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Grain Market Insider: May 11, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Anticipated lowered exports and increased ending stocks in tomorrow’s USDA WASDE pushed corn prices back down near their recent lows.

  • The confirmed sale of 132,000 tons of US soybeans to unknown destinations for the 2023/24 marketing year by the USDA this morning helped support the soybean complex.

  • Soybean meal prices moved sharply higher while soybean oil prices followed crude oil lower again.

  • Disappointing export sales and continued profit taking ahead of tomorrow’s USDA WASDE in K.C. and Minneapolis weighed on all three wheats.

  • To see the updated 1–7-day GFS Ensemble Forecast Precipitation for South America and updated 6-to-10-day NOAA precipitation and temperature outlooks scroll down to the Other Charts / Weather section.

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

Corn

Corn Action Plan Summary

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.

  • Corn market saw risk off trade on Thursday as the market prepares for Friday’s USDA WASDE report.  Prices were in consolidation, trading within Wednesday’s large price range, but closed near the low end of that range.

  • Friday’s WASDE report will show the first projections for the 2023-24 marketing year with an expected carryout projection of just over 2.000 billion bushels.  A softer demand tone is expected to cause old crop carryout to rise to 1.366 billion bushels, up slightly from last month.

  • Weekly export sales were disappointing at 10.13 mb for 22/23 and 3.27 mb for 23/24. U.S. exports continue to struggle against the cheaper Brazilian corn. Exports sales for 22/23 need to average 17.4 mb per week to meet the USDA’s current estimate.

  • Overall, weather forecasts appear mostly favorable for planting pace while still providing adequate moisture to allow this year’s crop to have a strong start.

  • CONAB raised their expected Brazilian corn crop projections for the 22/23 marketing year to 125.54 MMT, up slightly from last month, but over 12 MMT higher than last year’s total production.

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 ended the day higher in the front months but posted a slight loss for the Nov contract. Soybean meal rallied at the close while soybean oil was dragged lower by crude oil.

  • Export sales were very poor at just 2.3 mb for 22/23, down 70% from the previous week and 68% from the prior 4-week average. Shipments were 15.1 mb, just above the 12.8 mb needed each week to meet the USDA’s current marketing year estimate.

  • Weekly soybean meal export sales for 22/23 came in near the top end of expectations with Vietnam and Romania as top destinations. This helped move front month soybean meal futures higher by over 2.8%.

  • Despite the poor export sales, the USDA did confirm a sale of soybeans to unknown destinations of 132,000 tons for the 23/24 marketing year, which was supportive.

  • Tomorrow’s USDA report is expected to raise the soybean carryout slightly and estimate new crop production around 4.494 bb. Argentina’s production is expected to be lowered while Brazil’s is expected to rise.

Above: July soybeans have recovered from being severely oversold and posted a bearish reversal on 5/08 which indicates recent buying could be exhausted and the market may turn lower.  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

  • Wheat export sales were disappointing with the USDA reporting an increase of only 1.0 mb for 22/23. For 23/24 the USDA reported an increase of 12.3 mb.

  • Recent rainfall in the Plains states added pressure to wheat futures. Even some of the driest areas of Western Kansas have received measurable precipitation in the last 72 hours.

  • Another day of talks between the UN, Turkey, Russia, and Ukraine took place as they look for a resolution. As it currently stands, the deal will expire on May 18th.

  • Despite Russia offering FOB wheat at $245 per ton, Algeria backed away from that tender, as Balkan prices were lower.

  • The Buenos Aires Grain Exchange said that heavy rains for Argentina’s wheat areas may not come until September.

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.

Other Charts / Weather

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Grain Market Insider: May 10, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Position squaring ahead of Friday’s USDA report and tight on-hand supplies continue to support Old Crop July relative to the New Crop contracts which are being pressured by a friendly crop outlook.

  • Weak technical follow through from Monday’s bearish reversal continues to weigh on the market ahead of Friday’s USDA report.

  • Lower Malaysian palm oil and lower crude oil pressured soybean oil lower while soybean meal found support and reversed to settle higher after trading to a new recent low.

  • Profit taking, as indicated by falling open interest, pressured both K.C. and Minneapolis contracts, while good crop prospects continue to weigh on the Chicago contracts.

  • The US Consumer Price Index, measuring inflation, rose 4.9% on an annual basis, slightly lower than the expected rise of 5.0%, and has the market thinking the Federal Reserve may pause further interest rate hikes, which could be friendly commodities.

  • To see the updated National Weather Service 6 – 10 day forecast and the 1 week precipitation Brazilian 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

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.

  • The corn market saw good money flow into the front end of the market, erasing most of yesterday’s losses in the July contract. This was triggered by a reflection of tight current corn supplies and rolling on long May positions with May expiration on Friday.

  • Deferred futures had limited gains as the strong planting pace and the prospects of growing new crop supplies keeps the market cautious. December corn touched a new near-term low of 512-¼ before turning higher into the close.

  • The favorable price action in the corn futures market posted hook or price reversals, which improved the technical picture and could lead to additional buying support on Thursday.

  • The corn market and grain markets in general will be looking towards Friday’s USDA WASDE report for near-term direction and the market’s first look at 2023-24 marketing year supply/demand numbers. Expectations are for a slight increase in old crop carryout, and new crop projected carryout to push 2.0 billion bushels for this fall. The report will be released on Friday, May 12 at 2:00 CST.

  • The USDA Weekly Export Sales Report will be released on Thursday morning. Corn export demand continues to struggle, and the market will be looking for improvement off last week’s disappointing sales recording net cancellations of 315,600 MT for old crop corn.

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 lower again today, primarily led lower by the front months and soybean oil.  Soybean meal managed to close only slightly higher.

  • Despite friendly CPI data that showed inflation slowing, crude oil prices remained lower, which pressured the soy complex. The Dollar fell after the news, making soybeans slightly more competitive to Brazilian offers.

  • Friday’s WASDE report will likely hold both bullish and bearish numbers for soybeans. Argentina’s production is expected to fall to 24 mmt or lower, while estimates for Brazil are higher at 155 mmt.

  • With weather much improved, planting progress should be expected to continue at a good pace, and this has weighed on new crop prices as a large crop may be in the future.

Above: July soybeans have recovered from being severely oversold and posted a bearish reversal on 5/08 which indicates recent buying could be exhausted and the market may turn lower. Support lies near the recent low of 1392 with further support near 1350. Should support hold and buyers enter the market, resistance may be found between 1450 and 1460, and again near 1500.

