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Grain Market Insider: May 25, 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

  • Corn closed mixed with old crop prices moving higher for the fourth consecutive day. Export sales were disappointing for both 22/23 and 23/24.

  • Soybeans closed lower with new crop prices breaking below their recent lows. A continued push higher in the US dollar and poor soybean export sales added pressure.

  • Above average 22/23 soybean meal export sales did not help support soybean meal today, and soybean oil traded higher with palm oil despite a sharp drop in crude.

  • Wheat settled mixed across the board with HRW posting the strongest gains. Wheat export sales were a marketing year low for 22/23.

  • To see updated US Drought Monitor 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.

  • July corn was the strong leg of the corn market as a firm cash market tone and end user buying supports the old crop prices, but weak demand tone pressured the corn market overall.

  • USDA weekly export sales were disappointing again this week  For the week of May 12-18, old crop sales saw net reductions of 75,200 MT, and new crop sales of 52,100 MT, both were at the lower end of expectations. This was the third week out of the last four that old crop sales were negative on the week.

  • Weather models are showing warmer temperatures and limited rainfall over the core of the Corn Belt into early June, as a high-pressure ridge is developing over this region. Weather forecasts after Memorial Day will be key for potential precipitation to develop around the June 5-6 window.

  • June corn options expire on Friday, which could bring some volatility to the market as prices tend to drift to areas on large open interest. The 600 strike price holds the largest amount of open interest going into Friday.

  • The trend higher in the Dollar Index continued today, as the dollar traded to its highest levels since early March, which may help limit gains in the grain commodity markets on the session.

Above: The corn market has recovered somewhat from being oversold, and stochastic indicators have crossed back over to the upside, which can be supportive. The July contract has found support between 550 and 530, with further support near the 2021 September low of 497-1/2. Nearby resistance sits near 600 and again near the 50-day moving average.

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 traded lower today, with most of the losses in the deferred months and July only closing half a penny lower. Poor soybean export sales and the decline in soybean meal weighed on the bean market. Soybean oil closed higher despite lower crude.

  • Soybean meal export sales were a bright spot today coming in at 341,000 tons for 22/23. Poland was the top noted soybean meal buyer last week.

  • The weekly export sales report reported increases of 4.2 mb of soybean export sales for 22/23, a low number, but at least there were not any net cancellations. Export shipments were 10.6 mb and were above the 13.0 mb needed each week.

  • Palm oil closed 3% higher today, finally showing signs of life as the Malaysian Palm Oil Board raised some concerns about production in the coming year with El Niño potentially becoming a problem in southeast Asia. This should support soybean oil.

  • Brazil’s record soybean crop is now estimated near 157 mmt, while Argentina is expecting just 21 mmt, significantly less than the USDA’s estimate of 27 mmt. Rains are also now slowing down harvest in Argentina.

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 USDA reported a net cancellation of 1.7 mb of wheat export sales for 22/23, but an increase of 9.0 mb for 23/24.

  • The wheat complex had an overall mixed close with Chicago contracts lower, with gains in K.C. and Minneapolis futures. Even though rains are popping up over the western Plains, and the SRW areas are mostly dry.

  • Some of today’s weakness may have stemmed from rains beginning to fall in Argentina. While it is too late to help corn and beans, it may improve soil moisture for their wheat planting.

  • Russian wheat export FOB offers are now said to be as low as $240 per ton, as they continue to dominate the export front.

  • It has been confirmed that EU wheat has been imported from Germany and Poland into the southeastern US, contributing to weakness of futures.

  • There are potential demand concerns down the road, with reports that China’s economy is slowing, China has a rise in covid cases, and as of this writing, there has been no resolution to the US debt ceiling issue. This has also sent energy and financial markets lower, acting as an anchor on the grain complex.

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 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

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Grain Market Insider: May 24, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Corn traded both sides of unchanged in volatile trade.  A dry forecast and firmer cash basis helped to support, but weakness in the wheat market dragged on prices.

  • There was little supportive news for soybeans in today’s trade as continued weakness from abundant and less expensive South American supplies hung over the market, with current offers $35 – $45 per ton cheaper than the US.

  • Soybean oil was the bright spot in the soybean complex as it gained support from higher crude oil, and while crush margins were weaker today, they remain profitable and supportive with Board Crush margins in the July contracts near 93 cents/bu.

  • Record Illinois SRW yields estimated by the Illinois Wheat Association’s crop tour and the threat of more imports of European wheat into the US weighed heavily on the wheat complex.

  • The US dollar broke out of its range to make new recent highs, which likely added resistance to commodities.

  • Hawkish comments from Federal Reserve officials Bullard and Kashkari have raised expectations for a protracted period of higher interest rates, which could be supportive of the US Dollar.

  • To see the updated US 6-10 day Temperature and Precipitation Outlooks from the Climate Prediction Center, and the updated Brazil 2 week precipitation forecast, scroll down to the Other Charts/Weather Section. 

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

Corn

Corn Action Plan Summary

  • No 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.

  • Corn market fought the trend in other grains, and finished the day with moderate gains, led by the July contract.  July futures were pushed higher by short covering and buying into the bull spreads, with the market watching the weather forecast for the Midwest over the next couple weeks.

  • Strong selling in the wheat market and a fading soybean market throughout the session limited the corn market’s upside on the day as prices slipped off session highs.

  • Weather models are showing predicted warmer temperatures and limited rainfall over the core of the Corn Belt into early June as a high-pressure ridge is developing over this region.  Weather forecasts after Memorial Day will be keys for a potential precipitation to develop around the June 5-6 window.

  • Ethanol margins remain strong, but corn usage for ethanol production is still behind the required pace to reach USDA target.  The weekly ethanol report saw production slip to 983,000 barrels/day, down from last week and last year’s levels.  A total of 96.8 mb of corn was used last week for the ethanol grind, down from 99.9 mb from last year.

  • Private Brazil Crop Analyst, Agroconsult, raised their projection for the second crop Brazil corn harvest to 102.4 MMT, which is up 11% from their last projection and well above both USDA and CONAB current projections, as the overall condition of the Brazil 2nd crop corn remains strong.

Above: The corn market has recovered somewhat from being oversold, and stochastic indicators have crossed back over to the upside, which can be supportive. The July contract has found support between 550 and 530, with further support near the 2021 September low of 497-1/2. Nearby resistance sits near 600 and again near the 50-day moving average.

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 day mixed with the front month July higher, but all deferred contracts lower, with additional pressure coming from the decline in soybean meal.  

  • Soybean meal led soybeans lower today, but soybean oil moved higher despite another decline in palm oil. Higher crude oil has been supportive as Saudi Arabia hints at production cuts.

  • Tomorrow’s export sales report is not expected to be very friendly for soybeans, as Brazil’s cheaper offers get scooped up on the global market. If this trend continues, the USDA will likely decrease US exports and increase the carryout.

  • China is attempting to use fewer soy products and corn in favor of wheat for feed needs, which is weighing on soybean meal, but Brazil’s recent shipments of soybeans to Argentina to be crushed has hurt prices as well. The bullish thought was that the US would pick up some meal export business from Argentina due to their poor crop.

