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Grain Market Insider: June 26, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Disappointing rainfall and the anticipation of lower crop ratings in this afternoon’s Crop Progress report kept the corn market on the positive side of unchanged for most of the day, while weak export inspections weighed on the market.

  • Gaining support from a lack of rain in some key soybean growing areas and a strong soybean oil market, soybeans closed the day higher with Old Crop leading New Crop.

  • Soybean oil continued its rally from last Thursday’s bullish reversal, with additional support from higher palm oil. As for soybean meal, it saw both sides of unchanged and up to $6.10 higher before settling back to close in the green by 60 cents.

  • Globally, central banks are hawkish and continue to talk about raising rates which could trigger a recession, lowering demand for food and energy.

  • To see the current US 7 – day precipitation forecast and the US NOAA 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 productions concerns. The market is currently about 40 cents 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 today’s 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. We are currently eyeing the 670 – 700 level before we consider making additional sales recommendations for the 2024 crop. 

  • Corn futures finished the day mostly higher as prices tried to find a near-term bottom after last week’s disappointing end to the week. Corn futures were supported by overall weekend rainfall not hitting all key areas of the Corn Belt and the expectations of crop ratings slipping again this week.

  • The USDA will release weekly corn crop ratings on Monday afternoon. Expectations are for an additional drop to 52% good/excellent, down 3% from last week. The state of Illinois will stay as a focus of the market as rainfall missed many areas of the state and ratings were at 36% good/excellent last week, down 29% from the 5-year average.

  • Weekly corn export inspections were disappointing at 543,000 MT, and below market expectations. Year to date, corn inspections are still running 32% under last year’s pace.

  • Weather models in the longer term are trying to build a wetter forecast, which could limit market gains if realized. The key to all forecasts will be the coverage and location of rainfall.

  • The market may likely remain choppy as traders look to this Friday’s USDA Planted Acreage and Grain Stocks report.

Above: Weather is the dominant force for the corn market at this time. If the market can push through the 100-day moving average and the recent 625 high, it may be able to make a run for the March highs between 650 – 670. If not, support may be found between 580 and 540.

Above: Corn Managed Money Funds net position as of Tuesday, June 20. Net position in Green versus price in Red. Money Managers net bought 56,154 contracts between June 13 – June 20, bringing their total position to a net long 58,299 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 — 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 higher today along with both soybean meal and oil after rainfall this weekend missed crucial dry regions including southern Illinois, and tensions within Russia grew which could affect veg oil exports.

  • Crop progress will be released shortly, and expectations are that good to excellent ratings will fall by another 3 to 4%, but the weekend rains may have helped limit the decline. Last week, Illinois’ rating fell by 14% to just 33% good to excellent.

  • Soybean oil was supportive for soybeans as palm oil rallied 2.65% today along with other veg oils. Palm oil supplies may end up being tight due to weather issues, and exports from other countries may be limited.

  • Soybean export inspections were poor for last week and could be a wet blanket over the market even with dry weather in the US. Inspections totaled 5.2 mb for 22/23 and put total inspections at 1.807 bb which is down 4% from the previous year.

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: Soybeans Managed Money Funds net position as of Tuesday, June 20. Net position in Green versus price in Red.  Money Managers net bought 29,068 contracts between June 13 – June 20, bringing their total position to a net long 76,950 contracts.

Wheat

Market Notes: Wheat

  • News of a mutiny by a private Russian fighting group, the Wagner Group, against the Russian government may be tied to early strength in the wheat market. However, it is believed that some sort of deal was reached, because the group was no longer headed to Moscow, but instead back to Ukraine. This could explain why wheat faded into the close.

  • Weekly wheat inspections at 7.5 mb bring the total 23/24 inspections to 28 mb. This total is down 43% from this time last year.

  • Managed funds are still said to be net short about 84,000 contracts of Chicago wheat as of last Tuesday. This could lead to more of a short covering rally if there is a catalyst in the form of friendly news.

  • Russia will reportedly reduce their wheat export tax from 2,613 rubles per ton to 2,473, equivalent to roughly $31 vs $29 per ton. While not a huge move, the fact that they continue to dominate on the export front with low prices does not bode well for US exports and prices.

  • Paris milling wheat futures gapped higher on the open, likely due to the uncertainty of the Russia news. However, they finished with losses and closed the gap, offering no support to the US markets.

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.

  • Grain Market Insider sees an active opportunity to sell 2023 New Crop.  We are in a weather market and with the US Drought Monitor showing dryness across the Midwest, September Chicago Wheat has now rallied about 22% from its May 31 low into the March – April resistance area and is overbought. As of late, the wheat market has largely been a follower of the corn market, and this rally has been fueled in part by the Funds exiting their short positions. While there are production concerns in parts of the country, demand has been weak, and the potential remains for a rising carryout. Any change to a more favorable weather forecast could easily erase much, if not all, of the weather premium that has been added to prices. With the dry conditions and great uncertainty that many of you are experiencing about how much you will have to harvest, we understand there’s hesitancy to sell anything here. If you are concerned about committing physical bushels with a cash sale, consider selling futures or buying put options.

  • Grain Market Insider sees an active opportunity to sell 2024 Chicago wheat.  Prices for the 2024 crop have largely followed prices for the 2023 crop and are currently about 20% above the low set on May 31. Weather and production concerns have been the primary driver of prices lately, and the funds have likely been covering short positions, further feeding the rally.  As we all know, weather markets can be fickle beasts, and any change in the forecast or crop conditions can quickly turn traders from buyers to sellers, quickly erasing much, if not all, of the premium priced into the market.  Grain Market Insider recommends making a sale on next year’s 2024 Chicago wheat crop and using either a July ’24 futures contract or a July 24 HTA contract so basis can be set at a later date, as it should improve in time.

Above: September wheat has had a strong run and is near the 200-day moving average around 750, which it hasn’t seen since last October.  Above there, resistance may be found between the psychological resistance point of 800 and 865.  With further resistance coming in between 900 – 950. Should prices turn lower, initial support may be found near 670 and then again near 611. 

Above: Chicago Wheat Managed Money Funds net position as of Tuesday, June 20. Net position in Green versus price in Red. Money Managers net bought 29,296 contracts between June 13 – June 20, bringing their total position to a net short 84,134 contracts.

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: 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.

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 has rallied out of its congestion area on the Front Month Continuous chart towards the 200-day moving average. Resistance may be found above the market between 889 and 940, the April and December highs respectively.  While the upside breakout is a positive sign, the market will need additional bullish news to keep it moving. Should the market reverse course and turn lower, support below the market may be found between 770 and 760. 

Above: Minneapolis Wheat Managed Money Funds net position as of Tuesday, June 20. Net position in Green versus price in Red. Money Managers net bought 4,160 contracts between June 13 – June 20, bringing their total position to a net short 3,262 contracts. 

Other Charts / Weather

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Grain Market Insider: June 23, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Follow through selling and long liquidation with disappointing export sales weighed heavily on the corn market as traders took profits ahead of the weekend.

  • A shift in the weather forecast for the better across the “I” states of the Midwest, along with a 4% drop in soybean meal, added pressure to the soybean market as traders liquidated long positions from this week’s rally ahead of the weekend.

  • Soybean oil was the strong leg of the bean complex as it found follow through buying from yesterday’s bullish reversal and a stronger palm oil market.

  • All three wheat markets trade lower as spillover weakness from corn and soybeans weigh on prices and traders take profits from the recent rally.

  • To fight inflation, European central banks are raising interest rates, and there are growing concerns that this could put us into a global recession, reducing demand for food and energy.

  • To see the current US NOAA 7 – day US Precipitation Outlook and the US NOAA 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.  

  • Grain Market Insider recommends buying Dec 23 580 corn puts today for about 30 cents in premium plus commission and fees. Additionally, Grain Market Insider sees an active opportunity to sell New Crop 2023 corn. With the Dec 23 contract trading at the upper end of our 590 – 630 target range, Insider recommends buying December puts today to add downside coverage on New Crop in case prices move significantly lower. Despite the ongoing drought concerns, we still have confidence to continue to recommend selling into this rally as the Dec 23 610 Call options have been in place since May 2nd. On May 2nd, Insider recommended buying 560 and 610 Dec calls, and then recommended exiting the 560s on June 2nd once the 560 calls had gained enough in value to offset the cost of the 610 calls. Owning both calls and puts can be very beneficial in a market as volatile as this. If it doesn’t rain, and Dec corn continues to rally, the 610 calls will continue to gain in value and protect your new sale.  Meanwhile, buying puts will allow you to protect the downside on more bushels without committing to a sale when your production may be uncertain. For now, the market is strong, though demand remains sluggish, and with Brazil beginning to harvest another possible record crop, both domestic and world carryout figures could potentially rise further.  Any change to a more favorable weather forecast could easily turn the market lower and erase much, if not all, of the 125 cent rally from the May 19th low. 

  • Continue to hold current sales levels for the 2024 crop year. Much like the Dec 23 contract, the Dec 24 contract has rallied significantly from the May 18 lows as the market prices in possible crop reductions that could carry over into the 2024 crop year. Be watchful, as we are, entering into the time frame where we would consider suggesting making additional sales recommendations for the 2024 crop year. 

  • The corn market traded down in excess of 5% with traders booking profits ahead of the weekend on disappointing export sales and forecasts call for rain next week across the “I” states.

  • Forecasts for rain across the Midwest dominated the trade with the longer range 6 – 10 and 8 – 14 day outlooks shifting to more normal to above normal precipitation patterns, while the 7-day forecast has rain favoring the northern Midwest with less in MO, central IL and IN.

  • US export sales came in at a disappointing 36k tons for Old Crop versus 272k last week, well below the 470k tons in sales needed each week to reach the USDA’s goal. As for New Crop sales, the USDA reported 47k tons sold.

  • Further hampering US export sales, Brazilian offers continue to be $30 – $40 per ton cheaper than the US as they continue to harvest their large second (safrinha) corn crop.

  • It’s estimated with the latest run of the US Drought Monitor, that 64% of the corn crop is in areas with some level of drought, which includes 82% of Illinois and 83% of Iowa.

Above: Weather is the dominant force for the corn market at this time.  If the market can push through the 100-day moving average and the recent 625 high, it may be able to make a run for the March highs between 650 – 670.  If not, support may be found between 580 and 540.

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. 