Wheat

Market Notes: Wheat

  • The northeastern two thirds of Kansas saw good rainfall, which may have added resistance to prices, although it may be too little too late.

  • The Kansas winter wheat crop is rated 68% poor to very poor as of May 7. This is the lowest rating for that date since 1989.

  • Meetings began today between Russia, Ukraine, Turkey, and the UN to discuss the Black Sea grain deal and a possible resolution beyond the current May 18 end date.

  • For Friday’s WASDE report, the trade is looking for 1,782 mb in 23/24 all wheat production versus 1,650 in April.

  • The average US wheat carryout estimate for 22/23 is 603 mb versus 598 last month, and for 23/24 the average guess is 602 mb.

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.

Other Charts / Weather

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Grain Market Insider: May 9, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Chinese cancellations and a planting pace that is ahead of schedule had traders turn sellers following yesterday’s bearish reversal.

  • Monday’s bearish reversal and a planting pace that is well ahead of average weighed on the soybean complex.

  • Increases in the poor to very poor Hard Red Winter wheat ratings and the slowest Spring Wheat planting pace in ten years sparked K.C. and Minneapolis to rally, while Chicago drifted lower on continued selling from Monday’s bearish reversal.

  • While the US Dollar settled higher today and may have offered some resistance to commodities, it largely continues to trade in a sideways fashion with not a lot of influence on the grain markets at this time.

  • To see the updated National Weather Service 7-day precipitation forecast, scroll down to the Other Charts / Weather section.

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

Corn

Corn Action Plan Summary

Updated as of 5/05/2023

  • 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.

  • There is continued opportunity to buy December ’23 560 and 610 calls. The December corn contract shows signs of support with a hook reversal after making a new low for the move, and with the market approximately 50 cents off the recent high and 115 cents off the fall high, it has eroded enough risk premium ahead of the long growing season that call valuations look attractive here.

  • 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 follow through on Monday’s weak afternoon price action. Tuesday’s selling pressure was fueled by strong planting pace and demand concerns.

  • Export demand remains a concern as USDA announced that China cancelled 272,000 mt (10.7 mb) of old crop sales this morning, adding to the bearish tone in the corn market. This makes the third cancellation of old crop purchases by China since April 24, totaling nearly 32.7 mb.

  • As anticipated, planting progress was strong last week as producers planted 23% of the crop to reach 49% complete. This is 7% above the 5-year average. Keys stats of Iowa and Illinois have completed over 70% of his year’s plant projections.

  • Weather forecasts look favorable overall for continued planting progress. Warm temperatures and moisture should only aid in germination, as the market is anticipating getting the crop off to a good start.

  • The corn market and grain markets in general will be looking towards Friday’s USDA WASDE report for near-term direction and the market’s first look at 2023-24 marketing year supply/demand numbers. Expectations are for a slight increase in old crop carryout, and new crop projected carryout to push 2.0 billion bushels for this fall. The report will be released on Friday, May 12 at 2:00 CST.

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 finished the day significantly lower along with soybean meal and oil. Yesterday afternoon’s Planting Progress report showed soybeans ahead of pace, which pressured prices.

  • Yesterday’s Planting Progress report shows total plantings at 36% complete which was above trade expectations and above the average of 21% for this time of year. 9% of the crop has emerged, which compares with 4% on average.

  • Chinese soybean import pace was slower than expected last month, down 10% from the previous month. The Chinese economy may not be recovering as well as has been reported, which may slow their demand.

  • Tomorrow morning the CPI data will be released, and traders will look for signs of inflation. The  Federal Reserve has made comments that they will most likely not raise interest rates more this year, but will also not lower them this year even if there are signs of easing inflation.

Above: July soybeans have recovered from being severely oversold and posted a bearish reversal on 5/08 which indicates recent buying could be exhausted and the market may turn lower. Support lies near the recent low of 1392 with further support near 1350. Should support hold and buyers 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

  • The USDA rated the winter wheat crop at 29% good to excellent, which is up 1% from last week. Additionally, the poor to very poor rose 2% from last week to 44%, versus 39% last year.

  • Only 24% of the US spring wheat crop is planted, which is behind the average pace of 38% and the lowest in 10 years.

  • Matif wheat gapped lower in today’s trade and likely weighed on US futures.

  • Negotiations on the Black Sea export corridor will take place between Russia, Turkey, Ukraine, and the UN over the next couple days. This could mean the deadline will be extended beyond May 18.

  • Forecasts indicate that 3-5 inches of rain will likely fall in Texas and eastern Oklahoma, and could be perceived as negative to prices.

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, which indicates 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 is recovering from being oversold and has gained momentum on the rally with open interest on the rise, which indicates new buyers could be getting long the market. If the market can break through the 835 to 850 resistance area, it could further test the 886 to 902 resistance area. Otherwise, initial support may be found near 769, 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 04/24/2023

  • No action is currently recommended for the 2022 crop.  We look for better pricing opportunities for the 2022 crop with potential planting concerns and a seasonal tendency for better prices as we move through springtime.

  • No action is recommended on the 2023 crop at this time. The snowy and cold winter has given rise to wet conditions and planting concerns which may present good selling opportunities in the coming weeks.

  • 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 recover from being oversold, and with open interest on the rise, it appears that new buyers may be entering, and getting long the July contract. Resistance still resides above the market near 870 and 895, while support may be found between 770 and 760.

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

Other Charts / Weather

Above: Forecast 7-Day Total Precipitation

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Grain Market Insider: May 8, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Weak export inspections and expectations of lower export demand dragged on the corn market, while a strong US domestic basis is helping keep Old Crop firm relative to New Crop as end users need to keep their supplies flowing.

  • Anticipation of higher 23/24 ending stocks and lower soybean oil prices had traders selling soybeans with New Crop leading Old Crop lower.

  • Despite higher Malaysian palm oil and higher crude oil, soybean oil traded lower, likely on profit taking following the recent rally and ahead of Friday’s USDA report. Lower bean oil prices pressed July Board Crush margins 3 cents lower per bushel.

  • K.C. and Minneapolis wheat contracts continued their march north on poor crop and planting conditions in their respective areas, while Chicago contracts found pressure on continued fund selling and good crop conditions.

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. 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.

