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12-21 End of Day: Markets Close Mixed on Expectations of Favorable Weather

ByGrain Market Insider

The CME and Total Farm Marketing offices will be closed
Monday, December 25, in observance of Christmas

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Solid export sales and consolidation ahead of the upcoming extended weekend supported the corn market, which shook off most of yesterday’s losses in a tight 4 ¾ cent range.

  • The soybean market traded mostly lower throughout the day, with two sided trade with pressure coming from improved rain expectations for Brazil, and weaker soybean meal and oil.

  • Soybean oil and meal both closed lower on the day, with soybean oil sharply lower, down 1.43 cents, as it continues to trade sideways, and meal at a fresh 2-month low. Today’s losses in the products contributed to the slide in the soybean market as January and March Board crush margins gave up another 15 ¾ and 6 ¾ cents respectively.

  • Two sided trade dominated the wheat complex, which settled mixed on the day, with Chicago the strongest, Minneapolis the weakest, and nearby KC firmer versus the deferred. Disappointing export sales and expectations of favorable weather for the southern Plains added pressure, while a lower US dollar lent support.

  • To see the updated US Drought Monitor, 5-day precipitation forecast, and Brazil’s 2-week precipitation forecast, courtesy of the NDMC, National Weather Service, and NOAA, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. Since the beginning of August, the corn market has traded sideways largely between 470 and 500. October’s brief breakout to 509 ½ and the subsequent failure to stay above the 50-day moving average indicates there is significant resistance in that price range. The failure of December’s USDA report to provide a bullish influence on the market puts the market at risk of drifting sideways to lower without a bullish catalyst. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

  • No new action is recommended for 2024 corn. Since late February ’22, Dec ’24 has been bound by 485 ¾ on the bottom and 602 on the top. After testing 491 to 547 last July, it has mostly traded between 500 and 525. During this time, Dec ’24 has held up better as bear spreading has allowed Dec ’24 to maintain more of its value versus old crop prices as traders attempt to price in a larger 2023 carryout with more uncertainty remaining for the 2024 crop. Moving forward, the risk for 2024 prices is the same as for 2023 prices, which is a continuation of a sideways to lower trend without a bullish catalyst. Grain Market Insider is watching for signs of a change in the current trend to look at recommending buying Dec ’24 call options. This past spring, Grain Market Insider recommended buying Dec ‘23 560 and 610 call options ahead of the summer rally and having those in place helped provide confidence to pull the trigger on recommending 2023 sales into that sharp rally, knowing that if corn kept rallying and went to 700 or 800 that the call options would protect those sold bushels.

  • No Action is currently recommended for 2025 corn. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted two springs from now. It will probably be late winter or early spring of 2024 before Grain Market Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following corn recommendations:

  • The corn market held above the new recent low of 468 ¼ and reversed yesterday’s losses in two sided trade as it begins to consolidate ahead of the extended Christmas weekend.

  • This morning, the USDA released weekly export sales as of December 14, and corn sales came in as expected, totaling 1.013 mmt (39.9 mb). Corn sales commitments now total 1.109 bb for 23/24 and are up 37% from a year ago. The current pace is ahead of USDA projections, but the market still needs to see consistent export sales totals.

  • The closure of two major rail crossings into Mexico, caused by the migrant crises at the southern border, is limiting corn shipments into Mexico. It is currently estimated that about 1 mb of grain is being held up each day and that Mexico has about a 2 – 3 week supply. The closures may be adding resistance to prices with Mexico being the largest importer of US corn, and that they may need to look for other sources if the issue isn’t resolved soon.

  • The recent price drop in corn has given the US an edge in the world export market, with US prices currently cheaper than Argentina and Brazil out of the market for now.  

  • The latest release of the US Drought Monitor shows that 46% of the US corn area is currently in drought areas, an increase of 2% from last week. Though with the forecast calling for good rains through the Midwest over the weekend, conditions are likely to improve.

  • South American weather forecasts are staying supportive for the crop going into the end of the year with improved precipitation. The improved weather forecast is limiting buying strength in the corn and soybean markets.

Above: After posting bearish reversals on December 6 and 8, the market slowly eroded and traded through 470 support. Without fresh bullish input, the market runs the risk testing major support near 460. If a bullish catalyst does enter the market, overhead resistance comes in between 490 and 497, and again near 510.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Front month soybeans continue to be rangebound, largely between 1290 and 1400. At some point, the front month will eventually break out of that range, and if it breaks out to the downside, then the first risk would be 1180. If the breakout occurs to the topside, then the first opportunity would be 1510. The biggest looming catalyst behind a potential downside breakout is the projected record global carryout of soybeans, while the biggest looming catalyst for a potential upside breakout is continued adverse South American weather. Given the uncertainty of which direction the market will go, Grain Market Insider recently recommended adding to sales as the current price level is still historically good. It’s been disappointing how the market has been unable to push higher despite the South American planting disruptions. Because of that, Grain Market Insider’s concern is that, if the weather pattern doesn’t remain adverse, the path of least resistance could be lower. Grain Market Insider will continue to look at additional sales opportunities, as well as potential re-ownership strategies.

  • No action is recommended for the 2024 crop. Since the inception of the Nov ’24 contract, it has traded at a discount to the 2023 crop from as much as 142 back in July, to as little as 17 ¾ in early October during harvest. While the spread difference between the two crops has seen a good amount of volatility, Nov ’24 has been largely rangebound between 1250 and 1320 since it rallied off its 1116 ¼ low last May. To date, Grain Market Insider has not recommended any sales for next year’s soybean crop. First sales targets will probably be early winter at the earliest. Currently, Grain Market Insider’s focus is also on watching for any opportunities to recommend buying call options.

  • No Action is currently recommended for 2025 Soybeans. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted two springs from now, and it may be some time before conditions are conducive to consider making any recommendations. Be patient as we monitor the markets for signs of improvement.

To date, Grain Market Insider has issued the following soybean recommendations:

  • Soybeans ended the day lower for the fourth consecutive day, as improved Brazilian weather forecasts heavily impact the soy complex. Both soybean meal and oil were lower today, but bean oil posted the largest losses due to lower palm and crude oil.

  • Global shipping problems have contributed to the pressure on soybeans, along with the rest of the grain complex, as the lack of movement and rising costs affect margins. Two main railways leading into Mexico are currently closed at Eagle Pass and El Paso, many shipping routes in the Red Sea are suspended due to rebel attacks, and shipping through the Panama Canal is also restricted due to low water levels.

  • In Argentina, violent protests have broken out as citizens voice their frustration with the new government policies, especially those related to increased export taxes. Producers were anticipating friendly export policy from the new president, but instead were met with increased taxes on their grains.

  • Today’s export sales report showed 73 mb of soybeans exported last week for 23/24 and 5 mb for 24/25, which was in line with analyst expectations. China and unknown destinations accounted for 54 mb of those exports. Sales for soybean meal were 148k tons and below analyst expectations.

Above: After posting a high of 1398 ½ in November, soybeans found support around 1292. Overhead, nearby resistance remains near 1350 and again around 1400. If the market breaks support at 1292, it runs the risk of testing 1250.

Wheat

Market Notes: Wheat

  • Wheat had a mixed close, with Chicago contracts staying just above water, but a lower close in Kansas City and Minneapolis futures. Some support is stemming from a lower US Dollar Index today, which is forming a bearish pennant chart pattern. The formation of this pattern would signal more downside for the dollar, which, in theory, should make US exports more attractive and boost global business.

  • On a bearish note, Russia continues to be the world’s wheat export leader, with FOB values cheaper than other origins, around $260 to $265 per mt. They recently fulfilled tenders by Egypt and Saudi Arabia and are likely to continue to get much of the world export business.

  • Weekly US wheat export sales at 11.9 mb for 23/24 were a bit disappointing, and shipments last week at 12.4 mb are behind the weekly pace of 16.7 mb needed to reach the USDA’s export goal of 725 mb. Currently, wheat commitments are down 3% from last year at 546 mb.

  • Over the holiday weekend, the US Plains should see mostly warmer temperatures. Additionally, the southern Plains have more chances for rain over the next seven days or so. This rain may add pressure to the market, with soil moisture conditions looking a lot more optimal than last year.

  • SovEcon has increased their estimate of the Russian 2024 wheat harvest to 91.3 mmt, which is up 1.5 mmt from the previous projection. Favorable weather was cited as the reason for the increase, with conditions looking promising in winter wheat regions.