  • Grain Market Insider sees an active opportunity to sell New Crop 2023 soybeans. Grain Market Insider sees an active opportunity to sell New Crop 2023 soybeans.  November soybeans have rallied over 200 cents from the May 31st low and hit the upper end of our 1300 to 1350 target range. With the November contract a little bit over the upper end of this range, an Active sales opportunity continues to get some New Crop priced.  KC Wheat has demonstrated that domestic drought conditions do not necessarily guarantee higher domestic prices if global supplies are ample. US wheat country has been extremely dry for many months, yet prices are about even with where prices were in late 2021, before Russia invaded Ukraine. Global soybean supplies could be record large, and this could be a rally risk factor.

  • 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 with New Crop leading the way lower and July only down slightly.Soybean meal closed sharply lower, while soybean oil moved higher thanks to a jump in palm oil of 1.7% today.

  • Changes in the weather forecast have pressured both corn and soybeans with the 7-day forecast from NOAA showing an accumulated 0.5 to 1.5 inches of rain over the next week in the very dry areas of Iowa, Illinois, and Indiana.

  • Export sales were better this week at 16.8 mb for 22/23 and increases of 6.2 mb for 23/24. Last week’s export shipments of 14.2 mb were better than expected and above the 11.7 mb needed each week to meet the USDA’s expectations.

  • Next week, crop progress will be released, and conditions could decline after this week’s dryness. If weekend rains come through, conditions could remain steady with last week.

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

  • The USDA reported an increase of 4.0 mb of wheat export sales for 23/24, and an increase of 0.5 mb for 24/25. The figures for corn and soybeans were not much better and may have contributed to today’s weakness.

  • Several other factors are likely weighing on markets today – weather being number one. With both the American and European models putting rain in the forecast mid to late next week for the Midwest, wheat followed corn and soybeans lower today. Other factors may be profit taking, as well as the recent interest rate increases by European banks, which are causing renewed concern about recession.  

  • US futures received no support from Matif wheat, which traded lower today. Matif wheat is also overbought on daily stochastics and is showing potential sell signals, painting a weak technical picture despite the fact that French wheat conditions have declined for four weeks in a row.

  • Position squaring before month end could be playing into the grain complex trade as well. With the recent strong rally and the June 30 Stocks and Acreage reports due for release next week, traders may be taking profit ahead of uncertain results.

  • Russia has essentially said they are unwilling to extend the Black Sea grain deal beyond the July 18th deadline. This does not seem to be impacting the market much, however, perhaps because traders have heard this story before.

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.

  • Grain Market Insider sees an active opportunity to sell 2023 New Crop. We are in a weather market and with the US Drought Monitor showing dryness across the Midwest, September Chicago Wheat has now rallied about 22% from its May 31 low into the March – April resistance area and is overbought.  As of late, the wheat market has largely been a follower of the corn market, and this rally has been fueled in part by the Funds exiting their short positions. While there are production concerns in parts of the country, demand has been weak, and the potential remains for a rising carryout. Any change to a more favorable weather forecast could easily erase much, if not all, of the weather premium that has been added to prices.  With the dry conditions and great uncertainty that many of you are experiencing, about how much you will have to harvest, we understand there’s hesitancy to sell anything here.  If you are concerned about committing physical bushels with a cash sale, consider selling futures or buying put options.

  • Grain Market Insider sees an active opportunity to sell 2024 Chicago wheat. Prices for the 2024 crop have largely followed prices for the 2023 crop and are currently about 20% above the low set on May 31. Weather and production concerns have been the primary driver of prices lately, and the funds have likely been covering short positions, further feeding the rally. As we all know, weather markets can be fickle beasts, and any change in the forecast or crop conditions can quickly turn traders from buyers to sellers, quickly erasing much, if not all, of the premium priced into the market. Grain Market Insider recommends making a sale on next year’s 2024 Chicago wheat crop and using either a July ’24 futures contract or a July 24 HTA contract so basis can be set at a later date, as it should improve in time.

Above: September wheat has had a strong run and is near the 200-day moving average around 750, which it hasn’t seen since last October.  Above there, resistance may be found between the psychological resistance point of 800 and 865.  With further resistance coming in between 900 – 950.  Should prices turn lower, initial support may be found near 670 and then again near 611.

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. 

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.

  • No action is recommended on the 2023 crop at this time. The September ’23 contract had a 120-cent range in the month of May where it found support just above 770. While the planting has largely been completed, dryness in some areas is increasing. With a full growing season ahead of us, we are not looking to make any sales right now. (Updated 6/22)

  • 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 has rallied out of its congestion area on the Front Month Continuous chart towards the 200-day moving average. Resistance may be found above the market between 889 and 940, the April and December highs respectively.  While the upside breakout is a positive sign, the market will need additional bullish news to keep it moving. Should the market reverse course and turn lower, support below the market may be found between 770 and 760. 

Other Charts / Weather

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Grain Market Insider: June 22, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Profit taking from extremely overbought conditions weigh on the corn market as traders move long positions out of the nearby contract and into the deferred contracts.

  • Soybean meal, which was down 3.5%, led soybeans lower as traders booked profits from a radically overbought market.

  • Soybean oil, on the other hand, was able to shake off its losses and rally 240 points from the low to close .10 cents higher despite yesterday’s disappointing EPA mandate numbers.

  • Further short covering in the Chicago contracts and concerns that India’s wheat crop may be much smaller than anticipated helped buoy all three classes to a positive close save for July K.C., which likely saw traders move long positions to the September contract.

  • Possibly adding pressure to the markets today was the US dollar, as it traded higher today, likely in response to Fed Chairman Jerome Powell’s comments yesterday stating that more rate hikes are likely to fight inflation.

  • To see the current US NOAA 7 – day US Precipitation Outlook and US Drought Monitor scroll down to the Other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  •  No new action is recommended for Old Crop. 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.  

  • Grain Market Insider recommends buying Dec 23 580 corn puts today for about 30 cents in premium plus commission and fees. Additionally, Grain Market Insider sees an active opportunity to sell New Crop 2023 corn. With the Dec 23 contract trading at the upper end of our 590 – 630 target range, Insider recommends buying December puts today to add downside coverage on New Crop in case prices move significantly lower. Despite the ongoing drought concerns, we still have confidence to continue to recommend selling into this rally as the Dec 23 610 Call options have been in place since May 2nd. On May 2nd, Insider recommended buying 560 and 610 Dec calls, and then recommended exiting the 560s on June 2nd once the 560 calls had gained enough in value to offset the cost of the 610 calls. Owning both calls and puts can be very beneficial in a market as volatile as this. If it doesn’t rain, and Dec corn continues to rally, the 610 calls will continue to gain in value and protect your new sale.  Meanwhile, buying puts will allow you to protect the downside on more bushels without committing to a sale when your production may be uncertain. For now, the market is strong, though demand remains sluggish, and with Brazil beginning to harvest another possible record crop, both domestic and world carryout figures could potentially rise further.  Any change to a more favorable weather forecast could easily turn the market lower and erase much, if not all, of the 125 cent rally from the May 19th low. 

  • Continue to hold current sales levels for the 2024 crop year. Much like the Dec 23 contract, the Dec 24 contract has rallied significantly from the May 18 lows as the market prices in possible crop reductions that could carry over into the 2024 crop year. Be watchful, as we are, entering into the time frame where we would consider suggesting making additional sales recommendations for the 2024 crop year. 

Grain Market Insider Corn open positions listed above.

  • Profit taking on extremely overbought conditions and a sharply lower soybean market weighed down corn futures, as the July contract led the New Crop contracts lower as traders moved long July positions to the September contract.

  • The European weather model shows 10 days of mostly dry weather for the Midwest, primarily in Il, E IA, IN, and parts of MO and S WI. Whereas the US model has rain in 8-10 day forecast, but some think it may be overdone. 

  • The latest US Drought Monitor shows deepening drought in the Dakotas and much of the North and Central Midwest, where conditions haven’t been this poor since 1988.

  • Between June and July in 2012, the USDA lowered corn yield by 20 bu. and if it were to happen this year, there are concerns that it would put yield below 170 and take nearly 1 billion bushels from this year’s production.

  • Last week’s ethanol production numbers were released today and showed an increase to 1.052k barrels/day, up from 1.018k barrels/day the week prior. While the increase in production is positive, the pace still falls below what is needed to reach the USDA’s estimate.

  • Brazil’s safrinha corn harvest is well underway and continues to weigh on the country’s domestic basis, potentially further slowing US exports with cheaper export prices than US offers.

Above: The corn market continues to run on weather concerns, and the September contract is above the 50-day moving average and knocking on the door of 100-day moving average and the recent 625 high. If the market can push through that level, it may be able to make a run for the 650 – 670 resistance level around the March highs. If not, support may be found between 580 and 540.

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. 

  • Grain Market Insider sees an active opportunity to sell New Crop 2023 soybeans. Grain Market Insider sees an active opportunity to sell New Crop 2023 soybeans.  November soybeans have rallied over 200 cents from the May 31st low and hit the upper end of our 1300 to 1350 target range. With the November contract a little bit over the upper end of this range, an Active sales opportunity continues to get some New Crop priced.  KC Wheat has demonstrated that domestic drought conditions do not necessarily guarantee higher domestic prices if global supplies are ample. US wheat country has been extremely dry for many months, yet prices are about even with where prices were in late 2021, before Russia invaded Ukraine. Global soybean supplies could be record large, and this could be a rally risk factor.

  • 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, led down by new crop as soybean meal lost over 3.5% in the August contract, while soybean oil recovered at the end of the day for a positive close.

  • The entire soy complex was volatile today after soybean oil closed limit down yesterday causing all three soy products to have expanded limits today. Soybean oil was driven lower by the EPA announcement regarding biofuel mandates.

  • Forecasts for the Corn Belt are still very dry for the next seven days, but Iowa is now expected to receive slightly more rain, while Illinois and Indiana are expected to remain dry.

  • While the EPA’s targets for advanced biofuels were below industry hopes, they do allow some growth of renewable diesel production, but not as much as expansion plans already proposed.

Above: The market’s eye is squarely on the weather at this time. The August contract has rallied through the 50-day moving average, approaching the 1450 resistance area and the 100-day ma. 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

  • After trading on both sides of unchanged, all three US wheat classes closed higher with the exception of July K.C. wheat.

  • Private estimates of India’s wheat crop are 10% below their government’s estimate, and if this is correct, it could mean that India will need to import wheat.