  • There is continued opportunity to buy December ’23 560 and 610 calls. The December corn contract shows signs of support with a hook reversal after making a new low for the move, and with the market approximately 50 cents off the recent high and 115 cents off the fall high, it has eroded enough risk premium ahead of the long growing season that call valuations look attractive here.

  • 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.

  • Spread trading between Old Crop and New Crop corn futures was the setup of the market on Monday. Old crop prices, supported by the supportive cash market and expected planting pace and favorable weather, pressured the New Crop futures.

  • Cash basis levels on the National Average Corn basis were trading near 36 cents over July as of last Friday, and well over the 5-year average of 15 cents. This reflects the tightness of old crop supplies available and the current front-end demand for corn.

  • The expected planting pace for last week is that 48% of the corn crop will be planted as of Sunday versus a 5-year average of 42%. Favorable weather forecasts overall should help maintain a good pace of planting despite rain in the Corn Belt on Monday.

  • Weekly export inspections for corn were disappointing at 963,000 MT, well below last week’s totals. Year-over-year, export inspections are down 35% of last year and behind the pace needed to reach the USDA forecast for the marketing year.

  • The corn market and grain markets in general will be looking towards Friday’s USDA WASDE report for near-term direction and the market’s first look at 2023-24 marketing year supply/demand numbers. The report will be released on Friday, May 12 at 2:00 CST.

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 Tues. May 2. Net position in Green versus price in Red.

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 supplies flowing.

  • We recommend not adding to current sales levels for the new 2023 crop at this time. Our research indicates there is about a 74% likelihood of improved prices moving into the June time frame. Also, weather conditions will begin to dominate the market as we begin to move through planting and 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, along with soybean meal and oil, began the day higher but faded to a lower close for all but soybean meal, which ended slightly higher. Lower export inspections were not supportive.

  • Soybean inspections totaled 14.5 mb for the week ending Thursday, May 4, at the lower end of expectations. Total inspections are now at 1,758 mb and are even with the previous year.

  • Crop progress will be released this afternoon, and the average trade estimate is that 34% of the soybean crop has been planted. Progress was 19% planted as of last week.

  • Today, palm oil futures surged by 4.3% to the highest price in three weeks, while crude oil worked higher as well. Depressed world veg oil prices have negatively affected the soy complex.

  • While Brazilian soybean premiums have risen slightly from a few weeks ago, their prices are low enough to spur Chinese demand and for China to cancel US purchases for cheaper Brazilian soybeans. Brazilian producers are scaling back on sales, however, which could drive prices back up.

Above: July soybeans have recovered from being severely oversold and posted a bearish reversal on 5/08 which indicates recent buying could be exhausted and the market may turn lower. Support lies near the recent low of 1392 with further support near 1350. Should support hold and buyers enter the market, resistance may be found between 1450 and 1460, and again near 1500.

Above: Soybeans Managed Money Funds net position as of Tues. May 2. Net position in Green versus price in Red.

Wheat

Market Notes: Wheat

  • K.C. contracts led the market higher on the continued concern of lower production in the southern Plains. Some believe total HRW production could be as low as 200 mb.

  • Adding support to the Minneapolis contracts are dry conditions in Canada, while the northern Plains continue to be wet, with growing concerns about the number of prevent plant acres.

  • The Wheat Quality Council Tour will begin on May 15, which will give the market a much better understanding of the Kansas wheat crop’s condition. So far, Oklahoma’s wheat crop is thought to be the smallest in nearly 70 years.

  • The Black Sea grain deal continues to be in negotiations, though there are thoughts that any renewal may be unlikely. If so, it could be a bullish influence in the market as other world exporters would need to fill the gap.

  • The CFTC reported on Friday that Managed Money fund positions as of Tuesday, May 2 were net short 126,324 contracts of Chicago wheat, which comprises nearly 40% of the commodity’s total open interest, and the second highest percentage in 17 years.

Chicago Wheat Action Plan Summary

  • 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. Corn and K.C. wheat are near historic premiums to Chicago wheat, which could lend support to the Chicago contracts if HRW production concerns persist, or if any production concerns develop for 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 is correcting from being oversold and open interest has been declining on the rally, indicating traders are covering short positions and the rally may be short lived. Further short covering activity could be fuel for a test of the 718 to 724 resistance area if fresh buyers enter the market on additional bullish news. Initial resistance could be found near 668 and again between 718 and 724, while key support may be found near 592.

Above: Chicago Wheat Managed Money Funds net position as of Tues, May 2. Net position in Green versus price in Red.

Above: Managed Money Funds net Chicago Wheat position as a percentage of total open interest.

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 despite the recent rain.  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 is recovering from being oversold and has gained momentum on the rally with open interest on the rise, which indicates new buyers could be getting long the market. If the market can break through the 835 to 850 resistance area, it could further test the 886 to 902 resistance area. Otherwise, initial support may be found near 769, with key support near 740.

Above: K.C Wheat Managed Money Funds net position as of Tues, May 2. Net position in Green versus price in Red.

Mpls Wheat Action Plan Summary

  • No action is currently recommended for the 2022 crop.  We look for better pricing opportunities for the 2022 crop with potential planting concerns and a seasonal tendency for better prices as we move through springtime.

  • No action is recommended on the 2023 crop at this time. The snowy and cold winter has given rise to wet conditions and planting concerns which may present good selling opportunities in the coming weeks.

  • 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 recover from being oversold, and with open interest on the rise, it appears that new buyers may be entering, and getting long the July contract. Resistance still resides above the market near 870 and 895, while support may be found between 770 and 760.

Above: Minneapolis Wheat Managed Money Funds net position as of Tues, May 2. Net position in Green versus price in Red.

Other Charts / Weather

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Grain Market Insider: May 5, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Technical short covering and carryover strength from wheat helped the corn market continue its rally after posting a reversal earlier this week.

  • Soybean oil led the soybean complex higher today in concert with higher Malaysian palm oil and crude oil, while soybean meal posted minor gains, weighed down by global demand concerns.

  • Argentina reported early yield estimates of only 17 bpa, which added support to soybean prices.

  • Hard Red Winter and Spring wheat crop concerns in addition to the technical short covering after posting market reversals earlier in the week helped to rally all three wheat classes further to end the week.

  • To see the updated National Weather Service 6-10 day forecast and National Drought Monitor, scroll down to the Other Charts / Weather section.

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

Corn

Corn Action Plan Summary

  • No 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.