  • According to Argus Media, the French soft wheat area for the 2024 harvest will hit the lowest level since the year 2000 at 4.238 million hectares. This comes after several weeks of heavy rain and is said to be based on feedback from over 1,200 farmers. Many areas of France are said to have received nearly 14 inches of rain from mid-October to mid-December, with higher totals in some regions.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. Between late July and the end of November, front month Chicago wheat trended lower, driven mostly by weak US demand and lower world wheat prices. During that time, and as managed funds established most of their short position of nearly 120,000 contracts, the market became extremely oversold. Since then, as the market rallied to a high of 649 ½, China made several US SRW wheat purchases, and funds covered more than 23,000 short contracts. During that runup, Grain Market Insider recommended making an additional sale to take advantage of the elevated prices in case the rally was temporary since US wheat prices remain elevated relative to other world exporters, despite the increase in demand. If the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. From the end of July, the July ’24 contract has slowly stepped its way down to a low of 586 in sympathy with the front month contract where managed money established a large short position during that time. Since then, July ’24 rallied alongside the March ’24 contract, as the funds covered over 30k contracts of their nearly 130k short contract position. While bearish headwinds remain, the funds continue to carry a large short position and seasonals remain supportive for the addition of weather risk premium, which are two factors that could fuel further short covering and another leg up in prices. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. Back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

  • No action is currently recommended for 2025 Chicago Wheat. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next fall. It will probably be mid-winter before Grain Market Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following Chicago wheat recommendations:

Above: After rallying to 649 ½, Chicago wheat became overbought and turned lower after the December 8 USDA report. Since then, the market has found nearby support near 600. Nearby resistance remains overhead near 650, with additional resistance between 660 and 665. If the market breaks nearby support, it may test the 50-day moving average, and then support near 556.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since late July old crop KC wheat has been in a downtrend that has largely been driven by managed fund selling on low world wheat prices and weak US export demand. As the selloff progressed, the market became oversold, and the funds established the largest short position in three years. Even though bullish headwinds remain, these two factors have fueled the recent short-covering rally, which could extend much further if a bullish catalyst enters the market. This would also line up with the historical tendency for price appreciation as the market builds risk premium going into wintertime. Grain Market Insider’s strategy is to look for price appreciation going into this winter, as weather becomes a more prominent market mover and may consider suggesting additional sales if prices become over extended.

  • No new action is recommended for 2024 KC wheat. At the end of August, the July ’24 contract broke out of roughly a one-year trading range and stepped down to a 609 ¼ low in late November, largely driven by managed fund selling in the front month on weak US export demand and lower world wheat prices. Since then, the funds covered part of their large short position which also rallied prices in the July ’24 contract. While bearish headwinds remain, managed funds continue to hold a sizable, short position, and price seasonals remain positive for adding weather risk premium. These are two factors that could fuel additional short covering and rally prices in the months ahead. Back in August, Grain Market Insider recommended buying Jul’24 KC wheat 660 puts to protect the downside following the range breakout. As the market recently got further extended into oversold territory and the July contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. Moving forward, Grain Market Insider is prepared to recommend exiting the last 25% on any further supportive market developments.

  • No action is currently recommended for 2025 KC Wheat. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next fall. It will probably be mid-winter before Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following KC recommendations:

Above: Since posting bearish reversals on December 6 and 8, the market has been consolidating while holding support around 625, with close in resistance just overhead at the 50-day moving average. If the market breaks lower, the next area of support may come in around 595 and 575. Resistance above the 50-day moving average remains around 675 – 680.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop. Following last July’s rally, the market has slowly stair-stepped lower, primarily due to low world wheat prices, weak US export demand, and managed fund selling. With the funds building a record large short position as the market sold off. Since weak US export demand remains the main impediment to higher prices, the market continues to be at risk of further downside erosion. The record large fund short position could fuel a rally back higher if a bullish catalyst enters the scene, and if that happens, it may signal that a near-term low is in place. Earlier this year, Grain Market Insider made a sales recommendation during the July rally near 820, and with that sale in place, Grain Market Insider’s strategy is to look for price appreciation this winter with an eye on considering additional sales around 725 – 775, and again north of 800. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Minneapolis wheat. At the end of August, the Sept ’24 contract traded to a peak of 871 ¾ and has continued to slowly stair-step lower, largely driven by lower world wheat prices, weak US export demand, and managed fund selling, and as the selloff progressed, the funds built up a record large short position. While bearish headwinds remain, the significant oversold condition of the market and the large fund net short position are two factors that could fuel a short-covering rally in the months ahead. Price seasonals are also supportive as prices tend to build in some risk premium going into the winter months. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside following a 1-year range breakout in KC wheat. Though recently, as the KC market extended further into oversold territory and the July ‘24 KC wheat contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. While in the same time frame, Grain Market Insider also recommended making an additional sale as the Sept ’24 Minneapolis contract broke long time 743 support. For now, moving forward, Grain Market Insider is prepared to recommend exiting the last 25% of the open puts on any further supportive market developments.

  • No action is currently recommended for the 2025 Minneapolis wheat crop. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted two springs from now. It will probably be mid-winter before Grain Market Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following Minneapolis wheat recommendations:

Above: After making a new contract low on November 27, the March contract found buying interest from its oversold status and record fund short. Since then, the market posted a bearish reversal on December 6, showing significant resistance in the 750 area. If prices can break through upside resistance, they could run toward 790. If prices retreat, nearby support could be found around 718, with further support near the recent low of 697 ½.

Other Charts / Weather

US 5 day precipitation forecast courtesy of NOAA, Weather Prediction Center.

Brazil 2 week forecast total precipitation courtesy of the National Weather Service, Climate Prediction Center.

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12-21 Midday: Markets Mixed, Corn Firm, While Products Pressure Beans

ByGrain Market Insider

The CME and Total Farm Marketing offices will be closed
Monday, December 25, in observance of Christmas

All prices as of 10:30 am Central Time

Corn
MAR ’24 472.5 2.75
JUL ’24 495.5 3
DEC ’24 504 2.25
Soybeans
JAN ’24 1299.75 -8.5
MAR ’24 1305.75 -10
NOV ’24 1255.25 -8.5
Chicago Wheat
MAR ’24 614.75 4.75
MAY ’24 625.75 4.5
JUL ’24 632.25 4.25
K.C. Wheat
MAR ’24 624 -1
MAY ’24 628 -1.75
JUL ’24 632 -2.5
Mpls Wheat
MAR ’24 717.75 -0.25
JUL ’24 735.25 -0.25
SEP ’24 741.25 -2.25
S&P 500
MAR ’24 4779.75 30
Crude Oil
FEB ’24 73.83 -0.39
Gold
FEB ’24 2055.7 8

  • The USDA said corn export sales were 39.9 mb for 23/24, and total commitments are now 37% above last year at 1.109 bb.

  • The migrant crisis in Mexico has caused the closure of two major railway bridges. This has limited the supply of corn shipped from the US to Mexico, and it is estimated that they have about 2-3 weeks of supply left. It is also said that a total of about 1 mb of grain are being held back per day. If the issue is not quickly resolved, Mexico may turn elsewhere to secure their needs.

  • Yesterday’s ethanol data was above expectations and the pace needed to reach the USDA’s corn usage forecast. However, ethanol inventories have also reached a four month high.

  • China’s internal corn prices have recently hit seven month lows. However, there is a good chance that over the coming months they may purchase US corn, as it is currently cheaper than South American offers.

  • Soybeans are trading lower this morning, despite good export sales of 73.1 mb for 23/24 and 5.2 mb for 24/25. However, total commitments of 1.299 bb are 16% below last year.

  • Overnight rains in parts of north-central Brazil resulted in some areas receiving 1 to 1.5 inches of rain. This is pressuring futures this morning, although, rains have been disappointing in Mato Grosso, which is Brazil’s biggest grain producing state.

  • Most private estimates of the Brazilian soybean crop are around the mid 150’s, whereas the USDA and CONAB projections are just over 160 mmt.

  • Both soybean meal and oil are lower this morning, offering resistance to soybean futures. Going forward, the expected rise in biofuel production may be positive on the oil side, but this may also mean an abundance of soybean meal, which may weigh on the market.

  • Wheat export sales of 11.9 mb for 23/24 were on the softer side, and total commitments of 546 mb are down 3% from last year.

  • The US Dollar Index is under pressure this morning and may be lending some support to the wheat market. Additionally, the index is forming a bearish pennant chart pattern, which may point to more of a decline (which would be supportive for wheat).

  • Russia’s wheat export values remain near $260 to $265 per mt FOB. This keeps them the leader on the export market, fulfilling recent tenders by Egypt and Saudi Arabia.

  • Rumors that China will purchase more US wheat continue to circulate, but so far, there has been no confirmation. If they do step up, it would offer a boost to the market, but it may be unlikely; global importers currently have cheaper options than from the US.

Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing by Stewart-Peterson and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Stewart-Peterson Inc. Reproduction of this information without prior written permission is prohibited. Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Reproduction and distribution of this information without prior written permission is prohibited. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing.

Stewart-Peterson Inc., Stewart-Peterson Group Inc., and SP Risk Services LLC are each part of the family of companies within Total Farm Marketing (TFM). Stewart-Peterson Inc. is a publishing company. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services LLC is an insurance agency. A customer may have relationships with any or all three companies. 

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12-21 Opening Update: Markets Mixed in Quiet Holiday Trade

Bygmidev

All prices as of 6:30 am Central Time

Corn

MAR ’24 470.5 0.75
JUL ’24 493.25 0.75
DEC ’24 501.75 0

Soybeans

JAN ’24 1306.75 -1.5
MAR ’24 1313.75 -2
NOV ’24 1260.75 -3

Chicago Wheat

MAR ’24 615 5
MAY ’24 625.5 4.25
JUL ’24 631.75 3.75

K.C. Wheat

MAR ’24 631 6
MAY ’24 633.5 3.75
JUL ’24 637.5 3

Mpls Wheat

MAR ’24 722.75 4.75
JUL ’24 735.5 -8.5
SEP ’24 743.5 -8.75

S&P 500

MAR ’24 4774.5 24.75

Crude Oil

FEB ’24 73.86 -0.36

Gold

FEB ’24 2047 -0.7

  • Corn is trading slightly higher this morning after making new contract lows yesterday and posting the lowest close of the year.

  • Shipping issues globally have put pressure on futures with many routes in the Red Sea closed off due to attacks and shipping in the Panama Canal limited due to low water levels.

  • Estimates for today’s export sales report see corn between 800k and 1,500k tons with an average trade guess of 1,019k tons.