  • As a reminder, July grain option expiration is tomorrow, and first notice date for July grain futures next Friday. With the funds still believed to be net short wheat, this could lead to some spread trading if they roll out of July and into deferred contracts.

  • The heavy rain in China’s wheat growing region is still expected to result in quality downgrades, and more wheat to be used for feed.

  • Sov Econ reduced their Russian wheat crop projection to 86.8 mmt vs 88.0 mmt previously because of hot and dry weather.  

  • Due to the shortened week, export sales data is delayed until tomorrow, but is likely to continue to show disappointing numbers for wheat, since Russia continues to dominate on the export front.

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.

  • Grain Market Insider sees an active opportunity to sell 2023 New Crop. We are in a weather market and with the US Drought Monitor showing dryness across the Midwest, September Chicago Wheat has now rallied about 22% from its May 31 low into the March – April resistance area and is overbought.  As of late, the wheat market has largely been a follower of the corn market, and this rally has been fueled in part by the Funds exiting their short positions. While there are production concerns in parts of the country, demand has been weak, and the potential remains for a rising carryout. Any change to a more favorable weather forecast could easily erase much, if not all, of the weather premium that has been added to prices.  With the dry conditions and great uncertainty that many of you are experiencing, about how much you will have to harvest, we understand there’s hesitancy to sell anything here.  If you are concerned about committing physical bushels with a cash sale, consider selling futures or buying put options.

  • Grain Market Insider sees an active opportunity to sell 2024 Chicago wheat. Prices for the 2024 crop have largely followed prices for the 2023 crop and are currently about 20% above the low set on May 31. Weather and production concerns have been the primary driver of prices lately, and the funds have likely been covering short positions, further feeding the rally. As we all know, weather markets can be fickle beasts, and any change in the forecast or crop conditions can quickly turn traders from buyers to sellers, quickly erasing much, if not all, of the premium priced into the market. Grain Market Insider recommends making a sale on next year’s 2024 Chicago wheat crop and using either a July ’24 futures contract or a July 24 HTA contract so basis can be set at a later date, as it should improve in time.

Above: September wheat has had a strong run and is nearing the 200-day moving average around 750, which it hasn’t seen since last October.  Above there, resistance may be found between the psychological resistance point of 800 and 865.  With further resistance coming in between 900 – 950.  Should prices turn lower, initial support may be found near 670 and then again near 611. 

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 above the recent resistance area and is near the 200-day moving average and 870 resistance. If the market can push through, 920 is the next major point of resistance. If it falls back, initial support could be near 825 with further support between 778 and 764.

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.

  • No action is recommended on the 2023 crop at this time. The September ’23 contract had a 120-cent range in the month of May where it found support just above 770. While the planting has largely been completed, dryness in some areas is increasing. With a full growing season ahead of us, we are not looking to make any sales right now. (Updated 6/22)

  • We continue to be patient to market any of the 2024 crop. The market for the 2024 crop continues to be illiquid, and it may be early summer before we post any recommendations, continue to be patient.

Above: The market has rolled from the July to the September contract and has rallied out of its congestion area on the Front Month Continuous chart into the May highs. Further resistance above the market may be between 889 and 940, the April and December highs respectively. While the upside breakout is a positive sign, the market will need additional bullish news to keep it moving. Should the market reverse course and turn lower, support below the market may be found between 770 and 760.

Other Charts / Weather

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Grain Market Insider: June 21, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Lower than anticipated crop ratings helped to rally the corn market to 7 – month highs.

  • Like the corn market, soybeans rallied on lower crop ratings and crop concerns, with added support coming from a 7.5% rally in soybean meal.

  • Soybean oil traded limit down in reaction to much lower than expected EPA biofuel targets for both 2024 and 2025. The negative reaction in bean oil likely weighed on the enthusiasm in soybeans, keeping the market from trading higher.

  • Spillover strength from the corn and soybean markets, along with likely short covering in the Chicago wheat carried all three wheat classes to sharply higher closes in today’s trade.

  • To see the current US NOAA 8 – 14 day US 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.  

  • Grain Market Insider recommends selling New Crop 2023 corn today. Insider recommends selling New Crop as the Dec 23 contract has pushed towards the upper end of our 590 – 630 target range.  Despite the ongoing drought concerns, we have confidence to recommend selling into this rally as the Dec 23 610 Call options have been in place since May 2nd. On May 2, Insider recommended buying 560 and 610 Dec calls, and recommended exiting the 560s on June 2, once the 560 calls had gained enough in value to offset the cost of the 610 calls. If the skies never open up with rain, and Dec corn continues to rally, the 610 calls will continue to gain in value and protect today’s sale. Meanwhile, demand remains sluggish, and with Brazil beginning to harvest another possible record crop, both domestic and world carryout figures could potentially rise further.  Any change to a more favorable weather forecast could easily turn the market lower and erase much, if not all, of the 125 cent rally from the May 19th low. 

  • Continue to hold current sales levels for the 2024 crop year. We will look for opportunities to make further sales as we move through the 2023 growing season as weather volatility builds.

Grain Market Insider Corn open positions listed above.

  • The corn market rallied sharply, trading to within 9 cents of last October’s high, following the USDA’s release of yesterday’s Crop Progress report. The report showed a 6% drop in the good to excellent rating to just 55%, a steeper decline than expected and lower than 2012 ratings at this time.

  • Some feel the current ratings suggest a yield much closer to 174 bpa versus the USDA’s current estimate of 181.5 bpa.

  • The USDA reported that 877k tons of corn were inspected for export, much lower than the 1,170k tons inspected last week.  

  • The current 7-day forecast continues to look dry for much of the central Midwest, with conditions reportedly the worst since 1988.

  • In Illinois, subsoil moisture is reported to be 85% short to very short, 9% higher than in the drought of 2012. Looking toward Nebraska, the NOAA indicated that between 6 and 15 inches of rain would be needed to reduce drought conditions in the region.

  • Today’s rally will likely make US export offerings even more expensive on the world market, further hampering new export sales, especially with Brazil in the midst of harvesting their safrinha corn crop, which continues to weigh on the country’s domestic basis and export prices.

Above: The corn market continues to run on weather concerns, and the September contract is above the 50-day moving average and knocking on the door of 100-day moving average and the recent 625 high. If the market can push through that level, it may be able to make a run for the 650 – 670 resistance level around the March highs. If not, support may be found between 580 and 540.

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. 

  • Grain Market Insider sees an active opportunity to sell New Crop 2023 soybeans. Grain Market Insider sees an active opportunity to sell New Crop 2023 soybeans.  November soybeans have rallied over 200 cents from the May 31st low and hit the upper end of our 1300 to 1350 target range. With the November contract a little bit over the upper end of this range, an Active sales opportunity continues to get some New Crop priced.  KC Wheat has demonstrated that domestic drought conditions do not necessarily guarantee higher domestic prices if global supplies are ample. US wheat country has been extremely dry for many months, yet prices are about even with where prices were in late 2021, before Russia invaded Ukraine. Global soybean supplies could be record large, and this could be a rally risk factor.

  • 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 higher today, but soy products were a mixed bag as soybean meal rocketed over 6% higher, but soybean oil closed limit down after the EPA biofuel mandate.

  • The EPA made their announcement regarding biofuel targets and the 2024 and 2025 blending mandates are lower than had been previously hoped for, which caused the limit down move today in soybean oil.

  • Yesterday’s crop progress was a big catalyst for the gains in corn and soybeans today after it was revealed that the good to excellent rating for soybeans fell by 6% to 54%, far below analysts’ expectations. These ratings may continue to decline as the 10-day forecast remains dry.

  • Soybean export inspections were poor last week at 6.8 mb, which puts total inspections for 22/23 down 4% from the previous year. The US is struggling to compete with Brazil’s significantly cheaper corn exports.

Above: The market’s eye is squarely on the weather at this time. The August contract has rallied through the 50-day moving average and is approaching the 1450 resistance area and the 100-day ma. 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.

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 closed sharply higher alongside Paris milling wheat futures, which gained as much as 8.25 Euros per metric ton.

  • The weather market is still impacting the grain complex, with spillover support from corn and soybeans. Both of those crops saw a decline in condition beyond what the trade was expecting. Compared with last week, corn was down 6% and soybeans were down 5%.

  • The most recent Crop Progress report showed what winter wheat harvest is 15% complete vs 20% average. The lag appears to be in the southern plains area where rainfall is causing delays. Spring wheat condition declined (perhaps more than expected) to 51% good to excellent vs 60% last week and 59% at this time last year. The winter wheat good to excellent condition was left unchanged at 38% good to excellent.

  • The US Dollar Index trended lower today, offering a boost to the wheat market. Traders did not seem to mind the soft export sales figure of 8.7 mmt.

  • According to IKAR, a Russian consultancy, Russian wheat exports are now as cheap as $228 per metric ton FOB. Russia has also said they are unlikely to extend the Black Sea export corridor again.

  • Given the weather forecast and recent rally in the grain complex, funds are likely short covering, especially in the wheat market. July Chicago wheat closed higher for the fourth day in a row.

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.

  • Grain Market Insider recommends selling 2023 New Crop. We are in a weather market and with the US Drought Monitor showing dryness across the Midwest, September Chicago Wheat has now rallied about 22% from its May 31 low into the March – April resistance area and is overbought. As of late, the wheat market has largely been a follower of the corn market, and this rally has been fueled in part by the Funds exiting their short positions.  While there are production concerns in parts of the country, demand has been weak, and the potential remains for a rising carryout.  Any change to a more favorable weather forecast could easily erase much, if not all, of the weather premium that has been added to prices. With the dry conditions and great uncertainty that many of you are experiencing, about how much you will have to harvest, we understand there’s hesitancy to sell anything here.  If you are concerned about committing physical bushels with a cash sale, consider selling futures or buying put options.

  • Grain Market Insider recommends selling 2024 Chicago wheat. Prices for the 2024 crop have largely followed prices for the 2023 crop and are currently about 20% above the low set on May 31. Weather and production concerns have been the primary driver of prices lately, and the funds have likely been covering short positions, further feeding the rally. As we all know, weather markets can be fickle beasts, and any change in the forecast or crop conditions can quickly turn traders from buyers to sellers, quickly erasing much, if not all, of the premium priced into the market. Grain Market Insider recommends making a sale on next year’s 2024 Chicago wheat crop and using either a July ’24 futures contract or a July 24 HTA contract, so basis can be set at a later date, as it should improve in time.