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

  • KC futures led the wheat complex lower today. While most of the Midwest looks drier for the next 10 days or so, parts of Oklahoma and Texas are getting good moisture. Though this moisture is perceived largely as negative, it may be too little too late to help the crop, and there is some concern that it may cause some quality issues.

  • The Illinois Wheat Association crop tour came out with a record breaking 97 bushel per acre yield for Illinois’ SRW crop, versus the USDA’s estimate of 78 bpa.

  • The US Dollar Index continues to trend higher, nearly reaching the 104 level today, and because it tends to have an inverse relationship with the wheat market, it may have contributed to today’s weakness.

  • China has imported 6 mmt of wheat during the first four months of the year. This is up 61% from last year as they want to use more feed wheat versus corn and soybeans, with most of it sourced from Australia.

  • Russia continues to dominate world wheat exports, with FOB offers cheaper than the US that are reportedly as low as $245 per ton.

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 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

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Grain Market Insider: May 23, 2023

ByLisa Heder

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Technical buying and carryover support from a strong wheat market helped carry corn higher on the day.

  • A quick planting pace and low weekly export numbers from Monday added resistance to the market with little fresh bullish news to report.

  • Soybean meal and oil finished the day in the red, which dragged on soybeans and Board crush margins in the process. Soybean oil was pressured by lower palm and rapeseed oil.

  • After Monday’s bullish reversals in K.C. and Minneapolis wheat, follow-through buying in the two markets helped support oversold Chicago wheat contracts as they posted a bullish reversal in today’s trade.

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.

  • Following through on Monday’s rally, corn and wheat found technical buying strength on Tuesday, as prices finished higher with moderate gains. The corn market is still lacking overall bullish news, but prices are oversold and ready for a technical bounce.

  • Corn market may be adding some weather premium as forecasts show above average temperatures and below average moisture across the Corn Belt going into early June. Rain chances are limited in the near-term forecast, but a potential storm system for the week of June 5 may be a key potential rainfall for the Corn Belt.

  • The USDA reported that corn planting was 81% complete as of May 21, up from 65% last week. North Dakota remains a laggard at 36% complete versus the 5-year average of 50%. It is estimated approximately 2.6 million corn acres are unplanted as of May 21 with prevent plant date on May 25.

  • Demand news is still a concern. Weekly ethanol statistics will be released on Wednesday, and the market will be looking for an uptick in the usage of corn used to produce ethanol. This usage category is also trailing the pace needed to reach the USDA’s market year target.

Above: The corn market has recovered somewhat from being oversold, and stochastic indicators have crossed back over to the upside which can be supportive. The July contract has found support between 550 and 530, with further support near the 2021 September low of 497-1/2. Nearby resistance sits near 600 and again near the 50-day moving average.

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

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 lower along with both soybean meal and oil. The move comes due to lower palm oil futures and planting pace that is ahead of schedule, despite higher crude oil prices.

  • The USDA reported that 66% of the soybean crop has been planted as of May 21, and 36% has emerged. Planting is 10 percentage points ahead of where it was in 2016, which was the year the US recorded the highest soybean yield.

  • The planting delays in North Dakota may provide the market with some support as they are only 20% planted due to wet fields. Apart from North Dakota, the US is on track for a large crop.

  • Reports of Chinese cancellations of palm oil purchases and a large EU rapeseed crop added resistance to soybean oil, and soybeans.

  • Non-commercials sold an estimated 4,000 contracts of soybeans and 5,000 contracts of soybean products, and at this point they may have taken a net short position in soybeans.

Above: While July soybeans posted a bearish reversal on 5/08 and have continued to follow through to the downside, the market is showing signs of being oversold, which could be supportive if reversal action occurs. The next area of support may be found near 1288 and 1181, the July 2022 and November 2021 lows respectively. Nearby resistance may be found between 1420 and 1450, and again near 1500.

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

Wheat

Market Notes: Wheat

  • Leading the way in the grain complex, all three wheat classes posted double digit gains despite reports of an additional 210k mt of EU wheat being imported into the US.

  • The USDA reported that 31% of the winter wheat crop was rated good to excellent, up 2% from last week, and 61% of the crop is headed, versus 49% last week, in line with the 5-year average.

  • Winter wheat condition is rated only 10% good to excellent in both Kansas and Oklahoma, reiterating the fact that the crop is struggling in the southwestern Plains.

  • The USDA reported that 64% of the spring wheat crop was planted as of May 21, versus 40% last week, down from the average of 73%.

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 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. With follow-through buying, the market may be in a position to test resistance between 885 and 917. Below the market, further support may be found between 736 and 716.

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

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.

2023/24 Spring wheat percent planted (red) versus the 5-year average (green)

Other Charts / Weather

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Grain Market Insider: May 22, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Export inspections of 52 mb helped spark a short cover rally in July corn and recover somewhat from being oversold.

  • Short covering from extremely oversold conditions with carryover strength from soybean oil and a flash sale of 225k MT of meal gave support to the soybean market.

  • Rumors of delayed vessels inbound for Ukraine and support from the neighboring corn market helped all three wheat markets close on the positive side of unchanged.

To see the 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. 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 to the other in the next month or so.

  • No action is currently recommended for the 2023 new crop. While the crop is going in the ground fast, the most volatile part of the growing season remains ahead. We’re going to maintain an opportunistic posture for now, targeting 590 – 630 versus December corn to suggest any further cash sales.  

  • 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.

  • Despite lacking overall bullish news, the corn market rallied on short covering. With the corn market being oversold, technical buying pushed prices back higher.

  • Weekly export inspections were within expectations on Monday at 52.1 mb of corn inspected for export last week. China took shipments on 12.4 mb of that total. Even with this week’s totals, the current inspection pace is approximately 100 mb behind the pace needed to reach the USDA export target.

  • Corn market bulls are watching weather forecasts, which show above average temperatures and below average moisture across the corn belt going into early June. While the conditions should allow crop progress to continue, the dry pattern building across the heart of the corn belt may trigger some additional short covering and add potential weather premium in an oversold market.

  • Weekly crop progress numbers will be released on Monday afternoon. The market is anticipating corn planting to be 82% complete as of May 21, up from 65% last week. Close attention will be on the northern Plain’s progress with the first prevent planting date around the corner on May 25 for areas of the northern states.

  • The overall tone for cash basis remains soft, as producers have been moving more supplies, and exporters are concerned about demand for those supplies, which is limiting basis potential.

Above: Stochastic indicators have crossed over to the downside indicating there may be more weakness ahead, though the market is showing signs of being oversold. With July corn searching for support, it may find some between 550 and 530, and again near the 2021 September low of 497-1/2, while nearby resistance sits near 600 and again near the 50-day moving average.

Corn Managed Money Funds net position as of Tues. May 16.  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 higher and took back the losses from Friday and then some. A move higher in soybean oil brought the soy complex higher despite a decline in palm oil today.

  • Bullish news came from a sale to the Philippines of 225,000 metric tons of soy cake and meal, but export inspections for last week were poor as expected.

