|

Grain Market Insider: June 9, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Corn was lower to end the week after the USDA lowered 22/23 corn exports by 50 million bushels bringing ending stocks in line with pre-report estimates, but still higher than the May estimate.

  • Soybeans closed sharply higher with help once again from higher soybean oil prices. July Soybean Oil futures have closed higher in five of the first seven trading days to start the month of June.

  • Wheat was mixed with Chicago contacts moving higher while K.C. and Minneapolis contracts slid lower. Overall, the WASDE report was viewed as neutral to the wheat market with only minor changes from last month’s numbers.

  • With the June WASDE report in the rearview mirror, the trade will turn its attention back to weather as we enter critical weeks of crop development for corn and soybeans.

  • 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 lower on Friday as a confirmed growing supply picture and potential weather pattern shifts limited buying support. July corn futures closed the week 4-3/4 cents lower and December lost 10-3/4 cents.

  • The USDA June WASDE report lowered old crop corn export demand by 50 MB but decreased corn imports by 15 MB to add a difference of 35 MB to projected carryout. Old crop carryout is now at 1.452 BB and New crop was raised to 2.257 BB. The report was close to analysts’ expectations, but still confirmed a weaker demand tone and larger supply picture.

  • The USDA raised their projection for Brazilian corn production to 132 MMT (approx. 5.118 BB) by adding 2 MMT (79MB) over last month’s projections, this was larger than analyst expectations.

  • Now with the report behind the market, traders will shift focus back to the weather. Models are showing a potential change overall to a cooler and wetter pattern, but the market will be watching precipitation totals and locations over the weekend.

  • Corn future weakness may have been limited late today by buying strength in the soybean markets, and the Chicago wheat market trading off the lows of the session.

Above: Prices have continued to run into resistance at the 610 area. If current prices can hold and close above the 50-day moving average near 604, the market would be poised to test April’s high of 647-1/2. Support below the market rests between 550 and 530, and again near the 2021 September low of 497-1/2. 

Soybeans

Soybeans Action Plan Summary

  • May was a rough month for soybeans with a 175-cent range, but the market is consolidating, and found support just above 1270. July soybeans continue to be oversold with a tight Old Crop balance sheet, and with dryness concerns building and a seasonal window that is conducive for upside volatility and opportunity, 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 significantly higher on the day despite a neutral WASDE report. Soybean meal closed lower in the front months, while soybean oil closed higher as palm oil begins to recover.

  • Today’s WASDE report held essentially no surprises. The USDA lowered Argentinian production to 25 mmt from their previous estimate of 27 mmt, but that is likely still too high. Brazilian production was increased by 1 mmt to 156 mmt. In the US, soybean ending stocks were increased to 350 mb which was higher than the average trade guess.

  • Private exporters reported to the USDA export sales of 197,000 mt of soybeans for delivery to unknown destinations for the 22/23 marketing year. The marketing year for soybeans began on September 1.

  • Now that the WASDE is out of the way with very little reaction, traders will turn their focus back to weather. Forecasts for the Corn Belt this weekend and into the next week call for rain, but it may only be around 1 inch. If rains don’t fall this weekend, prices could easily move higher.

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. 

Wheat

Market Notes: Wheat

  • All eyes were on today’s USDA report which was overall neutral. Despite this, Chicago wheat posted small gains at the close alongside Paris milling wheat futures. Kansas City and Minneapolis contracts were lower, however.

  • The US 23/24 all wheat production was raised slightly from 1.659 bb in May, to 1.665 bb on today’s report.

  • The US 22/23 wheat carryout was unchanged at 598 mb. However, it was raised slightly for 23/24, from 556 mb in May to 562 mb in June, due to a slight increase in overall production.

  • The USDA estimated the average US wheat yield at 44.9 bpa, up from 44.7 last month. However, this is lower than the average yield last year of 47.0 bpa.

  • Russian wheat production was raised by 3.5 mmt to 85.0 mmt, and Ukraine was raised 1.0 mmt to 17.5 mmt. India and the European Union also saw increases to their overall wheat harvest estimates.

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.

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. 

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. 

Other Charts / Weather

|

Grain Market Insider: June 8, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Corn closed higher as forecasted weekend rainfall totals continue to fluctuate for areas of desperate need in the eastern Corn Belt. Spillover strength from the wheat market also helped add to higher momentum.

  • Soybeans ended higher, driven mostly by another daily surge in soybean oil futures. Soybean meal futures were fractionally lower on continued demand concerns.

  • Wheat ended higher despite weak export sales and a continued drop in Russian wheat export values.

  • The US Dollar Index moved sharply lower, closing below the 20-day moving average for the first time since early May, this helped support commodities throughout the session.

  • To see the updated US Drought Monitor Map 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

  •  

  • Corn prices finished higher on the session, fighting off overnight lows in some position squaring before Friday’s USDA report. The corn market was also supported by fluctuating weather models for weekend rains, and strength in the wheat market on increasing Ukrainian-Russian war tensions.

  • The USDA released weekly exports sales this morning for corn, and old crop sales were 173,000 MT and new crop sales saw cancelations of 107,000 MT. Overall sales were at the low end of expectations as export demand remains weak.

  • The wheat market was supported by the talk of a Ukrainian counter offensive, escalating activity in the Russia-Ukraine war. The strong wheat market spilled over to support corn prices at the end of the session.

  • Tomorrow morning at 11:00 CST, the USDA will release the June WASDE report. The June WASDE is expected to show a weaker demand tone and overall increasing corn supplies. The trade is looking for old-crop carryout at 1.449 billion bushels (bb), up slightly from last month; new crop at 2.254 bb, also up slightly.

Grain Market Insider Corn open positions listed above.

  • Corn prices finished higher on the session, fighting off overnight lows in some position squaring before Friday’s USDA report. The corn market was also supported by fluctuating weather models for weekend rains, and strength in the wheat market on increasing Ukrainian-Russian war tensions.

  • The USDA released weekly exports sales this morning for corn, and old crop sales were 173,000 MT and new crop sales saw cancelations of 107,000 MT. Overall sales were at the low end of expectations as export demand remains weak.

  • The wheat market was supported by the talk of a Ukrainian counter offensive, escalating activity in the Russia-Ukraine war. The strong wheat market spilled over to support corn prices at the end of the session.

  • Tomorrow morning at 11:00 CST, the USDA will release the June WASDE report. The June WASDE is expected to show a weaker demand tone and overall increasing corn supplies. The trade is looking for old-crop carryout at 1.449 billion bushels (bb), up slightly from last month; new crop at 2.254 bb, also up slightly.

Above: Prices have continued to run into resistance at the 610 area. If current prices can hold and close above the 50-day moving average near 604, the market would be poised to test April’s high of 647-1/2. Support below the market rests between 550 and 530, and again near the 2021 September low of 497-1/2. 

Soybeans

Soybeans Action Plan Summary

  • May was a rough month for soybeans with a 175-cent range, but the market is consolidating, and found support just above 1270. July soybeans continue to be oversold with a tight Old Crop balance sheet, and with dryness concerns building and a seasonal window that is conducive for upside volatility and opportunity, 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 have pressed US prices down nearly 17% from the beginning of the year. 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 higher, driven by large gains in soybean oil, which saw the July contract 4% higher, while soybean meal moved lower.