Above: September wheat has had a strong run and is nearing the 200-day moving average near 750 which it hasn’t seen since last October. Above there, resistance may be found between the psychological resistance point of 800 and 865. With further resistance coming in between 900 – 950. Should prices turn lower, initial support may be found near 670 and then again near 611.

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 above the recent resistance area and is near the 200-day moving average and 870 resistance. If the market can push through, 920 is the next major point of resistance. If it falls back, initial support could be near 825 with further support between 778 and 764.

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.

  • No action is recommended on the 2023 crop at this time. The September ’23 contract had a 120-cent range in the month of May where it found support just above 770. While the planting has largely been completed, dryness in some areas is increasing. With the market still largely oversold on the weekly charts and a full growing season ahead of us, we are not looking to make any sales right now.

  • We continue to be patient to market any of the 2024 crop. The market for the 2024 crop continues to be illiquid, and it may be early summer before we post any recommendations, continue to be patient.

Above: The market has rolled from the July to the September contract and has rallied out of its congestion area on the Front Month Continuous chart into the May highs. Further resistance above the market may be between 889 and 940, the April and December highs respectively. While the upside breakout is a positive sign, the market will need additional bullish news to keep it moving. Should the market reverse course and turn lower, support below the market may be found between 770 and 760.

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

Other Charts / Weather

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Grain Market Insider: June 20, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Hopes of improved relations with China following Secretary of State Blinken’s visit to China and continued dryness over large areas of the Midwest gave strength to the markets overnight, but forecasts for rain next week led to some profit taking and the corn market closing mixed.

  • Like the corn market, anticipation of better relations with China and the lack of significant rainfall in much of the Midwest drove soybean futures higher in the overnight session, but profit taking and weaker soybean meal and oil added resistance in the day session.

  • Harvest pressure and Canadian rains added pressure to the K.C. and Minneapolis wheat contracts respectively, while continued short covering on dry conditions helped to rally Chicago contracts.

  • While the US Dollar is down almost 2% from its recent high at the end of May, it looks to be consolidating. It appears to have traded into resistance and may trade lower, which would add support to commodities.

  • To see the current US NOAA 30-day US 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 action is recommended at this time for Old Crop. July corn is up over 90 cents from the May 18th low. Elevators are already rolling their bids from the July contract to September. While the price inverse between the two has been nearly cut in half in just six trading days, September is still trading at a 46-cent discount to July. The risk remains the loss of this premium as elevators roll from pricing off July to pricing off September. Any remaining old crop bushels 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 at this time for New Crop. Continued dryness has pushed the Dec 23 contract into the lower end of the price window we’ve been targeting for a number of weeks now: 590 – 630. No official recommendation yet as we are leaning toward the upper end of this target price range for the moment.

  • Continue to hold current sales levels for the 2024 crop year. We will look for opportunities to make further sales as we move through the 2023 growing season as weather volatility builds.

Grain Market Insider Corn open positions listed above.

  • The corn market traded both sides of unchanged on the spotty nature of the weekend’s precipitation but closed mixed on technically driven profit taking in the spreads and increased chances for moisture across the Midwest next week.

  • Recent forecasts with both the European and the US models are calling for additional rain in the Northern Midwest and Eastern Corn Belt early next week. Rain this week is expected to favor western Nebraska and the Northern Plains. Outside of that, it will remain dry, and if the forecast does not verify, the market may be in for another leg up.

  • Secretary of State Anthony Blinken visited to China to meet with President Xi Jinping and helped to smooth the US’ relationship with China, though concerns remain about the stability of China’s economy and its commitment to become more self-reliant.

  • Brazil’s second corn crop (safrinha) harvest is underway and with a lack of storage for both soybeans and corn, nearby basis is getting hit hard with farmers selling, adding further resistance to US prices.

  • Last week it was reported by the Commodity Futures Trading Commission that Managed Money funds bought a large 47k contracts between June 6 and June 13, thereby flipping their net position from net short 44.5k contracts to net long 2,145 contracts.

  • The USDA will release its weekly Crop Progress report this afternoon with many looking for lower ratings than last week’s 61% good to excellent rating with the relatively dry conditions last week and the relatively spotty rainfall over the weekend.

Above: The corn market has had quite a run recently on weather concerns. The September contract has pushed into the 50-day moving average, and the psychological resistance area is around 600 on the continuous chart. With a bearish reversal showing, the market will need more bad news to overcome the reversal and further resistance near 625 and the 100-day moving average. Otherwise, the market could turn lower where support may be found between 550 and 535.

Corn Managed Money Funds net position as of Tuesday, June 13. Net position in Green versus price in Red. Money Managers net bought 46,637 contracts between June 7 – June 13, bringing their total position to a net long 2,145 contracts.

Soybeans

Soybeans Action Plan Summary

  • Grain Market Insider sees an active opportunity to sell 2022 Old Crop soybeans. Grain Market Insider continues to recommend using this rally to clear out the last of the bushels in the bin. July beans are up nearly 200 cents from the May 31st low. If the weather pattern stays dry, prices could continue to push higher; yet the first significant moisture added to the forecast poses the risk of erasing this added weather premium just as fast (or faster) given the size of South American supplies and their discounted price. This will be the last Grain Market Insider recommendation for 2022 soybeans as we’re emptying the bins on this rally and moving fully on to 2023 and 2024 crops.

  • Grain Market Insider sees an active opportunity to sell New Crop 2023 soybeans. November soybeans have rallied over 200 cents from the May 31st low and today entered the target range we’ve been looking for: 1300 to 1350. The upper end of this range was nearly tagged with an intraday high of 1347, so we are recommending pricing some new crop. KC Wheat has demonstrated that domestic drought conditions do not necessarily guarantee higher domestic prices if global supplies are ample. US Wheat country has been extremely dry for many months, yet prices are about even with where prices were in late 2021, before Russia invaded Ukraine. Global soybean supplies could be record large, and this could be a rally risk factor.

  • 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 were mixed today trading both sides of unchanged and ultimately closed higher in July and November but lower in September. Both soybean oil and meal ended lower, and crude oil closed lower as well.

  • Crop progress will be released at 3pm today, and trade is estimating that the good to excellent rating will fall by 2% to 57% after disappointing and spotty rains over the past week.

  • Some support came from Secretary of State Anthony Blinken’s visit to China where he met with President Xi Jinping. The meeting apparently went well and soothed tensions. On the other hand, there have been some concerns that China’s GDP is lagging.

  • The EPA is slated to make their announcement regarding renewable diesel mandates tomorrow which could have a big impact on profitability.

  • Funds were buyers of soybeans by 33,901 contracts last week increasing their net long position to 47,882 contracts.

Above: With traders continuing to eye the weather maps, the August contract has pierced above the psychological level of 1400 and is presenting a bearish reversal. The market is in need of continued weather/crop concerns to fuel the current rally with resistance above the market near 1450.  If the market drops back, support could be found between 1340 and 1300 with further support near 1270.

Soybeans Managed Money Funds net position as of Tuesday, June 13. Net position in Green versus price in Red. Money Managers net bought 33,901 contracts between June 6 – June 13, bringing their total position to a net long 47,882 contracts.

Wheat

Market Notes: Wheat

  • After a two-sided trade, wheat finished with decent gains in the Chicago contract. Kansas city futures posted losses, with the nearby contracts down more than the deferred. This spread action may be related to the 7-day forecast for HRW areas, which is mostly dry, and may lead to increased harvest pressure.

  • Parts of Canada received heavy rains this weekend, which may account for the decline in spring wheat futures prices today.

  • Russian spring wheat areas remain in need of moisture. The longer range forecasts suggest these areas will get some rain. Northern Europe is also dry but looks like it will get some rain too.

  • Contrary to what normally happens in an El Nino year, Australia is getting rain. This could help their wheat crop, but it is possible that drought conditions could still develop over time.

  • Algeria is said to have purchased between 580,000 and 620,000 mt of milling wheat, likely sourced from Russia.

  • Managed funds reduced their net short position in Chicago wheat last week but are estimated to still be short more than 113k contracts as of last Tuesday.

Chicago Wheat Action Plan Summary

  • No new action is recommended for the 2022 crop. July pushed through the upper end of the 640 – 670 range we’ve been targeting. With harvest coming upon us, any remaining old crop bushels should be moved to make room for new crop. There will be no New Alerts posted for the 2022 crop going forward.

  • We recommend not taking any action on the 2023 crop at this time. While the window of opportunity is quickly closing for Old Crop, it is still wide open for better opportunities ahead for New Crop.  We are currently targeting a more aggressive window of 720 – 800 to suggest advancing sales and move more New Crop inventory.

  • No new action is recommended for the 2024 crop at this time. Prices have rallied nicely off of lows to start the month of June. With continued Black Sea tensions July of 2024 futures prices should be able to build off of the recent lows. We are currently targeting the 750-775 area to advance further on sales.

Above: September wheat was able to break out and close above the 50-day moving average and the May highs, which is supportive and could portend a change in trend. Resistance for the market could still be found between 670 and 724 with the 100-day moving average resting near 684. Initial support below the market (should prices turn lower) may be found between 625 and 610 and again near 573.

Chicago Wheat Managed Money Funds net position as of Tuesday, June 13. Net position in Green versus price in Red. Money Managers net bought 6,044 contracts between June 6 – June 13, bringing their total position to a net short 113,430 contracts.

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 bullish reversal from May 31 indicates that there is support near 760. US harvest selling pressure should keep upside limited to any near-term rallies. Resistance may be found above the market between 833 and 850, with further support resting below the market near 736-1/4. 

K.C. Wheat Managed Money Funds net position as of Tuesday, June 13. Net position in Green versus price in Red. Money Managers net sold 3,419 contracts between June 6 – June 13, bringing their total position to a net long 3,616 contracts.

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.

  • No action is recommended on the 2023 crop at this time. The September ’23 contract had a 120-cent range in the month of May where it found support just above 770. While the planting has largely been completed, dryness in some areas is increasing. With the market still largely oversold on the weekly charts and a full growing season ahead of us, we are not looking to make any sales right now.

  • We continue to be patient to market any of the 2024 crop. The market for the 2024 crop continues to be illiquid, and it may be early summer before we post any recommendations, continue to be patient.