  • Soybean inspections totaled 5.7 mb for the week ending Thursday, May 18, and total inspections are now at 1,771 mb for 22/23, down 2% vs the previous year.

  • Planting progress is expected to move along swiftly as weather forecasts improve, and the weekly crop progress report is expected to show planting and emergence well ahead of the 5-year average.

  • Overall, there hasn’t been much positive fundamental news to explain today’s rally, so it was likely technical due to being oversold. Support for the July contract is near the 13-dollar mark.

Above: While July soybeans posted a bearish reversal on 5/08 and have continued to follow through to the downside, the market is showing signs of being oversold, which could be supportive if reversal action occurs. The next area of support may be found near 1288 and 1181, the July 2022 and November 2021 lows respectively. Nearby resistance may be found between 1420 and 1450, and again near 1500.

Soybeans Managed Money Funds net position as of Tues. May 16.  Net position in Green versus price in Red.

Wheat

Market Notes: Wheat

  • The USDA reported wheat export inspections of 15 mb, bringing the total 22/23 inspections to 703 mb, they also estimated 775 mb of US wheat exports.

  • There have been reports that Ukraine claims Russian inspections are delaying vessels bound for the port of Pivdennyi, despite the extension of the Black Sea export corridor deal. 

  • Spread traders were active in the Minneapolis contracts selling the front month contracts and buying the deferred, possibly indicating supply concerns later on.

  • Sov Econ estimated Russian wheat production at 88 mmt, 1.2 mmt higher than their previous estimate.

  • There may be some concerns with Russian spring wheat areas drying out with forecasts of higher temperatures on the way.

Chicago Wheat Action Plan Summary

  • No new action is recommended for the 2022 crop.  As the 2022 crop marketing year begins to wind down, most if not all, your Old Crop bushels should be sold out, and with large rallies difficult to come by at this time of year. Consider selling rallies in the 640 to 670 range to market any remaining inventory.

  • We recommend not taking any action on the 2023 crop at this time.  Managed Money funds currently hold their largest net short position since 2018, with a near record of about 40% of the total open interest in the Chicago contracts. Such a large position could be very supportive should the funds buy back their positions if market dynamics change due to HRW concerns or supply concerns in corn.

  • 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 wheat market is searching for support, and open interest has been increasing on the recent selloff, which implies sellers may be adding to their positions. If buying returns and the market can break through nearby resistance between 655 and 669, it may be in position to test the April high of 718.  Support below the market may be found between 593 -565. 

Chicago Wheat Managed Money Funds net position as of Tues, May 16.  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: The July contract posted a bearish reversal lower on 5/17, a negative development, with some profit taking as indicated by a drop in open interest. If the market can reverse and break through the 885 to 917 resistance area it could make a move towards 966. With the market looking for support, some may be found between 736 and 716.

K.C. Wheat Managed Money Funds net position as of Tues. May 16.  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 posted a bearish reversal on 5/17 and stochastic indicators have crossed to the downside, indicating momentum has shifted downward for now.  Initial resistance may be found between 830 and 855, with support between 770 and 760.

Minneapolis Wheat Managed Money Funds net position as of Tues. May 16.  Net position in Green versus price in Red.

Other Charts / Weather

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Grain Market Insider: May 19, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Corn futures recovered early in the day as short covering entered the market following Thursday’s bullish reversal, but succumbed to selling pressure from outside markets and neighboring wheat and soybeans.

  • Despite Thursday’s bullish reversal, continued fund long liquidation and short selling on favorable weather and weak export demand pushed soybeans lower. 

  • Soybean meal and oil finished in the red along with soybeans, with soybean oil supported somewhat from higher Malaysian palm oil, while meal encountered weakness from cheaper South American offers.

  • Technical selling and profit taking dominated the K.C. contracts and led the wheat complex lower, as rain moves through the southern Plains, even though the Kansas City wheat council tour estimated the Kansas crop at only 178 mb.

  • A rise in economic concerns may have added to the pall over the grain markets as US debt ceiling negotiations stalled with both sides at an apparent impasse for now.

  • To see the updated US 7-day precipitation forecast and June Precipitation Outlook 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.  As the 2022 crop marketing year begins to wind down, most if not all, your Old Crop bushels should be sold out.  With recent export sales cancellations, large rallies for Old Crop corn may be difficult to come by, and with a substantial inverse between old and new crop contracts, consider selling rallies in the 575-600 range to market any remaining inventory.

  • No action is currently recommended for the 2023 new crop. While the crop is going in the ground fast, the most volatile part of the growing season remains ahead. We’re going to maintain an opportunistic posture for now, targeting 590 – 630 versus December corn to suggest any further cash sales.  

  • 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.

  • Early short covering faded during the session as selling pressure from wheat and soybean markets spilled into the corn market during the session. In addition, markets turned softer overall as the US debt ceiling talks stalled between politicians in Washington DC.

  • The weak afternoon price action keeps the market on the defensive going into next week, as the sellers appear to still be in control of the market.

  • Overall, US weather looks to stay favorable as corn planting is hitting the home stretch. The market will be keeping a close eye on the northern Plains and the slow progress in that region with prevent plant dates starting as early as May 25.

  • Demand remains a focus on Old Crop corn prices. Export sales are soft, and the market is concerned that additional China cancellations could occur, with still 2.1 MMT of corn sales on the books that still need to be delivered to China.

  • Corn basis levels are reflecting softer tones as producers have slowed field work, allowing for better movement of stored supplies onto the cash market.

Above: Stochastic indicators have crossed over to the downside indicating there may be more weakness ahead, though the market is showing signs of being oversold. With July corn searching for support, it may find some between 550 and 530, and again near the 2021 September low of 497-1/2, while nearby resistance sits near 600 and again near the 50-day moving average.

Soybeans

Soybeans Action Plan Summary

  • We recommend holding current sales levels for Old Crop.  We are beginning to push into the May-June seasonal window of opportunity, where prices could bounce as processors begin to push to keep tight on-hand supplies flowing, and seasonal weather concerns can get priced into the market.

  • 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. 

  • The soy complex started the day higher this morning but ended lower. July beans led the way down and were pulled lower primarily by soybean meal.

  • Early morning support came from a jump in Malaysian palm oil by 2.6% on renewed Chinese demand, but for the week it lost 4.6%. Crude oil began the day higher but slipped as well.

  • Bearish outside influences drove the entire grain complex lower following comments by Fed Chairman Powell, and agreements about raising the debt ceiling that were halted a few hours ago after disagreements occurred between Republican negotiators and the White House.

  • Last week’s export sales of 623,000 bushels of Old Crop beans weighed on markets again today. To arrive at the USDA’s expectations, an additional 80 mb of soybeans need to be sold by August. Shipments were a marketing year low at 6.9 mb.

Above: While July soybeans posted a bearish reversal on 5/08 and have continued to follow through to the downside, the market is showing signs of being oversold, which could be supportive if reversal action occurs. The next area of support may be found near 1288 and 1181, the July 2022 and November 2021 lows respectively. Nearby resistance may be found between 1420 and 1450, and again near 1500.

