – 1450 area before we would consider recommending any additional sales for the 2023 crop. Otherwise, in light of current crop conditions, we will suggest holding tight on further cash sales for now.

  • Continue to hold off on pricing the 2024 crop. We look to make sales further into the 2023 growing season when selling opportunities tend to improve seasonally. 

  • Soybeans ended the day higher after Friday’s huge rally, but November beans backed significantly off their highs overnight where they reached the highest levels since late February. Soybean meal closed lower while soybean oil closed higher.

  • On Friday, the USDA estimated soybeans at 83.5 million acres, far below the average trade guess of 87.7 million acres and the previous USDA estimate of 87.5 ma. US quarterly soy stocks came in at 796 million bushels, below the trade guess of 812 mb but overshadowed by the huge drop in acres.

  • Crop progress will be released later today, and it is expected that good to excellent ratings will increase after the recent rains in some of the driest areas of the Corn Belt. Soybeans are expected to improve by 1% to 52% good to excellent, but that number may come in higher.

  • Friday’s CFTC report showed funds as buyers of soybeans by 22,530 contracts, increasing their net long position to 99,480 contracts.

Above: The USDA’s Stocks and Acreage report gave the market a bullish shot in the arm with a much-reduced acreage estimate. If the market can continue to rally beyond the 1450 area, 1500 – 1550 could be its next target. If not, support could be found between 1340 and 1300 with further support near 1270.

Soybeans Managed Money Funds net position as of Tuesday, June 27. Net position in Green versus price in Red. Money Managers net bought 22,530 contracts between June 20 – June 27, bringing their total position to a net long 99,480 contracts.

Wheat

Market Notes: Wheat

  • The European Union is considering letting the Russian Agricultural Bank back into the global SWIFT program. This reduction of sanctions is an effort to get Russia to extend the Black Sea corridor once again – last week Russia said they do not have reason to extend it beyond expiration on July 17. Meanwhile, Russia continues to lead the world for cheap wheat exports, which remains an anchor for US export demand.

  • News outlets are reporting that Ukraine is conducting drills for a radiation exposure emergency. According to Ukraine officials, Russia has planted explosives at the Zaporizhzhia nuclear plant. This is the same plant that has had several other scares over the past months after being disconnected from the power grid.

  • Weekly wheat export inspections of 12.4 mb for the week ending 6/29 were 64% higher than the week prior 23% higher last year and bring total 23/24 inspections to 40.2 mb.

  • As of June 27, funds reduced their net short position in Chicago wheat from about 90,000 contracts to about 55,000 contracts.

  • Weather over the next seven days is expected to bring more rain to the western corn belt, which may continue to slow harvest in Kansas and Nebraska.

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.

Chicago Wheat Managed Money Funds net position as of Tuesday, June 27. Net position in Green versus price in Red. Money Managers net bought 31,966 contracts between June 20 – June 27, bringing their total position to a net short 52,168 contracts.

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.

K.C. Wheat Managed Money Funds net position as of Tuesday, June 27. Net position in Green versus price in Red. Money Managers net bought 6,475 contracts between June 20 – 27, bringing their total position to a net long 12,419 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.

  • There continues to be an opportunity to sell 2023 New Crop MINNEAPOLIS Wheat. Weather dominates the market right now, and friendlier forecasts have pushed prices below the 822 support level. Closing below that 822 support signals that the recent uptrend off the May lows may have ended, which poses the risk that the change in trend could erode the price further in the weeks ahead. The first risk being, price drops to the May low of 771, which is where first support comes in. If that level doesn’t hold, then the next risk could be in the 680-710 window. Although making a sale in a down market may be uncomfortable, it’s important at times to have a Plan B with the objective of trying to avoid having to sell bushels at even lower prices in the future if a downtrend takes hold.

  • 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 trading lower, it will need additional bullish news to turn it back around. Should the market continue to fall, support may be found between 770 and 730. 

Minneapolis Wheat Managed Money Funds net position as of Tuesday, June 27. Net position in Green versus price in Red. Money Managers net bought 6,263 contracts between June 20 – June 27, bringing their total position to a net long 3,001 contracts.