Above: The market has rolled from the July to the September contract and has rallied out of its congestion area on the Front Month Continuous chart into resistance at the 100-day moving average near 860, with further resistance above the market between 889 and 940 the April and December highs respectively. While the upside breakout is a positive sign, the market will need additional bullish news to keep it moving. Should the market reverse course and turn lower, support below the market may be found between 770 and 760.

Minneapolis Wheat Managed Money Funds net position as of Tuesday, June 13. Net position in Green versus price in Red. Money Managers net bought 1,552 contracts between May 31 – June 6 – June 13, bringing their total position to a net short 7,422 contracts.

Other Charts / Weather

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Grain Market Insider: June 16, 2023

ByGrain Market Insider

The CME and Total Farm Marketing offices will be closed
Monday, June 19, in observance of Juneteenth

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Short covering and technical buying on dry weather forecasts push December corn to close over the 200-day moving average.

  • Dry weather and the fact that 51% of the soybean crop currently sits in drought-stricken areas rallied November soybeans to close at their highest level since March.

  • Both products lent support to soybeans today as further technical buying shot soybean meal to close with a 5% gain and bean oil, a 2.5% gain, which added 8-1/2 cents to December Board Crush margins.

  • Short covering and spillover strength from corn and soybeans mixed with degrading French and Argentine crops had all three wheat classes closing sharply higher on the day.

  • To see the current US 6 – 10 day US 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 action is recommended at this time for Old Crop. July corn is up over 90 cents from the May 18th low. Elevators are already rolling their bids from the July contract to September. While the price inverse between the two has been nearly cut in half in just six trading days, September is still trading at a 46-cent discount to July. The risk remains the loss of this premium as elevators roll from pricing off July to pricing off September. Any remaining old crop bushels 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 at this time for New Crop. Continued dryness has pushed the Dec 23 contract into the lower end of the price window we’ve been targeting for a number of weeks now: 590 – 630. No official recommendation yet as we are leaning toward the upper end of this target price range for the moment.

  • Continue to hold current sales levels for the 2024 crop year. We will look for opportunities to make further sales as we move through the 2023 growing season as weather volatility builds.

Grain Market Insider Corn open positions listed above.

  • The corn market saw additional buying strength to end the week, and the market pushed through technical resistance. This triggered additional short covering and money flow as weather forecasts keep buyers active in the market.

  • December corn futures closed over the 200-day moving average for the first time since Nov 18 and crossed over top a long-term, down trendline during the session. The strong price action will keep buyers active going into next week if the weather forecast remains a concern.

  • Despite demand concerns and ongoing Brazil corn harvest, the corn market is clearly being led by the weather. Current forecasts keep threatening weather of dry conditions and limited rainfall into next week.

  • Market upside could be limited by the potential competition from Brazil corn harvest. Lower priced, fresh supplies are starting to hit the global market.

  • The cash market is staying supportive of futures prices as the national corn index is trending above multi-year averages, and dry weather concerns have triggered some end user buying to cover potential corn needs. The index gained 14 cents this week.

Above: The corn market has had quite a run recently on weather concerns, and the September contract has pushed into a resistance area between 560 and 585. Should the market break through the 585 level, it may be poised to test the congestion area between 595 and 625. If not, initial support below the market may be found near 535 and again between 505 and 515.

Soybeans

Soybeans Action Plan Summary

  • Grain Market Insider sees an active opportunity to sell 2022 Old Crop soybeans. Grain Market Insider continues to recommend using this rally to clear out the last of the bushels in the bin. July beans are up nearly 200 cents from the May 31st low. If the weather pattern stays dry, prices could continue to push higher; yet the first significant moisture added to the forecast poses the risk of erasing this added weather premium just as fast (or faster) given the size of South American supplies and their discounted price. This will be the last Grain Market Insider recommendation for 2022 soybeans as we’re emptying the bins on this rally and moving fully on to 2023 and 2024 crops. 

  • Grain Market Insider recommends selling New Crop 2023 soybeans at this time. November soybeans have rallied over 200 cents from the May 31st low and today entered the target range we’ve been looking for: 1300 to 1350. The upper end of this range was nearly tagged with an intraday high of 1347, so we are recommending pricing some new crop. KC Wheat has demonstrated that domestic drought conditions do not necessarily guarantee higher domestic prices if global supplies are ample. US Wheat country has been extremely dry for many months, yet prices are about even with where prices were in late 2021, before Russia invaded Ukraine. Global soybean supplies could be record large, and this could be a rally risk factor.

  • 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 skyrocketed higher again today to mark $1.02 in gains in just two days for the November contract. For the week, Nov beans gained $1.38 as dry weather triggered funds to get more aggressive with purchases.

  • Both soy products rallied today as well with soybean meal taking the lead today with gains of over 5% in all contracts, but soybean oil was the leader yesterday following higher palm oil and crude.

  • Drought data revealed that 51% of the soybean crop is experiencing drought. Dryness in the eastern Corn Belt is expected throughout at least the next three days with better chances for showers in the western Belt.

  • Yesterday, bullish news came from the NOPA May crush report which saw 177.915 mb of beans crushed, a record for the month of May and 4% higher than the previous year. While export demand has been poor, domestic demand has been enough for markets to feel the squeeze of tight on hand supplies.

Above: The market continues to be strong with traders eyeing the weather maps. The August contract is nearing its April highs in the neighborhood of 1383, and if the market can penetrate those levels, it may be poised to test the psychological level of 1400. If prices were to set back, initial support could be found between 1290 and 1250.

Wheat

Market Notes: Wheat

  • All three US wheat futures classes again posted double digit gains, as the weather forecast for most of the Midwest looks dry for the next couple weeks, likely triggering short covering by the Funds as well.

  • Alongside US futures, Paris milling wheat futures gapped higher, ending their session with gains of 3.75 to 4.75 Euros per metric ton, well off the session high. US futures also closed off daily highs, likely due to profit taking after the strong rally.

  • Despite recent reports that the Russian government set a $240 (per ton) price floor on exports, this week their export prices are said to have hit a low of $230. This is sure to keep pressure on the US export market.

  • Supportive to wheat is the fact that El Nino could bring drought to Australia’s wheat growing region. Additionally, the French wheat crop conditions are worsening with a rating of 85% good to excellent, which is down 10% over the past three weeks.

  • Argentina’s wheat crop was recently downgraded by the Rosario Grain Exchange by 3 mmt and is currently below the USDA’s estimate.

Chicago Wheat Action Plan Summary

  • No new action is recommended for the 2022 crop. July pushed through the upper end of the 640 – 670 range we’ve been targeting. With harvest coming upon us, any remaining old crop bushels should be moved to make room for new crop. There will be no New Alerts posted for the 2022 crop going forward.

  • We recommend not taking any action on the 2023 crop at this time. While the window of opportunity is quickly closing for Old Crop, it is still wide open for better opportunities ahead for New Crop.  We are currently targeting a more aggressive window of 720 – 800 to suggest advancing sales and move more New Crop inventory.

  • No new action is recommended for the 2024 crop at this time. Prices have rallied nicely off of lows to start the month of June. With continued Black Sea tensions July of 2024 futures prices should be able to build off of the recent lows. We are currently targeting the 750-775 area to advance further on sales.

Above: September wheat was able to break out and close above the 50-day moving average and the May highs, which is supportive and could portend a change in trend. Resistance for the market could still be found between 670 and 724 with the 100-day moving average resting near 684. Initial support below the market (should prices turn lower) may be found between 625 and 610 and again near 573.

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 bullish reversal from May 31 indicates that there is support near 760. US harvest selling pressure should keep upside limited to any near-term rallies. Resistance may be found above the market between 833 and 850, with further support resting below the market near 736-1/4. 

Mpls Wheat Action Plan Summary

  • Grain Market Insider sees an active opportunity to sell 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.

  • No action is recommended on the 2023 crop at this time. The September ’23 contract had a 120-cent range in the month of May where it found support just above 770. While the planting has largely been completed, dryness in some areas is increasing. With the market still largely oversold on the weekly charts and a full growing season ahead of us, we are not looking to make any sales right now.

  • We continue to be patient to market any of the 2024 crop. The market for the 2024 crop continues to be illiquid, and it may be early summer before we post any recommendations, continue to be patient.

Above: The July contract continues to be weak and consolidate. With winter wheat harvest on the horizon, spillover selling pressure could plague the spring wheat market in the weeks to come. Resistance currently sits between 820 and 855 and then the recent high of 888-1/2. Support below the market may be found between 770 and 760. 

Other Charts / Weather

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Grain Market Insider: June 15, 2023

ByGrain Market Insider

The CME and Total Farm Marketing offices will be closed
Monday, June 19, in observance of Juneteenth

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Corn was sharply higher on a drier outlook for much of the corn belt over the next seven days and a continued expansion of drought in key corn producing areas according to the weekly updated drought monitor map.

  • Strong May NOPA soybean crush, strong weekly export sales and a continued surge higher in soybean oil all helped send soybean futures sharply higher.

  • Soybean oil continued its impressive June rally, closing over 4.4% higher, while soybean meal also traded higher on the day.

  • Spillover strength from corn and soybeans as well as a lower US Dollar Index helped propel all three wheat classes higher.

  • To see the updated US Drought Monitor as well as the 7-day NOAA Precipitation Outlook 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 action is recommended at this time for Old Crop. July corn has had nearly a 60-cent rally in the last couple of weeks. Expect volatility to remain in the market; a changing weather forecast can push the market significantly in either direction. If you still have Old Crop to sell, consider using this rally to begin pricing some of those bushels. Don’t forget, there is a significant inverse between the July and September futures contracts, which could be lost when bids get rolled from one contract to the next.   

  • No action is recommended at this time for New Crop. With dryness building in the Midwest and an estimated fund short position near 40k contracts, we continue to target the 590 – 630 range in the December futures to suggest adding cash sales. If you don’t happen to have any New Crop sold, you should consider targeting the 550 – 560 area to begin pricing bushels.  

  • Continue to hold current sales levels for the 2024 crop year. We will look for opportunities to make further sales as we move through the 2023 growing season as weather volatility builds.

Grain Market Insider Corn open positions listed above.

  • Corn prices surged higher on Thursday, fueled by concerns regarding weather forecasts remaining dry across large portions of the corn belt. Strong technical buying pushed prices through levels of resistance. December corn closed at its highest price level since February 27 and is trading 44 cents higher on the week.