Wheat

Market Notes: Wheat

  • The Kansas wheat crop tour estimated an average yield of 30 bpa, compared to a 5-year average of 45 bpa. Additionally, they are projecting the Kansas crop at 178 mb, the worst since 1963.

  • Despite the crop tour findings, K.C. wheat lost about 30 cents today in the front month contracts. This may indicate that the poor conditions have already been priced in the market.

  • The strengthening El Nino pattern could be cause for concern with drought for Australia’s wheat crop. Russia’s spring wheat areas are also warm and dry.

  • Russian wheat exports continue to be cheap, with their FOB values hitting a 22-month low of $250 per metric ton.

Chicago Wheat Action Plan Summary

  • No new action is recommended for the 2022 crop.  As the 2022 crop marketing year begins to wind down, most if not all, your Old Crop bushels should be sold out, and with large rallies difficult to come by at this time of year. Consider selling rallies in the 640 to 670 range to market any remaining inventory.

  • We recommend not taking any action on the 2023 crop at this time.  Managed Money funds currently hold their largest net short position since 2018, with a near record of about 40% of the total open interest in the Chicago contracts. Such a large position could be very supportive should the funds buy back their positions if market dynamics change due to HRW concerns or supply concerns in corn.

  • 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: July wheat has pierced the low end of the recent trading range but remains in the broader range from earlier this month. If buying returns and the market can break through nearby resistance around 669 and the 50-day moving average, it may be in position to test the April high of 718. Key support may be found near 592.   

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: The July contract posted a bearish reversal lower on 5/17, a negative development, with some profit taking as indicated by a drop in open interest. If the market can reverse and break through the 885 to 917 resistance area it could make a move towards 966. With the market looking for support, some may be found between 736 and 716.

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 posted a bearish reversal on 5/17 and stochastic indicators have crossed to the downside, indicating momentum has shifted downward for now.  Initial resistance may be found between 830 and 855, with support between 770 and 760.

Other Charts / Weather

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Grain Market Insider: May 18, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Corn export sales for the week ending May 11th came in at a net negative 13.3 million bushels for the 22/23 marketing year, which weighed on the corn market.

  • Soybeans and soybean meal continued their recent liquidation trend while soybean oil managed to rally despite lower crude oil prices.

  • Net cancellations in weekly export sales for the 22/23 marketing year pressured the market, K.C. wheat contracts were hit hardest by sellers as all three wheats worked lower.

  • The US Dollar continued its winning streak adding outside pressure once again to commodities.

  • To see the updated U.S. Drought Monitor and June Temperature Outlook 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

Updated as of 05/10/2023

  • No action is recommended at this time for Old Crop. At this point in the crop marketing year most, if not all, of your Old Crop 2022 corn should be sold out. With the substantial inverse between old and new crop contract months, large rallies for Old Crop corn may be difficult to come by as we move forward. Consider using 40 to 50-cent rallies to sell any remaining inventory.

  • No action is currently recommended for the 2023 new crop. While the crop is going in the ground fast, the most volatile part of the growing season remains ahead. We’re going to maintain an opportunistic posture for now, targeting 590 – 630 versus December corn to suggest any further cash sales.  

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

Grain Market Insider Corn open positions listed above.

  • The corn market finished mixed on Thursday as weak export demand and competition from cheaper South American corn limited gains on the front end of the market.

  • The USDA released weekly export data this morning and corn sales continue to disappoint.  For the week of May 11, the 22/23 crop year saw net cancellations of 13.3 mb, a market year low, and new crop sales were light at 2.9 mb. These totals are well below sales needed to reach USDA targets.

  • The large second crop Brazil corn is making good progress with limited concerns as harvest is getting closer. The expected record crops have Brazil offering corn for export at a discount to US prices.

  • Overall, US weather looks to stay favorable as corn planting is hitting the home stretch. The market will be keeping a close eye on the northern Plains and the slow progress in that region with prevent plant dates starting as early as May 25.

  • A strong US Dollar and aggressive selling in the wheat market limited the upside potential in the corn market as US wheat prices are still expensive compared to the global wheat market.

Above: Stochastic indicators have crossed over to the downside indicating there may be more weakness ahead, though the market is showing signs of being oversold. With July corn searching for support, it may find some between 550 and 530, and again near the 2021 September low of 497-1/2, while nearby resistance sits near 600 and again near the 50-day moving average.

Soybeans

Soybeans Action Plan Summary

Updated as of 05/09/2023

  • We recommend holding current sales levels for Old Crop.  We are beginning to push into the May-June seasonal window of opportunity, where prices could bounce as processors begin to push to keep tight on-hand supplies flowing, and seasonal weather concerns can get priced into the market.

  • We recommend not adding to current sales levels for the new 2023 crop at this time.  As we work through planting season, our research indicates there is a 66% likelihood of better prices moving into early June. Additionally, weather conditions will begin to dominate the market as we begin to move into the growing season, and we may consider recommending sales in the 1400 to 1450 area if any significant concerns arise.

  • 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 traded either side of unchanged today but ultimately closed lower, led down by soybean meal. Soybean oil traded higher despite a drop in crude oil.

  • Export sales were poor last week with the USDA reporting an increase of just 0.6 mb of soybeans for 22/23, far below the average trade guess. Export sales for 23/24 were 24.4 mb, while export shipments were 6.9 mb and below the 12.6 mb needed each week to meet the USDA’s expectations.

  • With Brazil’s harvest complete and estimated at 5.7 billion bushels, premiums there are rallying on an FOB basis, from close to 200 under Chicago futures to 57 under yesterday.

  • Planting pace has accelerated everywhere but North Dakota and Minnesota. And, while showers are forecast across the central and southern Plains, the forecasts into June look mostly dry.

Above: While July soybeans posted a bearish reversal on 5/08 and have continued to follow through to the downside, the market is showing signs of being oversold, which could be supportive if reversal action occurs. The next area of support may be found near 1288 and 1181, the July 2022 and November 2021 lows respectively. Nearby resistance may be found between 1420 and 1450, and again near 1500.

Wheat

Market Notes: Wheat

  • Net cancellations of 1.5 mb of 22/23 wheat export sales did not offer any support to the market today. However, an increase of 12.4 mb for 23/24, while not stellar, does look better.

  • Day 2 of the HRW crop tour found a yield of 27.5 bpa. Last year at this time it was 37 bpa.

  • Kansas City contracts finished almost 30 cents lower, despite the friendly Kansas wheat tour yield projection coming in 13 million bushels below current USDA projections. Good rains have recently fallen in Kansas, many feel these rains were too little too late to help the maturing wheat crop.

  • The US Dollar Index again made a new near term high today, offering weakness to wheat futures.

Chicago Wheat Action Plan Summary

Updated as of 05/09/2023

  • No new action is recommended for the 2022 crop.  At this point in the crop marketing year most, if not all, of your Old Crop 2022 wheat should be sold out. With large rallies difficult to come by at this time of year, consider using 40 to 50-cent rallies to sell any remaining inventory.

