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11-16 Corn Higher, Beans and Wheat lower in a “Risk Off” Day for Commodities

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Corn futures managed to hang onto gains today as the rest of the grain complex fell lower. Strong weekly export sales helped provide underlying support.  

  • New forecasts for South America showing much needed precipitation in western and central Brazil this weekend and into the end of the month sparked liquidation in soybeans today.

  • Soybean meal and soybean oil followed the commodity trend lower today. WTI crude oil shed over 4% as well, which added to the momentum lower for soybean oil.

  • Poor weekly export sales and pressure from outside markets pushed all three wheats lower today.

  • To see the updated US Drought Monitor and the Brazil 2 week forecast precipitation, percent of normal, courtesy of the National Weather Service, Climate Prediction Center, 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 November’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. So, for now, the thought process is to hold tight on any further sales recommendations until later this fall or early winter, with the objective of seeking out better pricing opportunities. If the market has not turned around by early winter, then Grain Market Insider may sit tight on the next sales recommendations until spring. If you end up harvesting more bushels than you can store this fall and must move them, consider protecting those sold bushels with either July or September ’24 call options.

  • No new action is recommended for 2024 corn. Since late February ’22, Dec ’24 has been bound by 489 ¾ on the bottom and 600 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 Dec ’23 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 lower trend without further bullish input. 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 560 and 610 Dec ’23 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:

  • Corn futures saw positive money flow on Thursday, supported by a better-than-expected Export Sales report for last week. Dec corn futures finished 4 cents higher, but 9 1/2 cents off the session low, despite strong selling pressure in the grain and crude oil markets.

  • USDA reported weekly exports sales of 1.808 MMT (71.2 mb) for the current marketing year last week.  This was larger than market expectations and brings total sales for the 2023-24 marketing year to 21,098 MMT, up 33% versus last year. Mexico was the top buyer of U.S. corn last week at 41.8 mb.

  • Crude oil prices traded over 4% lower during the session on Thursday. The drop in crude oil prices could be a limiting factor and margins for ethanol production could tighten, slowing this key domestic demand.

  • Some improving forecast for Brazil helped weigh on soybean prices for the session. Corn futures traded independently from both soybeans and wheat on the day. While Brazil forecast is staying dry overall, a weather wildcard will be Argentina. After two years of drought, conditions are improved, which could lead to price limiting production from the South American country.

  • Despite the positive price action on Thursday, Dec corn futures are looking to test key resistance at the $4.80 price level. This price point has been a cap overtop the corn market since the start of November.

Above: The nearby contract in corn has rolled from the December to the March, and while the chart looks like prices made a significant jump, it is in fact the premium in the March that is being represented on the chart. Upside resistance remains between 500 and 509 ½, while support below the market remains 460, with the next major area of support near 415.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. At the end of August, the soybean market turned lower and didn’t find any significant buying interest until it traded down to 1251 in early October. Since then, the nearby contract has traded through nearby resistance and the 50-day moving average and may be poised to test the August high. Looking back, since last May, nearby soybeans have been in a range from 1435 up top to 1251 down below. Last summer, Grain Market Insider did make two sales recommendations in the 1310 – 1360 price window versus Nov ’23. Given that those sales recommendations were made and given that now is not the time of year to be making many sales, if any, Grain Market Insider is content to hold tight on any further sales recommendations until later this fall or early winter. The focus for strategy right now is to be on the lookout for any call option buying opportunities. If you end up harvesting more bushels than you can store this fall, consider protecting any sold bushels with July or Aug ’24 call options. 

  • 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. And 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 July. 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 soonest. 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 following a new forecast for South America, which features better chances of rain for Argentina and northern and central Brazil that is expected to begin on Sunday and last until at least the end of the month. Export sales were strong, but were overshadowed by the weather.

  • Both soybean meal and oil ended the day lower as well, with a sharp selloff in crude oil which saw prices break support and drop below 73 dollars a barrel. Soybean meal may encounter pressure down the road as Argentina’s soy crop is being planted in better conditions than the previous year, which could allow them to export more soybean meal next year.

  • For the week ending November 9, the USDA reported an increase of 144.0 mb of soybean export sales for 23/24, a marketing year high. Last week’s export shipments of 73.2 mb were above the 30.6 mb needed each week to meet the USDA’s expectations. Primary destinations were to China, the Netherlands, and Bangladesh.