  • Current drought monitor maps reflect the impacts of dry conditions across the corn belt as overall drought area expanded last week. With today’s weekly update, an estimated 57% of corn production areas in the US are experiencing some form of drought.

  • Weekly export sales were still disappointing last week, but the U.S. did sell 273,300 MT of old crop corn. This was the largest weekly total for old crop corn sales in the last five weeks.

  • Outside markets were supportive of the grain markets on Thursday as equity and energy futures saw buying support, helping build a “risk-on” trade during the day.

  • The weather forecast overall remains spotty as rainfall coverage is expected to be hit-or-miss for the next seven days. Temperatures are forecasted to warm over the corn belt, which will likely increase crop stress.

Above: The corn market has had quite a run recently on weather concerns, and the September contract has pushed into a resistance area between 560 and 585. Should the market break through the 585 level, it may be poised to test the congestion area between 595 and 625. If not, initial support below the market may be found near 535 and again between 505 and 515.

Soybeans

Soybeans Action Plan Summary

  • Grain Market Insider sees a continuing opportunity to sell 2022 Old Crop soybeans and take advantage of the recent rally. July soybeans have rallied nearly 160 cents from the May low and are approaching the 100-day moving average which should pose some resistance. Additionally, with a 60+ cent inverse to the August contract, much of that value may be lost as end users roll bids from the July contract. 

  • We recommend not adding to current sales levels for the new 2023 crop at this time. A quick planting pace with favorable conditions and South American competition greatly pressured soybeans in April and May. The potential remains for a tighter New Crop balance sheet, as the US Drought Monitor map remains concerning. We would consider recommending the next sales in the 1300 to 1350 area.

  • 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 skyrocketed higher today along with both soybean meal and soybean oil, which gained nearly 4.50%. NOPA crush was released and was supportive, and weather forecasts have trended slightly drier into next week.

  • NOPA US crush for May 2023 was pegged at 177.915 mb of soybeans, which was a record for the month and 4% above May of 2022. Soybean oil stocks came in at 1.872 billion bushels, which was below all trade guesses, and the average guess was 1.942. Stocks were up 5.5% from May 2022.

  • The dry weather has added support to the soy complex as well as the corn market, although soybeans have a wider window for beneficial rain to fall. Soil moisture has been extremely short in the eastern Corn Belt, and good rains will be needed to offset the coming high temperatures.

  • Argentina’s Rosario grain exchange cut their soybean production estimate again today by 5% to 20.5 mmt. The previous estimate was 21.5 mmt, both way below the USDA’s 25 mmt estimate.

  • Export sales for soybeans showed an increase of 17.6 mb for 22/23, which was up from the prior week and the 4-week average. There was an increase of 1.8 mb for 23/24, and last week’s export shipments were 5.2 mb, down 43% from the previous week and 41% from the prior 4-week average.

Above: The market continues to be strong with traders eyeing the weather maps. The August contract is nearing its April highs in the neighborhood of 1383, and if the market can penetrate those levels, it may be poised to test the psychological level of 1400. If prices were to set back, initial support could be found between 1290 and 1250.

Wheat

Market Notes: Wheat

  • The USDA reported an increase of 6.1 mb of wheat export sales for 23/24.

  • Spillover support from corn and soybeans certainly helped the wheat market rally today. The current weather market environment is sure to remain volatile, especially with markets closed Monday for the Juneteenth holiday.

  • Both the American and European weather models are aligning to show a dry forecast for the next 10 days across most of the corn belt, and this likely led to today’s rally. Short covering may have also played a part, especially in wheat, where the funds are said to still hold a net short of about 115,000 contracts.

  • The US Dollar Index was sharply lower today, which eased pressure on the wheat market, allowing it to run. In general, wheat and the US Dollar have an inverted relationship, meaning that when the dollar trades lower, wheat tends to trade higher (and vice versa).

  • The Russian government is said to have established a $240 per ton price floor on wheat exports for July and August. It remains to be seen if exporters will adhere to this, but these export values are far below US prices and may limit upside potential.

Chicago Wheat Action Plan Summary

  • No new action is recommended for the 2022 crop. The market is down more than 300 cents from its October high and has become extremely oversold. With good price action to start June, the market may be positioned for a short covering rally as new crop harvest quickly approaches. We continue to eye the 640 – 670 range to clean up and market any remaining Old Crop inventory.

  • We recommend not taking any action on the 2023 crop at this time. While the window of opportunity is quickly closing for Old Crop, it is still wide open for better opportunities ahead for New Crop.  We are currently targeting a more aggressive window of 720 – 800 to suggest advancing sales and move more New Crop inventory.

  • No new action is recommended for the 2024 crop at this time. Prices have rallied nicely off of lows to start the month of June. With continued Black Sea tensions July of 2024 futures prices should be able to build off of the recent lows. We are currently targeting the 750-775 area to advance further on sales.

Above: September wheat was able to break out and close above the 50-day moving average and the May highs, which is supportive and could portend a change in trend. Resistance for the market could still be found between 670 and 724 with the 100-day moving average resting near 684. Initial support below the market (should prices turn lower) may be found between 625 and 610 and again near 573.

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 bullish reversal from May 31 indicates that there is support near 760. US harvest selling pressure should keep upside limited to any near-term rallies. Resistance may be found above the market between 833 and 850, with further support resting below the market near 736-1/4. 

Mpls Wheat Action Plan Summary

  • Grain Market Insider sees a continued opportunity to sell 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.

  • No action is recommended on the 2023 crop at this time. The September ’23 contract had a 120-cent range in the month of May where it found support just above 770. While the planting has largely been completed, dryness in some areas is increasing. With the market still largely oversold on the weekly charts and a full growing season ahead of us, we are not looking to make any sales right now.

  • We continue to be patient to market any of the 2024 crop. The market for the 2024 crop continues to be illiquid, and it may be early summer before we post any recommendations, continue to be patient.

Above: The July contract continues to be weak and consolidate. With winter wheat harvest on the horizon, spillover selling pressure could plague the spring wheat market in the weeks to come. Resistance currently sits between 820 and 855 and then the recent high of 888-1/2. Support below the market may be found between 770 and 760. 

Other Charts / Weather

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Grain Market Insider: June 14, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Corn prices recovered somewhat from their overnight lows that were weighed down due in part to the rain that fell in parts of the northeastern and eastern Corn Belt yesterday.

  • An increase in Brazil’s crop production estimate and weakness in their export basis weighed on July soybeans as they may hinder further US sales, while New Crop contracts held small gains in carryover support from yesterday’s rally.

  • Falling Russian prices and the continuing harvest in Texas added pressure to all three wheat classes and pushed them to close lower.

  • The two day Federal Reserve meeting to determine whether to increase interest rates concluded this afternoon, leaving the current rates unchanged, which was largely anticipated by the market and may have added pressure to the US dollar and its move lower.

  • To see the updated 7-day NOAA Precipitation Outlook and, NOAA 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 action is recommended at this time for Old Crop. July corn has had nearly a 60-cent rally in the last couple of weeks. Expect volatility to remain in the market; a changing weather forecast can push the market significantly in either direction. If you still have Old Crop to sell, consider using this rally to begin pricing some of those bushels. Don’t forget, there is a significant inverse between the July and September futures contracts, which could be lost when bids get rolled from one contract to the next.   

  • No action is recommended at this time for New Crop. With dryness building in the Midwest and an estimated fund short position near 40k contracts, we continue to target the 590 – 630 range in the December futures to suggest adding cash sales. If you don’t happen to have any New Crop sold, you should consider targeting the 550 – 560 area to begin pricing bushels.  

  • Continue to hold current sales levels for the 2024 crop year. We will look for opportunities to make further sales as we move through the 2023 growing season as weather volatility builds.

Grain Market Insider Corn open positions listed above.

  •  

  • Corn futures finished mixed on the session, pressured on the overnight session by rainfall in the northeastern and eastern Corn Belt. Concerns regarding the direction of the Fed regarding interest rates limited both commodity and equity markets overall on the day.

  • The weather forecast overall remains spotty as rainfall coverage is expected to be hit-or-miss for the next seven days. Despite some recent, but limited, rainfall in many areas of the Corn Belt are still in need of additional and timely rainfall.

  • Demand will stay a focus on Thursday with the USDA releasing weekly export sales.  Expectations are for old crop sales to range from –110,000 MT – 550,000 MT and New crop from 0 – 350,000 MT, as U.S. corn export prices struggle against cheaper global competition.

  • Weekly ethanol margins remain rangebound with the weekly Ethanol Production report showing production of 18,000 barrels/day and stocks down 722,000 barrels. Overall corn usage for ethanol is still behind the USDA pace needed to reach targets for the marketing year.

Above: The breakout above the recent congestion area has the market knocking on the door of the next resistance area between the 100-day moving average near 630 and the April high of 647-1/2, and while a test of the April high is within reach, the market is showing some signs of being overbought. Initial support below the market rests between 595 and 575, with additional support near 550. 

Soybeans

Soybeans Action Plan Summary

  • Grain Market Insider sees a continuing opportunity to sell 2022 Old Crop soybeans and take advantage of the recent rally. July soybeans have rallied nearly 130 cents from the May low and are approaching the psychological resistance level of 1400. Additionally, with a 70+ cent inverse to the August contract, much of that value may be lost as end users roll bids from the July contract. 

  • We recommend not adding to current sales levels for the new 2023 crop at this time. A quick planting pace with favorable conditions and South American competition greatly pressured soybeans in April and May. The potential remains for a tighter New Crop balance sheet, as the US Drought Monitor map remains concerning. We would consider recommending the next sales in the 1300 to 1350 area.

  • 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 mixed with July lower, but November slightly higher.  As for the products, soybean meal closed lower, while soybean oil ended higher despite a decline in crude oil.

  • Prospects for rain are improving in the forecast with good, widespread rains expected across the Midwest that should begin to fall Thursday and into the weekend. If significant rains fall over the upcoming three-day weekend, prices might face some selling pressure.

  • Today, the Federal Reserve announced that they would not be raising interest rates this month, but that they would likely implement two more “small hikes” before the year is over. This noticeably weighed on the stock market as the trade was expecting either no more hikes this year or one more, and the comment likely weighed on commodities as well.

  • The EPA was supposed to make their decision about biofuel mandates today, which had given the soy complex support yesterday, but the decision was delayed until June 21. The decision could provide support for soybeans and the expansion of biodiesel.