  • We recommend not taking any action on the 2023 crop at this time.  Managed Money funds currently hold their largest net short position since 2018, with a near record of about 40% of the total open interest in the Chicago contracts. Such a large position could be very supportive should the funds buy back their positions if market dynamics change due to HRW concerns or supply concerns in corn.

  • 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: July wheat has pierced the low end of the recent trading range but remains in the broader range from earlier this month. If buying returns and the market can break through nearby resistance around 669 and the 50-day moving average, it may be in position to test the April high of 718. Key support may be found near 592.   

KC Wheat Action Plan Summary

Updated as of 05/09/2023

  • 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: The July contract posted a new recent high and reversed lower, a negative development, and open interest has fallen off somewhat, indicating some profit taking. If the market can break through the 912, it may make a run towards 966. Initial support may be found near 833, with key support near 740.

Mpls Wheat Action Plan Summary

Updated as of 05/10/2023

  • 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. Due to the lack of liquidity for the 2024 crop, there may not be any recommendations until late spring or early summer. This is the time for patience, not action.

Above: The market posted a bearish reversal and open interest has fallen off somewhat, indicating some profit taking, and the potential for weakness ahead. Initial resistance above the market sits between 888 and 895, while initial support may be found near 831 and then between 770 and 760.

Other Charts / Weather

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Grain Market Insider: May 17, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Cancellations reported by the USDA totaling 272k mt in export sales to China weighed heavily on the July corn futures contract, with carryover weakness also spreading to the deferred contracts.

  • Continued technical selling on weakening demand and favorable weather drove prices lower in the soybean complex as funds liquidated more long positions.

  • Russia has agreed to extend the Black Sea Grain Initiative for another 60 days, adding further selling pressure to both corn and wheat markets.

  • Poor conditions and low estimated yields from the K.C. wheat crop tour lent support to K.C. contracts.  While Chicago and Minneapolis contracts took the brunt of the selling, pressured by weak demand and better crop outlooks.

  • Hawkish Fed commentary gave legs to the US Dollar which continued its climb higher, adding some weakness to commodities.

  • To see the updated U.S. 6-10 day Temperature and Precipitation outlooks from the National Weather Service, 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

Updated as of 05/10/2023

  • No action is recommended at this time for Old Crop. At this point in the crop marketing year most, if not all, of your Old Crop 2022 corn should be sold out. With the substantial inverse between old and new crop contract months, large rallies for Old Crop corn may be difficult to come by as we move forward. Consider using 40 to 50-cent rallies to sell any remaining inventory.

  • No action is currently recommended for the 2023 new crop. While the crop is going in the ground fast, the most volatile part of the growing season remains ahead. We’re going to maintain an opportunistic posture for now, targeting 590 – 630 versus December corn to suggest any further cash sales.  

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

Grain Market Insider Corn open positions listed above.

  • The corn market saw additional technical selling as prices pushed through levels of support, triggering long liquidation and momentum selling, boosted by strong selling pressure across the grain complex. July futures traded to their lowest close since December 2021, and December corn closed under the key psychological $5.00 level.

  • A cancellation of 272,000 MT (10.7 mb) old crop corn by China only added to the selling pressure and fueled additional demand concerns. The corn market is anticipating further old crop demand adjustments, adding to a growing carry out picture.

  • Brazilian second crop corn is still developing without any major overall issues. The forecasted record corn production allows for cheaper export offerings which will make it difficult for the US exporters to compete on the global market.

  • The overall weather forecast stays supportive for the majority of the Corn Belt with above average temperatures and with rainfall average to below, which should keep the planting window over the next couple weeks very favorable.

  • The USDA will release weekly export sales totals for last week on Thursday morning, and expectations are for -500,000 MT to 300,000 MT of old crop sales. If even at the top end of expectations, the US corn export program is struggling to reach USDA export projections for the marketing year.

Above: Stochastic indicators have crossed over to the downside indicating there may be more weakness ahead, though the market is showing signs of being oversold. With July corn searching for support, it may find some between 550 and 530, and again near the 2021 September low of 497-1/2, while nearby resistance sits near 600 and again near the 50-day moving average.

Soybeans

Soybeans Action Plan Summary

Updated as of 05/09/2023

  • We recommend holding current sales levels for Old Crop.  We are beginning to push into the May-June seasonal window of opportunity, where prices could bounce as processors begin to push to keep tight on-hand supplies flowing, and seasonal weather concerns can get priced into the market.

  • We recommend not adding to current sales levels for the new 2023 crop at this time.  As we work through planting season, our research indicates there is a 66% likelihood of better prices moving into early June. Additionally, weather conditions will begin to dominate the market as we begin to move into the growing season, and we may consider recommending sales in the 1400 to 1450 area if any significant concerns arise.

  • 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 traded sharply lower again today with front month July leading the way lower as both soybean oil and meal fell. The move lower in soybean oil came despite a jump in crude oil. Palm oil was down for the third straight day on rising production and weaker demand.

  • November soybeans are at the lowest level since December of 2021, but closed a chart gap left in July of last year which could be a technical level of support.

  • The selloff comes as the USDA forecasts a record crop for the US and Brazil, while larger outside influences having to do with the economy and recession, pressure commodities.

  • With Brazil’s soybean harvest complete and the bulk of soybeans that could not be stored sold, producers are holding on to their soybeans as an inflation hedge which is driving up premiums in Brazil. This could have a positive effect on US prices.

Above: While July soybeans posted a bearish reversal on 5/08 and have continued to follow-through to the downside, the market is showing signs of being oversold, which could be supportive if reversal action occurs. The next area of support may be found near 1288 and 1181, the July 2022 and November 2021 lows respectively. Nearby resistance may be found between 1420 and 1450, and again near 1500.

Wheat

Market Notes: Wheat

  • Wheat plunged to double-digit losses in all three US classes after Turkey announced that a deal had been reached to extend the Black Sea grain corridor for another 60 days.

  • The day 1 yield estimate of 29.8 bpa on the HRW wheat crop tour is the worst finding since the tour began in 2003. Normally the yield is closer to 45 bpa. This could explain why KC futures were not down as hard as Chicago and Minneapolis.

  • Paris milling wheat futures were also sharply lower due to the extension of the Black Sea agreement. The front month September contract lost 9.00 euros per metric ton.

  • Not offering any support to US wheat futures is the US Dollar as it trends higher, breaking the 103 level today.

Chicago Wheat Action Plan Summary

Updated as of 05/09/2023

  • No new action is recommended for the 2022 crop.  At this point in the crop marketing year most, if not all, of your Old Crop 2022 wheat should be sold out. With large rallies difficult to come by at this time of year, consider using 40 to 50-cent rallies to sell any remaining inventory.

  • We recommend not taking any action on the 2023 crop at this time.  Managed Money funds currently hold their largest net short position since 2018, with a near record of about 40% of the total open interest in the Chicago contracts. Such a large position could be very supportive should the funds buy back their positions if market dynamics change due to HRW concerns or supply concerns in corn.

  • 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: July wheat has pierced the low end of the recent trading range but remains in the broader range from earlier this month. If buying returns and the market can break through nearby resistance around 669 and the 50-day moving average, it may be in position to test the April high of 718. Key support may be found near 592.   