  • Following a string of sales recently to both China and unknown, another flash sale was reported this morning of 220,000 mt of soybeans for delivery to unknown destinations for 23/24. Since last week, China and unknown destinations have purchased well over 100 mb of soybeans. President Biden and Chinese President Xi met and reportedly had a “productive meeting”.

Above: January soybeans closed sharply higher following a gap higher open on Nov. 13. The development is bullish, though resistance remains between 1385 and 1410, and the market may seek to fill the gap left from 1349 ¾. If the market can close above 1410, it would be poised to make a run toward 1490 – 1505. If not, initial support below the market rests between 1336 and the 50-day moving average near 1317.

Wheat

Market Notes: Wheat

  • The markets took a risk off posture today, with many commodities trading lower. All three US wheat futures classes posted losses with KC leading the way down. Paris milling wheat futures offered no support either, with losses of around two Euros per metric ton.

  • The USDA reported a dismal increase of 6.5 mb of wheat export sales for 23/24. Each week, 14.8 mb needs to be exported to reach their goal of 700 mb for 23/24, but last week’s shipments totaled only 11.4 mb.

  • Adding to pressure in the wheat market is the Australian harvest, with yields so far better than anticipated. However, according to the Australian government, their wheat production will still be over a third lower than last year’s record harvest due to the hot and dry weather this season.

  • Ukraine has reportedly began repairing railroads, presumably damaged in the war. This repair work will allow for cargo to be transported to three Black Sea ports near Odesa. These shipments would then be shipped on Ukraine’s humanitarian corridor that was created after Russia left the Black Sea Grain Initiative.

  • France is seeing heavy rains and flooding, which may impact the 2024 soft wheat crop, according to FranceAgriMer. France has seen the highest total rainfall ever (for 26 consecutive days) from October 18 to November 12. President Macron is said to be visiting some of the affected areas.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. After making a high in late July, nearby Chicago wheat trended lower until finding support at 540 on September 29, from which it rallied back, briefly piercing 600 and the 50-day moving average. The market now appears to be finding value in the 540 – 616 range established since early September, as weak US export demand, driven by cheap Russian exports, remains the dominant headwind to higher prices. Grain Market Insider made sales recommendations in the late June rally around 720 and again earlier this fall near 604. With those two sales, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales in the 625 – 650 range. 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 Chicago wheat. After retesting the 800 level back in July, new crop Chicago wheat retreated steadily until hitting the late September low of 610 ¼. Since then, prices have been mostly rangebound between 620 and 650.  Just as fund positioning and weak fundamentals have driven old crop prices down closer to the mid to upper 500 range and new crop prices to the low to mid 600s. The risk of further new crop price erosion remains without fresh bullish input to move prices higher. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for this possibility, 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 some 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: The nearby contract in corn has rolled from the December to the March, and while the chart looks like prices made a significant jump, it is in fact the premium in the March that is being represented on the chart. Upside resistance remains between 604 ½ and 618, while support below the market may be found between 564 and 554.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since late July the nearby KC wheat has been in a downtrend that has had periods of relative stability, but not any significant reversals higher. The market once again found nearby support as it traded to, and held, its recent low of 625 ½. Currently, weak US export demand, driven by cheap Russian exports, remains the dominant headwind, and the market is in need of bullish input to stabilize and rally prices back higher. If a bullish catalyst enters the market to push prices above 700, it may signal that a fall low is in place and would line up with the historical tendency for prices to appreciate into winter and early spring. Grain Market Insider’s strategy is to look for price appreciation going into this winter, as weather becomes a more prominent market mover with an eye on considering additional sales near 750 – 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 KC wheat. Back in July, the July ’24 contract tested the 870 range, while Dec ‘23 was testing the 930 level. Since then, fund positioning and weak demand fundamentals have driven both the nearby old crop contracts and July ’24 prices lower, with nearby old crop prices now in the low to mid 600s, while July ’24 retains about a 15 cent premium. The risk for the July ’24 contract remains the same as for the nearby old crop contracts, in that the market needs fresh bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July 660 puts to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 800 to take advantage of elevated prices before they eroded further. If the market receives the needed impetus to move prices back toward 750 – 800, Grain Market Insider is prepared to recommend adding to current sales levels. 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 some of the original cost and move toward a net neutral cost for the remaining position.