  • There is continued opportunity to buy December ’23 560 and 610 calls. The December corn contract shows signs of support with a hook reversal after making a new low for the move, and with the market approximately 50 cents off the recent high and 115 cents off the fall high, it has eroded enough risk premium ahead of the long growing season that call valuations look attractive here.

  • 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.

  • Buyer strength led by good front month spread action and short covering in the wheat market spilled over into the corn market again on Friday, as July corn closed the week with double digit gains.

  • The corn market forged a good rally in the second half of the week as money moved into the long side of the market despite a fundamental picture that is negative in the short term.

  • Demand concerns stay a focus of the corn market as weekly export sales totals this past week posted net cancellations for the first time in 20 years. There was talk on Friday that China was a buyer of South African corn, still looking away from the U.S. for corn supplies.

  • Despite some areas of potential rainfall, extended forecasts are favorable for improved planting pace for this year’s corn crop. The market will be watching the planting pace in northern states closely next week.

  • Next week will set up a battle between favorable technical signals and possible bearish fundamentals as the market prepares for the May 12 USDA WASDE report and our first projection for the 2023-24 marketing year.

Above: The market is severely oversold and has exhibited a second reversal after making a new low for the move, indicating short-term selling may be exhausted, which could be seen as supportive. 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

  • 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 supplies flowing.

  • We recommend not adding to current sales levels for the new 2023 crop at this time. Our research indicates there is about a 74% likelihood of improved prices moving into the June time frame. Also, weather conditions will begin to dominate the market as we begin to move through planting and 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. 

  • Argentina’s soybean harvest is estimated to be about 20% complete with yields coming in near 17 bpa, suggesting a crop of only 18 mmt versus the USDA’s April estimate of 27 mmt.

  • Lending further support to soybeans, soybean oil gained on follow through strength from strong weekly export sales and palm oil, which was up nearly 5% overnight. Additionally, crude oil posted gains of about $2.95, or about 4.25%.

  • With Brazil’s offers for September delivery having rallied about 60 cents in the last few days for September and making US offers more attractive, it has been rumored that China has purchased US soybeans out of the PNW for October delivery.

  • Soybeans continue higher with follow through buying from Wednesday’s reversal. Strong resistance lies near Tuesday’s high of 1440, and if the market can break through that area, it could be set up to test the 50-day moving average near 1462.

Above: July soybeans traded lower to post a new low for the move and reversed to settle near unchanged. The market will need further confirmation to continue in either direction following two consecutive reversals. Support lies near the recent low of 1392 with further support near 1350. Should support hold and buyers enter the market, resistance may be found between 1450 and 1460, and again near 1500.

Wheat

Market Notes: Wheat

  • Strong short covering in the three classes of wheat futures continues to push prices higher into the end of the week. Wheat futures have likely found a near-term bottom on Wednesday, and prices have rallied into today’s close.

  • Fueled by crop concerns, KC hard red winter wheat prices have rallied nearly $1.00 off Wednesday’s lows fueled by the Oklahoma crop tour forecasting the worst Oklahoma winter wheat crop since 1955. The Kansas wheat tour kicks off on May 15 with similar results expected.

  • The wheat market will stay focused on the May 18 deadline for a possible disruption of the Black Sea grain deal, as increased tensions and constant rhetoric out of Russia may put the agreement lasting in jeopardy.

  • In the northern Plains, spring wheat planting is delayed, and forecast for precipitation over the weekend might further stall progress and concerns for production of the crop.

  • Despite the late week rally, managed funds are likely to show a near record short position in the wheat market on Tuesday when the Commitment of Traders report is calculated, giving the market more potential room for short covering rally to grow.

Chicago Wheat Action Plan Summary

  • 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. Corn and K.C. wheat are near historic premiums to Chicago wheat, which could lend support to the Chicago contracts if HRW production concerns persist, or if any production concerns develop for 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 is correcting from being oversold and open interest has been declining on the rally, indicating traders are covering short positions and the rally may be short lived. Further short covering activity could be fuel for a test of the 718 to 724 resistance area if fresh buyers enter the market on additional bullish news. Initial resistance could be found near 668 and again between 718 and 724, while 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 despite recent the recent rain.  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 is recovering from being oversold and has gained momentum on the rally with open interest on the rise, which indicates new buyers could be getting long the market. If the market can break through the 835 to 850 resistance area, 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

  • No action is currently recommended for the 2022 crop.  We look for better pricing opportunities for the 2022 crop with potential planting concerns and a seasonal tendency for better prices as we move through springtime.

  • No action is recommended on the 2023 crop at this time. The snowy and cold winter has given rise to wet conditions and planting concerns which may present good selling opportunities in the coming weeks.

  • 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 recover from being oversold, and with open interest on the rise, it appears that new buyers may be entering, and getting long the July contract. Resistance still resides above the market near 870 and 895, while support may be found between 770 and 760.

Other Charts / Weather

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Grain Market Insider: May 4, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Corn ended mixed as traders absorbed net negative weekly corn export sales reflecting Chinese corn cancellations from last week.

  • Soybeans closed slightly lower matching similar quiet price changes from other commodities such as corn and crude.

  • Soybean meal and oil prices closed fractionally lower; US Census data showed record high soybean meal exports in the month of March which lent support.

  • All three wheat markets continued higher following yesterday’s bullish key reversals as tensions continue to rise in the Black Sea region.

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. 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.

  • There is continued opportunity to buy December ’23 560 and 610 calls. The December corn contract is extremely oversold and shows signs of support with a hook reversal after making a new low for the move. Additionally, with the market approximately 50 cents off the recent high and 115 cents off the fall high, it has eroded enough risk premium ahead of the long growing season that call valuations look attractive here.

  • 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 USDA reported net cancellations of 12.4 mb of corn export sales for 22/23 as expected following Chinese cancellations last week. Export sales for next year came in at 4.8 mb.

  • Although the Fed raised interest rates again yesterday, the comments by Fed Chairman Powell that there may be a pause on further rate hikes was viewed as supportive to financial and commodity markets.

  • Much of the Midwest is forecast to see favorable weather conditions ahead; this should lead to a continued uptick in planting progress.

  • The Brazilian safrinha corn crop is looking good. Harvest typically begins in early July, and a lack of domestic storage capacity could lead to a flood of Brazilian corn into the world export market.

Above: The market is severely oversold and has exhibited a second reversal after making a new low for the move, indicating short-term selling may be exhausted, which could be seen as supportive. 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

  • 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 supplies flowing.