KC Wheat Action Plan Summary

Updated as of 05/09/2023

  • 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: The July contract posted a new recent high and reversed lower, a negative development, and open interest has fallen off somewhat, indicating some profit taking. If the market can break through the 912, it may make a run towards 966. Initial support may be found near 833, with key support near 740.

Mpls Wheat Action Plan Summary

Updated as of 05/10/2023

  • 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. Due to the lack of liquidity for the 2024 crop, there may not be any recommendations until late spring or early summer. This is the time for patience, not action.

Above: The market posted a bearish reversal and open interest has fallen off somewhat, indicating some profit taking, and the potential for weakness ahead. Initial resistance above the market sits between 888 and 895, while initial support may be found near 831 and then between 770 and 760.

Other Charts / Weather

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Grain Market Insider: May 16, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Weighed down by a quick planting pace and favorable weather, corn finished in the bottom two-thirds of its recent range.

  • With planting well ahead of average and rising South American production estimates, the soybean market posted its largest down day this year, as speculators continue to liquidate long positions.

  • Also adding pressure to soybeans was a weak world veg oil market that led soybean oil to near 5% losses.

  • A slower-than-average spring wheat planting pace lent support to Minneapolis contracts, while profit taking on the recent rally led the Chicago and nearby K.C. contracts lower.

  • To see the updated U.S. 7- day Total Precipitation outlook from the National Weather Service, 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

Updated as of 05/10/2023

  • No action is recommended at this time for Old Crop. At this point in the crop marketing year most, if not all, of your Old Crop 2022 corn should be sold out. With the substantial inverse between old and new crop contract months, large rallies for Old Crop corn may be difficult to come by as we move forward. Consider using 40 to 50-cent rallies to sell any remaining inventory.

  • No action is currently recommended for the 2023 new crop. While the crop is going in the ground fast, the most volatile part of the growing season remains ahead. We’re going to maintain an opportunistic posture for now, targeting 590 – 630 versus December corn to suggest any further cash sales.  

  • 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 markets saw technical selling follow through from the softer price action from Monday’s close. Historically, high corn planting pace and strong selling pressure in the soybean market added to the selling pressure.

  • US corn planting moved to 65% planted, which was slightly below expectations, but still 6% above the 5-year average. Key corn-producing states of Iowa and Illinois were over 80% complete, while northern states are still lagging the multi-year averages.

  • Crop emergence was also above 5-year averages as 30% of the crop has germinated. This was up from 12% last year at this time and a 5-year average of 25%.

  • The overall weather forecast stays supportive for the majority of the Corn Belt with above-average temperatures and rainfall average to below, which should keep the planting window over the next couple weeks very favorable.

  • July corn could find support on the lack of producer selling and a friendly cash basis as producers are looking to complete crop planting. Selling pressure seemed to slow near the 580 price level, which held into the close. Dec corn charts look more technically challenged, placing a new near-term low on Tuesday, pressured by a potentially growing corn supply picture.

Above: The market is recovering from being oversold and continues to be under the influence of the bullish reversal from 5/03. Nearby resistance sits near 612 and again near the 50-day moving average, while support for the July contract rests between the recent low of 569 and the July ’22 low near 562.

Above: 23/24 Corn Percent Planted (red) versus the 5-year average (green)

Soybeans

Soybeans Action Plan Summary

Updated as of 05/09/2023

  • We recommend holding current sales levels for Old Crop.  We are beginning to push into the May-June seasonal window of opportunity, where prices could bounce as processors begin to push to keep tight on-hand supplies flowing, and seasonal weather concerns can get priced into the market.

  • We recommend not adding to current sales levels for the new 2023 crop at this time.  As we work through planting season, our research indicates there is a 66% likelihood of better prices moving into early June. Additionally, weather conditions will begin to dominate the market as we begin to move into the growing season, and we may consider recommending sales in the 1400 to 1450 area if any significant concerns arise.

  • 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 by a big selloff in soybean oil, and though soybean meal was the strongest leg in the complex, it closed lower as well.

  • Further pressure came from yesterday afternoon’s planting progress which showed soybean planting 49% complete and 13% above the 5-year average. Iowa and Illinois led the way at 69% and 77% respectively, but North Dakota lags at just 2%.

  • While crude oil was slightly lower, the recent decline in palm oil has been a large bearish factor for soybean oil as demand from India decreases.

  • South American crop watcher, Dr. Michael Cordonnier, raised his production estimate for Brazil’s crop to 155 mmt, matching the USDA’s estimate, but left his estimate for Argentina’s crop unchanged at 23 mmt, versus the USDA’s 27 mmt.

  • Outside markets may have been a factor in today’s selloff as fund managers are weary of the future of the economy, though there are upcoming meetings to raise the debt ceiling.

  • With Argentina’s soybean production so small, they will have trouble meeting export expectations for soybean meal, and the US will likely pick up some of that business which would be friendly. Yesterday there was a reported sale of soybean meal to Poland from the US.

Above: July soybeans posted a bearish reversal on 5/08 and experienced continued downside follow-through. Support lies near the recent low of 1385 with further support near 1350. With support holding, buyers may enter the market, resistance may be found between 1450 and 1460, and again near 1500.

Above: 23/24 Soybeans Percent Planted (red) versus the 5-year average (green)

Wheat

Market Notes: Wheat

  • Despite heavy selling pressure in the grains, wheat had an overall mixed close. Chicago was red across the board, but both Kansas City and Minneapolis contracts ended the session with some green.

  • The winter wheat crop was rated 29% good to excellent, which is unchanged from last week. However, the Kansas wheat tour will likely find dismal conditions, with 68% of their crop rated poor to very poor.

  • According to the USDA, 40% of the spring wheat crop has been planted, compared to 57% average.

  • There has still not been an agreement on the Black Sea Grain Initiative. The deal is set to expire on May 18th and Ukraine will reportedly host online talks. However, Russia does not appear to want to allow an extension.

Chicago Wheat Action Plan Summary

Updated as of 05/09/2023

  • No new action is recommended for the 2022 crop.  At this point in the crop marketing year most, if not all, of your Old Crop 2022 wheat should be sold out. With large rallies difficult to come by at this time of year, consider using 40 to 50-cent rallies to sell any remaining inventory.

  • We recommend not taking any action on the 2023 crop at this time.  Managed Money funds currently hold their largest net short position since 2018, with a near record of about 40% of the total open interest in the Chicago contracts. Such a large position could be very supportive should the funds buy back their positions if market dynamics change due to HRW concerns or supply concerns in corn.

  • 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: July wheat has found some support just below the market near 626. If it can break through nearby resistance around 669 and the 50-day moving average, it may be in position to test the April high of 718. Key support may be found near 592.   

KC Wheat Action Plan Summary

Updated as of 05/09/2023

  • 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: The July contract continues to show upward momentum, though open interest has fallen off somewhat, indicating some profit taking. If the market can break through the 912, it may make a run towards 966. Initial support may be found near 833, with key support near 740.