  • Export sales were decent, all things considered, the USDA reported an increase of 7.6 mb for the 22/23 year, which was up 68% from the previous week, 9.7 mb were reported for 23/24. Export shipments of 9.1 mb were below the 12.1 mb needed each week to meet the USDA’s expectations.

  • US biodiesel exports for April were up 110% from last year at over 147,000 mt, which is the highest on record. The first four months of the year were 52% higher than that of a year ago.

  • Tomorrow’s WASDE report will be released at 11:00 CST, and traders will be watching for a change in the carryout number. Trade expectations are for 223 mb of old crop beans and 345 mb of new crop, which would be slightly up from last month. Argentinian production will most likely be revised lower.

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. Support should be found near the recent lows of 1300 with nearby resistance near the 1420 area.

Wheat

Market Notes: Wheat

  • Weekly export sales for wheat were reported at 8.6 mb. Shipments last week of just 7.0 mb are well below the needed 34.5 mb per week to reach the 775 mb export estimate.

  • Russian wheat export values continue to fall, with reports of August offers as low as $226 per metric ton. With Russia cutting into US exports, it is possible that in tomorrow’s USDA report there may be an increase to US carryout.

  • Most Ukrainian wheat areas and spring wheat areas of Russia remain dry. Australia is wet, however. This is contrary to the typical El Nino pattern, which should bring dryness to Australia’s wheat growing areas.

  • The average pre-report estimate for US 23/24 all wheat production is 1.666 bb (vs 1.659 in May, and 1.650 for 22/23)

  • The average pre-report estimate for US 22/23 wheat carryout is 606 mb (vs 598 in May), estimates for 23/24 carryout come in at 568 mb (vs 556 in May).

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. The July contract may also post its 8th consecutive down month in a row at prices not seen since early 2021, even though wheat inventories of major exporting countries are anticipated to fall to 16-year lows. With the market being this oversold and a fund net position short nearly 113k contracts, 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.

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. 

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. 

Other Charts / Weather

|

Grain Market Insider: June 7, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Corn closed sharply lower as weather forecasts continue to point towards cooler and wetter conditions for much of the Corn Belt late next week.

  • Soybeans ended mixed with Old Crop contracts higher on still tight domestic supplies, while New Crop contracts fell lower on a more favorable US weather outlook into the back half of June.

  • Soybean meal traded in line with soybeans as nearby contracts were higher, while deferred contracts slumped lower and soybean oil futures were lower across the board.

  • Wheat finished sharply lower with double-digit losses across all three wheats despite this week’s news of the Ukrainian dam collapse.  

  • To see updated US 6-10 Day Temperature and Precipitation Outlooks from the Climate Prediction Center scroll down to the Other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  •  No 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 a 70-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 prices traded lower on the session as strong selling pressure in the wheat market, and the weather forecast staying on the wetter side for the Corn Belt going into next week limited buying interest.

  • On Friday, the USDA will release the June WASDE report, and after the recent rally prices may have been squaring up and profit taking going into that report at the end of the week. The June WASDE is expected to show a weaker demand tone and overall increasing corn supplies.

  • The USDA will release the weekly Exports Sale report on Thursday morning. U.S. corn export sales are expected to remain weak as US exporters struggle for business against cheaper global competition. 

  • Overnight and afternoon weather models are still looking for a change in the current weather patterns, moving to a cooler and wetter overall pattern next week. If realized, the weather premium in the market will likely be pulled out on the fear of improved production with the beneficial rain.

Above: The July contract is beginning to show signs of exhaustion, but Friday’s bullish surge higher is a positive sign that there is support near 575. If current prices can hold and close above the 50-day moving average near 610, the market would be poised to test April’s high of 647-1/2. Support below the market rests between 550 and 530, and again near the 2021 September low of 497-1/2.

Soybeans

Soybeans Action Plan Summary

  • May was a rough month for soybeans with a 175-cent range, but the market is consolidating, and found support just above 1270. July soybeans continue to be oversold with a tight Old Crop balance sheet, and with dryness concerns building and a seasonal window that is conducive for upside volatility and opportunity, 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 have pressed US prices down nearly 17% from the beginning of the year. 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 were mixed today with front month July ending higher, but the deferred contracts closing lower as forecasts turn wetter. Soybean meal was bull spread and soybean oil closed lower despite higher crude oil.

  • Traders have been fixated on weather and lately, it has turned to a more favorable cooler and wetter forecast over the next 7 days. Old crop supplies remain tight supporting the July contract.

  • Friday’s WASDE report will likely show a revision to Argentinian production to be lower as the USDA has lagged behind other analysts to reflect the damage the drought has done to the soy crop. Trade will also look for an old crop carryout of 223 mb and 345 mb of new crop.

  • US soy exports have been slow due to Brazil’s significantly cheaper offerings, and analysts are now expecting June exports to be 13.1 mmt vs 9.9 mmt a year ago with China as the major buyer.

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. Support should be found near the recent lows of 1300 with nearby resistance near the 1420 area.

Wheat

Market Notes: Wheat

  • Russia’s FOB offers are now said to be as low as $229 per metric ton. This is pressuring the US export market, as well as futures prices. Additionally, Egypt purchased 55,000 mt of wheat from Russia at some of these low levels.

  • Despite the recent news that a Ukrainian dam was destroyed by Russia, wheat traded sharply lower today. The damage is said to have caused flooding in agricultural areas, but the trade does not appear concerned.

  • Russian spring wheat areas could be facing drought with temperatures as high as 90-100 degrees. And due to the El Nino weather pattern, Australian wheat production could also be reduced below what the USDA is estimating to just 26.2 mmt.

  • Scattered showers across the Corn Belt today likely took away some weather premium in corn and soybeans with some of this weakness spilling over into the wheat market as winter wheat harvest looms on the horizon.

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. The July contract may also post its 8th consecutive down month in a row at prices not seen since early 2021, even though wheat inventories of major exporting countries are anticipated to fall to 16-year lows. With the market being this oversold and a fund net position short nearly 113k contracts, 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.

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. Prices mostly failed to react to the heightened tensions in the Black Sea region to start this week. US harvest selling pressure should keep an upside 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

  • 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. 

Other Charts / Weather

|

Grain Market Insider: June 6, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Corn finished higher with July futures leading the surge, as traders digested lower-than-expected good to excellent ratings countered by a continued outlook for beneficial rains later next week.

  • Soybeans finished fractionally higher after the USDA reported a daily flash sale of Old Crop soybeans to Spain.

  • Soybean meal closed lower, while soybean oil held onto late day gains despite weakness in crude oil futures.

  • Wheat ended mixed after trading sharply higher in the overnight session on news of a major Ukrainian dam collapse in a Russian controlled portion of Ukraine.

  • To see updated US 8-14 Day Temperature and Precipitation Outlooks from the Climate Prediction Center, as well as the latest 7-Day Rainfall Outlook from NOAA, scroll down to the Other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  •  No 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 a 70-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.

  • For 2023 New Crop corn, Grain Market Insider recommends liquidating December ‘23 560 calls. Since our previous recommendation to purchase December ‘23 560 and 610 calls, the December ‘23 corn contract has rallied enough that you should be able to liquidate your 560 call position with enough equity to pay for the December 610 call position. With dryness building in the Midwest, and an estimated fund short position in excess of 45k 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.