Above: After a strong close last week, July soybeans will look for follow-through momentum to turn around a down-trend that has been in place since April. The strong close above the 20-day moving average is a great sign of a short-term trend change higher. If prices were to set back, support should be found near 1340 with nearby resistance near the 1420 area. 

Wheat

Market Notes: Wheat

  • Rain in the Plains states may slow harvest short term. In any case, this year’s winter wheat harvest could be close to the smallest in 50 years because of the drought experienced in the southwestern Plains this growing season.

  • Western Canada has been too dry in spring wheat areas, but there are chances for rain over the coming week in Alberta and Saskatchewan, and the front could potentially make it into Manitoba as well. This moisture would be welcomed for the spring wheat crop.

  • Both Brazil and Argentina are experiencing potential frost and freezing conditions. While there is not much concern about Brazil’s safrinha corn at this time, the low temperatures over the next few days could slow germination and growth of Argentina’s winter wheat crop.

  • This afternoon, the Fed announced a pause in interest rate increases. However, they said there might be a couple more hikes later this year. Financial markets did not like this result, and some of that negativity may have spilled over into the commodity complex.

  • In general, the grain trade is in a weather market, and the European weather model shows a bit more moisture than it did previously. This offered some weakness to corn and soybeans, which likely weighed on wheat as well.

Chicago Wheat Action Plan Summary

  • No new action is recommended for the 2022 crop. The market is down more than 300 cents from its October high and has become extremely oversold. With good price action to start June, the market may be positioned for a short covering rally as new crop harvest quickly approaches. We continue to eye the 640 – 670 range to clean up and market any remaining Old Crop inventory.

  • We recommend not taking any action on the 2023 crop at this time. While the window of opportunity is quickly closing for Old Crop, it is still wide open for better opportunities ahead for New Crop.  We are currently targeting a more aggressive window of 720 – 800 to suggest advancing sales and move more New Crop inventory.

  • No new action is recommended for the 2024 crop at this time. Prices have rallied nicely off of lows to start the month of June. With continued Black Sea tensions July of 2024 futures prices should be able to build off of the recent lows. We are currently targeting the 750-775 area to advance further on sales.

Above: The bullish reversal from May 31 indicates that there is support near 760. US harvest selling pressure should keep upside limited to any near-term rallies. Resistance may be found above the market between 833 and 850, with further support resting below the market near 736-1/4.

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 bullish reversal from May 31 indicates that there is support near 760. US harvest selling pressure should keep upside limited to any near-term rallies. Resistance may be found above the market between 833 and 850, with further support resting below the market near 736-1/4. 

Mpls Wheat Action Plan Summary

  • Grain Market Insider recommends selling 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.

  • No action is recommended on the 2023 crop at this time. The September ’23 contract had a 120-cent range in the month of May where it found support just above 770. While the planting has largely been completed, dryness in some areas is increasing. With the market still largely oversold on the weekly charts and a full growing season ahead of us, we are not looking to make any sales right now.

  • We continue to be patient to market any of the 2024 crop. The market for the 2024 crop continues to be illiquid, and it may be early summer before we post any recommendations, continue to be patient.

Above: The July contract continues to be weak and consolidate. With winter wheat harvest on the horizon, spillover selling pressure could plague the spring wheat market in the weeks to come. Resistance currently sits between 820 and 855 and then the recent high of 888-1/2. Support below the market may be found between 770 and 760. 

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Grain Market Insider: June 13, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • The rolling of long positions from the July to the New Crop contracts likely added to the weakness in the July, while December held onto some of its gains from a drop in the good to excellent ratings to 61%.

  • The lowest good to excellent rating for this time since 2013, 59% according to the USDA, and sharp gains in soybean oil, gave soybeans the energy to rally sharply on the day.

  • Soybean oil followed Malaysian palm oil and crude oil higher, and while soybean meal saw significant gains for New Crop, the mere 10-cent gain in July was not enough to keep pace with soybeans as July Board Crush margins fell 10-1/4 cents.

  • All three wheat classes traded on both sides of unchanged today but succumbed to pressure as corn prices faded with K.C. and Minneapolis contracts finishing lower on the day while Chicago held some strength with some mild short covering.

  • The US Dollar closed lower today, likely in anticipation of no change in interest rates at the end of the Federal Reserve meeting that is being held today and tomorrow. As of now the market is estimating a 95% chance that rates will remain unchanged, with a 5% chance of a 0.25% increase.

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 action is recommended at this time for Old Crop. July corn has had nearly a 60-cent rally in the last couple of weeks. Expect volatility to remain in the market; a changing weather forecast can push the market significantly in either direction. If you still have Old Crop to sell, consider using this rally to begin pricing some of those bushels. Don’t forget, there is a significant inverse between the July and September futures contracts, which could be lost when bids get rolled from one contract to the next in the next couple of weeks.

  • No action is recommended at this time for New Crop. With dryness building in the Midwest and an estimated fund short position in excess of 40k contracts, we continue to target the 590 – 630 range in the December futures to suggest adding cash sales. If you don’t happen to have any New Crop sold, you should consider targeting the 550 – 560 area to begin pricing bushels.

  • Continue to hold current sales levels for the 2024 crop year. We will look for opportunities to make further sales as we move through the 2023 growing season as weather volatility builds.

Grain Market Insider Corn open positions listed above.

  •  Corn prices finished mixed on the day as prices faded off early session strength supported by a further reduction in crop ratings.

  •  Spread activity in the later part of the session pressured prices as traders moved long positions out of the July contract. The spread between July and September corn futures has dropped 20 cents from 85 cents to 65 cents in the past four trading sessions.

  •  Weekly Crop ratings slipped again on the USDA Crop Progress report, dropping an additional 3% to 61% good/excellent. Analysts were expecting 62% good/excellent as dry conditions still pressure the crop.

  •  Brazilian corn harvest is starting to pick up, and the push of cheaper, fresh corn supplies hitting the market may limit the front end of the corn market as U.S. prices are well above global competition for export demand.

  •  The weather forecast overall remains spotty as rainfall coverage is expected to be hit-or-miss for the next seven days.

Above: The breakout above the recent congestion area has the market knocking on the door of the next resistance area between the 100-day moving average near 630 and the April high of 647-1/2, and while a test of the April high is within reach, the market is showing some signs of being overbought. Initial support below the market rests between 595 and 575, with additional support near 550. 

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

Soybeans

Soybeans Action Plan Summary

  • July soybeans have rallied 128 cents from the May low and are approaching 1400 psychological resistance. With a 78 cent inversion to the August contract, Grain Market Insider recommends taking advantage of the recent rally to make a sale for the old 2022 soybean crop.

  • We recommend not adding to current sales levels for the new 2023 crop at this time. A quick planting pace with favorable conditions and South American competition greatly pressured soybeans in April and May. The potential remains for a tighter New Crop balance sheet, as the US Drought Monitor map remains concerning. We would consider recommending the next sales in the 1300 to 1350 area.

  • 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 significantly higher today thanks to gains in soybean oil, crop progress that showed conditions declining, and an EPA decision that will be announced tomorrow about biofuel mandates that could be bullish for the soy complex.

  •  Planting progress showed that the soy crop is 96% planted (which is above 86% on average) and 86% emerged vs 70% on average. The good to excellent rating fell by 3 points to 59% due to dry conditions, and the poor to very poor rating rose to 9%.

  •  The Environmental Protection Agency has a June 14 deadline for announcing final renewable volume obligations that will impact the profitability of renewable diesel. The outcome of this decision could be very supportive to the soy complex.

  •  Soybean oil was supported by a jump in crude oil and an increase in palm oil which gained 2.5% today. Soybean oil has become overbought, but it has followed palm oil very closely and will likely continue to do so.

Above: After a strong close last week, July soybeans will look for follow-through momentum to turn around a down-trend that has been in place since April. The strong close above the 20-day moving average is a great sign of a short-term trend change higher. If prices were to set back, support should be found near 1340 with nearby resistance near the 1420 area. 

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

Wheat

Market Notes: Wheat

  • Despite earlier strength, wheat posted gains of just a couple cents in the Chicago contract, while Kansas City and Minneapolis contracts were mostly lower. This is likely because wheat acted as a follower today, and as the gains in corn faded, so did wheat.

  • According to the USDA, 38% of the winter wheat crop is rated good to excellent vs 36% last week. Also, 8% of the crop is harvested vs 9% average.

  • The USDA also said that 97% of the spring wheat crop is planted which is in line with average. Only 60% of that crop is rated good to excellent, compared with 64% last week.

  • Russian export values continue to fall, with reports that they are talking about lowering the floor to $230 per metric ton. This is below current offers of $235-$240 and is well below the $275 floor that was encouraged a couple months ago.

  • The developing El Nino weather pattern is expected to cause drought in Australia, lowering their wheat production.

  • Despite a large wheat crop in India which is expected to be 113.5 mmt, tight stocks may mean that they don’t export much wheat this year, if any at all. This could contribute to tighter global availability.

Chicago Wheat Action Plan Summary

  • No new action is recommended for the 2022 crop. The market is down more than 300 cents from its October high and has become extremely oversold. With good price action to start June, the market may be positioned for a short covering rally as new crop harvest quickly approaches. We continue to eye the 640 – 670 range to clean up and market any remaining Old Crop inventory.

  • We recommend not taking any action on the 2023 crop at this time. While the window of opportunity is quickly closing for Old Crop, it is still wide open for better opportunities ahead for New Crop.  We are currently targeting a more aggressive window of 720 – 800 to suggest advancing sales and move more New Crop inventory.

  • No new action is recommended for the 2024 crop at this time. Prices have rallied nicely off of lows to start the month of June. With continued Black Sea tensions July of 2024 futures prices should be able to build off of the recent lows. We are currently targeting the 750-775 area to advance further on sales.

Above: The bullish reversal from May 31 indicates that there is support near 760. US harvest selling pressure should keep upside limited to any near-term rallies. Resistance may be found above the market between 833 and 850, with further support resting below the market near 736-1/4.

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

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 bullish reversal from May 31 indicates that there is support near 760. US harvest selling pressure should keep upside limited to any near-term rallies. Resistance may be found above the market between 833 and 850, with further support resting below the market near 736-1/4. 