Above: 23/24 Winter Wheat Condition Percent Good-Excellent (red) versus the 5-year average (green)

Mpls Wheat Action Plan Summary

Updated as of 05/10/2023

  • 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. Due to the lack of liquidity for the 2024 crop, there may not be any recommendations until late spring or early summer. This is the time for patience, not action.

Above: The market continues to show upward momentum with the market nearing the 100-day moving average, which may provide some additional resistance. The market may still encounter resistance above the market near 870 and 895, while initial support may be found near 831 and then between 770 and 760.

Above: 23/24 Spring Wheat Percent Planted (red) versus the 5-year average (green)

Other Charts / Weather

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Grain Market Insider: May 15, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Carryover strength from the wheat market and better weekly export inspections numbers helped corn to close on the positive side of unchanged, with Old Crop gaining on New Crop.

  • Despite neutral to bearish demand news in last week’s USDA report and weak export inspections numbers today, soybeans found carryover strength from neighboring corn and wheat.

  • July soybean meal and oil closed mixed, with meal showing a bearish reversal on profit taking from its recent rally, while soybean oil posted gains, trading in sympathy with crude oil.

  • The buying continued in all three wheat classes on low US crop prospects and the possible ending of the Black Sea Grain Initiative.

  • While the US Dollar was moderately lower on the day, there are thoughts that the recent rally may be short lived due to the possibility of steady to lower interest rates ahead.

  • To see the updated U.S. 6-10 day temperature and precipitation outlooks from the National Weather Service, 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

Updated as of 05/10/2023

  • No action is recommended at this time for Old Crop. At this point in the crop marketing year most, if not all, of your Old Crop 2022 corn should be sold out. With the substantial inverse between old and new crop contract months, large rallies for Old Crop corn may be difficult to come by as we move forward. Consider using 40 to 50-cent rallies to sell any remaining inventory.

  • No action is currently recommended for the 2023 new crop. While the crop is going in the ground fast, the most volatile part of the growing season remains ahead. We’re going to maintain an opportunistic posture for now, targeting 590 – 630 versus December corn to suggest any further cash sales.  

  • 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 saw some price recovery off overnight lows as a strong wheat market helped trigger some light short covering in the corn market.

  • The USDA weekly corn export inspections were improved over last week with 1.174 MMT (46.2 mb) being inspected for shipment last week. Even with the lowered USDA projection, this total is still behind the recommended USDA pace and 33% behind last year. Demand remains a concern and limiting factor.

  • The Mississippi River lock and dam system is back in operation after being closed the past couple weeks for flooding concerns. Improved river movement could help front-end demand and support a firm cash market.

  • The USDA weekly crop progress numbers are expected to see corn planting at 68% complete, up from 49% last week and still ahead of the 5-year average.

  • The National Corn Index, which reflects cash markets across the Corn Belt, is trading at $6.21 (+0.034) and a premium to July futures, reflecting a still relatively tight domestic supply of corn and firm cash market tone.

Above: The market is recovering from being oversold and continues to be under the influence of the bullish reversal from 5/03. Nearby resistance sits near 612 and again near the 50-day moving average, while support for the July contract rests between the recent low of 569 and the July ’22 low near 562.

Above: Corn Managed Money Funds net position as of Tuesday, May 9. Net position in Green versus price in Red.

Soybeans

Soybeans Action Plan Summary

Updated as of 05/09/2023

  • We recommend holding current sales levels for Old Crop.  We are beginning to push into the May-June seasonal window of opportunity, where prices could bounce as processors begin to push to keep tight on-hand supplies flowing, and seasonal weather concerns can get priced into the market.

  • We recommend not adding to current sales levels for the new 2023 crop at this time.  As we work through planting season, our research indicates there is a 66% likelihood of better prices moving into early June. Additionally, weather conditions will begin to dominate the market as we begin to move into the growing season, and we may consider recommending sales in the 1400 to 1450 area if any significant concerns arise.

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

  • Soybeans closed higher today along with soybean oil, supported in part by carryover strength from the corn market and a higher crude oil market.

  • In soybean meal, the deferred contracts closed higher, while the Jul and Aug contracts posted bearish reversals, which could lead to additional profit taking on any further weakness.

  • The USDA reported a private export sale of 100,000 tonnes of US soybean meal for delivery to Poland for the 22/23 marketing year.

  • April NOPA soybean crush was pegged at 173.232 million bushels, which was down from 185.81 mb in March, but still a record for April. Trade was expecting 174.173 mb.

  • Weekly soybean inspections for the week ending Thursday, May 11, were poor at 5.4 mb which puts total inspections for 22/23 at 1,764 mb which is down 1% from the previous year.

  • In Brazil, harvest has wrapped up, but producers are unwilling to sell at current spot prices. Instead of making cash sales, some producers are opting to barter their soybeans in exchange for inputs and fertilizer.

Above: July soybeans posted a bearish reversal on 5/08 and experienced continued downside follow-through. Support lies near the recent low of 1385 with further support near 1350. With support holding, buyers may enter the market, resistance may be found between 1450 and 1460, and again near 1500.

Above: Soybeans Managed Money Funds net position as of Tuesday, May 9. Net position in Green versus price in Red.

Wheat

Market Notes: Wheat

  • Despite negotiations, there currently has been no resolution to the extension of the Black Sea Grain Initiative, which is set to expire in a few days on May 18th.

  • The USDA is projecting Kansas winter wheat production at 191.4 mb, the lowest number in 50 years.

  • Paris milling wheat traded higher today, adding further support to all three classes of US wheat futures.

  • Wheat inspections of 5.4 mb bring total 22/23 wheat inspections to 688 mb. The USDA is still estimating 775mb of wheat exports.

  • The strengthening El Nino weather pattern could mean global weather changes, including drought conditions for Australia’s wheat crop.

Chicago Wheat Action Plan Summary

Updated as of 05/09/2023

  • No new action is recommended for the 2022 crop.  At this point in the crop marketing year most, if not all, of your Old Crop 2022 wheat should be sold out. With large rallies difficult to come by at this time of year, consider using 40 to 50-cent rallies to sell any remaining inventory.

  • We recommend not taking any action on the 2023 crop at this time.  Managed Money funds currently hold their largest net short position since 2018, with a near record of about 40% of the total open interest in the Chicago contracts. Such a large position could be very supportive should the funds buy back their positions if market dynamics change due to HRW concerns or supply concerns in corn.

  • 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: July wheat has found some support just below the market near 626. If it can break through nearby resistance around 669 and the 50-day moving average, it may be in position to test the April high of 718. Key support may be found near 592.   

Above: Chicago Wheat Managed Money Funds net position as of Tuesday, May 9. Net position in Green versus price in Red.

KC Wheat Action Plan Summary

Updated as of 05/09/2023

  • 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: The July contract continues to show upward momentum, though open interest has fallen off somewhat, indicating some profit taking. If the market can break through the 912, it may make a run towards 966. Initial support may be found near 833, with key support near 740.

Above: K.C. Wheat Managed Money Funds net position as of Tuesday, May 9. Net position in Green versus price in Red.