  • We recommend not adding to current sales levels for the new 2023 crop at this time.  Our research indicates there is about a 74% likelihood of improved prices moving into the June time frame. Also, weather conditions will begin to dominate the market as we begin to move through planting and 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. 

  • July soybeans ended the day slightly higher after trading lower for the better part of the day. The higher close came despite losses in both soybean meal and oil, with crude oil a bit lower as well.

  • US soybean meal exports in March were a record high for the month and up 22% from March of 2022 according to US Census Bureau data released this week.

  • Export sales for soybeans were low but were at the higher end of the trade guesses. The USDA reported an increase of 10.6 mb of soybean export sales in 22/23 and an increase of 2.5 mb for 23/24. Last week’s export shipments of 20.6 mb were above the 13.1 mb needed each week.

  • Crude oil has fallen by over 7 dollars a barrel since Monday as traders nurse concerns about recession and the new bank failures. Demand for crude oil is expected to fall, which has pressured the soy complex.

  • Weather in most of the country is forecast to warm up, and rains are expected to fall near normal levels. Soybean plantings remain ahead of pace for this time of year, and the improved weather will give northern states a chance to catch up.

Above: July soybeans traded lower to post a new low for the move and reversed to settle near unchanged. The market will need further confirmation to continue in either direction following two consecutive reversals. Support lies near the recent low of 1392 with further support near 1350. Should support hold and buyers enter the market, resistance may be found between 1450 and 1460, and again near 1500.

Wheat

Market Notes: Wheat

  • Wheat may have found a near term bottom after the strong reversal yesterday and a higher close across the board today.

  • The USDA reported an increase of 7.8 mb of wheat export sales for 22/23 and an increase of 10.3 mb for 23/24.

  • The increase in tensions between Russian and Ukraine after yesterday’s news suggests that the Black Sea export deal may not be renewed on May 18.

  • The May 15-18 Kanas winter wheat crop tour is likely to show poor conditions, which could be supportive to prices.

Chicago Wheat Action Plan Summary

  • 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. Corn and K.C. wheat are near historic premiums to Chicago wheat, which could lend support to the Chicago contracts if HRW production concerns persist, or if any production concerns develop for 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: While the market is considered extremely oversold, it did post an outside-day up pattern, where the range is larger than that of the previous day/s and closed higher than it opened. This market set-up could be considered bullish and be supportive. Initial resistance could be found near 668 and again between 718 and 724, while 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 despite recent the recent rain.  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 is oversold, and posted an outside day up, which is a type of reversal pattern where the current price action overtook the previous day’s and closed near the day’s highs. This pattern could be supportive should buyers enter the market on new positions or to cover existing short positions. Support may be found near 742 with further chart support near 690. Initial resistance lies between 835 and 850 and then near 886.

Mpls Wheat Action Plan Summary

  • No action is currently recommended for the 2022 crop.  We look for better pricing opportunities for the 2022 crop with potential planting concerns and a seasonal tendency for better prices as we move through springtime.

  • No action is recommended on the 2023 crop at this time. The snowy and cold winter has given rise to wet conditions and planting concerns which may present good selling opportunities in the coming weeks.

  • 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: While the market is considered extremely oversold, it did post an outside-day up pattern, where the range is larger than that of the previous day/s and closed higher than it opened. This market set up could be considered bullish and can be supportive should buying return to the market. Nearby support may be found between 770 and 760, while resistance may be found near 870 and 895.

Other Charts / Weather

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Grain Market Insider: May 3, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Corn ended higher on the day on carryover strength from the wheat markets as historically low crop numbers were noted in the Oklahoma crop tour.

  • Soybeans closed higher on strength in soybean oil, and neighboring corn and wheat markets.

  • Soybean meal and oil continued in their reactions to yesterday’s record March crush numbers, as meal struggled from large supplies and weakening demand. Soybean oil gained strength from higher inferred biofuel demand on lower-than-expected supplies.

  • All three wheat markets were sharply higher following KC contracts, as Oklahoma was noted as potentially having its smallest crop since 1955.

  • The grain markets appeared to add a level of “war premium” on reports of a foiled drone attack on the Kremlin by Ukraine.  Ukraine denies the attacks, but the result is more concern over the world’s grain supply.

Note – For the best viewing experience, some Grain Market Insider content may be best viewed in horizontal mode.

Corn

Corn Action Plan Summary

  • 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.

  • There is continued opportunity to buy December ’23 560 and 610 calls. The December corn contract is extremely oversold and shows signs of support with a hook reversal after making a new low for the move. Additionally, with the market approximately 50 cents off the recent high and 115 cents off the fall high, it has eroded enough risk premium ahead of the long growing season that call valuations look attractive here.

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

Grain Market insider Corn open positions listed above.

  • Corn futures reversed off early session lows, and the results of the Oklahoma Winter Wheat crop tour revealed one of the worst crops since 1955, triggering a strong short covering reaction in the wheat market, spilling over and supporting the corn market.

  • The planting pace of this year’s crop is expected to be more complete across the corn belt this week as forecasts are calling for warmer and drier weather into the second week of May.

  • The weekly Ethanol Production report saw mixed numbers, as weekly production was improved over last week, and ethanol stockpiles were lower than expected. The overall pace of corn usage for ethanol is trending below USDA projections at this point of the marketing year.

  • Demand concerns will still be a focus with the release of weekly export sales totals on Thursday morning. Expectations are for corn sales to be from -450,000 mt to 800,000 mt for the next two marketing years. Export sales totals will be influenced by the cancellations of Chinese purchases last week.

  • The strong closing price action posted a bullish reversal on the corn charts after retesting previous lows. With a market holding an oversold status, this could allow for additional price strength on technical buying and covering of short positions.

Above: The market is severely oversold and has exhibited a second reversal after making a new low for the move, indicating short-term selling may be exhausted, which could be seen as supportive. 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

  • 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 supplies flowing.

  • We recommend not adding to current sales levels for the new 2023 crop at this time.  Our research indicates there is about a 74% likelihood of improved prices moving into the June time frame. Also, weather conditions will begin to dominate the market as we begin to move through planting and 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 lower for most of the day but ultimately ended higher along with soybean oil following the Federal Reserve announcement that cast a bearish shadow over the markets.