Other Charts / Weather

|

Grain Market Insider: June 30, 2023

ByGrain Market Insider
The CME and Total Farm Marketing offices will be closed
Tuesday, July 4, in observance of Independence Day

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • While corn stocks reported by the USDA as of June 1 were 150 mb below expectations, it was the incredibly bearish surprise increase of 2.3 mil. acres that shocked the market and sent it reeling sharply lower.

  • The USDA’s soybean stocks and planted acreage numbers came in well below expectations at 796 mb and 83.5 mil. acres respectively and launched soybeans higher, wiping out losses back to June 22.

  • Soybean meal and oil joined in the fun trading higher and added support to soybeans as Dec meal closed with a gain of $16.80 (4.4%), and Dec bean oil closed limit up with a gain of 4.00 cents (7.3%).

  • The wheat complex ended the day mixed, as pressure spilled over from lower corn, and planted acres for wheat were mostly as expected, with June 1 stocks 31 mb below expectations.

  • A lower US Dollar was unable to lend any support to the corn or wheat markets as it traded lower, eclipsing yesterday’s gains.

  • To see the updated USDA Planted Acreage maps, 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.  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.

  • Continue to hold current sales levels for the 2024 crop year.  The Dec 24 contract is trading weather much like the rest of the market and posted nearly an eighty-cent range between 5/18 and 6/21 as dry conditions affect the ’23 crop and the potential carryout for the 2024 crop year. For now, continue to be patient as Grain Market Insider would like to see prices in the 570 – 600 level before considering making additional sales recommendations for the 2024 crop.

  • A surprise jump in corn planted acres brought strong selling pressure in the corn market to end the week. December corn closed down 6.4% and posted its lowest daily close since October 2021. For the week, December corn futures dropped 93-1/4 cents.

  • The USDA Planted Acres report raised planted corn acres to 94.1 million acres, the highest total in 10 years, and up 2.3% from the March intentions report and 6.2% over last year.  Market analysts were expecting a total of 91.9 million acres.

  • USDA released quarterly Grain Stocks report, and total grain stocks were 4.106 billion bushels, down 150 million bushels from expectations and 5.6% from last year’s total. The supportive number was outweighed by the strong jump in planted acres during the session.

  • Weather forecasts remain more friendly for crop development as long-range forecasts hold a wetter and cooler bias across the corn belt into the middle of July.

  • The weak prices action and technical close will likely keep the corn market pressured going into the holiday trade next week. The December close below $5.00 is disappointing to market bulls and could trigger additional liquidation to start the week.

Above: The USDA’s Stocks and Acreage report added bearish news to the market with its higher acres estimate. Since the last week of June, prices have been racing towards the 490 – 505 support level which has been in place since January 2021. If the market breaks through the 490 area, 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. 

  • No action is being recommended for New Crop 2023 soybeans. Changes in weather forecasts and crop conditions will continue to dominate the market. With having just recommended making a cash sale, and with one of the most volatile USDA report days of the year coming this Friday, we would need to see the market rally to 1400 – 1450 area before we would consider recommending any additional sales for the 2023 crop. Otherwise, in light of current crop conditions, we will suggest holding tight on further cash sales for now.

  • Continue to hold off on pricing the 2024 crop. We look to make sales further into the 2023 growing season when selling opportunities tend to improve seasonally. 

  • Soybeans absolutely skyrocketed today following the USDA Acreage and Stocks report which saw fewer soybean acres planted in favor of corn. Soybean meal ended over 4% higher, and soybean oil closed over 7% higher in the December contracts.

  • The USDA has estimated soybeans at 83.5 million acres, far below the average trade guess of 87.7 million acres and the previous USDA estimate of 87.5 ma. US quarterly soy stocks came in at 796 million bushels, below the trade guess of 812 mb but overshadowed by the huge drop in acres.

  • Private exporters reported to the USDA export sales of 132,000 metric tons of soybeans for delivery to China during the 23/24 marketing year. This was the first flash sale to China that the US has seen in months.

  • While today’s report gave soybeans a significant rally, weekend weather is forecast to be wet in the driest areas of the Corn Belt, and the longer-term forecast is wet as well. It is possible that trade will go back to trading weather markets next week.