  • After two-sided trade for the early part of the session, corn futures turned higher led by the July contract and supported by poorer-than-expected crop ratings, a drier afternoon weather model, and an escalation in the Russia-Ukraine war.

  • The USDA released weekly crop ratings on Monday afternoon, and the U.S. corn crop was rated 64% Good/Excellent This rating was down 5% from last week and below market expectations, as the crop conditions are reflecting the current dry weather across the Corn Belt. Most noticeable was the impact in the eastern Corn Belt with Michigan down 20%, Illinois down 19%, Ohio down 17%, and Indiana down 10% from last week.

  • Afternoon weather models are still looking to a more active pattern the second week of June, but models trended slightly drier than the overnight models, helping turn corn price higher into the end of the session.

  • The corn market will likely stay volatile and choppy this week, focusing on daily weather forecasts and preparing for the June WASDE report to be released on Friday, June 9. The June WASDE is expected to show a weaker demand tone and overall increasing corn supplies.

Above: The July contract is beginning to show signs of exhaustion, but Friday’s bullish surge higher is a positive sign that there is support near 575. If current prices can hold and close above the 50-day moving average near 610, the market would be poised to test April’s high of 647-1/2. Support below the market rests between 550 and 530, and again near the 2021 September low of 497-1/2.

Soybeans

Soybeans Action Plan Summary

  • May was a rough month for soybeans with a 175-cent range, but the market is consolidating, and found support just above 1270. July soybeans continue to be oversold with a tight Old Crop balance sheet, and with dryness concerns building and a seasonal window that is conducive for upside volatility and opportunity, 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 have pressed US prices down nearly 17% from the beginning of the year. 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. 

  • Yesterday’s Crop Progress report showed soybeans are 91% planted vs 83% last week, and 76% average. Additionally, 62% of the crop was rated good to excellent (the lowest since 2014).

  • Soybeans traded both sides of neutral in today’s session, as weather remains an uncertainty. Many areas of the Midwest have seen scattered rains, but no widespread coverage just yet.

  • Private exporters reported sales of 165,000 mt of soybeans for delivery to Spain during the 22/23 marketing year.

  • Higher soybean oil today lent some support, despite lower palm and crude oil. Crude oil has set back on doubt that OPEC will stick with their lower production targets, and palm oil was lower after news that Malaysia could see an uptick in output of 4.7%.

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. Support should be found near the recent lows of 1300 with nearby resistance near the 1420 area.

Wheat

Market Notes: Wheat

  • Yesterday’s Crop Progress report showed winter wheat was 4% harvested, which is in line with the average. In addition, 36% of that crop was rated good to excellent vs 34% last week. Finally, spring wheat was said to be 93% planted (in line with average), and 64% of that crop was rated good to excellent.

  • Wheat was up sharply overnight and early this morning after news that Russia destroyed a key hydroelectric dam in Ukraine. The explosion and destruction occurred at the Nova Kakhovka Dam on the Dnipro River in southern Ukraine. This region produces approximately 6% of Ukrainian wheat.

  • The Australian agriculture department is projecting a decline wheat production of 30% due to the El Nino weather pattern. This provided some support to wheat early in the session.

  • On Friday’s WASDE report, the market will receive updated estimates of US wheat production, but the export estimate of 775 mb may have to be lowered due to the current slower export pace.

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. The July contract may also post its 8th consecutive down month in a row at prices not seen since early 2021, even though wheat inventories of major exporting countries are anticipated to fall to 16-year lows. With the market being this oversold and a fund net position short nearly 113k contracts, 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.

  • For 2024 New Crop SRW wheat, Grain Market Insider recommends adding to current sales levels. Prices have rallied nicely off of lows to start the month of June. Rallies have recently been difficult to come by for wheat and this is historically a good area to add to current sales levels.

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.

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, and any follow-through buying could be supportive with the market still showing signs of being oversold.  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

  • 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. Additionally, open interest is falling, indicating liquidation. The market is showing signs of being oversold, which could be supportive if buying returns.  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

|

Grain Market Insider: June 5, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Corn futures closed lower after trading sharply higher in the Sunday night open. Weather models trended slightly wetter in their mid-day run for areas of desperate need in the eastern Corn Belt.

  • Soybeans and soybean oil closed lower despite crude oil moving higher on news of a Saudi Arabian production cut. Soybean meal managed to hold onto gains and close back above the $400/ton level.

  • All three wheats closed higher bucking the lower trend in the row crops. Spring wheat was the biggest winner adding double-digits as forecast models continue to point towards dryness into mid to late June for key producing regions.  

  • To see updated US 6-10 Day Temperature and Precipitation Outlooks from the Climate Prediction Center, scroll down to the Other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  •  No 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 a 70-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.

  • For 2023 New Crop corn, Grain Market Insider recommends liquidating December ‘23 560 calls. Since our previous recommendation to purchase December ‘23 560 and 610 calls, the December ‘23 corn contract has rallied enough that you should be able to liquidate your 560 call position with enough equity to pay for the December 610 call position. With dryness building in the Midwest, and an estimated fund short position in excess of 45k 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 reversed off overnight highs as weather models are still forecasting rainfall chances to increase around June 12, with a potential pattern shift coming in the back half of the month. The weak price action could lead to additional selling pressure on the Monday night open.

  • Demand keeps the market cautious as weekly corn export inspections were at 46.5 mb for the week ending June 1. This number was within expectations, but overall export inspections are running 32% behind last year versus a predicted drop in exports of 28% for the marketing year by the USDA. Total inspections are still behind the pace needed to reach USDA targets.

  • The USDA will release weekly crop ratings on Monday afternoon, and the market is expecting a 2% drop to 67% good/excellent, reflecting the current dry weather across the Corn Belt. Corn planting should be nearly complete, analyst estimate US corn at 97% planted as of Sunday.

  • The corn market will likely stay volatile and choppy this week, focusing on daily weather forecasts and preparing for the June WASDE report to be released on Friday, June 9. The June WASDE is expected to show a weaker demand tone and overall increasing corn supplies.

Above: The July contract is beginning to show signs of exhaustion, but Friday’s bullish surge higher is a positive sign that there is support near 575. If current prices can hold and close above the 50-day moving average near 610, the market would be poised to test April’s high of 647-1/2. Support below the market rests between 550 and 530, and again near the 2021 September low of 497-1/2.

Soybeans

Soybeans Action Plan Summary

  • May was a rough month for soybeans with a 175-cent range, but the market is consolidating, and found support just above 1270. July soybeans continue to be oversold with a tight Old Crop balance sheet, and with dryness concerns building and a seasonal window that is conducive for upside volatility and opportunity, 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 have pressed US prices down nearly 17% from the beginning of the year. 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 lower after trading either side of unchanged, while soybean meal ended higher but soybean oil was lower despite higher crude oil prices. Weather forecasts changed around midday causing prices to turn negative.

  • Weather has been the focus for the price movement in corn and soybeans, and up until around noon, forecasts were calling for dryness until mid-June. Forecasts have changed slightly now calling for more rain within the next 7 days in the heart of the Corn Belt where it is sorely needed.