  • The Federal Reserve raised rates by 25 basis points but hinted that they may be done with hikes for the year. The US Dollar reacted well to the news, but crude oil stayed suppressed, down 3 dollars a barrel.

  • Brazil’s basis levels had fallen sharply in the past two months but recently have improved by 75 cents as harvest wraps up and farmers slow selling. This has added some support to the soy complex.

  • In the US, soy planting is ahead of schedule at 20% complete with northern states showing the most sluggish pace. Temperatures in the North are forecast to warm over the next two weeks, which should speed up planting.

Above: July soybeans traded lower to post a new low for the move and reversed to settle near unchanged. The market will need further confirmation to continue in either direction following two consecutive reversals. Support lies near the recent low of 1392 with further support near 1350. Should support hold and buyers enter the market, resistance may be found between 1450 and 1460, and again near 1500.

Wheat

Market Notes: Wheat

  • The wheat market saw significant reversals today in all three US wheat futures classes with gains of 30 or more cents.

  • News outlets are reporting an attempted drone attack on the Kremlin in Russia. This may have been the catalyst behind today’s rally, as war premium was added back into the market.

  • Offering support to wheat price is the Oklahoma wheat tour’s projection of their crop at 54.3 mb. This would be the lowest production since 1955.

  • The American weather model predicts up to seven inches of rain next week in parts of Nebraska and Kansas. The European model is somewhat in conflict, though, with a drier forecast.

  • Egypt fulfilled their tender from Romania and Russia. US SRW wheat was cheaper but was also at a freight cost disadvantage. Additionally, the Russian wheat was purchased at $260 per ton, whereas Russia previously encouraged a $275 export price floor.

Chicago Wheat Action Plan Summary

  • 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. Corn and K.C. wheat are near historic premiums to Chicago wheat, which could lend support to the Chicago contracts if HRW production concerns persist, or if any production concerns develop for 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: While the market is considered extremely oversold, it did post an outside-day up pattern, where the range is larger than that of the previous day/s and closed higher than it opened. This market set-up could be considered bullish and be supportive. Initial resistance could be found near 668 and again between 718 and 724, while 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 despite recent the recent rain.  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 is oversold, and posted an outside day up, which is a type of reversal pattern where the current price action overtook the previous day’s and closed near the day’s highs. This pattern could be supportive should buyers enter the market on new positions or to cover existing short positions. Support may be found near 742 with further chart support near 690. Initial resistance lies between 835 and 850 and then near 886.

Mpls Wheat Action Plan Summary

  • No action is currently recommended for the 2022 crop.  We look for better pricing opportunities for the 2022 crop with potential planting concerns and a seasonal tendency for better prices as we move through springtime.

  • No action is recommended on the 2023 crop at this time. The snowy and cold winter has given rise to wet conditions and planting concerns which may present good selling opportunities in the coming weeks.

  • 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: While the market is considered extremely oversold, it did post an outside-day up pattern, where the range is larger than that of the previous day/s and closed higher than it opened. This market set up could be considered bullish and can be supportive should buying return to the market. Nearby support may be found between 770 and 760, while resistance may be found near 870 and 895.

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Grain Market Insider: May 2, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • The lack of threatening weather and a risk off mentality in outside markets, especially crude oil, led the corn market lower.

  • Soybeans traded lower today as planting gets off to a swift start. The USDA is estimating plantings at 19% complete.

  • Soybean meal traded lower on record production from the March census crush report, while soybean oil found support, despite record production, from lower-than-expected stocks.

  • All three wheat classes closed lower on improved winter wheat ratings.

  • Concerns regarding the US banking sector, debt ceiling and higher interest rates weighed on outside markets in a risk off type of trade, which likely bled over and added pressure to the grain markets.

Note – For the best viewing experience, some Grain Market Insider content may be best viewed in horizontal mode.

Corn

Corn Action Plan Summary

  • 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.

  • For 2023 New Crop corn, Grain Market Insider recommends buying December ‘23 560 and December ‘23 610 calls in equal quantities. The December corn contract is extremely oversold and has left tails on the daily pricing chart indicating that it is finding support near the 520 area. Additionally, with the market approximately 50 cents off the recent high and 115 cents off the fall high, it has eroded enough risk premium ahead of the long growing season that call valuations look attractive here.

  • 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. 

  • Risk off trade across many markets weighed on corn prices. The market saw money flow out of corn as fear of the looming debt ceiling and fed interest rate announce on Wednesday led to broad based selling.

  • USDA Crop Progress report showed corn planting at 26% completed, even with the 5-year average, and slightly below market expectations. Cold temperatures continue to limit planting pace in the Northern and Western Corn Belt states, but Southern planting progress has been strong.

  • Planting should start to pick up more in some areas as forecasts are calling for warmer and drier weather into the second week of May for the Northern and Eastern Corn Belt.

  • Demand concerns remain an overall concerning theme for the corn market as export activity and corn bushels used for weekly ethanol production are running behind USDA forecasts.  This brings fear that the USDA will make further demand adjustments on the May 12 WASDE report, potentially increasing corn carry out projections.

Above: The market is severely oversold and has exhibited a reversal after making a new low for the move, indicating short-term selling may be exhausted, which could be seen as supportive. Nearby resistance sits near 612 and again near the 50-day moving average, while support for the July contract rests near the recent low of 572.

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 supplies flowing.

  • We recommend not adding to current sales levels for the new 2023 crop at this time.  Our research indicates there is about a 74% likelihood of improved prices moving into the June time frame. Also, weather conditions will begin to dominate the market as we begin to move through planting and 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 were higher for most of the day but ultimately turned sharply lower, as crude oil declined suddenly to a loss of nearly 4 dollars a barrel.

  • Soybean plantings in the US are ahead of pace at 19%, while the 5-year average is 11%. Illinois and Iowa are leading the way with the benefit of better planting conditions.

  • Tomorrow’s Federal Reserve announcement for interest rate changes likely put pressure on crude oil today and therefore soybeans. The Fed is expected to increase rates by 25 basis points, but there is a small chance of no change due to the most recent banking failure.

  • While export demand remains sluggish, domestic demand is still firm thanks to the still profitable crushing margins. There have been no deliveries so far against May soybeans or soybean meal, which is a testament to the tight supplies.

Above: July soybeans have reversed and closed lower after making a new high for the move, which could lead to profit taking and possibly lower prices. Support lies near the recent low of 1396 with further support near 1350. Should support hold and buyers enter the market, resistance may be found between 1450 and 1460, and again near 1500.