  • 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 breaking through the bottom of the consolidation range at 655, the market has drifted lower and tested minor support which has held so far with the low at 625 ½. The next level of major support below that remains near 575. Major resistance above the market remains around 690 – 700.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop. After making highs in July, and the subsequent downtrend to the October 2 low of 707 ½, nearby Minneapolis wheat has traded mostly sideways with no significant reversal higher. With weak US export demand still the primary impediment to higher prices, the market remains at risk of trending lower if September’s low close of 709 is violated to the downside unless another bullish impetus enters the scene. If that happens and prices begin to push back toward 775, 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 going into this winter with an eye on considering additional sales around 750 – 800, and again north of 825. 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. Even though the primary strategy is to look for higher prices, Grain Market Insider may also consider a “plan b” in the next couple of weeks if prices grind sideways to lower.

  • No new action is currently recommended for 2024 Minneapolis wheat. In the last three months, the Sep ’24 contract has gone from a 60 – 80 discount to Dec ’23, to a 50-cent premium. Weak fundamentals led bear spreading to drive Dec ’23 in search of new contract lows, while Sep ’24 remains off its low from last May. The risk for the Sep ’24 contract is much like that of Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July KC 660 puts (for their greater liquidity, and correlation to Minneapolis pricing) to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 815 to take advantage of elevated prices. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further. Grain Market Insider will then be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

  • 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: The nearby contract in corn has rolled from the December to the March, and while the chart looks like prices made a significant jump, it is in fact the premium in the March that is being represented on the chart. Nearby resistance remains near 755 with heavy resistance above the market near the September high of 791. Below the market initial support lies near 721, with major support down near 669, the May ’21 low.

Other Charts / Weather

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11-16 Midday: Grains Lower at Midday

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn
DEC ’23 468.5 -2.25
MAR ’24 486.5 -2
DEC ’24 510 -2.25
Soybeans
JAN ’24 1356.5 -28.5
MAR ’24 1370.25 -29.25
NOV ’24 1290.5 -23.5
Chicago Wheat
DEC ’23 550 -10.5
MAR ’24 577.75 -10.25
JUL ’24 608 -10
K.C. Wheat
DEC ’23 632 -7.75
MAR ’24 639.75 -8.5
JUL ’24 650.75 -10
Mpls Wheat
DEC ’23 730.5 -4.75
MAR ’24 743.25 -4.75
SEP ’24 763.5 -5.5
S&P 500
DEC ’23 4507 -12.25
Crude Oil
JAN ’24 73.71 -3.08
Gold
JAN ’24 1999 24.3

  • Corn is trading lower today due to improved rain chances in South America and pressure from sharply lower soybeans. Export sales were good and are providing some support.

  • For the week ending November 9, the USDA reported an increase of 71.2 mb of corn export sales for 23/24. Last week’s export shipments of 26.9 mb were below the 42.9 mb needed each week to meet the USDA’s export estimate. Primary destinations were to Mexico, Columbia, and Honduras.

  • In South America, improved chances of rain are forecast from this Sunday through the end of November or longer, in what would be a reversal from the hot and dry conditions that the crop was planted in.

  • Dry weather in the U.S. is helping the corn harvest wrap up on a high note, but the expected production of 15.234 bb of new corn supplies is pressuring prices.

  • Soybeans are sharply lower today following an updated weather forecast for South America, which is calling for better rain chances throughout November. Both soybean meal and oil are trading lower.

  • While central and northern Brazil, along with Argentina, are expected to get more frequent showers, southern Brazil continues to get rain and is too wet.

  • Following a string of sales recently to both China and unknown, another flash sale was reported this morning of 220,000 mt of soybeans for delivery to unknown destinations for 23/24.

  • For the week ending November 9, the USDA reported an increase of 144.0 mb of soybean export sales for 23/24, a marketing year high. Last week’s export shipments of 73.2 mb were above the 30.6 mb needed each week to meet the USDA’s expectations. Primary destinations were to China, the Netherlands, and Bangladesh.

  • Wheat is trading lower today in what appears to be a risk-off day for most commodities. Export sales for wheat were poor again, but both corn and soybeans had strong weeks and are trading lower anyways.

  • For the week ending November 9, the USDA reported an increase of 6.5 mb of wheat export sales, which was 50% lower than the previous week. Last week’s export shipments of 11.4 mb were below the 14.8 mb needed each week, and primary destinations were to the Philippines, Mexico, and South Korea.

  •  Ukrainian grain exports have fallen by 30% year over year due to Russia’s attacking of port cities, with 5.2 mmt of wheat exported for the season, which is down 12% from last year.