  • On Monday’s inspections report, out of the 35.5 mb of corn that was inspected, only 5.5 mb were inspected at the Gulf and 10 mb were out of the PNW showing the disruptive shipping issues.

  • Soybeans are trading slightly lower again this morning as rains fall in Brazil and the forecast remains friendly there. Soybean meal is unchanged to slightly higher while soybean oil is lower.

  • Brazil’s soybean output for 23/24 is now being called lower than last year’s at 156.5 mmt due to a 20% expected drop in production from the main growing state of Mato Grosso.

  • To offset some of Brazil’s losses, Argentinian soybean production is now called higher at 47.9 mmt due to improved soil moisture levels in key areas.

  • Expectations for today’s export sales report see soybean sales between 1,300 and 2,500k tons with an average guess of 1,984k. Considering that there was a flash sale every day last week, export numbers should be strong.

  • All three wheat classes are trading slightly higher this morning as March Chicago wheat hugs the 100-day moving average and remains in a bull pennant formation which looks like may break higher technically.

  • There have not been any reported flash sales by China since two weeks ago, but the fact that wheat has remained off its lows despite the lack of sales has been encouraging.

  • Estimates for today’s export sales report are low with a lack of flash sales and are between 300k and 600k tons with an average guess of 425k tons.

  • SovEcon has raised its estimate for the Russian 2024 wheat harvest by 1.5 mmt to 91.3 mmt as a result of good weather conditions.

Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing by Stewart-Peterson and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Stewart-Peterson Inc. Reproduction of this information without prior written permission is prohibited. Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Reproduction and distribution of this information without prior written permission is prohibited. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing.

Stewart-Peterson Inc., Stewart-Peterson Group Inc., and SP Risk Services LLC are each part of the family of companies within Total Farm Marketing (TFM). Stewart-Peterson Inc. is a publishing company. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services LLC is an insurance agency. A customer may have relationships with any or all three companies. 

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12-20 End of Day: The Prospect of Improved Conditions Presses Markets Lower.

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Weakness from wheat and neighboring soybeans weighed on the corn market as it closed lower for the third day in a row and below 470 support as it continues to drift lower into year’s end.

  • The prospect of additional rainfall in the parched areas of Brazil and weakness from lower soybean meal and oil spilled over to the soybean market and siphoned off the gains from the overnight session.

  • Abiove made a statement that Brazil’s soybean oil demand for biodiesel is set to rise, citing expected increases in Brazil’s biodiesel mix. The announcement likely added pressure to meal, as added crush for bean oil could easily produce excess meal, depressing prices.

  • Forecasts for additional rainfall in the HRW growing areas added pressure to the wheat complex as all three classes reversed course and gave up yesterday’s gains.

  • To see the updated US 6 – 10 day temperature and precipitation outlooks, and the GRACE-Based Root Zone Drought Indicators for the US, Brazil, and Argentina, courtesy of the National Weather Service, and NASAGRACE in partnership with the NDMC, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. Since the beginning of August, the corn market has traded sideways largely between 470 and 500. October’s brief breakout to 509 ½ and the subsequent failure to stay above the 50-day moving average indicates there is significant resistance in that price range. The failure of December’s USDA report to provide a bullish influence on the market puts the market at risk of drifting sideways to lower without a bullish catalyst. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

  • No new action is recommended for 2024 corn. Since late February ’22, Dec ’24 has been bound by 485 ¾ on the bottom and 602 on the top. After testing 491 to 547 last July, it has mostly traded between 500 and 525. During this time, Dec ’24 has held up better as bear spreading has allowed Dec ’24 to maintain more of its value versus old crop prices as traders attempt to price in a larger 2023 carryout with more uncertainty remaining for the 2024 crop. Moving forward, the risk for 2024 prices is the same as for 2023 prices, which is a continuation of a sideways to lower trend without a bullish catalyst. Grain Market Insider is watching for signs of a change in the current trend to look at recommending buying Dec ’24 call options. This past spring, Grain Market Insider recommended buying Dec ‘23 560 and 610 call options ahead of the summer rally and having those in place helped provide confidence to pull the trigger on recommending 2023 sales into that sharp rally, knowing that if corn kept rallying and went to 700 or 800 that the call options would protect those sold bushels.

  • No Action is currently recommended for 2025 corn. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted two springs from now. It will probably be late winter or early spring of 2024 before Grain Market Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following corn recommendations:

  • Pressure from the wheat market on the prospects of better conditions in the southern Plains spilled over into the corn market on the session. March corn futures 3 cents as traded lower for the third consecutive day and established a new low for the March contract at 468 ¼.

  • US Customs and Border Protection has maintained the closure of the Eagle Pass and El Paso rail gateways to Mexico to handle migrant surges. The closures are causing disruptions in supply movements and remain despite calls for the gateways to reopen from the Association of American Railroads and various Ag commodity groups.

  • South American weather forecasts are staying supportive for the crop going into the end of the year with improved precipitation. The improved weather forecast is limiting buying strength in the corn and soybean markets.

  • Ethanol average daily production for the week ending December 15 averaged 1.071 million barrels. This was down 0.3% from last week and up 4.1% from last year. The amount of corn used for the week is estimated at 106.30 million bushels. This pace is slightly ahead of the USDA target for the marketing year.

  • USDA will release weekly export sales on Thursday morning. Expectations are for new sales last week to range from 800,000 to 1,500,000 mt for the week.

Above: After posting bearish reversals on December 6 and 8, the market slowly eroded and traded through 470 support. Without fresh bullish input, the market runs the risk testing major support near 460. If a bullish catalyst does enter the market, overhead resistance comes in between 490 and 497, and again near 510.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Front month soybeans continue to be rangebound, largely between 1290 and 1400. At some point, the front month will eventually break out of that range, and if it breaks out to the downside, then the first risk would be 1180. If the breakout occurs to the topside, then the first opportunity would be 1510. The biggest looming catalyst behind a potential downside breakout is the projected record global carryout of soybeans, while the biggest looming catalyst for a potential upside breakout is continued adverse South American weather. Given the uncertainty of which direction the market will go, Grain Market Insider recently recommended adding to sales as the current price level is still historically good. It’s been disappointing how the market has been unable to push higher despite the South American planting disruptions. Because of that, Grain Market Insider’s concern is that, if the weather pattern doesn’t remain adverse, the path of least resistance could be lower. Grain Market Insider will continue to look at additional sales opportunities, as well as potential re-ownership strategies.

  • No action is recommended for the 2024 crop. Since the inception of the Nov ’24 contract, it has traded at a discount to the 2023 crop from as much as 142 back in July, to as little as 17 ¾ in early October during harvest. While the spread difference between the two crops has seen a good amount of volatility, Nov ’24 has been largely rangebound between 1250 and 1320 since it rallied off its 1116 ¼ low last May. To date, Grain Market Insider has not recommended any sales for next year’s soybean crop. First sales targets will probably be early winter at the earliest. Currently, Grain Market Insider’s focus is also on watching for any opportunities to recommend buying call options.

  • No Action is currently recommended for 2025 Soybeans. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted two springs from now, and it may be some time before conditions are conducive to consider making any recommendations. Be patient as we monitor the markets for signs of improvement.

To date, Grain Market Insider has issued the following soybean recommendations:

  • Soybeans ended the day lower for the second consecutive trading session with pressure from an improving Brazilian weather forecast and widespread showers over the central region of the country today. Both soy products were lower, but the majority of losses were in soybean meal.

  • Although weather forecasts are improved for Brazil, production for the main soybean growing state of Mato Grosso is now forecast to produce 20% fewer soybeans this season. The lowest estimates for the entire country are around 155 mmt which is what was produced last season, and this year, Argentina is also expecting a normal soybean crop. The combined production of both countries could put pressure on US soybean prices.

  • Argentinian weather has been very favorable, and the country can likely expect normal to above normal production. This would lead to increased crush numbers and increased exports of both soybean meal and oil. If Argentina regains its status as the largest exporter of meal, US soybean meal prices could fall further and pressure soybeans. Soybean oil could be buoyed by strong demand for bean oil as biofuel in the US.

  • Two main rail bridges to Mexico have been closed by US customs at Eagle Pass and El Paso due to large congregations of migrants. This has made shipments to Mexico more difficult and likely added to today’s pressure in the soy complex.

Above: After posting a high of 1398 ½ in November, soybeans found support around 1292. Overhead, nearby resistance remains near 1350 and again around 1400. If the market breaks support at 1292, it runs the risk of testing 1250.

Wheat

Market Notes: Wheat

  • Wheat gave back all of yesterday’s gains and then some. Weakness today stemmed from consolidation in the US Dollar Index, a mixed close in Paris milling wheat, and a wetter nearby forecast in the US southern plains. Additionally, global freight costs are increasing due to low water levels on the Panama Canal and Houthi attacks on Red Sea shipping lanes; the rising costs may be reducing export competitiveness of US goods to some parts of the world.

  • Egypt’s tender did end up being fulfilled by Russia for all 480,000 mt. Of the total, 180,000 mt are to be shipped during the first half of February, while the remaining 300,000 mt will be shipped during the second half of February.

  • Despite an increased estimate of Ukraine’s 2023 grain harvest by consultancy APK-Inform, they kept their wheat production estimate unchanged at 21.5 mmt. The total grain harvest estimate was increased by 1.6 mmt to 56.3 mmt. However, that change is mostly reflected in the corn production number.

  • According to state-run news agency Xinhua, China has vowed to focus on grain and ag production during a recent conference. Their goal is said to be to strengthen the use of technology in agriculture, boost grain yields, and ensure that grain production in 2024 exceeds 650 mmt. As they work towards becoming more self-sufficient, this may mean reduced imports of US goods over the coming years.