Above: The USDA’s Stocks and Acreage report gave the market a bullish shot in the arm with a much-reduced acreage estimate. If the market can continue to rally beyond the 1450 area, 1500 – 1550 could be its next target. If not, support could be found between 1340 and 1300 with further support near 1270.

Wheat

Market Notes: Wheat

  • Today the USDA estimated 2023 all wheat acreage basically in line with expectation at 49.6 mb vs 49.65 mb expected. This was, however, up 9% from 2022. Included in this change was spring wheat acreage, which increased from the expected 10.51 mb to 11.1 mb.

  • Today the USDA estimated June 1 wheat stocks at 580 million bushels. This was less than the 611 mb expectation and 698 mb last year. While this is somewhat friendly, wheat likely followed corn lower.

  • Yesterday the International Grains Council increased their projection of world wheat production by 6 mmt to 783 mmt for 23/24, which offered no support to the US wheat market today.

  • Technical momentum for wheat is downward on both stochastics and the RSI. Support for Dec Chicago wheat at the 21-day moving average, around 6.91, was violated today.

  • According to Russia’s foreign minister, Sergei Lavrov, he sees no arguments to extend the Black Sea export deal beyond the expiration of July 18.

  • Paris milling wheat could not hold onto earlier gains and posted losses for a fourth day out of the past five sessions.

Chicago Wheat Action Plan Summary

  • No new action is recommended for the 2022 crop. Grain Market Insider is done with the 2022 crop, and there will be no New Alerts posted for the 2022 crop going forward.

  • 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.  

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

  • No new action is recommended for the 2022 crop. Though most, if not all, of your Old Crop 2022 wheat may be sold, consider storing any remaining Old Crop, if possible, in anticipation of a short new crop this year, and marketing it along with the new crop.

  • 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.

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.

  • There continues to be an opportunity to sell 2023 New Crop MINNEAPOLIS Wheat. Weather dominates the market right now, and friendlier forecasts have pushed prices below the 822 support level. Closing below that 822 support signals that the recent uptrend off the May lows may have ended, which poses the risk that the change in trend could erode the price further in the weeks ahead. The first risk being, price drops to the May low of 771, which is where first support comes in. If that level doesn’t hold, then the next risk could be in the 680-710 window. Although making a sale in a down market may be uncomfortable, it’s important at times to have a Plan B with the objective of trying to avoid having to sell bushels at even lower prices in the future if a downtrend takes hold.

  • 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 trading lower, it will need additional bullish news to turn it back around. Should the market continue to fall, support may be found between 770 and 730. 

Other Charts / Weather

|

Grain Market Insider: June 29, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Continued long liquidation and technical selling, paired with less than stellar export sales, pressured the corn market ahead of tomorrow’s USDA Stocks and Acreage report.

  • First Notice Day is tomorrow, and with reduced position limits for the July contract, it appears short July position holders were in a race to cover positions with July closing sharply higher and the July/August spread gaining 26 cents.

  • New Crop soybean contracts closed nearly unchanged, balanced by higher soybean meal and lower soybean oil. With traders squaring meal positions ahead of tomorrow’s report while bean oil saw more technical follow through selling after yesterday’s bearish reversal.

  • Weak export sales and a higher US Dollar added resistance to the wheat markets with Chicago and K.C. following corn lower, while Minneapolis closed higher.  

  • The US Dollar broke out of its recent range to the upside and traded to a high of 103.44, on hawkish comments from Jerome Powell and a better-than-expected GDP report. The move higher may add a layer of resistance to the grain markets if it continues.

  • To see the current US Drought Monitor and US 7-day Precipitation forecast, 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.  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.

  • Continue to hold current sales levels for the 2024 crop year.  The Dec 24 contract is trading weather much like the rest of the market and posted nearly an eighty-cent range between 5/18 and 6/21 as dry conditions affect the ’23 crop and the potential carryout for the 2024 crop year. For now, continue to be patient as Grain Market Insider would like to see prices in the 570 – 600 level before considering making additional sales recommendations for the 2024 crop.

  • Further technical selling and long liquidation pushed the corn market moderately lower.  December corn failed to find support at the June 8 price gap at $6.33 ½. Confirmation of rainfall in recent forecasts and longer-term weather models holding a wetter and cooler bias pressure the market.