  • Soybean inspections totaled just 7.9 mb for the week ending Thursday, June 1, bringing total inspections to 1.788 bb and down 3% from the previous year. The USDA is estimating soybean exports at 2.015 bb for 22/23 which is down 7% from the previous year, but those numbers could change on Friday’s WASDE report.

  • Crop progress will be released this afternoon and planting progress is being estimated at 92% complete from 83% last week, and we will get our first glimpse of the soybean ratings for which analysts are estimating at 65% good to excellent.

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. Support should be found near the recent lows of 1300 with nearby resistance near the 1420 area.

Wheat

Market Notes: Wheat

  • Weekly wheat inspections of 8.6 mb bring the total 22/23 inspections to 728 mb. The USDA is estimating exports at 775 mb, and with only a few weeks left in the marketing year, they may need to revise that estimate on Friday’s USDA report.

  • As of May 30th, funds have increased their net short position of Chicago wheat to 127,034 contracts (equivalent to about 635 mb).

  • News outlets are reporting that Russia stated they will not extend the Black Sea grain corridor again in July. However, time will tell. They have made similar statements in the past before the deal was renewed. Russia does appear to still be delaying vessel inspections though.

  • Weather is improving in China’s wheat-growing regions, where recent heavy rains may have caused some crop damage. From a bigger-picture perspective, there is some concern that global wheat supply could be lower than anticipated, especially if there is adverse weather.

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. The July contract may also post its 8th consecutive down month in a row at prices not seen since early 2021, even though wheat inventories of major exporting countries are anticipated to fall to 16-year lows. With the market being this oversold and a fund net position short nearly 113k contracts, 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 action is currently recommended for the 2024 crop. Although the market is down nearly 17% from the beginning of the year, the July ’24 contract is finding support near 2021 lows. With major exporting countries’ stocks expected to fall to 16-year lows, and the great amount of economic and geopolitical uncertainty in the world, it wouldn’t take much to trigger a 23% retracement of the 2022 highs, toward the 700-750 level, which we are targeting to suggest adding coverage on next year’s crop.

Above: The market is currently oversold and testing support between 593 and 565, with the next area of possible support below the market near the September ’20 low of 533-1/4. Resistance above the market could be found between 670 and 724.

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. The 2024 market has limited liquidity, and it may be until mid-summer before recommendations are posted. 

Above: Last week Wednesday’s bullish reversal indicates that there is support near 760, and any follow-through buying could be supportive with the market still showing signs of being oversold.  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

  • 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. Additionally, open interest is falling, indicating liquidation. The market is showing signs of being oversold, which could be supportive if buying returns.  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

|

Grain Market Insider: June 2, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Corn rallied sharply to end the week as weather models continued their dry bias for much of the Corn Belt through the next week to ten days.

  • Soybeans continued their move higher with help from soybean oil, as well as outside markets.

  • Soybean oil futures posted a second straight session of strong gains moving over 3% higher, while soybean meal slumped slightly despite once again strong weekly net export sales.

  • All three wheat classes continued higher following the strength of the corn market and commodities as a whole.

  • Total nonfarm US payrolls increased by 339,000 jobs in May, this was well above the expectations of the market and spurred buying in both commodities and the stock market.

  • To see updated US 8-14 Day Temperature and Precipitation Outlooks from the Climate Prediction Center, scroll down to the Other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  • No action is recommended at this time for Old Crop.

  • 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. The selloff from the recent high of 606-3/4 shows there is still a lot of volatility in the market, and that 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 a 75-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.  

  • For 2023 New Crop corn, Grain Market Insider recommends liquidating December ‘23 560 calls. Since our previous recommendation to purchase December ‘23 560 and 610 calls, the December ‘23 corn contract has rallied enough that you should be able to liquidate your 560 call position with enough equity to offset much of the original premium outlay for both options and leave you with a long December 610 call position for a nearly net neutral premium cost. The open long December 610 call position will afford you the potential to gain more equity in the event the December corn futures contract continues to rally, thus providing you with a level of “re-ownership” on previous sales and giving you more confidence to make further sales at higher prices. The recent rally off the May low of 490-3/4 shows how volatile December corn can be on the turn of a weather forecast with little risk premium built into prices and a full growing season ahead of us. With dryness building in the Midwest, and an estimated fund short position in excess of 95k 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 turned higher off early session lows as money flowed into the market, supported by “risk on” trade across the broader markets, and weather models turning drier for the eastern Corn Belt next week.

  • The CBOE Volatility Index (VIX), which measures fear in the markets, pushed to its lowest level in over 23 months, allowing strong money flow into both equity and commodity markets.

  • Demand concerns are still a major factor in the corn market. Weekly exports sales for corn were disappointing with old crop sales at only 7.4 mb and new crops sales 12.3 mb last week. Both were on the lower end of expectations as the U.S. struggles against foreign export competition.

  • July corn futures had a strong close over the 50-day moving average for the first time since April 19th, and the strong price action could lead to additional buying support on Sunday night’s open.

  • Next week, the corn market will likely stay volatile focusing on daily weather forecasts and preparing for the June WASDE report to be released on Friday, June 9.

Above: The July contract is beginning to show signs of exhaustion, but Wednesday’s bullish reversal is a positive sign that there is support near 575. If current prices can hold and close above the 50-day moving average near 610, the market would be poised to test April’s high of 647-1/2. Support below the market rests between 550 and 530, and again near the 2021 September low of 497-1/2. 

Soybeans

Soybeans Action Plan Summary

  • May was a rough month for soybeans with a 175 cent range, but the market is consolidating, and found support just above 1270. July soybeans continue to be oversold with a tight Old Crop balance sheet, and with dryness concerns building and a seasonal window that is conducive for upside volatility and opportunity, 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 have pressed US prices down nearly 17% from the beginning of the year. 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 higher thanks to strong gains from soybean oil, while soybean meal closed lower. July soybeans gained 14-¾ cents on the week, while Nov beans lost 6 cents. The stock market posted significant gains, which helped support commodities.

  • The debt ceiling bill being passed by both the House and Senate calmed many traders’ fears and resulted in a 600-point gain in the Dow and spurred buying in the commodity market. The debt ceiling deal will be good until January 1, 2025.

  • The Midwest has been dealing with dryness and has only received very sparse scattered showers. The dryness has helped support prices, but good rains are forecast for the second half of June. If those promised rains don’t fall, futures could continue higher.

  • Export sales for the week ending May 25 showed an increase of 4.5 mb for soybeans in 22/23, which was up 7% from the previous week. Sales for 23/24 were 11.1 mb and export shipments of 8.5 mb and were below the 13.3 mb needed each week to achieve the USDA’s estimates.

Above: The market continues to show signs of being oversold and Wednesday’s bullish reversal indicates there is support near 1270 and follow through buying could lead to a market bounce. The next area of support could be found between 1237 – 1214 with nearby resistance near 1350 and 1420. 

Wheat

Market Notes: Wheat

  • The USDA reported net cancellations of 7.7 mb of wheat export sales for 22/23, but an increase of 17.1 mb for 23/24.

  • Wheat traded both sides of neutral today, but ended with a positive close. Spillover from higher corn and soybeans was likely a contributing factor.

  • A combination of weather and higher outside markets also lent support to the grain markets today. As of writing, the Dow is up over 700 points and crude oil is up about $1.50 per barrel, coming after the debt ceiling deal was passed by congress and strong jobs data this morning.