  • An investment group in Brazil is looking to invest $62 million into a port terminal with a capacity of 3 mmt of grain. The reason behind the expansion is believed to be an attempt to reduce congestion on the roads from the transport of ag goods. The investment decision is expected to take place during the first half of 2024. Brazil continues to increase ag exports every year, and investment into port infrastructure may add pressure to the US export market down the road.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. Between late July and the end of November, front month Chicago wheat trended lower, driven mostly by weak US demand and lower world wheat prices. During that time, and as managed funds established most of their short position of nearly 120,000 contracts, the market became extremely oversold. Since then, as the market rallied to a high of 649 ½, China made several US SRW wheat purchases, and funds covered more than 23,000 short contracts. During that runup, Grain Market Insider recommended making an additional sale to take advantage of the elevated prices in case the rally was temporary since US wheat prices remain elevated relative to other world exporters, despite the increase in demand. If the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. From the end of July, the July ’24 contract has slowly stepped its way down to a low of 586 in sympathy with the front month contract where managed money established a large short position during that time. Since then, July ’24 rallied alongside the March ’24 contract, as the funds covered over 30k contracts of their nearly 130k short contract position. While bearish headwinds remain, the funds continue to carry a large short position and seasonals remain supportive for the addition of weather risk premium, which are two factors that could fuel further short covering and another leg up in prices. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion. Back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

  • No action is currently recommended for 2025 Chicago Wheat. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next fall. It will probably be mid-winter before Grain Market Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following Chicago wheat recommendations:

Above: After rallying to 649 ½, Chicago wheat became overbought and turned lower after the December 8 USDA report. Since then, the market has found nearby support near 600. Nearby resistance remains overhead near 650, with additional resistance between 660 and 665. If the market breaks nearby support, it may test the 50-day moving average, and then support near 556.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since late July old crop KC wheat has been in a downtrend that has largely been driven by managed fund selling on low world wheat prices and weak US export demand. As the selloff progressed, the market became oversold, and the funds established the largest short position in three years. Even though bullish headwinds remain, these two factors have fueled the recent short-covering rally, which could extend much further if a bullish catalyst enters the market. This would also line up with the historical tendency for price appreciation as the market builds risk premium going into wintertime. Grain Market Insider’s strategy is to look for price appreciation going into this winter, as weather becomes a more prominent market mover and may consider suggesting additional sales if prices become over extended.

  • No new action is recommended for 2024 KC wheat. At the end of August, the July ’24 contract broke out of roughly a one-year trading range and stepped down to a 609 ¼ low in late November, largely driven by managed fund selling in the front month on weak US export demand and lower world wheat prices. Since then, the funds covered part of their large short position which also rallied prices in the July ’24 contract. While bearish headwinds remain, managed funds continue to hold a sizable, short position, and price seasonals remain positive for adding weather risk premium. These are two factors that could fuel additional short covering and rally prices in the months ahead. Back in August, Grain Market Insider recommended buying Jul’24 KC wheat 660 puts to protect the downside following the range breakout. As the market recently got further extended into oversold territory and the July contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. Moving forward, Grain Market Insider is prepared to recommend exiting the last 25% on any further supportive market developments.

  • No action is currently recommended for 2025 KC Wheat. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next fall. It will probably be mid-winter before Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following KC recommendations:

Above: Since posting bearish reversals on December 6 and 8, the market has been consolidating while holding support around 625, with close in resistance just overhead at the 50-day moving average. If the market breaks lower, the next area of support may come in around 595 and 575. Resistance above the 50-day moving average remains around 675 – 680.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop. Following last July’s rally, the market has slowly stair-stepped lower, primarily due to low world wheat prices, weak US export demand, and managed fund selling. With the funds building a record large short position as the market sold off. Since weak US export demand remains the main impediment to higher prices, the market continues to be at risk of further downside erosion. The record large fund short position could fuel a rally back higher if a bullish catalyst enters the scene, and if that happens, it may signal that a near-term low is in place. Earlier this year, Grain Market Insider made a sales recommendation during the July rally near 820, and with that sale in place, Grain Market Insider’s strategy is to look for price appreciation this winter with an eye on considering additional sales around 725 – 775, and again north of 800. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Minneapolis wheat. At the end of August, the Sept ’24 contract traded to a peak of 871 ¾ and has continued to slowly stair-step lower, largely driven by lower world wheat prices, weak US export demand, and managed fund selling, and as the selloff progressed, the funds built up a record large short position. While bearish headwinds remain, the significant oversold condition of the market and the large fund net short position are two factors that could fuel a short-covering rally in the months ahead. Price seasonals are also supportive as prices tend to build in some risk premium going into the winter months. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside following a 1-year range breakout in KC wheat. Though recently, as the KC market extended further into oversold territory and the July ‘24 KC wheat contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. While in the same time frame, Grain Market Insider also recommended making an additional sale as the Sept ’24 Minneapolis contract broke long time 743 support. For now, moving forward, Grain Market Insider is prepared to recommend exiting the last 25% of the open puts on any further supportive market developments.

  • No action is currently recommended for the 2025 Minneapolis wheat crop. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted two springs from now. It will probably be mid-winter before Grain Market Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following Minneapolis wheat recommendations:

Above: After making a new contract low on November 27, the March contract found buying interest from its oversold status and record fund short. Since then, the market posted a bearish reversal on December 6, showing significant resistance in the 750 area. If prices can break through upside resistance, they could run toward 790. If prices retreat, nearby support could be found around 718, with further support near the recent low of 697 ½.

Other Charts / Weather

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12-20 Midday: Markets Turn Mostly Lower While Jan Beans Remain Firm

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn
MAR ’24 471.5 -1.25
JUL ’24 494 -0.75
DEC ’24 502.75 -0.5
Soybeans
JAN ’24 1316 3.5
MAR ’24 1321.75 -0.75
NOV ’24 1267.25 -3.5
Chicago Wheat
MAR ’24 615.75 -7
MAY ’24 626.5 -6.75
JUL ’24 632 -6.5
K.C. Wheat
MAR ’24 631 -10.5
MAY ’24 634 -11.25
JUL ’24 637.25 -11.25
Mpls Wheat
MAR ’24 720.5 -7.75
JUL ’24 736 -8
SEP ’24 744 -8.25
S&P 500
MAR ’24 4825.5 5.25
Crude Oil
FEB ’24 75.05 1.11
Gold
FEB ’24 2047.5 -4.6

  • March corn held the 470 support level overnight and is doing so, so far this morning. From a technical point of view, corn futures may be considered oversold and due for a bounce to the upside.

  • In November, Brazil overtook the US as the top corn supplier to China. For that month, Brazil’s exports to China totaled 3.22 mmt of corn; China imported a total of 3.59 mmt that month. China’s total corn imports this year are at 22.18 mmt, with 40% of that having come from Brazil and 29% from the US.

  • Crude oil is higher again this morning due to continued Houthi drone attacks on Red Sea shipping lanes. The rally in oil may offer some underlying support to the grain markets.

  • In addition to the issues in the Red Sea, water levels on the Panama Canal are still low, and both of these issues are leading to increased global freight costs. In turn, this may offer some resistance to corn futures.

  • Soybean futures are relatively close to unchanged this morning, and traders may be awaiting more news as far as the Brazilian weather forecast goes. The next ten days or so show a wetter pattern, but the key will be how much of that materializes.

  • The spread between January and March soybeans continues to narrow, likely due to the recent sales to China and unknown destinations, along with the fact that commercials are short in the nearby market.

  • Chinese imports of Brazilian soybeans are up 108% in November at 5.29 mmt, compared to November of last year. China’s total November soybean imports this year were 7.92 mmt.

  • According to a farmer survey, soybean production in Mato Grosso (Brazil’s top grain producing state) is expected to be down 20% in 2024 due to heat waves and spotty rains.

  • The forecast for the US southern plains has rain in the nearby, but the second week looks drier and colder.

  • Egypt purchased 480,000 mt of Russian wheat in their tender. Shipments are for 180,000 mt during the first half of February, with the remainder during the second half of the month.

  • As of December 17th, EU soft wheat exports have fallen 16% year on year, since the season began on July 1. The total of 14 mmt compares with 16.6 mmt for the same timeframe last year.

  • Consultancy group APK-Inform increased their estimate of the 2023 Ukraine grain harvest to 56.3 mmt, versus 54.7 mmt previously. This reflects an increase in corn production, while keeping the wheat output estimate unchanged at 21.5 mmt.

Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing by Stewart-Peterson and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Stewart-Peterson Inc. Reproduction of this information without prior written permission is prohibited. Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Reproduction and distribution of this information without prior written permission is prohibited. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing.

Stewart-Peterson Inc., Stewart-Peterson Group Inc., and SP Risk Services LLC are each part of the family of companies within Total Farm Marketing (TFM). Stewart-Peterson Inc. is a publishing company. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services LLC is an insurance agency. A customer may have relationships with any or all three companies. 