  • The selling in December corn futures has been aggressive as prices have lost nearly 16% over the past six trading sessions and has been measured as one of the steepest six-session drops in corn prices during the month of June over the past three decades.

  • Export demand remains a concern as the weekly USDA Export Sales report showed new sales of 140,400 MT of old crop and 123,500 MT of new crop. The total sales were at the lower end of analysts’ expectations.

  • Weather models remain bearish for prices, as the 8-14 day forecast is looking at trending overall cooler temperature and above average precipitation over the majority of the corn belt.  Rainfall looks to be targeted over Iowa, Illinois and into Indiana, areas that shifted drier on the latest drought monitor maps.

  • Drought monitor maps are reflecting the dry conditions, as the estimate is up to 70% of corn acres in the U.S. are experiencing some form of drought, up 10% from last week.

  • The market may be poised for some short covering before Friday’s 11:00 am USDA Planted Acreage and Grain Stocks report, as traders could look to square positions. Expectations are for corn acres to be at 91.8 million acres, down slightly from the March planting estimates. Grain stocks for the quarter are expected to be near 4.25 billion bushels, down 2.3% from last year.

Above: The weather has been a dominant feature of the current market and since May 18, September corn has had a 127-cent swing and back, testing 625 resistance and falling through 540 support. Without more bullish news, prices could slide further, where support may be found around the psychological level of 500, between 490 – 505, with key resistance above the market near 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. 

  • No action is being recommended for New Crop 2023 soybeans. Changes in weather forecasts and crop conditions will continue to dominate the market. With having just recommended making a cash sale, and with one of the most volatile USDA report days of the year coming this Friday, we would need to see the market rally to 1400 – 1450 area before we would consider recommending any additional sales for the 2023 crop. Otherwise, in light of current crop conditions, we will suggest holding tight on further cash sales for now.

  • Continue to hold off on pricing the 2024 crop. We look to make sales further into the 2023 growing season when selling opportunities tend to improve seasonally. 

  • Soybeans ended significantly higher in the July contract as First Notice Day approaches tomorrow, but deferred contracts only ended slightly higher. Soybean meal closed higher while only July and August soybean oil ended higher.

  • The USDA’s Planted Acreage and Stocks report will be released tomorrow, and analysts are expecting soybean acres to increase slightly, while stocks are estimated to decline.

  • Significant rains are currently moving through central Illinois, but they are accompanied by strong winds in some areas with reports of up to 70 and 80 mph. More rain is in the forecast for Iowa, Illinois, and Indiana over the next 5 days.

  • Weekly export sales were disappointing again with an increase of 8.4 mb for 22/23 and an increase of 0.6 mb for 23/24. Sales were down 28% from the prior 4-year average. Last week’s export shipments of 7.0 mb were below the 11.4 mb needed each week to achieve the USDA’s export estimates.

Above: The market continues to keep its eye on the weather. The August contract rallied in June and tested the 1450 resistance area near the 100 and 200-day moving averages before it slid back. If the market receives additional bullish news and can rally beyond the 1450 area, 1500 – 1550 could be its next target. If not, support could be found between 1340 and 1300 with further support near 1270.

Wheat

Market Notes: Wheat

  • Despite holding in positive territory for much of the day, Chicago wheat posted small losses at the close. The silver lining may be that the market is probing for a bottom at these lower support levels.

  • The USDA reported an increase of 5.7 mb of wheat export sales for 23/24. The USDA is estimating 725 mb of wheat exports for 23/24 and last week’s shipments of 5.8 mb are behind the 14.1 mb pace needed to meet that goal.

  • The US Dollar Index is trending higher today and above the 103 level. Along with poor export data, these factors are likely limiting the upside for wheat futures.

  • Also offering resistance to US wheat is the fact that Canada revised higher their spring wheat seeding to the largest acreage since 2001. Recent rains in the northern US are likely to improve spring wheat conditions as well. Interestingly, Minneapolis wheat was the only US class to post gains today in the face of these negative factors.

  • The US Ag Attaché in Australia is projecting their wheat crop at 29 mmt, down about 10 mmt from last year. The reduction is a result of anticipated drought conditions caused by the El Nino weather pattern.