Wheat

Market Notes: Wheat

  • After strength earlier in the session, wheat closed lower in all three US futures classes. Paris milling wheat futures were also sharply lower at the close.

  • The USDA’s Crop Progress report showed spring wheat was 12% planted vs 22% average. Additionally, winter wheat condition was rated 28% good to excellent (up 2% from last week).

  • As of this writing, crude oil is down roughly $4 per barrel, and the Dow is down about 450 points. This outside market pressure may have spilled over into the grains today.

  • The Fed is expected to raise interest rates by one quarter percent at the FOMC meeting this week. This could, in part, be offering weakness to financial and commodity markets.

  • Further rains are needed in the US Southern Plains. In Kansas the winter wheat poor to very poor crop rating is at 64% (2% worse than last week).

  • Egypt’s GASC is tendering for wheat. With the recent drop in price, they could look to source it from the US. However, the freight costs may be the deciding factor.

Chicago Wheat Action Plan Summary

  • 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. Corn and K.C. wheat are near historic premiums to Chicago wheat, which could lend support to the Chicago contracts if HRW production concerns persist, or if any production concerns develop for 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 broke below the March low of 654 and is oversold. Initial resistance could be found near 668 and again between 718 and 724, while 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 despite recent the recent rain.  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 short-term trend is down, and the July contract is oversold, which could be supportive should buyers enter the market. Support may be found near 742 with further chart support near 690. Initial resistance lies between 835 and 850 and then near 886.

Mpls Wheat Action Plan Summary

  • No action is currently recommended for the 2022 crop.  We look for better pricing opportunities for the 2022 crop with potential planting concerns and a seasonal tendency for better prices as we move through springtime.

  • No action is recommended on the 2023 crop at this time. The snowy and cold winter has given rise to wet conditions and planting concerns which may present good selling opportunities in the coming weeks.

  • 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 short-term trend is down, though the July contract is oversold, which can be supportive should buying return to the market. Nearby support may be found near 778 and again near 760, while resistance may be found near 870 and 895.

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Grain Market Insider: May 1, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Corn traded lower to begin the week with pressure coming from good planting weather ahead and a lower wheat market, while tight on-hand supplies supported the nearby contracts.

  • Soybeans found strength following Friday’s reversal higher as last week’s short sellers continued to cover their positions.

  • Despite weaker palm and crude oil markets, and less expensive South American meal offers, soybean oil and meal closed mid-range and on the positive side of unchanged, while adding support to soybeans. 

  • All three wheat classes closed lower today from follow through selling on expected crop improvements from last week’s rain and that more is forecasted for this week.

  • Likely adding some pressure to the corn and wheat markets, the US Dollar traded higher today in anticipation of another 0.25% rate hike by the Federal Reserve on Wednesday.

Note – For the best viewing experience, some Grain Market Insider content may be best viewed in horizontal mode.

Corn

Corn Action Plan Summary

  • 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.

  • Be patient to take further action for New Crop.  We are moving into a time of year when we may be looking for option buying opportunities given the market is very oversold and weather-related issues could pop up at any time to move the market significantly. Additionally, owning both calls and puts could be warranted depending on market conditions and volatility.

  • 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. 

  • The corn market saw choppy, pressured trade overall to start the week, with support staying in the old crop due to potential tighter supplies helping support the front end of the market.  The lack of deliveries against the May futures reflects this tighter old crop corn supply picture.

  • Strong selling pressure in the wheat markets limited the potential gains in the corn futures market as wheat futures broke to new nearby lows to start the week.

  • Weather forecasts are turning more favorable for improved planting pace, as recent cold temperatures likely limited planting in the north and northwestern corn belt this past week.

  • Money flow is a concern in the corn markets as managed money funds moved back to a net short position in the corn markets of 15,297 short contracts, selling over 64,000 net corn positions last week.

  • Weekly export inspections for corn were strong this week at 1.518 MMT, which was a market year high.  Despite the strong shipment week, export inspections are still down 35% year-over-year.

Above: The market is severely oversold and has exhibited a reversal after making a new low for the move, indicating short-term selling may be exhausted, which could be seen as supportive.  Nearby resistance sits near 612 and again near the 50-day moving average, while support for the July contract rests near the recent low of 572.

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 supplies flowing.

  • We recommend not adding to current sales levels for the new 2023 crop at this time.  Our research indicates there is about a 74% likelihood of improved prices moving into the June time frame. Also, weather conditions will begin to dominate the market as we begin to move through planting and 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 kept their momentum from Friday and moved higher again today with support from both soybean meal and oil.

  • While lower crude oil pressured soybean oil earlier in the day, bean oil recovered to close on the positive side of unchanged.

  • Basis for Brazilian soybeans appears to have put in a bottom and has rallied between 30 and 50 cents in the last week. Farmers initially sold everything they could not store but are now holding onto what they can to avoid making sales below their cost of production.

  • Argentina’s soy-dollar incentive to get farmers to make cash sales has not worked nearly as well as it did the two previous times and has resulted in sales of just 2 mmt. Argentinian farmers are keen to hold on to their old crop due to the drought which significantly cut into production.

  • Soybean inspections were on the lighter side last week with 14.8 mb inspected for export. Total inspections are now at 1,744 mb and are even with the previous year. The USDA is estimating soybean exports at 1.990 bb for 22/23, which is down 8% from the previous year.

Above: The market has retraced itself back to the March lows and has exhibited a reversal after making a new low for the move. This reversal indicates short-term selling may be exhausted and could be seen as supportive. Support lies near the recent low of 1396 with further support near 1350. Should support hold and buyers enter the market, resistance may be found between 1450 and 1460, and again near 1500.

Wheat

Market Notes: Wheat

  • The managed funds are said to have sold 146,000 grain contracts in total last week. With all three US wheat classes posting double-digit losses, it is likely that they continued to add to shorts today.

  • Spring wheat planting conditions should improve mid to late week, with temperatures in the Dakotas expected to reach the 70s.

  • The EU struck a deal with several eastern European countries: Five nations will ban imports of Ukrainian grain to maintain profitability for their farmers, but they will allow the grain to be transported westward to other countries through their regions.

  • At this point in time, it does not seem like Russia intends to renew the Black Sea Grain Initiative. The current deal is set to expire on May 18.

  • Wheat inspections of 13.2 mb for the week bring total 22/23 inspections to 671 mb. That is down 3% from last year.