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12-20 Opening Update: Corn and Soybeans Higher as Trade Shakes Off Yesterday’s Losses

ByGrain Market Insider

All prices as of 6:30 am Central Time

Corn

MAR ’24 473.5 0.75
JUL ’24 495.25 0.5
DEC ’24 503.75 0.5

Soybeans

JAN ’24 1316.75 4.25
MAR ’24 1324 1.5
NOV ’24 1269.75 -1

Chicago Wheat

MAR ’24 621 -1.75
MAY ’24 630.75 -2.5
JUL ’24 635 -3.5

K.C. Wheat

MAR ’24 638.5 -3
MAY ’24 642.5 -2.75
JUL ’24 646 -2.5

Mpls Wheat

MAR ’24 725 -3.25
JUL ’24 741.75 -2.25
SEP ’24 750.25 -2

S&P 500

MAR ’24 4811 -9.25

Crude Oil

FEB ’24 74.92 0.98

Gold

FEB ’24 2047.8 -4.3

  • Corn is trading slightly higher this morning as markets attempt to shake off some of yesterday’s losses. So far, prices are still rangebound, but March corn did have its lowest close of the year yesterday.

  • Projections for the weekly ethanol output and stockpile report see production lower than last week at 1.067m b/d with stockpiles estimated at 22.098 m bbl, slightly lower than last week.

  • Brazil has overtaken the US as China’s primary corn supplier and has maintained the top spot for soybeans. Out of the 22.18 mmt of corn imported by China, 40% was shipped from Brazil and 29% was from the US.

  • Ever in an effort to diversify their imports, China has given Russia the right to supply corn from all of its regions. The US still has the competitive advantage globally.

  • Soybeans are trading higher this morning with the majority of gains in the two front months while deferred contracts are only slightly higher.

  • Both soybean meal and oil are slightly higher as well, but the overall trend has been lower as trade prepares for the Argentinian soy harvest and the large number of soy products that will be exported from the country.

  • Scattered showers continue to fall in central and northern Brazil this morning and the overall forecast looks much better for January.

  • Due to the heat and drought early in the season, Brazil’s largest soybean growing state, Mato Grosso, is expected to produce 20% fewer soybeans in 2024 with estimates at 36.15 mmt.

  • All three wheat classes are trading lower this morning, but held their own yesterday while corn and soybeans were down significantly.

  • March soybeans have been consolidating at the 100-day moving average and have also formed a bull pennant. Friendly news like a new Chinese sale could cause wheat to break out higher.

  • The European Union’s soft wheat exports have dropped by 16% year over year in the season through December 17 as the world continues to look to Russia for their needs.

  • Private analyst APK-Inform has increased their estimates for the 23/24 Ukrainian grain harvest to 56.3 mmt from previous estimates of 54.7 mmt. Wheat production is called at 21.5 mmt.

Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing by Stewart-Peterson and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Stewart-Peterson Inc. Reproduction of this information without prior written permission is prohibited. Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Reproduction and distribution of this information without prior written permission is prohibited. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing.

Stewart-Peterson Inc., Stewart-Peterson Group Inc., and SP Risk Services LLC are each part of the family of companies within Total Farm Marketing (TFM). Stewart-Peterson Inc. is a publishing company. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services LLC is an insurance agency. A customer may have relationships with any or all three companies. 

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12-19 End of Day: Wheat Turns Higher on Tuesday, while Corn and Beans Slide Lower.

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Weakness in the soybeans and more favorable South American weather forecasts weighed on the corn market which posted a new low close for the move and settled just 2 ¼ cents off the day’s low.

  • Improved South American weather added resistance to soybean meal which settled 9.0 lower and helped press soybeans to a 17 ½ cent lower close. Soybeans continue to consolidate since printing a bullish reversal on 12/7, with mild support coming from soybean oil.

  • Reports from the EU’s Monitoring Ag Resources unit suggesting that the remaining planting of winter wheat may not be completed in parts of northern France, and rumors of more possible Chinese wheat purchases, may have lent support to the wheat complex today, in which all three wheat classes higher into the close.

  • To see the updated US 5-day precipitation forecast, 6 – 10 day temperature and precipitation outlooks, and Brazil’s and Argentina’s 2 week precipitation forecast, courtesy of the National Weather Service, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. Since the beginning of August, the corn market has traded sideways largely between 470 and 500. October’s brief breakout to 509 ½ and the subsequent failure to stay above the 50-day moving average indicates there is significant resistance in that price range. The failure of December’s USDA report to provide a bullish influence on the market puts the market at risk of drifting sideways to lower without a bullish catalyst. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

  • No new action is recommended for 2024 corn. Since late February ’22, Dec ’24 has been bound by 485 ¾ on the bottom and 602 on the top. After testing 491 to 547 last July, it has mostly traded between 500 and 525. During this time, Dec ’24 has held up better as bear spreading has allowed Dec ’24 to maintain more of its value versus old crop prices as traders attempt to price in a larger 2023 carryout with more uncertainty remaining for the 2024 crop. Moving forward, the risk for 2024 prices is the same as for 2023 prices, which is a continuation of a sideways to lower trend without a bullish catalyst. Grain Market Insider is watching for signs of a change in the current trend to look at recommending buying Dec ’24 call options. This past spring, Grain Market Insider recommended buying Dec ‘23 560 and 610 call options ahead of the summer rally and having those in place helped provide confidence to pull the trigger on recommending 2023 sales into that sharp rally, knowing that if corn kept rallying and went to 700 or 800 that the call options would protect those sold bushels.

  • No Action is currently recommended for 2025 corn. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted two springs from now. It will probably be late winter or early spring of 2024 before Grain Market Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following corn recommendations:

  • Sellers stayed active in the corn market, pressured by soybeans as March corn lost 4 ¼ cents. With today’s close at 472 ¾, March corn established a new contract low close for the move. The intraday contract low is in reach at 470 ½ from November 29.

  • US Customs and Border Protection announced on Sunday night that it would temporarily close the Eagle Pass and El Paso rail gateways to Mexico to handle migrant surges. The move closes the number 2 and 3 gateways by volume and is backing up Mexico bound freight including grains. Mexico has bought 47% of current US corn export sales.

  • South American weather forecasts are staying supportive for the crop going into the end of the year with improved precipitation. Corn will stay a longer-term story with planting delays, unfavorable prices and dry weather limiting the potential acres for the key exportable second crop of Brazilian corn.

  • Chinese corn prices on the Dalian Commodity Exchange are trading to a multi-month low pressured by the arrival of Brazil corn exports. In November, China imported 3.590 mmt of corn, up 384% from last year and a record for the month. Since January, Chinese corn imports are up 12% over last year, influenced by cheap South American corn prices.

  • The softer tone of the market and the end of the calendar year should reduce farmer selling. Basis levels will likely stay firm, supported by friendly overall ethanol margins.

Above: Since the middle of November, the corn market has been rangebound between 470 on the downside and 497 on the upside. Upside resistance appears to be heavy given the bearish reversal that was posted on December 6. That heavy resistance also extends up to the October high of 509 ½, which the market will need more bullish influence to trade through. If the market retreats through nearby 470 support, major support remains near 460.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Front month soybeans continue to be rangebound, largely between 1290 and 1400. At some point, the front month will eventually break out of that range, and if it breaks out to the downside, then the first risk would be 1180. If the breakout occurs to the topside, then the first opportunity would be 1510. The biggest looming catalyst behind a potential downside breakout is the projected record global carryout of soybeans, while the biggest looming catalyst for a potential upside breakout is continued adverse South American weather. Given the uncertainty of which direction the market will go, Grain Market Insider recently recommended adding to sales as the current price level is still historically good. It’s been disappointing how the market has been unable to push higher despite the South American planting disruptions. Because of that, Grain Market Insider’s concern is that, if the weather pattern doesn’t remain adverse, the path of least resistance could be lower. Grain Market Insider will continue to look at additional sales opportunities, as well as potential re-ownership strategies.

  • No action is recommended for the 2024 crop. Since the inception of the Nov ’24 contract, it has traded at a discount to the 2023 crop from as much as 142 back in July, to as little as 17 ¾ in early October during harvest. While the spread difference between the two crops has seen a good amount of volatility, Nov ’24 has been largely rangebound between 1250 and 1320 since it rallied off its 1116 ¼ low last May. To date, Grain Market Insider has not recommended any sales for next year’s soybean crop. First sales targets will probably be early winter at the earliest. Currently, Grain Market Insider’s focus is also on watching for any opportunities to recommend buying call options.

  • No Action is currently recommended for 2025 Soybeans. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted two springs from now, and it may be some time before conditions are conducive to consider making any recommendations. Be patient as we monitor the markets for signs of improvement.

To date, Grain Market Insider has issued the following soybean recommendations:

  • Soybeans ended the day lower, wiping out yesterday’s gains that were caused by the Argentine government’s announcement that export taxes for soybean meal would increase. Today, scattered showers in the driest areas of Brazil along with an improved long-term forecast pressured soybeans and meal while soybean oil ended higher thanks to higher crude and palm oil.

  • Soybeans are currently at the bottom of their range, but the selloff today was a bit discouraging considering that the US dollar fell and that a flash sale was reported. These are both things that should have been supportive along with Argentina’s increase in export taxes which should have some bullish implications for meal.

  • This morning, the USDA reported private exporter sales of 132,000 metric tons of soybeans for delivery to unknown destinations during the 2023/2024 marketing year. While no sales were reported yesterday, there was a sale to either China or unknown destinations every day last week. This comes as the export window for the US nears its close with the looming Brazilian harvest.

  • Brazil’s soybean exports for the year have exceeded 100 million tons for the first time ever following their record harvest of 155 mmt. Brazil is the world’s largest soybean exporter and will likely keep that title as the USDA forecasts a harvest in 2024 of 161 mmt. Some private analysts have predicted that production may be as low as 155 mmt.

Above: After posting a high of 1398 ½ in November, soybeans found support around 1292. Overhead, nearby resistance remains near 1350 and again around 1400. If the market breaks support at 1292, it runs the risk of testing 1250.