Chicago Wheat Action Plan Summary

  • No new action is recommended for the 2022 crop. Grain Market Insider is done with the 2022 crop, and there will be no New Alerts posted for the 2022 crop going forward.

  • 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.  

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

  • No new action is recommended for the 2022 crop. Though most, if not all, of your Old Crop 2022 wheat may be sold, consider storing any remaining Old Crop, if possible, in anticipation of a short new crop this year, and marketing it along with the new crop.

  • 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.

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.

  • There continues to be an opportunity to sell 2023 New Crop MINNEAPOLIS Wheat. Weather dominates the market right now, and friendlier forecasts have pushed prices below the 822 support level. Closing below that 822 support signals that the recent uptrend off the May lows may have ended, which poses the risk that the change in trend could erode the price further in the weeks ahead. The first risk being, price drops to the May low of 771, which is where first support comes in. If that level doesn’t hold, then the next risk could be in the 680-710 window. Although making a sale in a down market may be uncomfortable, it’s important at times to have a Plan B with the objective of trying to avoid having to sell bushels at even lower prices in the future if a downtrend takes hold.

  • 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 trading lower, it will need additional bullish news to turn it back around. Should the market continue to fall, support may be found between 770 and 730. 

Other Charts / Weather

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

|

Grain Market Insider: June 28, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Long liquidation dominated the corn market, led by the July contract, as traders began moving out of their long positions ahead of Friday’s First Notice Day when long July position holders will be notified of delivery.

  • Like the corn market, soybeans were held hostage by sellers liquidating July positions ahead of Friday’s First Notice Day, as the July/August spread lost 9-1/2 cents.

  • Sharply lower soybean meal and oil added to the negativity in soybeans, as Stats Canada reported an increase of 500k acres to Canada’s Canola crop.

  • Sharply lower corn and beans add downward pressure to the wheat complex as Funds likely add to short positions on a more favorable weather forecast for the Midwest.

  • To see the current US NOAA 6 – 10 and 8 – 14 day Temperature and Precipitation Outlooks 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.   Any remaining old crop bushels that you may have should be getting priced into this rally. We won’t have any “New Alerts” for 2022 Corn — either 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.

  • Continue to hold current sales levels for the 2024 crop year.  The Dec 24 contract is trading weather much like the rest of the market and posted nearly an eighty-cent range between 5/18 and 6/21 as dry conditions affect the ’23 crop and the potential carryout for the 2024 crop year. For now, continue to be patient as Grain Market Insider would like to see prices in the 570 – 600 level before considering making additional sales recommendations for the 2024 crop.

  • Sellers stayed in control in the corn market as prices finished with strong double-digit losses, dropping another 4% again on Wednesday. Since peaking at $6.29-3/4 on June 16, December corn has lost 93 cents into today’s close.

  • Technical selling and long liquidation gripped the corn market as prices pushed through support levels. Selling pressure was only fueled by the weather forecast staying on the wetter side for the next couple weeks, which could provide some severely needed moisture in key growing areas.

  • The USDA announced an export sale of corn to Mexico this morning. Mexico bought 170,706 MT of corn. Of that total, 21,340 MT was old crop, and 149,366 MT was new crop. This was the first published export corn sale since April 14.

  • The market may turn choppy as traders look to this Friday’s USDA Planted Acreage and Grain Stocks report. Expectations are for corn acres to be at 91.8 million acres, down slightly from the March planting estimates. Grain stocks for the quarter are expected to be near 4.25 billion bushels, down 2.3% from last year.

Above: Weather continues to dominate price discovery with every change in the weather forecast. Corn rallied into the 625 resistance area and reversed lower to test 580 – 540 support level. Should this support area fail, further support may be found below the market between 505 and 490. With resistance above 625 coming in near the March highs between 650 – 670.

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 — either Cash, Calls, or Puts, as we have moved focus onto 2023 and 2024 Crop Year Opportunities. 

  • No action is being recommended for New Crop 2023 soybeans.  Changes in weather forecasts and crop conditions will continue to dominate the market. With having just recommended making a cash sale, and with one of the most volatile USDA report days of the year coming this Friday, we would need to see the market rally to 1400 – 1450 area before we would consider recommending any additional sales for the 2023 crop. Otherwise, in light of current crop conditions, we will suggest holding tight on further cash sales for now.