  • Paris milling wheat was also higher today, as it is being reported that Russia is again refusing to register Ukrainian grain vessels. Tensions between the two warring nations are high, despite the recent extension of the export deal.

  • Managed funds are said to be short 605 mb of SRW wheat – that is more than the USDA’s estimate of 2023 production (406 mb). This could lead to a short covering rally if there is a catalyst to light the fuse.

  • The rains have subsided in China’s wheat growing regions. However, the damage may already be done. Crop damage is likely, and at a minimum, there will be quality downgrades.

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. The July contract may also post its 8th consecutive down month in a row at prices not seen since early 2021, even though wheat inventories of major exporting countries are anticipated to fall to 16 year lows. With the market being this oversold and a fund net position short nearly 113k contracts, 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 action is currently recommended for the 2024 crop. Although the market is down nearly 17% from the beginning of the year, the July ’24 contract is finding support near 2021 lows. With major exporting countries’ stocks expected to fall to 16 year lows, and the great amount of economic and geopolitical uncertainty in the world, it wouldn’t take much to trigger a 23% retracement of the 2022 highs, toward the 700-750 level, which we are targeting to suggest adding coverage on next year’s crop.

Above: The market is currently oversold and testing support between 593 and 565, with the next area of possible support below the market near the September ’20 low of 533-1/4. Resistance above the market could be found between 670 and 724.

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. The 2024 market has limited liquidity, and it may be until mid-summer before recommendations are posted. 

Above: Wednesday’s bullish reversal indicates that there is support near 760, and any follow through buying could be supportive with the market showing signs of being oversold. 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

  • 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. Additionally, open interest is falling, indicating liquidation. The market is showing signs of being oversold, which could be supportive if buying returns.  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

|

Grain Market Insider: June 1, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Corn ended the day mixed as July futures gave up early morning gains to close slightly lower, while New Crop contracts rallied on continued hot and dry weather worries.

  • The soybean complex piggybacked on yesterday’s strong reversals, July soybeans and soybean oil led the gains with moves higher of 2.29% and 3.59% respectively.

  • Wheat finished higher across the entire complex on follow-through buying from yesterday’s reversal in the two winter wheats. A weaker US dollar also likely helped spur some buying.

  • A sharp daily break in the US dollar lent a helping hand to commodities. An almost certain resolution to US debt ceiling concerns, as well as Federal Reserve comments hinting at potential a pause to rate hikes, are likely pressuring the US dollar.

  • To see updated US Drought Monitor and US 6-10 day Temperature and Precipitation Outlooks from the Climate Prediction Center, scroll down to the Other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  • No action is recommended at this time for Old Crop.

  • 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. The selloff from the recent high of 606-3/4 shows there is still a lot of volatility in the market, and that 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 a 75-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 currently recommended for the 2023 new crop. The recent rally off the May low of 490-3/4 shows how volatile December corn can be on the turn of a weather forecast with little risk premium built into prices and a full growing season ahead of us. With dryness building in the Midwest, and an estimated fund short position in excess of 95k 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.

  • A break in the U.S Dollar Index, likely a resolution to the debt ceiling concerns, and strong outside markets supported corn futures for most of the session. July corn saw prices erode as demand concerns stay in the forefront of the market, and the competition for cheaper newly harvested Brazil corn is starting to come to the export market.

  • New crop corn futures added some premium as precipitation chances for the heart of the Corn Belt were pushed further back into next week, but weather models are still looking for a significant pattern change into mid-June.

  • Most recent drought monitor maps reflected the current dry conditions across the Corn Belt as areas of abnormally dry and Level 1 drought conditions developed across the key corn producing states of Iowa, Illinois, and Indiana.

  • Private analysts continue to raise their Brazil 2nd crop corn production estimates higher, as StoneX raised their estimates to 102.9 MMT from their estimate of 100.8 MMT in April.

  • The USDA will release weekly export sales on Friday morning, expectations are for old crop corn sales to range from –100,000 MT to 400,000 MT as U.S. corn continues to struggle against export competition.

Above: The July contract is beginning to show signs of exhaustion, but Wednesday’s bullish reversal is a positive sign that there is support near 575. If current prices can hold and close above the 50-day moving average near 610, the market would be poised to test April’s high of 647-1/2. Support below the market rests between 550 and 530, and again near the 2021 September low of 497-1/2. 

Soybeans

Soybeans Action Plan Summary

  • May was a rough month for soybeans with a 175 cent range, but the market is consolidating, and found support just above 1270. July soybeans continue to be oversold with a tight Old Crop balance sheet, and with dryness concerns building and a seasonal window that is conducive for upside volatility and opportunity, 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 have pressed US prices down nearly 17% from the beginning of the year. 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 significantly higher and were led by gains in soybean oil and crude oil. Malaysian palm oil and other world veg oils have moved higher supporting soybeans. Soybean meal closed higher as well.

  • The forecast for most of the Corn Belt is dry until the middle of this month with some scattered showers in the interim, but many producers need rain and higher futures are reflecting that. The market will likely trade weather in the absence of other news.

  • The debt ceiling issue seems to be resolved with the agreement passing through the House and now on to the Senate where it will most likely be successful. Traders and markets have reacted positively to the resolution with the stock market working higher today too.

  • One other concern for soybeans is China’s economy and the sluggish economic data that was released yesterday. Soybeans on the Dalian exchange have fallen to their lowest levels in two years at the equivalent of $14.47 a bushel. Sagging prices of Chinese stocks, copper, and crude oil have also pointed to a slowing economy.

Above: The market continues to show signs of being oversold and Wednesday’s bullish reversal indicates there is support near 1270 and follow through buying could lead to a market bounce. The next area of support could be found between 1237 – 1214 with nearby resistance near 1350 and 1420. 

Wheat

Market Notes: Wheat

  • The US dollar is sharply lower today, which may have given wheat some room to run higher.

  • All three classes of US wheat futures are still at, or near, oversold levels on daily stochastics. After yesterday’s reversal and today’s follow through, a near term bottom may be in place.

  • With the exception of dry Russian spring wheat areas, and drought in Spain, most of Europe and the Black Sea have seen favorable wheat crop conditions.

  • China has recently received heavy rains in their wheat growing regions. This could cause quality issues, which may result in more of their wheat being used for feed.

  • Today’s Drought Monitor map shows an increase in dry conditions throughout the eastern and central parts of the Midwest. The SRW crop should still be in good shape with plenty of soil moisture, but if the pattern persists it could be cause for concern.

  • According to the UN, only 6 grain vessels have left Ukraine since the last deal extension. Russia is believed to still be restricting or delaying movement of ships.

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. The July contract may also post its 8th consecutive down month in a row at prices not seen since early 2021, even though wheat inventories of major exporting countries are anticipated to fall to 16 year lows. With the market being this oversold and a fund net position short nearly 113k contracts, 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 action is currently recommended for the 2024 crop. Although the market is down nearly 17% from the beginning of the year, the July ’24 contract is finding support near 2021 lows. With major exporting countries’ stocks expected to fall to 16 year lows, and the great amount of economic and geopolitical uncertainty in the world, it wouldn’t take much to trigger a 23% retracement of the 2022 highs, toward the 700-750 level, which we are targeting to suggest adding coverage on next year’s crop.