Wheat

Market Notes: Wheat

  • All three US wheats rallied today, in the face of lower corn and soybean markets. This may be in part due to reports that wheat plantings in northern France are likely to remain incomplete due to the heavy rains they received, along with snow towards the end of planting. Apparently about 10% of the intended area will remain unplanted.

  • Egypt is tendering for more wheat. Russia will be the likely one to fulfill the tender, as they are the cheapest origin at $260 per ton FOB. France and Romania would be next in line but are about eight to ten dollars more per ton.

  • Rumors that China may be looking to purchase more US soft wheat are unconfirmed at this time. However, this may have lent some support to futures in any case. The recent Chinese purchases were significant, and if they step up again, it is likely to be in a big way.

  • Russia has stated that they have no interest in re-establishing the Black Sea Grain Initiative, despite efforts by Turkey to broker a deal. Since the corridor was closed in July, Ukraine has been able to ship 10 mmt of ag goods, but that is down 19% from last year.

  • Argentina saw some severe storms recently that have left about half a million homes without power. As it pertains to the wheat market, the storm may have also caused some crop losses for crops that are ready to harvest, including wheat, as wind gusts were reported to be up to 93 miles per hour. Additionally, corn and soybeans plantings may face some delays.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. Between late July and the end of November, front month Chicago wheat trended lower, driven mostly by weak US demand and lower world wheat prices. During that time, and as managed funds established most of their short position of nearly 120,000 contracts, the market became extremely oversold. Since then, as the market rallied to a high of 649 ½, China made several US SRW wheat purchases, and funds covered more than 23,000 short contracts. During that runup, Grain Market Insider recommended making an additional sale to take advantage of the elevated prices in case the rally was temporary since US wheat prices remain elevated relative to other world exporters, despite the increase in demand. If the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. Since July, new crop Chicago wheat has slowly worked its way lower with no significant opportunities to make additional sales. The lower market was driven mostly by managed fund selling from lower world wheat prices and weak US demand. As the market sold off, it became significantly oversold with managed funds building a short position in excess of 100,000 contracts. While bearish headwinds remain, the large fund short position and oversold condition of the market are two factors that could fuel a sizeable, short-covering rally. Additionally, price seasonals are supportive as prices tend to build in some risk premium going into the winter months. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion, and back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

  • No action is currently recommended for 2025 Chicago Wheat. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next fall. It will probably be mid-winter before Grain Market Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following Chicago wheat recommendations:

Above: After rallying to 649 ½, Chicago wheat became overbought and turned lower after the December 8 USDA report. Since then, the market has found nearby support near 600. Nearby resistance remains overhead near 650, with additional resistance between 660 and 665. If the market breaks nearby support, it may test the 50-day moving average, and then support near 556.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since late July old crop KC wheat has been in a downtrend that has largely been driven by managed fund selling on low world wheat prices and weak US export demand. As the selloff progressed, the market became oversold, and the funds established the largest short position in three years. Even though bullish headwinds remain, these two factors have fueled the recent short-covering rally, which could extend much further if a bullish catalyst enters the market. This would also line up with the historical tendency for price appreciation as the market builds risk premium going into wintertime. Grain Market Insider’s strategy is to look for price appreciation going into this winter, as weather becomes a more prominent market mover and may consider suggesting additional sales if prices become over extended.

  • No new action is recommended for 2024 KC wheat. At the end of August, the Jul ’24 contract broke out of roughly a one-year trading range, between 740 and 860, to the downside. Since that breakout, the market has continued to slowly stair-step lower, largely driven by managed fund selling, weak US export demand, and lower world wheat prices. As the selloff progressed, the funds built up the largest net short position in three years. While bearish headwinds remain, the significant oversold condition of the market and the large fund net short position are two factors that could fuel a short-covering rally in the months ahead. Price seasonals are also supportive as prices tend to build in some risk premium going into the winter months. Back in August, Grain Market Insider recommended buying Jul’24 KC wheat 660 puts to protect the downside following the range breakout. Though as the market recently got further extended into oversold territory and the July contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. Moving forward, Grain Market Insider is prepared to recommend exiting the last 25% on any further supportive market developments.

  • No action is currently recommended for 2025 KC Wheat. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next fall. It will probably be mid-winter before Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following KC recommendations:

Above: Following bearish reversals on December 6th and December 8th, the market has shown that there is significant overhead resistance above 680. The market is also showing signs of being oversold following the recent runup, which adds upward resistance and could add pressure if the market continues lower. Below the market, initial support comes in near 630, with further support remaining around 595 and 575. 

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop. Following last July’s rally, the market has slowly stair-stepped lower, primarily due to low world wheat prices, weak US export demand, and managed fund selling. With the funds building a record large short position as the market sold off. Since weak US export demand remains the main impediment to higher prices, the market continues to be at risk of further downside erosion. The record large fund short position could fuel a rally back higher if a bullish catalyst enters the scene, and if that happens, it may signal that a near-term low is in place. Earlier this year, Grain Market Insider made a sales recommendation during the July rally near 820, and with that sale in place, Grain Market Insider’s strategy is to look for price appreciation this winter with an eye on considering additional sales around 725 – 775, and again north of 800. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Minneapolis wheat. At the end of August, the Sept ’24 contract traded to a peak of 871 ¾ and has continued to slowly stair-step lower, largely driven by lower world wheat prices, weak US export demand, and managed fund selling, and as the selloff progressed, the funds built up a record large short position. While bearish headwinds remain, the significant oversold condition of the market and the large fund net short position are two factors that could fuel a short-covering rally in the months ahead. Price seasonals are also supportive as prices tend to build in some risk premium going into the winter months. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside following a 1-year range breakout in KC wheat. Though recently, as the KC market extended further into oversold territory and the July ‘24 KC wheat contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. While in the same time frame, Grain Market Insider also recommended making an additional sale as the Sept ’24 Minneapolis contract broke long time 743 support. For now, moving forward, Grain Market Insider is prepared to recommend exiting the last 25% of the open puts on any further supportive market developments.

  • No action is currently recommended for the 2025 Minneapolis wheat crop. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted two springs from now. It will probably be mid-winter before Grain Market Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following Minneapolis wheat recommendations:

Above: After making a new contract low on November 27, the March contract found buying interest from its oversold status and record fund short. Since then, the market posted a bearish reversal on December 6, showing significant resistance in the 750 area. If prices can break through upside resistance, they could run toward 790. If prices retreat, nearby support could be found around 718, with further support near the recent low of 697 ½.

Other Charts / Weather

Brazil 1-week forecast precipitation, percent of normal, courtesy of the National Weather Service, Climate Prediction Center.

Argentina 1-week forecast precipitation, percent of normal, courtesy of the National Weather Service, Climate Prediction Center.

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12-19 Midday: Wheat Higher, Corn and Beans Lower at Midday.

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn
MAR ’24 473 -4
JUL ’24 495.25 -4.25
DEC ’24 504.25 -4.25
Soybeans
JAN ’24 1313.25 -13.75
MAR ’24 1323.25 -16.75
NOV ’24 1270.25 -13.75
Chicago Wheat
MAR ’24 619.5 2.5
MAY ’24 629.75 1.75
JUL ’24 635 1.25
K.C. Wheat
MAR ’24 636 8.25
MAY ’24 640.5 7.75
JUL ’24 644.25 6.5
Mpls Wheat
MAR ’24 725.75 4.25
JUL ’24 743 4.5
SEP ’24 753 7.25
S&P 500
MAR ’24 4814.75 21.75
Crude Oil
FEB ’24 73.87 1.05
Gold
FEB ’24 2058.8 18.3

  • Some meteorologists suggest that El Nino has peaked recently, however it is not over yet. It may continue to extend into February or March but the weather pattern for Brazil may improve during that timeframe.

  • Due to weather issues, Brazil’s safrinha corn crop may be somewhat delayed. This may keep the US export window open a bit longer, into the late spring and early summer.

  • Export inspections yesterday showed that corn inspections are running 27% above last year. This is running above the USDA’s estimated pace. 

  • Corn is under pressure this morning but so far, the March contract is holding $4.70 support. However, a break below that level could trigger technical selling and may lead to a lower trading range.

  • Farmers in Mato Grosso (Brazil) were granted an additional 20 days to plant soybeans by the ag minister. While not the 40 days originally requested, this extension will allow them to plant up to January 13.

  • The Argentinian government proposed a plan to increase taxes on soybean meal and oil by 2%, raising it to 33%. This would put the products on par with the tax rate for soybeans.

  • The European weather model suggests good rains through some of the drier areas of Brazil over the next ten days or so. This includes the states of Mato Grosso, Goias, Tocantins, and Bahia.

  • February palm oil futures are up for the fifth day in a row due to lower inventory as well as reduced production. Nevertheless, soybean oil futures are looking a bit soft this morning.

  • Private exporters reported sales of 132,000 mt of US soybeans for delivery to unknown destinations during the 23/24 marketing year.

  • Egypt is again tendering for wheat. Currently the cheapest offer is from Russia at $260 per ton FOB.

  • Following the recent Chinese purchases of US wheat and the resulting rebound in US SRW futures, US wheat has become uncompetitive on the global export market. There are rumors that China may be looking to purchase more US wheat, but so far there has been no confirmation.

  • Despite the closure of the Black Sea Grain Initiative this summer, Ukraine has managed to ship 10 mmt of ag goods. However, that is down 19% from last year. According to Russia, there is no interest on their end to resume the deal.