  • Continue to hold off on pricing the 2024 crop. We look to make sales further into the 2023 growing season when selling opportunities tend to improve seasonally. 

  • Soybeans closed sharply lower again, along with both soybean meal and oil, as weather forecasts continue to predict needed rains over the next 5 days in the Corn Belt. Illinois and Indiana are slated to receive the most rain followed by Iowa.

  • Next week’s Crop Progress report will be interesting in that we will see how much help the crop received from this week’s rain. Monday’s report showed good to excellent ratings at just 51% and Illinois’ ratings at just 25%.

  • Brazil’s soybean crop has been estimated higher yet again, now at 156 mmt. They increased their soy exports as well to a record large 97.3 mmt, up 1.3 mmt from their last estimate.

  • On Friday, the Planted Acreage report will be released, and the Dow Jones survey expects the USDA to say that 97.7 million acres of soybeans were planted in 2023 and 808 mb of soybeans were on hand as of June 1.

Above: The market’s eye is squarely on the weather at this time. The August contract rallied through the 50-day moving average and hit resistance near 1450 and the 100-day moving average. If the market can rally beyond this point, the resistance area between 1500 and 1550 could be its next target. If the market drops back, support could be found between 1340 and 1300 with further support near 1270.

Wheat

Market Notes: Wheat

  • Neither the higher US Dollar today, nor lower Matif wheat futures offered any support to the US wheat complex. Funds are likely adding short positions due to the shift in weather towards a wetter forecast. Additionally, lower row crop futures do not help the wheat price situation.

  • Major weather models are all putting more rain in the forecast for the driest parts of the Midwest. This may slow winter wheat harvest, which is already behind the normal pace. But it may also bring some moisture to northern spring wheat areas, improving crop conditions there. Spring wheat is currently rated 50% good to excellent.

  • Within the past week, two cargoes of wheat have left Ukraine along with 5 cargoes of corn, destined for Europe and China. While there have been reports of Russia blocking shipments in the Black Sea, some grain still appears to be flowing. This is also despite the recent developments in Russia and the Wagner group’s attempted coup.

  • The Ukraine Grain Traders Union is estimating Ukraine’s wheat crop at 24.4 mmt, which is higher than other estimates ranging from 16-18 mmt. If the Black Sea corridor is renewed on July 18th (still an uncertainty at this point), increased exports out of that region could further pressure US markets.

  • On Friday, traders will receive the quarterly Stocks and Acreage reports from the USDA. All wheat acreage is expected to be down slightly at 49.647 million acres, compared to 49.855 on the March report. The pre-report average stocks estimate is at 611 mb, vs 946 in March, and vs 698 at this time last year.

  • December Chicago wheat broke through support at the 100-day moving average today but did hold support at 5.85, the 21-day moving average. Technically, momentum is down on daily stochastics and the RSI.

Chicago Wheat Action Plan Summary

  • No new action is recommended for the 2022 crop. Grain Market Insider is done with the 2022 crop, and there will be no New Alerts posted for the 2022 crop going forward.

  • 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.  

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 near 670 with further support coming in between 650 – 610. While resistance above the market rests between 770 – 810.

KC Wheat Action Plan Summary

  • No new action is recommended for the 2022 crop. Though most, if not all, of your Old Crop 2022 wheat may be sold, consider storing any remaining Old Crop, if possible, in anticipation of a short new crop this year, and marketing it along with the new crop.

  • 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.

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

Mpls Wheat Action Plan Summary

  • No new action for 2022 Old Crop MINNEAPOLIS Wheat. Prices haven’t moved much over the last couple of weeks, and it’s disappointing to see the lack of upside opportunities that the market has offered following the large snowfall and the late start to planting this spring. Yet, 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, especially given record European wheat shipments and falling Russian prices. Also, we typically recommend finishing up sales on any remaining Old Crop bushels by mid-June, as bids will soon shift from the July to September contract, and there is currently no carry offered.