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

Mpls Wheat Action Plan Summary

  • No action is currently recommended for the 2022 crop. With planting concerns and a seasonal tendency for old crop prices to increase over the next 4-5 weeks, we are continuing to wait for better prices to develop. The calendar is becoming a constraint though, and we’ll be looking to part with any remaining old crop bushels by mid-June or so. 

  • No action is recommended on the 2023 crop at this time. The September ’23 contract had a 120-cent range in the month of May where it found support just above 770. While the planting has largely been completed, dryness in some areas is increasing. With the market still largely oversold on the weekly charts and a full growing season ahead of us, we are not looking to make any sales right now.

  • We continue to be patient to market any of the 2024 crop. The market for the 2024 crop continues to be illiquid, and it may be early summer before we post any recommendations, continue to be patient.

Above: The July contract continues to be weak and continues to consolidate. With winter wheat harvest on the horizon, spillover selling pressure could plague the spring wheat market in the weeks to come. Resistance currently sits between 820 and 855 and then the recent high of 888-1/2. Support below the market may be found between 770 and 760.

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

Other Charts / Weather

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Grain Market Insider: June 12, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Increasing dryness and a forecast for limited moisture rallied July corn to test the 100-day moving average for the first time in two months.

  • Weak export inspections and Fund spreading weighed heavily on Old Crop contracts, while New Crop was able to close on the positive side of unchanged as weather premium is added to the market.

  • Carryover strength from corn helped to boost Chicago and Minneapolis contracts, while K.C. contracts saw continued pressure from better than expected crop numbers in Friday’s USDA report.

  • Limited rainfall this past weekend brought the buyers out for the New Crop contracts as the market turned its attention to the weather, and with some rain chances expected in the next week a keen eye will be on Iowa, Illinois, and Missouri.

  • To see the updated NOAA 8-14 Day Temperature and Precipitation Outlooks and 7-day NOAA Precipitation Outlook 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 action is recommended at this time for Old Crop. July corn has had nearly a 60-cent rally in the last couple of weeks. Expect volatility to remain in the market, a changing weather forecast can push the market significantly in either direction. If you still have Old Crop to sell, consider using this rally to begin pricing some of those bushels. Don’t forget, there is about an 80-cent inverse between the July and September futures contracts, which could be lost when bids get rolled from one contract to the next in the next few weeks.

  • No action is recommended at this time for New Crop. With dryness building in the Midwest and an estimated fund short position in excess of 40k contracts, we continue to target the 590 – 630 range in the December futures to suggest adding cash sales. If you don’t happen to have any New Crop sold, you should consider targeting the 550 – 560 area to begin pricing bushels.

  • Continue to hold current sales levels for the 2024 crop year. We will look for opportunities to make further sales as we move through the 2023 growing season as weather volatility builds.

Grain Market Insider Corn open positions listed above.

  • Corn futures finished higher on the session as recent rainfall lacked the coverage and intensity that was anticipated, causing additional short covering as prices pushed higher through some levels of resistance.

  • Weekly crop ratings will be released on Monday afternoon, and expectations are for an additional drop in corn ratings to 62% good/excellent, down 2% from 64% last week.

  • The weather will stay as the market’s focus as weather models are variable over the next 10 days as overall rainfall still looks limited, pressuring the stressed crop.

  • Demand remains a concern as the weekly export inspection report was released on Monday morning. Last week, U.S. exporters shipped 1.169 MMT of corn, near the top end of expectations, but still behind the pace needed to reach the USDA corn export goal. Corn shipments are still down 31% year–over-year.

  • Brazil corn harvest of their second crop corn is starting to begin. Private analyst, AgRural, forecasted that Brazilian farmers have harvested 2.2% of the area planted for corn. This is down from 6.6% last year. 

Above: The breakout above the recent congestion area has the market knocking on the door of the next resistance area between the 100-day moving average near 630 and the April high of 647-1/2, and while a test of the April high is within reach, the market is showing some signs of being overbought. Initial support below the market rests between 595 and 575, with additional support near 550. 

Corn Managed Money Funds net position as of Tuesday, June 6. Net position in Green versus price in Red. Money Managers net bought 6,573 contracts between May 31 – June 6, bringing their total position to a net short 44,492 contracts.

Soybeans

Soybeans Action Plan Summary

  • The trend in the soybean market since early April has been down. Since the bullish reversal on 5/31, the market has found some support near 1270 and has formed a possible head-and-shoulders bottom. The Old Crop balance sheet remains on the tight side, and as dryness continues to build, we remain in a seasonal window that is conducive to upside opportunity and volatility. Continue to hold on progressing any Old Crop sales for now.

  • We recommend not adding to current sales levels for the new 2023 crop at this time. A quick planting pace with favorable conditions and South American competition greatly pressured soybeans in April and May. The potential remains for a tighter New Crop balance sheet, as the US Drought Monitor map remains concerning. We would consider recommending the next sales in the 1300 to 1350 area.

  • 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 mixed with the July contract posting losses and deferred contracts gaining as first notice approaches and funds likely rolled out of some of their Jul contracts and into Sep and Nov. Soybean meal closed slightly higher, while soybean oil fell alongside crude.

  • Export inspections for soybeans were low at 5.2 mb and put total inspections for 22/23 at 1.794 bb which is down 3% from last year. The USDA is estimating soybean exports at 2.000 bb for 22/23 which is down 7% from last year.

  • Weather has been a key factor for the moves in corn and this past weekend’s rains were spotty and underwhelming, but soybeans have more time before rains become crucial and so did not keep up with the gains in corn today.

  • Crop progress will be released later today, and estimates are that the good to excellent rating in soybeans will drop to 60% from 62% last week, and that 96% of the crop will be planted which would be up from 91% last week.

Above: After a strong close last week, July soybeans will look for follow-through momentum to turn around a down-trend that has been in place since April. This week’s strong close above the 20-day moving average is a great sign of a short-term trend change higher. If prices were to set back, support should be found near 1340 with nearby resistance near the 1420 area. 

Soybeans Managed Money Funds net position as of Tuesday, June 6. Net position in Green versus price in Red. Money Managers net bought 13,452 contracts between May 31 – June 6, bringing their total position to a net long 13,981 contracts.

Wheat

Market Notes: Wheat

  • After a two-sided trade, the wheat complex closed mostly higher. Wheat acted as a follower today and was likely pulled higher by the corn market into the end of the session.

  • Weekly wheat export inspections were pegged at 9.1 mb., bringing total 23/24 inspections to 12 mb. The USDA is estimating 23/24 wheat exports at 725 mb versus 775 for 22/23.

  • Some support may have come from higher Paris milling wheat futures. Dry conditions in Spain and northern France may be the reason for Matif wheat’s uptrend since the May 31 lows, and because of this dry weather, one analyst group is estimating a decline in European wheat production of 2.1 mmt.

  • Managed funds are estimated to still be net short 122,280 contracts of Chicago wheat. With uncertain weather, in addition to global political and economic uncertainties, this could prime the wheat market for a short covering rally.

  • On Friday’s USDA report, US HRW wheat production was increased by 11 mb, and this is being attributed to recent rains in Texas and Oklahoma that helped the crop. Kansas production was left unchanged in the report.

Chicago Wheat Action Plan Summary

  • No new action is recommended for the 2022 crop. The market is down more than 300 cents from its October high and has become extremely oversold. With good price action to start June, the market may be positioned for a short covering rally as new crop harvest quickly approaches. We continue to eye the 640 – 670 range to clean up and market any remaining Old Crop inventory.

  • We recommend not taking any action on the 2023 crop at this time. While the window of opportunity is quickly closing for Old Crop, it is still wide open for better opportunities ahead for New Crop.  We are currently targeting a more aggressive window of 720 – 800 to suggest advancing sales and move more New Crop inventory.

  • No new action is recommended for the 2024 crop at this time. Prices have rallied nicely off of lows to start the month of June. With continued Black Sea tensions July of 2024 futures prices should be able to build off of the recent lows. We are currently targeting the 750-775 area to advance further on sales.

Above: The market appears to have put in short-term lows to end the month of May near the 575 level. A close above the 660 area would be a supportive sign of a trend change to higher. The next area of possible support, if the late May lows do not hold, would be below the market near the September ’20 low of 533-1/4. Resistance above the market could be found between 670 and 724.

Chicago Wheat Managed Money Funds net position as of Tuesday, June 6. Net position in Green versus price in Red. Money Managers net bought 7,524 contracts between May 31 – June 6, bringing their total position to a net short 119,474 contracts.

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. Crop ratings overall are at historically low levels, and production concerns persist. Additionally, any unforeseen geopolitical changes in the Black Sea region could cause the market to bounce and retrace 25% towards the 2022 high. 

  • 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: Last week Wednesday’s bullish reversal indicates that there is support near 760. US harvest selling pressure should keep upside limited to any near-term rallies. Resistance may be found above the market between 833 and 850, with further support resting below the market near 736-1/4. 

K.C. Wheat Managed Money Funds net position as of Tuesday, June 6. Net position in Green versus price in Red. Money Managers net sold 2522 contracts between May 31 – June 6, bringing their total position to a net long 7,106 contracts.

Mpls Wheat Action Plan Summary

  • No action is currently recommended for the 2022 crop. With planting concerns and a seasonal tendency for old crop prices to increase over the next 4-5 weeks, we are continuing to wait for better prices to develop. The calendar is becoming a constraint though, and we’ll be looking to part with any remaining old crop bushels by mid-June or so. 

  • No action is recommended on the 2023 crop at this time. The September ’23 contract had a 120-cent range in the month of May where it found support just above 770. While the planting pace has largely caught up to the 5-year average, dryness in some areas is increasing. With the market still largely oversold and a full growing season ahead of us, we are not looking to make any sales right now.

  • We continue to be patient to market any of the 2024 crop. The market for the 2024 crop continues to be illiquid, and it may be early summer before we post any recommendations, continue to be patient.

Above: The July contract continues to be weak and showing signs of being oversold after breaking back below the 800 level this week.  With winter wheat harvest on the horizon, spill over selling pressure could plague the spring wheat market in the weeks to come. Resistance currently sits between 820 and 855 and then the recent high of 888-1/2.  Support below the market may be found between 770 and 760. 

Minneapolis Wheat Managed Money Funds net position as of Tuesday, June 6. Net position in Green versus price in Red. Money Managers net sold 1,271 contracts between May 31 – June 6, bringing their total position to a net short 8,974 contracts.

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