  • Paris milling wheat futures are trading lower for the fourth time in the past five sessions. This is not offering any support to the US market. In any case, US wheat futures have turned positive at midday, despite a lower start to the session.  

Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing by Stewart-Peterson and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Stewart-Peterson Inc. Reproduction of this information without prior written permission is prohibited. Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Reproduction and distribution of this information without prior written permission is prohibited. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing.

Stewart-Peterson Inc., Stewart-Peterson Group Inc., and SP Risk Services LLC are each part of the family of companies within Total Farm Marketing (TFM). Stewart-Peterson Inc. is a publishing company. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services LLC is an insurance agency. A customer may have relationships with any or all three companies. 

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12-19 Opening Update: Grains Lower as Issues in Red Sea and Panama Canal Raise Shipping Costs

ByGrain Market Insider

All prices as of 6:30 am Central Time

Corn

MAR ’24 476.25 -0.75
JUL ’24 497.75 -1.75
DEC ’24 506.5 -2

Soybeans

JAN ’24 1318.25 -8.75
MAR ’24 1329.5 -10.5
NOV ’24 1274.25 -9.75

Chicago Wheat

MAR ’24 617.25 0.25
MAY ’24 627.75 -0.25
JUL ’24 632 -1.75

K.C. Wheat

MAR ’24 627.5 -0.25
MAY ’24 632.5 -0.25
JUL ’24 637.5 -0.25

Mpls Wheat

MAR ’24 721.75 0.25
JUL ’24 738.5 -7
SEP ’24 745.75 -5.75

S&P 500

MAR ’24 4800.25 7.25

Crude Oil

FEB ’24 72.73 -0.09

Gold

FEB ’24 2042.9 2.4

  • Corn is trading slightly lower this morning and is near the bottom of its trading range as forecasts for the driest parts of central and northern Brazil begin to show improved rain chances through the end of the month.

  • Yesterday, open interest in corn rose by nearly 50,000 contracts which suggests that funds are adding onto their short position in response to rising shipping costs.

  • With rebels attacking in the Red Sea region and low water levels in the Panama Canal, shipping costs globally are rising, and this will likely effect costs in the US.

  • Brazilian first crop corn planting is now reportedly 96.8% complete as of December 15 which compares with 94.4% last year.

  • Soybean futures are lower this morning and have given back all of yesterday’s gains as scattered showers fall in Brazil with a friendlier long-term forecast.

  • Yesterday’s rally can be attributed to Argentina’s proposal to increase export taxes on soybean meal and oil to 33% from 31%. Trade had initially expected the Argentine government to enact policy that was more friendly to producers.

  • Both soybean meal and oil are trading lower this morning, and the recent selloff in both has caused crush margins to slip slightly.

  • Brazilian soybean planting is now reported at 94% as of December 14 which compares with 91% the previous year, but some has had to be replanted or was planted in extremely hot and dry conditions.

  • All three wheat classes are trading slightly lower this morning but were higher overnight as rumors circulate that China may be looking to buy more US wheat.

  • There was a tender overnight issued by Egypt to buy wheat from Russia which comes after it purchased a large volume yesterday. The theme of the world relying on Russia for cheap wheat has been a constant bearish factor.

  • In northern France, some sowings are looking unlikely to be completed due to overly wet conditions. Nearly 10% of planned soft wheat areas are unsown in France.

  • Ukraine’s demand for wheat and other grains out of the Danube River has begun to slip as shipping costs rise and more wheat leaves via the Black Sea corridor.

Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing by Stewart-Peterson and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Stewart-Peterson Inc. Reproduction of this information without prior written permission is prohibited. Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Reproduction and distribution of this information without prior written permission is prohibited. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing.

Stewart-Peterson Inc., Stewart-Peterson Group Inc., and SP Risk Services LLC are each part of the family of companies within Total Farm Marketing (TFM). Stewart-Peterson Inc. is a publishing company. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services LLC is an insurance agency. A customer may have relationships with any or all three companies. 

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12-18 End of Day: Monday Markets Close Mixed; Beans Higher; Corn and Wheat Lower.

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Weekly corn export inspections came in at 37 mb, near the high end of expectations but below the average needed to reach the USDA’s estimate. That and weakness from the neighboring wheat complex weighed on corn futures, which closed near the bottom of the somewhat tight 7 ¼ cent range.

  • The soybean complex got an added boost from an announcement reported by Reuters that Argentina is moving toward increasing its export tax on soybean meal and oil from 31% to 33%.

  • Soybean oil got additional support from higher energy markets and higher Malaysian palm oil, which carried over to Board crush margins that gained 11 ¾ in the spot January contracts and 8 ½ cents in the March.

  • The wheat complex saw two-sided trade that was mostly lower, with the day’s losses led by the KC contracts. A forecast for the return of moisture to the central and southern Plains added resistance, along with weekly export inspections that came in below expectations and the level needed to reach the USDA’s goal. Although the recent sales to China should show up in the coming weeks.

  • To see the updated US 6 – 10 day temperature and precipitation outlooks, as well as the Brazil and Argentina 1 week total accumulated precipitation, courtesy of the National Weather Service, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. Since the beginning of August, the corn market has traded sideways largely between 470 and 500. October’s brief breakout to 509 ½ and the subsequent failure to stay above the 50-day moving average indicates there is significant resistance in that price range. The failure of December’s USDA report to provide a bullish influence on the market puts the market at risk of drifting sideways to lower without a bullish catalyst. During last summer’s June rally, Grain Market Insider recommended making sales when Dec ’23 was around 624. For now, Grain Market Insider will continue to hold tight on any further sales recommendations for the next few weeks with the objective of seeking out better pricing opportunities. If the market has not turned around by then, Grain Market Insider may sit tight on the next sales recommendations until spring.

  • No new action is recommended for 2024 corn. Since late February ’22, Dec ’24 has been bound by 485 ¾ on the bottom and 602 on the top. After testing 491 to 547 last July, it has mostly traded between 500 and 525. During this time, Dec ’24 has held up better as bear spreading has allowed Dec ’24 to maintain more of its value versus old crop prices as traders attempt to price in a larger 2023 carryout with more uncertainty remaining for the 2024 crop. Moving forward, the risk for 2024 prices is the same as for 2023 prices, which is a continuation of a sideways to lower trend without a bullish catalyst. Grain Market Insider is watching for signs of a change in the current trend to look at recommending buying Dec ’24 call options. This past spring, Grain Market Insider recommended buying Dec ‘23 560 and 610 call options ahead of the summer rally and having those in place helped provide confidence to pull the trigger on recommending 2023 sales into that sharp rally, knowing that if corn kept rallying and went to 700 or 800 that the call options would protect those sold bushels.

  • No Action is currently recommended for 2025 corn. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted two springs from now. It will probably be late winter or early spring of 2024 before Grain Market Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following corn recommendations:

  • As the trading volume began to thin going into the holiday trade, the sellers were active in the corn and wheat markets. March corn lost 6 cents and closed at its lowest point since November 30. The weak price action and close will leave the corn market vulnerable to additional selling pressure going into Tuesday.

  • Weekly export sales for corn 947,000 mt (37.3 mb) for the week ending December 14. Total inspections for 23/24 are now at 399 mb, up 27% from the previous year. The USDA is estimating corn exports at 2.100 bb in 23/24, up 26% from the previous year.  

  • China imported 3.59 mmt (141 mb) of corn in November, a record volume for any month. That comes despite China’s report of a record corn crop this past growing season. Total January-November imports were up 12% from last year, largely due to increased arrivals from Brazil. The strong import total brings concerns that China may not need US corn.

  • Ethanol margins should see some price support with a potential turn in energy prices. Both crude oil and gasoline prices saw support on concerns of trade disruptions in the Red Sea and the Suez Canal. Crude oil traded 2-3% higher during the session.

  • South American weather should remain good for Argentina and Brazil’s first crop corn in the coming week, but it’s still a concern in the longer view for the corn market. The impact of the potential of the Argentina crop returning to normal production will bring competition for US corn in the export market this spring.

Above: Since the middle of November, the corn market has been rangebound between 470 on the downside and 497 on the upside. Upside resistance appears to be heavy given the bearish reversal that was posted on December 6. That heavy resistance also extends up to the October high of 509 ½, which the market will need more bullish influence to trade through. If the market retreats through nearby 470 support, major support remains near 460.

Corn Managed Money Funds net position as of Tuesday, December 12. Net position in Green versus price in Red. Managers net bought 8,963 contracts between December 6 – 12, bringing their total position to a net short 151,570 contracts.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Front month soybeans continue to be rangebound, largely between 1290 and 1400. At some point, the front month will eventually break out of that range, and if it breaks out to the downside, then the first risk would be 1180. If the breakout occurs to the topside, then the first opportunity would be 1510. The biggest looming catalyst behind a potential downside breakout is the projected record global carryout of soybeans, while the biggest looming catalyst for a potential upside breakout is continued adverse South American weather. Given the uncertainty of which direction the market will go, Grain Market Insider recently recommended adding to sales as the current price level is still historically good. It’s been disappointing how the market has been unable to push higher despite the South American planting disruptions. Because of that, Grain Market Insider’s concern is that, if the weather pattern doesn’t remain adverse, the path of least resistance could be lower. Grain Market Insider will continue to look at additional sales opportunities, as well as potential re-ownership strategies.