  • Grain Market Insider recommends selling 2023 New Crop MINNEAPOLIS Wheat today.  Weather dominates the market right now and friendlier forecasts have pushed prices below the 822 support level. Closing below that 822 support signals that the recent uptrend off the May lows may have ended, which poses the risk that the change in trend could erode the price further in the weeks ahead. The first risk being price drops to the May low of 771, which is where first support comes in. If that level doesn’t hold, then the next risk could be in the 680 – 710 window. Although making a sale in a down market may be uncomfortable, it’s important at times to have a Plan B with the objective of trying to avoid having to sell bushels at even lower prices in the future if a downtrend takes hold.

  • 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 trading lower, it will need additional bullish news to turn it back around. Should the market continue to fall, support may be found between 770 and 730. 

Other Charts / Weather

|

Grain Market Insider: June 27, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Lower than expected crop ratings led the corn market to gap open 5 cents higher at the start of the evening session, only to uncover the sellers in the market as weather forecasts showed more rain chances across the Midwest.

  • Soybeans opened steady to better at the opening of the overnight session, and like corn, sellers emerged to liquidate long positions on improved weather forecasts.

  • Soybean meal and oil settled in opposite directions, while December meal added to the woes in soybeans and succumbed to more long liquidation to close down 3.38%, December bean oil found support midday to rally nearly 2.00 cents and close up 1.67%.

  • Led by the Chicago contracts, all three wheat classes fell victim to the sellers’ wrath as spillover pressure from corn and soybeans weighed heavily on the wheat market.

  • To see the current US NOAA 6 – 10 and 8 – 14 day Precipitation and Temperature Outlooks 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.   Any remaining old crop bushels that you may have should be getting priced into this rally. We won’t have any “New Alerts” for 2022 Corn — either 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 as traders book profits and liquidate long positions on poor export sales figures and a forecast that shows increased chances of rain in the next two weeks. The US Drought Monitor still shows drought conditions across much of the Midwest and it is estimated that 64% of the corn crop is experiencing some level of drought and is in desperate need of rain. If you missed getting any sales made or adding Dec 23 580 puts before this sharp break, for now, we are looking at a level north of 610 as a catchup opportunity. 

  • Continue to hold current sales levels for the 2024 crop year.  The Dec 24 contract is trading weather much like the rest of the market and posted nearly an eighty-cent range between 5/18 and 6/21 as dry conditions affect the ’23 crop and the potential carryout for the 2024 crop year. For now, continue to be patient as Grain Market Insider would like to see prices in the 570 – 600 level before considering making additional sales recommendations for the 2024 crop.  

  • Strong selling pressure gripped the corn market on Tuesday as New Crop prices closed down over 4% lower as improved weather forecasts outweighed the USDA crop ratings from Monday afternoon.

  • The USDA released weekly corn crop ratings on Monday afternoon. The corn conditions dropped an additional 5% to 50% good/excellent. The state of Illinois is still the focus of the market as rainfall missed many areas of the state over the weekend and ratings were at 26% good/excellent last week, down 10% from the prior week. These are the worst ratings since 2012.

  • Sellers took control of the market as weather forecasts for the next two weeks look to bring plenty of chances for rainfall to most of the Midwest. If realized, this could help stabilize the crop as pollination is right around the corner.

  • AgRural estimates that Brazil’s safrinha corn, or second crop corn, is 9.3% harvested. They estimate the safrinha crop at 97.9 MMT and the total corn crop estimate at 127.4 MMT. The influence of fresh supplies to the market is a wet blanket on rallies.

  • The market may likely remain choppy as traders look to this Friday’s USDA Planted Acreage and Grain Stocks report. Expectations are for corn acres to be at 91.8 million acres, down slightly from the March planting estimates. Grain stocks for the quarter are expected to be near 4.25 billion bushels, down 2.3% from last year.

Above: Weather continues to dominate price discovery with every change in the weather forecast. Corn rallied into the 625 resistance area and reversed lower to test 580 – 540 support level. Further support may be found below the market between 505 and 490, with resistance above 625 coming in near the March highs between 650 – 670.

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 — either Cash, Calls, or Puts, as we have moved focus onto 2023 and 2024 Crop Year Opportunities. 

  • No action is being recommended for New Crop 2023 soybeans.  Changes in weather forecasts and crop conditions will continue to dominate the market. With having just recommended making a cash sale, and with one of the most volatile USDA report days of the year coming this Friday, we would need to see the market rally to 1400 – 1450 area before we would consider recommending any additional sales for the 2023 crop. Otherwise, in light of current crop conditions, we will suggest holding tight on further cash sales for now.