Above: The market is currently oversold and testing support between 593 and 565, with the next area of possible support below the market near the September ’20 low of 533-1/4. Resistance above the market could be found between 670 and 724.

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. The 2024 market has limited liquidity, and it may be until mid-summer before recommendations are posted. 

Above: Wednesday’s bullish reversal indicates that there is support near 760, and any follow through buying could be supportive with the market showing signs of being oversold. 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

  • 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. Additionally, open interest is falling, indicating liquidation. The market is showing signs of being oversold, which could be supportive if buying returns.  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

|

Grain Market Insider: May 31, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Following a sharp drop in the overnight session on a more favorable June weather forecast and demand concerns, corn had a strong recovery of 15-1/2 cents as month end positioning entered the market.

  • The soybean complex saw quite the reversal led by the July contract following concerns of slowing Chinese demand and higher world veg oil production, which weighed heavily on the soybean complex overnight.

  • The wheat complex ended the day mixed as Minneapolis contracts lagged on strong planting progress numbers, while K.C. and Chicago contracts uncovered short covering on continued Kansas crop concerns and oversold conditions.

  • Concerns over possible higher interest rates, lower consumer demand and slower world economies weighed on the commodity sector, likely adding pressure to grain futures early in the session.

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. The selloff from the recent high of 606-3/4 shows there is still a lot of volatility in the market, and that 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 a 75-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 currently recommended for the 2023 new crop. Planting is nearly complete and the volatile weather months still ahead. December corn has dropped nearly 120 cents from its January high, and with that drop, much of the weather risk premium has eroded away. With drought still looming in the WCB and the funds carrying a 92k contract short position, we continue to target the 590 – 630 range in the December futures to suggest adding cash sales. If you happen to not 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.

  • Weak Chinese economic data, demand concerns, and a weather forecast showing the potential for a more active pattern weighed heavily on corn prices to start the session, but end of month profit taking and position squaring lifted corn to a steady to lower close.

  • Tuesday evening weather models continue to show the potential for increased precipitation and cooler temperatures for the second week of June in areas of the Corn Belt, limiting the new crop futures ability to rally. 

  • The USDA released the first corn crop ratings on Tuesday afternoon. The USDA stated that 69% of this year’s crop rated good/excellent as of Sunday night. Expectations were for the crop to be 71% good/excellent and in line with the 5-year average. Last year’s first initial crop rating was 73% good/excellent. Corn planting reached 92% complete, up from 81% last week and in line with expectations.

  • The firmer close off the session lows may indicate a market looking for more information.  While demand news stayed quiet, weather forecasts can have a tendency to change. Money flow may have been more neutral, looking for more confirmation of a true weather pattern change. The movement of wheat futures turning higher into the close likely supported the corn market in the afternoon.

Above: The July contract is beginning to show signs of exhaustion, but Wednesday’s bullish reversal is a positive sign that there is support near 575. If current prices can hold and close above the 50-day moving average near 610, the market would be poised to test April’s high of 647-1/2. Support below the market rests between 550 and 530, and again near the 2021 September low of 497-1/2. 

Soybeans

Soybeans Action Plan Summary

  • July soybeans found support last week just above the 1300 level. While the month of May has been a rough one for the soy complex, the market remains in a seasonal window conducive for upside volatility and opportunity. Given the oversold nature of the market, combined with a still tight Old Crop domestic balance, 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. As we continue through planting season, favorable weather conditions and South American competition have pressed US prices down nearly 17% from the beginning of the year. 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 1350 to 1400 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 began the day sharply lower driven by another significant drop in soybean oil, but prices managed to somewhat recover through the day with July soybeans ending higher, deferred months lower, and soybean oil relatively unchanged.

  • Disappointing economic numbers out of China added bearish pressure to the market with their PMI data showing a slowing in the economic activity over the past month.

  • China is still a buyer of Brazilian soybeans despite the poor economic data and purchased 5 more July soybean cargoes in addition to the 10 to 12 last week. Some analysts estimate total Chinese soybean imports closer to 102-104 mmt compared to the USDA’s estimate of 98 mmt.

  • Brazil has reportedly made some rare soybean sales to the US equal to a combined 120,000 metric tonnes. Brazil has now passed the US in both soy and corn exports.

  • Yesterday’s USDA weekly Crop Progress report showed a jump in soybean planting to 83% completion vs 65% on average, and 56% of the crop is emerged vs 40% on average.

Above: The market continues to show signs of being oversold and Wednesday’s bullish reversal indicates there is support near 1270, and follow through buying could lead to a market bounce. The next area of support could be found between 1237 – 1214 with nearby resistance near 1350 and 1420. 

Wheat

Market Notes: Wheat

  • The USDA rated the US winter wheat crop condition at 34% good to excellent versus 31% last week and the spring wheat crop at 85% planted only slightly behind the 86% average.

  • Despite recent rains, the winter wheat crop in Kansas is still struggling with a 69% poor to very poor rating. The rain is probably too late to help the wheat crop, but could benefit corn and soybeans.

  • End of month profit taking and position squaring possibly added to the strength in the wheat market along with anticipation that a US debt ceiling deal may be reached.

  • Russia is still said to be lowering their wheat export prices, now at $230-$240 per ton. Alongside the rising US dollar, both factors may pressure the US export market and limit upside for wheat futures.

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. The July contract may also post its 8th consecutive down month in a row at prices not seen since early 2021, even though wheat inventories of major exporting countries are anticipated to fall to 16 year lows. With the market being this oversold and a fund net position short nearly 113k contracts, 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 action is currently recommended for the 2024 crop. While we are looking for stronger markets to present themselves in this currently weak environment, there are factors that could be supportive, should they occur. Such as any escalation of the Ukraine war or disruption of grain movement in the Black Sea, or a significant devaluation of the US Dollar back to 2021 levels, as that market is showing characteristics of a potential drop.

Above: The market is currently oversold and testing support between 593 and 565, with the next area of possible support below the market near the September ’20 low of 533-1/4. Resistance above the market could be found between 670 and 724.

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. The 2024 market has limited liquidity, and it may be until mid-summer before recommendations are posted. 

Above: Wednesday’s bullish reversal indicates that there is support near 760, and any follow through buying could be supportive with the market showing signs of being oversold. 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

  • 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. Wet conditions have delayed some planting and raised some prevent planting concerns which could continue to influence the market and generate better selling opportunities in the coming months.  We are in no hurry to sell right now with everything going on.

  • 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. Additionally, open interest is falling, indicating liquidation. The market is showing signs of being oversold, which could be supportive if buying returns.  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

|

Grain Market Insider: May 30, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Decent export inspections were not enough to support the corn market as it fell on a more favorable weather forecast.

  • Poor export inspections added fuel to the selloff in soybeans, which was triggered by a less threatening weather outlook.

  • Soybean meal and oil also felt the pressure in the complex. Soybean oil led the way down losing 2.62 cents/lb, a 5.37% loss in the July, and crude oil added pressure with a 4.3% loss.

  • With K.C. contracts leading the way, all three wheat classes succumbed to the seller’s wrath with help coming from neighboring corn and soybeans and lower global demand concerns.