  • No action is recommended for the 2024 crop. Since the inception of the Nov ’24 contract, it has traded at a discount to the 2023 crop from as much as 142 back in July, to as little as 17 ¾ in early October during harvest. While the spread difference between the two crops has seen a good amount of volatility, Nov ’24 has been largely rangebound between 1250 and 1320 since it rallied off its 1116 ¼ low last May. To date, Grain Market Insider has not recommended any sales for next year’s soybean crop. First sales targets will probably be early winter at the earliest. Currently, Grain Market Insider’s focus is also on watching for any opportunities to recommend buying call options.

  • No Action is currently recommended for 2025 Soybeans. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted two springs from now, and it may be some time before conditions are conducive to consider making any recommendations. Be patient as we monitor the markets for signs of improvement.

To date, Grain Market Insider has issued the following soybean recommendations:

  • Soybeans ended the day firmly higher as trade waits to see if the wetter Brazilian forecast materializes or remains hot and dry. Both soybean meal and oil ended the day higher as well with some support from a jump in crude oil prices.

  • Additional support came from an announcement out of Argentina stating that the government will look to increase export taxes on both soybean meal and oil from 31% to 33% as they attempt to raise funds and fight the extreme inflation that is plaguing the country. The increase in taxes hits especially hard considering the large amount of soybean meal that they are expected to export in the coming marketing year.

  • Crude oil prices jumped this morning after BP announced that they were pausing all Red Sea shipments of oil following attacks on vessels by Iran-backed Houthi rebels. Many freight firms have suspended transportation in the wake of the attacks, and this increase in crude prices has been supportive to soybean oil.

  • Weekly US export inspections for soybeans were good totaling 51.9 mb for the week ending December 14. This was toward the upper range of analysts’ expectations but was still down 17% from the previous year. Total inspections for 23/24 are now at 778 mb.

Above: After posting a high of 1398 ½ in November, soybeans found support around 1292. Overhead, nearby resistance remains near 1350 and again around 1400. If the market breaks support at 1292, it runs the risk of testing 1250.

Soybean Managed Money Funds net position as of Tuesday, December 12. Net position in Green versus price in Red. Money Managers net sold 5,784 contracts between December 6 – 12, bringing their total position to a net long 30,849 contracts.

Wheat

Market Notes: Wheat

  • All three US wheat classes posted losses, with Kansas City leading the way lower. Rains in the US Southern Plains, along with a firmer US Dollar may have been keeping a lid on the wheat market today. Additionally, the lack of follow through Chinese purchases is viewed as negative.

  • Disappointing weekly wheat inspections at 10.5 mb bring the 23/24 total inspections to 328 mb. That is down 22% from last year and is running behind the pace needed to meet the USDA’s goal.

  • Saudi Arabia bought 1.35 mmt of wheat over the weekend. Russia is believed to be the one to fulfill this purchase. As long as Russia continues to remain the dominant player on the export front, it will be difficult for wheat prices to rally.

  • Managed funds have recently reduced their net short position in wheat, but still hold about 70,000 short contracts of Chicago wheat. This does keep the market primed for more of a rally if there is a catalyst in the form of friendly news.

  • According to India’s food secretary, the nation has no current plan to import wheat from Russia. Additionally, they will hold off on adjusting any wheat import duties.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. Between late July and the end of November, front month Chicago wheat trended lower, driven mostly by weak US demand and lower world wheat prices. During that time, and as managed funds established most of their short position of nearly 120,000 contracts, the market became extremely oversold. Since then, as the market rallied to a high of 649 ½, China made several US SRW wheat purchases, and funds covered more than 23,000 short contracts. During that runup, Grain Market Insider recommended making an additional sale to take advantage of the elevated prices in case the rally was temporary since US wheat prices remain elevated relative to other world exporters, despite the increase in demand. If the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Chicago wheat. Since July, new crop Chicago wheat has slowly worked its way lower with no significant opportunities to make additional sales. The lower market was driven mostly by managed fund selling from lower world wheat prices and weak US demand. As the market sold off, it became significantly oversold with managed funds building a short position in excess of 100,000 contracts. While bearish headwinds remain, the large fund short position and oversold condition of the market are two factors that could fuel a sizeable, short-covering rally. Additionally, price seasonals are supportive as prices tend to build in some risk premium going into the winter months. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for further price erosion, and back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward this summer’s highs, Grain Market Insider is prepared to recommend adding to current sales levels and possibly even purchasing call options to protect those sales. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset much of the original cost and move toward a net neutral cost for the remaining position.

  • No action is currently recommended for 2025 Chicago Wheat. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next fall. It will probably be mid-winter before Grain Market Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following Chicago wheat recommendations:

Above: After rallying to 649 ½, Chicago wheat became overbought and turned lower after the December 8 USDA report. Since then, the market has found nearby support near 600. Nearby resistance remains overhead near 650, with additional resistance between 660 and 665. If the market breaks nearby support, it may test the 50-day moving average, and then support near 556.

Chicago Wheat Managed Money Funds net position as of Tuesday, December 12. Net position in Green versus price in Red. Money Managers net bought 26,693 contracts between December 6 – 12, bringing their total position to a net short 69,529 contracts.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since late July old crop KC wheat has been in a downtrend that has largely been driven by managed fund selling on low world wheat prices and weak US export demand. As the selloff progressed, the market became oversold, and the funds established the largest short position in three years. Even though bullish headwinds remain, these two factors have fueled the recent short-covering rally, which could extend much further if a bullish catalyst enters the market. This would also line up with the historical tendency for price appreciation as the market builds risk premium going into wintertime. Grain Market Insider’s strategy is to look for price appreciation going into this winter, as weather becomes a more prominent market mover and may consider suggesting additional sales if prices become over extended.

  • No new action is recommended for 2024 KC wheat. At the end of August, the Jul ’24 contract broke out of roughly a one-year trading range, between 740 and 860, to the downside. Since that breakout, the market has continued to slowly stair-step lower, largely driven by managed fund selling, weak US export demand, and lower world wheat prices. As the selloff progressed, the funds built up the largest net short position in three years. While bearish headwinds remain, the significant oversold condition of the market and the large fund net short position are two factors that could fuel a short-covering rally in the months ahead. Price seasonals are also supportive as prices tend to build in some risk premium going into the winter months. Back in August, Grain Market Insider recommended buying Jul’24 KC wheat 660 puts to protect the downside following the range breakout. Though as the market recently got further extended into oversold territory and the July contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. Moving forward, Grain Market Insider is prepared to recommend exiting the last 25% on any further supportive market developments.

  • No action is currently recommended for 2025 KC Wheat. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted next fall. It will probably be mid-winter before Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following KC recommendations:

Above: Following bearish reversals on December 6th and December 8th, the market has shown that there is significant overhead resistance above 680. The market is also showing signs of being oversold following the recent runup, which adds upward resistance and could add pressure if the market continues lower. Below the market, initial support comes in near 630, with further support remaining around 595 and 575. 

KC Wheat Managed Money Funds net position as of Tuesday, December 12. Net position in Green versus price in Red. Money Managers net bought 8,154 contracts between December 6 – 12, bringing their total position to a net short 30,704 contracts.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop. Following last July’s rally, the market has slowly stair-stepped lower, primarily due to low world wheat prices, weak US export demand, and managed fund selling. With the funds building a record large short position as the market sold off. Since weak US export demand remains the main impediment to higher prices, the market continues to be at risk of further downside erosion. The record large fund short position could fuel a rally back higher if a bullish catalyst enters the scene, and if that happens, it may signal that a near-term low is in place. Earlier this year, Grain Market Insider made a sales recommendation during the July rally near 820, and with that sale in place, Grain Market Insider’s strategy is to look for price appreciation this winter with an eye on considering additional sales around 725 – 775, and again north of 800. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 Minneapolis wheat. At the end of August, the Sept ’24 contract traded to a peak of 871 ¾ and has continued to slowly stair-step lower, largely driven by lower world wheat prices, weak US export demand, and managed fund selling, and as the selloff progressed, the funds built up a record large short position. While bearish headwinds remain, the significant oversold condition of the market and the large fund net short position are two factors that could fuel a short-covering rally in the months ahead. Price seasonals are also supportive as prices tend to build in some risk premium going into the winter months. Back in August, Grain Market Insider recommended buying July ’24 KC wheat 660 puts to protect the downside following a 1-year range breakout in KC wheat. Though recently, as the KC market extended further into oversold territory and the July ‘24 KC wheat contract showed signs of support near 630, Grain Market Insider recommended exiting 75% of the originally recommended position. While in the same time frame, Grain Market Insider also recommended making an additional sale as the Sept ’24 Minneapolis contract broke long time 743 support. For now, moving forward, Grain Market Insider is prepared to recommend exiting the last 25% of the open puts on any further supportive market developments.

  • No action is currently recommended for the 2025 Minneapolis wheat crop. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted two springs from now. It will probably be mid-winter before Grain Market Insider starts considering the first sales targets.

To date, Grain Market Insider has issued the following Minneapolis wheat recommendations:

Above: After making a new contract low on November 27, the March contract found buying interest from its oversold status and record fund short. Since then, the market posted a bearish reversal on December 6, showing significant resistance in the 750 area. If prices can break through upside resistance, they could run toward 790. If prices retreat, nearby support could be found around 718, with further support near the recent low of 697 ½.

Minneapolis Wheat Managed Money Funds net position as of Tuesday, December 12. Net position in Green versus price in Red. Money Managers net bought 123 contracts between December 6 – 12, bringing their total position to a net short 26,768 contracts.

Other Charts / Weather

Brazil 7-day total accumulated precipitation courtesy of the National Weather Service, Climate Prediction Center.

Argentina 7-day total accumulated precipitation courtesy of the National Weather Service, Climate Prediction Center.