Mpls Wheat Action Plan Summary

Updated as of 05/10/2023

  • 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. Due to the lack of liquidity for the 2024 crop, there may not be any recommendations until late spring or early summer. This is the time for patience, not action.

Above: The market continues to show upward momentum with the market nearing the 100-day moving average, which may provide some additional resistance. The market may still encounter resistance above the market near 870 and 895, while initial support may be found near 831 and then between 770 and 760.

Above: Minneapolis Wheat Managed Money Funds net position as of Tuesday, May 9. Net position in Green versus price in Red.

Other Charts / Weather

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Grain Market Insider: May 12, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Corn ended mixed as traders absorbed larger than expected carry-outs for both 22/23 and 23/24 US corn while finding carryover strength from wheat.

  • The USDA left Argentina’s soybean crop size unchanged from last month, this brought world soybean ending stocks in well above pre-report estimates for both the 22/23 and 23/24 crop years, weighing on soybeans.

  • All three wheat classes rallied to end the week as the USDA estimated US wheat inventories will come in at a 16-year low.

  • The US Dollar Index rallied sharply to end the week on fears of the US debt ceiling expiry and banking fallouts.

  • To see the updated U.S. Drought Monitor scroll down to the Other Charts/Weather section.

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

Corn

Corn Action Plan Summary

Updated as of 5/10/2023

  • No action is recommended at this time for Old Crop. At this point in the crop marketing year most, if not all, of your Old Crop 2022 corn should be sold out. With the substantial inverse between old and new crop contract months, large rallies for Old Crop corn may be difficult to come by as we move forward. Consider using 40 to 50-cent rallies to sell any remaining inventory.

  • No action is currently recommended for the 2023 new crop. While the crop is going in the ground fast, the most volatile part of the growing season remains ahead. We’re going to maintain an opportunistic posture for now, targeting 590 – 630 versus December corn to suggest any further cash sales.  

  • 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.

  • Despite overall bearish WASDE report numbers, strength in the wheat market supported front month corn futures to end the week. Bull spreading was noted, buying old crop and selling new, helping limit selling pressure in the corn market overall.

  • USDA estimated Old Crop corn carryout at 1.417 billion bushels, using a 75 mb cut in export demand to increase the supply picture.  This total was 51 mb above trade expectations.

  • The most negative side of the USDA WASDE report was 23/24 carryout projections of 2.222.  The USDA used a baseline yield of 181.5 bushels/acre and 92 million planted acres of corn to estimate production at 15.265 billion bushels, up 1.54 billion bushels from last year.

  • With the USDA report passed, the market will shift its focus back to the weather, which appears mostly favorable for planting pace while still providing adequate moisture to allow this year’s crop to have a strong start.

  • USDA raised projected Brazilian corn crop to 130 MMT, up 5MMT from last month as acreage has increased, and the crop has been supported by favorable weather overall.  The record Brazilian production will be direct competition to U.S. export business well into the summer.

Above: The market is recovering from being oversold and continues to be under the influence of the bullish reversal from 5/03. Nearby resistance sits near 612 and again near the 50-day moving average, while support for the July contract rests between the recent low of 569 and the July ’22 low near 562.

Soybeans

Soybeans Action Plan Summary

Updated as of 05/09/2023

  • We recommend holding current sales levels for Old Crop.  We are beginning to push into the May-June seasonal window of opportunity, where prices could bounce as processors begin to push to keep tight on-hand supplies flowing, and seasonal weather concerns can get priced into the market.

  • We recommend not adding to current sales levels for the new 2023 crop at this time.  As we work through planting season, our research indicates there is a 66% likelihood of better prices moving into early June. Additionally, weather conditions will begin to dominate the market as we begin to move into the growing season, and we may consider recommending sales in the 1400 to 1450 area if any significant concerns arise.

  • 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 with new crop leading the way down after a bearish WASDE report. Soybean meal closed slightly higher while soybean oil moved lower with crude oil.

  • Brazilian soybean production estimates were raised to 155 mmt which was above trade guesses and above April’s WASDE by 1 mmt. Surprisingly, Argentinian production was left unchanged at 37 mmt despite many private analysts estimating it much lower near 35 mmt or below.

  • The USDA estimated the 23/24 soybean ending stocks at 335 mb which was higher than expected, and production was pegged at a record high 4.51 bb. Ending stocks for 22/23 were 215 mb, above the last estimate of 210 mb.

  • Argentina has imported a record 539,000 mt of Brazilian soybean meal to offset its own lost supplies, but analysts have reported that Argentina’s capacity to import meal is limited to just 8 mmt per year. This has been supportive for US soybean meal prices as the US may be able to export more.

Above: July soybeans posted a bearish reversal on 5/08 and experienced continued downside follow-through. Support lies near the recent low of 1385 with further support near 1350. With support holding buyers may enter the market, resistance may be found between 1450 and 1460, and again near 1500.  

Wheat

Market Notes: Wheat

  • The USDA projected 23/24 US all wheat production at 1.659 bb (vs the average trade guess of 1.782 bb)

  • The USDA pegged US wheat 22/23 ending stocks at 598 mb, compared with an expectation of 603 mb. For 23/24 carryout is estimated at 556 mb vs the average trade guess of 602 mb.

  • The Black Sea grain deal negotiations are said to have not gone well, with the talks ending yesterday with no resolution.

  • July KC wheat rallied sharply to end the week after the USDA estimated HRW production at 514 mb vs an expectation of 591 mb (and 531 mb last year).

Chicago Wheat Action Plan Summary

Updated as of 05/09/2023

  • No new action is recommended for the 2022 crop.  At this point in the crop marketing year most, if not all, of your Old Crop 2022 wheat should be sold out. With large rallies difficult to come by at this time of year, consider using 40 to 50-cent rallies to sell any remaining inventory.

  • We recommend not taking any action on the 2023 crop at this time.  Managed Money funds currently hold their largest net short position since 2018, with a near record of about 40% of the total open interest in the Chicago contracts. Such a large position could be very supportive should the funds buy back their positions if market dynamics change due to HRW concerns or supply concerns in corn.

  • 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 experienced a bearish reversal on 5/08 with follow through selling. Currently, the slow stochastics indicator may be crossing over to the downside, indicating upward momentum has slowed for the time being. Nearby resistance can be found between the recent high of 669 and 718,  while key support may be found near 592.   

KC Wheat Action Plan Summary

Updated as of 05/09/2023

  • 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: The July contract continues to show upward momentum, though open interest has fallen off somewhat, indicating some profit taking.  If the market can break through nearby resistance, it could further test the 886 to 902 resistance area. Otherwise, initial support may be found near 769, with key support near 740.

Mpls Wheat Action Plan Summary

Updated as of 05/10/2023

  • 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. Due to the lack of liquidity for the 2024 crop, there may not be any recommendations until late spring or early summer. This is the time for patience, not action.

Above: The market continues to show upward momentum, though open interest has fallen off somewhat, indicating some profit taking.  Resistance still resides above the market near 870 and 895, while support may be found between 770 and 760.

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