  • While Australia’s wheat crop has struggled with hot and dry conditions, harvest has been ahead of pace with yields so far coming in better than expected, but still more than a third below last year.

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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11-16-23 Opening Update: Grains Lower on Rainy Brazilian Forecast

ByGrain Market Insider

All prices as of 6:30 am Central Time

Corn

DEC ’23 468.75 -2
MAR ’24 486.25 -2.25
DEC ’24 510 -2.25

Soybeans

JAN ’24 1372.75 -12.25
MAR ’24 1386.75 -12.75
NOV ’24 1303.25 -10.75

Chicago Wheat

DEC ’23 552.75 -7.75
MAR ’24 581.5 -6.5
JUL ’24 612.25 -5.75

K.C. Wheat

DEC ’23 637.5 -2.25
MAR ’24 645.25 -3
JUL ’24 656.5 -4.25

Mpls Wheat

DEC ’23 733 -2.25
MAR ’24 745.5 -2.5
SEP ’24 769 -2.25

S&P 500

DEC ’23 4510.25 -9

Crude Oil

JAN ’24 76.15 -0.64

Gold

JAN ’24 1979.8 5.1

  • Corn is trading slightly lower this morning with pressure from lower soybeans, rain in the Brazilian forecast, and large domestic supplies.

  • U.S. harvest conditions have been favorable and the work is about wrapped up. Despite the lack of rain this growing season, harvest is estimated to bring a record 15.234 billion bushels of new corn.

  • U.S. ethanol stocks were unchanged at 21m bbl, below analyst expectations of 21.353. Plant production was at 1.047m b/d, slightly below the trade guess.

  • Export sales of corn will be released today, and the trade range is between 900k and 1,700k tons with an average guess of 1,203k tons.

  • Soybeans are lower this morning following changes in the Brazilian forecast and after Biden’s meeting with Chinese president Xi. Both soybean meal and oil are lower.

  • Soybeans have owed a large portion of their rally to dry South American weather, so now that rain is expected from Sunday to the end of November or longer, prices have retreated.

  • Yesterday’s NOPA report showed a record 187.237 mb of soybeans crushed in October, an all-time high for any month and above analyst expectations.

  • Export sales for soybeans will also be released today and the trade range is between 2,900k and 4,500k tons with an average of 3,431k following a slew of sales to China.

  •  

  • Wheat is lower again this morning remaining near its recent lows with Chicago wheat posting the bulk of the losses as poor export demand keeps prices down.

  • U.S. wheat exports are at a 52 year low, and even Europe is struggling to export their wheat due to the availability of extremely cheap Russian offers.

  • Today’s export sales report is expected to show another low number for wheat with the trade range between 250k and 500k tons with the average guess at 355k.

  • While Australia’s wheat crop has struggled with hot and dry conditions, harvest has been ahead of pace with yields so far coming in better than expected, but still more than a third below last year.

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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11-15 Corn and Beans Lower, and Wheat Follows as Traders Take Profits

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Profit taking, triggered by the prospect of much needed rain in Brazil over the weekend, led to a bearish reversal and a lower close in the corn market after it posted a new high for the recent move up.

  • Despite impressive record NOPA crush numbers for October, nearby soybeans sold off and settled lower with a bearish reversal, while the deferred months remained firm, on talk of rain in Brazil’s two week forecast.

  • Soybean meal posted a bearish key reversal and closed lower after making a new high today. The selloff may have triggered some profit taking and certainly weighed on nearby soybeans. Even though bean oil settled off its high of the day, it still posted a solid close following the rally in palm oil.

  • The lack of fresh bullish news and a general risk off attitude in other markets carried over to the wheat market, contributing to its weakness. Although nearby KC and Minneapolis settled unchanged to slightly firmer, the wheat complex was mostly lower to close the day, after trading on both sides of unchanged.

  • To see the US 7-day precipitation forecast, Brazil’s 2-week precipitation forecast, and the South American GRACE-Based Drought Indicators, courtesy of NOAA, NWS, CPC, NASA and the NDM, 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 November’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. So, for now, the thought process is to hold tight on any further sales recommendations until later this fall or early winter, with the objective of seeking out better pricing opportunities. If the market has not turned around by early winter, then Grain Market Insider may sit tight on the next sales recommendations until spring. If you end up harvesting more bushels than you can store this fall and must move them, consider protecting those sold bushels with either July or September ’24 call options.