  • To see updated US 8-10 day Temperature and Precipitation Outlooks from the Climate Prediction Center, scroll down to the Other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  • No action is recommended at this time for Old Crop. July corn touched the lower end of the target range of 575 – 600 with a high of 575-1/2, which put it 30 cents off last week’s low. If you still have Old Crop bushels to sell, consider using this rally to begin pricing some of those remaining bushels and adding incremental sales up to 600. Another thing to consider is that there is about a 65-cent inversion from the July contract to the September contract, which may be lost when bids roll from one contract to the other in the next month or so.

  • No action is currently recommended for the 2023 new crop. Planting is nearly complete and the volatile weather months still ahead. December corn has dropped nearly 120 cents from its January high, and with that drop, much of the weather risk premium has eroded away. With drought still looming in the WCB and the funds carrying a 92k contract short position, we continue to target the 590 – 630 range in the December futures to suggest adding cash sales. If you happen to not 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.

  • Extended weather forecasts are signaling a potential pattern change as the current ridge over the Corn Belt will be replaced by a more active weather pattern. This triggered profit taking and technical selling after last week’s rally, as corn futures traded lower to start the week.

  • Corn demand remains a concern as weekly export inspections were marked at 52 mb, at the top of expectations, but still down 32% from last year and behind the pace needed to reach the USDA export target.

  • The Brazilian corn harvest is starting to begin, and AgRural raised their projection for the Brazil second crop corn to 127.4 MMT up from 125.1 MMT for their April projection.

  • For the first time since 2013, Chicago wheat prices are trading below corn futures prices on the front month as July Chicago Wheat (SRW) closed at $5.91 versus July corn at $5.94. Cheaper wheat may lead to additional demand concerns with the substitution of wheat into feed rations versus corn.

  • The USDA is scheduled to release the first corn crop ratings on Tuesday afternoon. Expectations are for the crop to be 71% Good/Excellent, in line with the 5-year average. Last year’s first initial crop rating was 73% Good/Excellent. Corn planting is expected to be 92% complete, up from 81% last week.

Above: The July contract traded through the May 8th high of 600 and continues to show positive momentum. If current prices can hold and close above the 50-day moving average near 613, the market would be poised to test April’s high of 647-1/2. Support below the market rests between 550 and 530, and again near the 2021 September low of 497-1/2.

Above: Money Managers net sold 6042 contracts between May 17-23, bringing their total position to a net short 98,027 contracts.
Corn Managed Money Funds net position as of Tuesday, May 23. Net position in Green versus price in Red.

Soybeans

Soybeans Action Plan Summary

  • July soybeans found support last week just above the 1300 level. While the month of May has been a rough one for the soy complex, the market remains in a seasonal window conducive for upside volatility and opportunity. Given the oversold nature of the market, combined with a still tight Old Crop domestic balance, 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. As we continue through planting season, favorable weather conditions and South American competition have pressed US prices down nearly 17% from the beginning of the year. 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 1350 to 1400 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 sharply lower, led down by a decline in soybean oil by over 5% and declines in soybean meal and crude oil as well. A change in the weather forecast for June put pressure on the markets today.

  • Last week, the 10-day forecast was calling for warm and dry weather as planting wraps up, but over the weekend forecasts were updated to show cooler weather with more precipitation beginning in the middle of June. For now, it appears as though the market will be trading weather.

  • Export inspections for soybeans came in at 9 mb which was in line with expectations, but still below the 17mb needed each week to reach the USDA’s estimate.

  • Soybeans in both Brazil and China declined today, partially because of Brazil’s crop size and partially due to slowing demand in China. On the Dalian exchange, soybeans lost 1.8% and are trading at the equivalent of $14.80 per bushel.

  • Soybean planting progress will likely show a large jump from last week’s 66% completion, and typically soybeans can handle early dry conditions better than corn can. So, the recent dryness is of less concern since it may not affect yields.

Above: The market traded through the July ‘22 low of 1304 in search of support, and the stochastic indicators continue to be oversold, which could be supportive if reversal action occurs. The next area of support could be found between 1237 – 1214, with nearby resistance near 1350 and 1420.

Above: Money Managers net sold 19,795 contracts between May 17-23, bringing their total position to a net short 4142 contracts.
Soybeans Managed Money Funds net position as of Tuesday, May 23. Net position in Green versus price in Red.

Wheat

Market Notes: Wheat

  • Wheat’s lower trade today is likely the result of a risk off session caused by improving chances for rain throughout the Midwest, spillover pressure from corn and beans, as well as concern about lower global demand for wheat due to financial and economic issues.

  • Wheat inspections were decent at 14.0 mb, bringing the total 22/23 inspections to 719 mb.

  • Despite Russian attacks over the weekend in the port of Odessa, one of the ports supposedly protected in the Black Sea grain deal, and reports of Ukrainian drones hitting Moscow, US wheat futures posted sharp losses in today’s session.

  • Australia is starting to get some rain, although the El Nino weather pattern is growing, which generally means less rain for that region of the world. This may have contributed to today’s weakness as some drought concerns were reduced.

  • Higher temperatures last week in North Dakota are likely to be reflected in an increase in spring wheat planting on this afternoon’s Crop Progress report.

  • Friday’s Commitments of Traders report showed, as of May 23rd, funds holding 121,053 short contracts of Chicago wheat, which is equivalent to 605 million bushels.

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. The July contract may also post its 8th consecutive down month in a row at prices not seen since early 2021, even though wheat inventories of major exporting countries are anticipated to fall to 16 year lows. With the market being this oversold and a fund net position short nearly 113k contracts, 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 action is currently recommended for the 2024 crop. While we are looking for stronger markets to present themselves in this currently weak environment, there are factors that could be supportive, should they occur. Such as any escalation of the Ukraine war or disruption of grain movement in the Black Sea, or a significant devaluation of the US Dollar back to 2021 levels, as that market is showing characteristics of a potential drop.

Above: The market is currently oversold and testing support between 593 and 565, with the next area of possible support below the market near the September ’20 low of 533-1/4. Resistance above the market could be found between 670 and 724.

Above: Money Managers net sold 6019 contracts between May 17-23, bringing their total position to a net short 118,788 contracts.
Chicago Wheat Managed Money Funds net position as of Tuesday, May 23. Net position in Green versus price in Red.

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. The 2024 market has limited liquidity, and it may be until mid-summer before recommendations are posted. 

Above: With support failing near 807, and the July contract showing a head and shoulders formation, there is a potential downside objective near 740 with support near the May 2nd low of 736-1/4. The market is also showing signs of being oversold, which can be supportive if a reversal occurs. Resistance may be found above the market between 833 and 850.

Above: Money Managers net bought 28 contracts between May 17-23, bringing their total position to a net long 16,621 contracts.
K.C. Wheat Managed Money Funds net position as of Tuesday, May 23. Net position in Green versus price in Red.

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. Wet conditions have delayed some planting and raised some prevent planting concerns which could continue to influence the market and generate better selling opportunities in the coming months.  We are in no hurry to sell right now with everything going on.

  • 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 is testing support near the 5/22 low of 793 and is showing signs of being oversold, which could be supportive if buying returns. Resistance currently sits between 830 and 855 and then the recent high of 888-1/2. If the current support area fails, support below the market may be found between 770 and 760. 

Above: Money Managers net sold 1564 contracts between May 17-23, bringing their total position to a net short 6402 contracts. 
Minneapolis Wheat Managed Money Funds net position as of Tuesday, May 23. Net position in Green versus price in Red.