  • Continue to hold off on pricing the 2024 crop. We look to make sales further into the 2023 growing season when selling opportunities tend to improve seasonally. 

  • Soybeans closed lower today along with soybean meal, while soybean oil closed higher. A wetter forecast for the Corn Belt over the next week has put pressure on corn and beans while rising world veg oil prices have given soybean oil support.

  • At the moment, traders are clearly fixated on weather forecasts, because yesterday’s Crop Progress report showed the worst good to excellent ratings since 1988 at just 51%, down 3% from the previous week, but the selloff today was due to increased chances for widespread rain.

  • The next report to watch will be Friday’s Quarterly Stocks and Acreage report, where analysts are expecting soybean acres to increase slightly to 87.67 million acres from 87.45 million acres in the previous report.

  • Yesterday’s soybean inspections were poor as Brazil keeps control of the export market with their cheaper soybean offerings. Due to slow US sales, exports may be lowered in the next WASDE report.

Above: The market’s eye is squarely on the weather at this time. The August contract rallied through the 50-day moving average and hit resistance near 1450 and the 100-day moving average. If the market can rally beyond this point, the resistance area between 1500 and 1550 could be its next target. If the market drops back, support could be found between 1340 and 1300 with further support near 1270.

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

Wheat

Market Notes: Wheat

  • All three US wheat futures classes posted double-digit losses. No support was received from Paris milling wheat futures, which gapped lower and also saw a sharp decline. Spillover pressure from lower corn and soybeans did not help.

  • The increased chances of rain for some parts of the central Midwest likely has funds jumping back into the market. While the actual weather impact to the wheat crop at this point should be minimal, pressure from lower row crop prices is expected to weigh on wheat as well.

  • US winter wheat harvest is well behind the average pace of 33% complete for this time of year, with only 24% of the crop collected. And while at this point the impact is minimal, the USDA did say winter wheat conditions improved 2% from last week to 40% good to excellent. Spring wheat conditions did decrease by 1% from last week to 50% GTE.

  • Russia continues to rule the wheat export front, with FOB offers said to range between $230 and $240 per ton. This is well below US or European offers and is keeping pressure on futures prices.

  • The 100-day moving average for Chicago wheat is around 713. This may act as an area of support, especially if traders catch wind of some friendly news. If there is a bright spot, it is the fact that Russia is said to already be blocking grain shipments in the Black Sea and may not renew the corridor deal on July 18th.

Chicago Wheat Action Plan Summary

  • No new action is recommended for the 2022 crop. Grain Market Insider is done with the 2022 crop, and there will be no New Alerts posted for the 2022 crop going forward.

  • 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.  

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 near 670 with further support coming in between 650 – 610. While resistance above the market rests between 770 – 810.

KC Wheat Action Plan Summary

  • No new action is recommended for the 2022 crop. Though most, if not all, of your Old Crop 2022 wheat may be sold, consider storing any remaining Old Crop, if possible, in anticipation of a short new crop this year, and marketing it along with the new crop.

  • 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.

Above: The market has been able to trade out of the recent congestion area to near the 200-day moving average and into the 870 – 920 resistance area. If the market can push through, 970 – 1000 is the next major point of resistance. If it falls back, initial support could be near 825 with further support between 778 and 764. 

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. Prices haven’t moved much over the last couple of weeks, and it’s disappointing to see the lack of upside opportunities that the market has offered following the large snowfall and the late start to planting this spring. Yet, 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, especially given record European wheat shipments and falling Russian prices. Also, we typically recommend finishing up sales on any remaining Old Crop bushels by mid-June, as bids will soon shift from the July to September contract, and there is currently no carry offered.

  • K.C. Wheat Managed Money Funds net position as of Tuesday, June 20. Net position in Green versus price in Red. Money Managers net bought 2,328 contracts between June 13 – 20, bringing their total position to a net long 5,944 contracts.

  • 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 trading lower, it will need additional bullish news to turn it back around. Should the market continue to fall, support may be found between 770 and 760. 

Other Charts / Weather