  • No new action is recommended for 2024 corn. Since late February ’22, Dec ’24 has been bound by 489 ¾ on the bottom and 600 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 Dec ’23 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 lower trend without further bullish input. 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 560 and 610 Dec ’23 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:

  • Corn futures failed to push through resistance early in the session and reversed over during the day.  Dec corn lost 7 1/2 cents on the session. The weak price action saw the daily chart post a bearish reversal, which could lead to additional technical selling on Thursday.

  • Brazil’s weather forecast is looking for some possible rain chances this weekend into early next week. The prospect of rain triggered profit taking in the grain markets. Longer term models are keeping the current dry and hot forecast in place, but the Brazil crops could see some temporary relief.

  • Argentia weather is improving, which should support corn and soybean production this season. After two year of drought, Argentina crop coming back to full production would greatly limit the impact of a possible loss in Brazil bushels.

  • The USDA will release the weekly export sales report on Thursday morning. Expectations are for sales to range between 900,000 – 1.55 MMT of new sales last week. The USDA announced a flash 124,000 MT (4.8 mb) for corn to Japan this morning for the current marketing year.

  • Daily ethanol production for the week averaged 1.047 million barrels. This was up 0.5% from last week and up 3.6% from last year. Ethanol stocks were 20.954 million barrels. This was the lowest since December 24, 2021. Last week, corn used for ethanol was estimated at 103.92 million bushels, and the overall trend for corn usage stays friendly compared to USDA forecasts.

Above: The nearby contract in corn has rolled from the December to the March, and while the chart looks like prices made a significant jump, it is in fact the premium in the March that is being represented on the chart. Upside resistance remains between 500 and 509 ½, while support below the market remains 460, with the next major area of support near 415.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. At the end of August, the soybean market turned lower and didn’t find any significant buying interest until it traded down to 1251 in early October. Since then, the nearby contract has traded through nearby resistance and the 50-day moving average and may be poised to test the August high. Looking back, since last May, nearby soybeans have been in a range from 1435 up top to 1251 down below. Last summer, Grain Market Insider did make two sales recommendations in the 1310 – 1360 price window versus Nov ’23. Given that those sales recommendations were made and given that now is not the time of year to be making many sales, if any, Grain Market Insider is content to hold tight on any further sales recommendations until later this fall or early winter. The focus for strategy right now is to be on the lookout for any call option buying opportunities. If you end up harvesting more bushels than you can store this fall, consider protecting any sold bushels with July or Aug ’24 call options. 

  • 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. And 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 July. 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 soonest. 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 were bear spread today, with the front months ending the day lower, with November 2024 ending slightly higher. January took out yesterday’s high this morning and reached 13.98-1/2, but has struggled to get above the 14-dollar mark.

  • NOPA soybean crush numbers were very impressive today, with October 2023 crush at 187.775 mb, which was an all-time high for any month and way above the average trade guess of 187.237 mb. Soybean oil stocks came in below expectations at 1.099 billion bushels and this was the sixth straight monthly fall, signaling the still strong demand.

  • This afternoon, President Biden and Chinese President Xi will meet in San Francisco for the Asia-Pacific Economic Cooperation summit, and leading up to the meeting, China has been an active buyer of US soybeans. Since last week, China and unknown destinations have purchased over 100 mb of soybeans from the US.

  • Weather in central and northern Brazil remains very hot and dry, with talk of an increased chance for rain over the next 7-days, but southern Brazil continues to receive too much rain. Trade has been watching South American weather closely, but Argentinian weather has improved recently, which would add a large amount of soybean meal back to the market if their soy production returns to its typical production of 45 mmt, rather than the meager 25 mmt in last year’s drought.

Above: January soybeans closed sharply higher following a gap higher open on Nov. 13. The development is bullish, though resistance remains between 1385 and 1410, and the market may seek to fill the gap left from 1349 ¾. If the market can close above 1410, it would be poised to make a run toward 1490 – 1505. If not, initial support below the market rests between 1336 and the 50-day moving average near 1317.

Wheat

Market Notes: Wheat

  • A risk off session led to a lower close for the wheat market. Lower corn, soybeans, crude oil, and Matif wheat futures, in addition to a higher US dollar, all offered weakness to US wheat futures. A lack of fresh bullish news may have also played a part in today’s softness.

  • According to the Ukrainian Grain Association, their wheat exports are down 32% from last year. Although this statement may sound like a broken record, it bears repeating:  Russia continues to dominate the wheat export market, and that is keeping a lid on futures prices, as US exports have fallen to the lowest level in 52 years.