Other Charts / Weather

|

Grain Market Insider: May 26, 2023

ByGrain Market Insider

The CME and Total Farm Marketing offices will be closed
Monday, May 29, 2023, in observance of Memorial Day

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Fund short covering and the building of weather premium on a warm and dry outlook ahead of a long weekend pushed the corn market higher with December leading the way.

  • The addition of weather premium on the warm and dry outlooks had November leading the Old Crop contracts higher, with further support coming from both soybean meal and oil.

  • Led by strength in the corn market and a short fund position in the Chicago, all three wheat classes ended the day on the positive side of unchanged, with K.C. being the laggard, likely on ideas of increased crop ratings with the recent moisture in the southern Plains.

  • With debt ceiling talks in Washington D.C. appearing to progress, there has been a sense of optimism that has permeated the markets and likely added a broad level of support to the commodities.

  • To see updated US 7 day precipitation forecast and US 8-10 day Temperature and Precipitation Outlooks from the Climate Prediction Center, scroll down to the Other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  • No action is recommended at this time for Old Crop. July corn touched the lower end of the target range of 575 – 600 with a high of 575-1/2, which put it 30 cents off last week’s low. If you still have Old Crop bushels to sell, consider using this rally to begin pricing some of those remaining bushels and adding incremental sales up to 600. Another thing to consider is that there is about a 65-cent inversion from the July contract to the September contract, which may be lost when bids roll from one contract to the other in the next month or so.

  • No action is currently recommended for the 2023 new crop. Planting is nearly complete and the volatile weather months still ahead. December corn has dropped nearly 120 cents from its January high, and with that drop, much of the weather risk premium has eroded away. With drought still looming in the WCB and the funds carrying a 92k contract short position, we continue to target the 590 – 630 range in the December futures to suggest adding cash sales. If you happen to not 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.

  • Fund short covering pushed corn prices strongly higher to end the week as weather forecasts for the heart of the Corn Belt are a concern into the first week of June.

  • Weather models are showing above normal temperatures and limited rainfall over the core of the Corn Belt into early June as a high-pressure ridge has developed over this region.  Evaporation rates will stay high next week, which has the potential to damage the early-stage corn crop.

  • Weather forecasts after Memorial Day will be key for potential precipitation to develop around the June 5-7 window. The grain markets could have a high amount of volatility based off those forecasts given the recent rally and the positioning of the Managed money funds in the corn market.

  • The cash corn market stays supportive as end-users are pursuing supplies given a potential weather issue. The National Corn Index closed Friday at $6.25 with July Futures at $6.04, a discount to the index, reflecting the cash market strength.

  • Demand will likely be a limiting factor as weekly exports remain poor, and the recent price rally will only add more premium to U.S. corn price versus the cheaper Brazil supplies coming online.

Above: The July contract traded through the recent high of 600 and continues to show positive momentum. If current prices can hold and close above the 50-day moving average near 613, the market would be poised to test April’s high of 647-1/2.  Support below the market rests between 550 and 530, and again near the 2021 September low of 497-1/2. 

Soybeans

Soybeans Action Plan Summary

  • July soybeans found support last week just above the 1300 level. While the month of May has been a rough one for the soy complex, the market remains in a seasonal window conducive for upside volatility and opportunity. Given the oversold nature of the market, combined with a still tight Old Crop domestic balance, 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. As we continue through planting season, favorable weather conditions and South American competition have pressed US prices down nearly 17% from the beginning of the year. 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 1350 to 1400 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 week on a strong note along with higher soybean meal and oil. July beans posted a 30-cent gain on the week, while November gained 14 cents. Higher crude oil and palm oil prices were supportive as well.

  • The entire grain complex got a boost today from talk of dry weather that may continue into the beginning of July, but the European weather models are calling for moderate showers in some of the Corn Belt. We will get a clearer weather picture within the next two weeks.

  • While soybean meal found some much-needed technical support, soybean oil got a boost from palm oil, which had its third consecutively higher close.There is concern for drought in Malaysia and Indonesia this coming year, which may impact their production.

  • Argentina will be exporting approximately 5.4 mmt less soybean meal in the coming year due to their drought ravaged crop, and there is still hope that the US will pick up some of that export business.

Above: Soybean prices have fallen to near 1300 and have found some support near 1304.  The market continues to show signs of being oversold and appears to be consolidating.  Stochastic indicators have crossed to the upside, which is considered positive, and could be supportive if reversal action occurs.  Should the 1304 support level fail, the next area of support may be found near the July 2022 and November 2021 lows of 1288 and 1181 respectively. 

Wheat

Market Notes: Wheat

  • The poor US HRW crop, as well as dryness in Russian spring wheat areas, are supportive factors. However, the wheat market was likely pulled higher today, mostly by spillover from corn and soybeans; the US Midwest weather forecast looks warm and dry for the next two weeks or so and the market may be putting in some weather premium ahead of the 3 day weekend.

  • Nearby contracts were weaker relative to the deferred in K.C. wheat futures today. This may be indicative of the recent rains in the panhandle areas versus supply concerns down the road, given the overall poor conditions in the southern Plains.

  • There are reports that Russa may not extend the Black Sea export deal on July 17th unless demands are met regarding their grain and fertilizer exports.This may have been reflected in higher Matif wheat futures today, even though French wheat is rated 93% good to excellent.

  • Taiwan flour millers are reported to have purchased 56,000 mt of US milling wheat overnight.

  • The US Dollar Index continues to trend higher, and though wheat posted gains today, the rising Dollar Index may limit upside potential going forward.

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. The July contract may also post its 8th consecutive down month in a row at prices not seen since early 2021, even though wheat inventories of major exporting countries are anticipated to fall to 16 year lows. With the market being this oversold and a fund net position short nearly 113k contracts, 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 action is currently recommended for the 2024 crop. While we are looking for stronger markets to present themselves in this currently weak environment, there are factors that could be supportive, should they occur. Such as any escalation of the Ukraine war or disruption of grain movement in the Black Sea, or a significant devaluation of the US Dollar back to 2021 levels, as that market is showing characteristics of a potential drop.

Above: The July contract posted a bullish reversal on 5/23 indicating support between 593 and 565, which has held so far. Any follow through buying from this reversal could trigger fund short covering and fuel a bigger bounce to test nearby resistance between 655 and 669, with further resistance near the April high of 718. 

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. The 2024 market has limited liquidity, and it may be until mid-summer before recommendations are posted. 

Above: Following the recent break, the July contract posted a bullish reversal on 5/22, indicating short-term support near 807.  The break below Tuesday’s (5/23) low puts the 807 support level in jeopardy, with the next major support level between 736 and 716 if it does not hold.  If 807 can hold, follow-through buying may put the market in position to rally and test resistance between 885 and 917.

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. Wet conditions have delayed some planting and raised some prevent planting concerns which could continue to influence the market and generate better selling opportunities in the coming months.  We are in no hurry to sell right now with everything going on.

  • 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 posted a bullish reversal on 5/22, indicating the market has found short-term support near 793. Technical follow-through buying could put the market in position to test resistance between 830 and 855 and then the recent high of 888-1/2. If not, support below 793 may be found between 770 and 760.

Other Charts / Weather