Chicago Wheat Action Plan Summary

  • 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. Corn and K.C. wheat are near historic premiums to Chicago wheat, which could lend support to the Chicago contracts if HRW production concerns persist, or if any production concerns develop for 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 broke below the March low of 654 and is oversold. Initial resistance could be found near 668 and again between 718 and 724, while 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 despite recent the recent rain.  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 short-term trend is down, and the July contract is oversold, which could be supportive. Support may be found near 753 and again near 742, while initial resistance lies between 835 and 850 and then near 886. 

Mpls Wheat Action Plan Summary

  • No action is currently recommended for the 2022 crop.  We look for better pricing opportunities for the 2022 crop with potential planting concerns and a seasonal tendency for better prices as we move through springtime.

  • No action is recommended on the 2023 crop at this time. The snowy and cold winter has given rise to wet conditions and planting concerns which may present good selling opportunities in the coming weeks.

  • 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 short-term trend is down, though the July contract is oversold, which can be supportive should buying return to the market. Nearby support may be found near 778 and again near 760, while resistance may be found near 870 and 895.

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Grain Market Insider: April 28, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Corn finished the day mixed with Old Crop contracts firmer and New Crop weaker. Traders covering short positions in the July contract, and the lack of deliveries versus the May contract, helped the market reverse after making a new low for the move.   

  • Soybeans closed the session near the upper end of the 27-cent range, as profit taking on short positions ensued following 7 straight days with lower prices.

  • Both soybean meal and oil joined the fun by trading higher and supported soybeans with higher crush margins. 

  • All three classes of wheat closed higher on the day from deeply oversold conditions as traders covered short positions and took month end profits.

Note – For the best viewing experience, some Grain Market Insider content may be best viewed in horizontal mode.

Corn

Corn Action Plan Summary

  • 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.

  • Be patient to take further action for New Crop.  We are moving into a time of year when we may be looking for option buying opportunities given the market is very oversold and weather-related issues could pop up at any time to move the market significantly. Additionally, owning both calls and puts could be warranted depending on market conditions and volatility.

  • 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. 

  • Corn futures lifted off early session lows as prices saw some recovery off the recent selling pressure and early session lows to finish mixed on the day.

  • The May/July spreads became active again on Friday supported by short covering in the front month contracts and by the lack of deliveries versus the May contract, reflecting a tight near-term corn supply.

  • Deferred contracts stayed under pressure as crop planting will likely be supported overall by the weather forecast, and the concerns for demand because of competition against the cheaper Brazil corn that will be harvested in late June/July.

  • A cool but drier forecast for most of the Midwest will allow planting to stay on or ahead of the 5-year average pace. This will keep the pressure on the deferred corn futures contracts.

  • Old crop charts (May, July) turned more technically friendly with the close on Friday as price action posted a hook reversal, which could lead to additional strength and short covering going into next week.

Above: The market is severely oversold and has exhibited a reversal after making a new low for the move, indicating short-term selling may be exhausted, which could be seen as supportive. Nearby resistance sits near 612 and again near the 50-day moving average of 639, while support for the July contract rests near the recent low of 572.

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 supplies flowing.

  • We recommend not adding to current sales levels for the new 2023 crop at this time.  Our research indicates there is about a 74% likelihood of improved prices moving into the June time frame. Also, weather conditions will begin to dominate the market as we begin to move through planting and 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 finally broke their downward trend and closed higher today as funds take end-of-the-month profits and Brazilian premiums rise. For the week, July soybeans lost 29 cents.

  • Both soybean meal and oil moved higher and were supportive along with crude oil which rose over 2 dollars a barrel.

  • Malaysian palm oil fell by 11% in April which put significant pressure on soybean oil.

  • Last week, Brazilian FOB basis levels had plunged due to a lack of storage for the record crop and producers were flooding the market with whatever they could not store, but basis levels have started to rise since yesterday as Brazilian farmers hold on to what they can store.

  • While the Brazilian harvest is nearly complete, in Argentina the harvest is only 28% complete with production estimated between 20 and 23 mmt. Last year Argentina produced 43.5 mmt, and the USDA’s most recent estimate was 27 mmt so they will most likely lower that number in the next WASDE.

Above: The market has retraced itself back to the March lows and has exhibited a reversal after making a new low for the move. This reversal indicates short-term selling may be exhausted and could be seen as supportive. Support lies near the recent low of 1396 with further support near 1350. Should support hold and buyers enter the market, resistance may be found between 1450 and 1460, and again near 1500.

Wheat

Market Notes: Wheat

  • After trading both sides of unchanged, wheat made a nice recovery with all three US classes posting gains at the close on month-end profit-taking.

  • Russia is said to have encouraged a $275 per ton price floor on wheat exports. US FOB prices of soft red winter are now cheaper than those offers, which could lead to increased US export demand.

  • Though the Southern Plains had good rainfall this week, more will be needed in the region to see conditions improve.

  • The bleeding appears to have stopped today in the wheat market, but there are legitimate concerns about inflation and recession further down the road, which could continue to weigh on commodities.

  • French soft wheat crop conditions are the best since 2011; 94% of the crop is rated good to excellent.

Chicago Wheat Action Plan Summary

  • 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. Corn and K.C. wheat are near historic premiums to Chicago wheat, which could lend support to the Chicago contracts if HRW production concerns persist, or if any production concerns develop for 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 broke below the March low of 654 and is oversold. Initial resistance could be found near 668 and again between 718 and 724. While key support may be found near 592.

KC Wheat Action Plan Summary

  • 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 continue to look for better prices before making any 2023 sales. Crop ratings overall are at historically low levels, and production concerns persist despite the recent rain. 

  • 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 short-term trend is down, and the July contract is oversold, which could be supportive. Support may be found near 753 and again near 742, while initial resistance lies between 835 and 850 and then near 886. 

Mpls Wheat Action Plan Summary

  • No action is currently recommended for the 2022 crop.  We look for better pricing opportunities for the 2022 crop with potential planting concerns and a seasonal tendency for better prices as we move through springtime.

  • No action is recommended on the 2023 crop at this time. The snowy and cold winter has given rise to wet conditions and planting concerns which may present good selling opportunities in the coming weeks.

  • 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 short-term trend is down, though the July contract is oversold, which can be supportive should buying return to the market. Nearby support may be found near 778 and again near 760, while resistance may be found near 870 and 895.

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