  • The US Plains may see some shower activity over the next five days or so. While rain totals are not expected to be heavy, it is still expected to bring relief to some of the drier areas.

  • Kazakhstan’s wheat production estimate has been reduced by 5.6% to 13.0 mmt due to heavy rain and delays to harvest.

  • The drought in Brazil is causing more shipping delays than expected, with low Amazon River levels, and grain exports are being re-routed South. While this is mainly impacting corn and soybeans at this point, it could have repercussions for the grain markets as a whole.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. After making a high in late July, nearby Chicago wheat trended lower until finding support at 540 on September 29, from which it rallied back, briefly piercing 600 and the 50-day moving average. The market now appears to be finding value in the 540 – 616 range established since early September, as weak US export demand, driven by cheap Russian exports, remains the dominant headwind to higher prices. Grain Market Insider made sales recommendations in the late June rally around 720 and again earlier this fall near 604. With those two sales, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales in the 625 – 650 range. 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 Chicago wheat. After retesting the 800 level back in July, new crop Chicago wheat retreated steadily until hitting the late September low of 610 ¼. Since then, prices have been mostly rangebound between 620 and 650.  Just as fund positioning and weak fundamentals have driven old crop prices down closer to the mid to upper 500 range and new crop prices to the low to mid 600s. The risk of further new crop price erosion remains without fresh bullish input to move prices higher. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for this possibility, 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 some 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: The nearby contract in corn has rolled from the December to the March, and while the chart looks like prices made a significant jump, it is in fact the premium in the March that is being represented on the chart. Upside resistance remains between 604 ½ and 618, while support below the market may be found between 564 and 554.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since late July the nearby KC wheat has been in a downtrend that has had periods of relative stability, but not any significant reversals higher. The market once again found nearby support as it traded to, and held, its recent low of 625 ½. Currently, weak US export demand, driven by cheap Russian exports, remains the dominant headwind, and the market is in need of bullish input to stabilize and rally prices back higher. If a bullish catalyst enters the market to push prices above 700, it may signal that a fall low is in place and would line up with the historical tendency for prices to appreciate into winter and early spring. Grain Market Insider’s strategy is to look for price appreciation going into this winter, as weather becomes a more prominent market mover with an eye on considering additional sales near 750 – 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 KC wheat. Back in July, the July ’24 contract tested the 870 range, while Dec ‘23 was testing the 930 level. Since then, fund positioning and weak demand fundamentals have driven both the nearby old crop contracts and July ’24 prices lower, with nearby old crop prices now in the low to mid 600s, while July ’24 retains about a 15 cent premium. The risk for the July ’24 contract remains the same as for the nearby old crop contracts, in that the market needs fresh bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July 660 puts to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 800 to take advantage of elevated prices before they eroded further. If the market receives the needed impetus to move prices back toward 750 – 800, Grain Market Insider is prepared to recommend adding to current sales levels. 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 some of the original cost and move toward a net neutral cost for the remaining position.

  • 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 breaking through the bottom of the consolidation range at 655, the market has drifted lower and tested minor support which has held so far with the low at 625 ½. The next level of major support below that remains near 575. Major resistance above the market remains around 690 – 700.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop. After making highs in July, and the subsequent downtrend to the October 2 low of 707 ½, nearby Minneapolis wheat has traded mostly sideways with no significant reversal higher. With weak US export demand still the primary impediment to higher prices, the market remains at risk of trending lower if September’s low close of 709 is violated to the downside unless another bullish impetus enters the scene. If that happens and prices begin to push back toward 775, 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 going into this winter with an eye on considering additional sales around 750 – 800, and again north of 825. 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. Even though the primary strategy is to look for higher prices, Grain Market Insider may also consider a “plan b” in the next couple of weeks if prices grind sideways to lower.

  • No new action is currently recommended for 2024 Minneapolis wheat. In the last three months, the Sep ’24 contract has gone from a 60 – 80 discount to Dec ’23, to a 50-cent premium. Weak fundamentals led bear spreading to drive Dec ’23 in search of new contract lows, while Sep ’24 remains off its low from last May. The risk for the Sep ’24 contract is much like that of Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July KC 660 puts (for their greater liquidity, and correlation to Minneapolis pricing) to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 815 to take advantage of elevated prices. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further. Grain Market Insider will then be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

  • 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: The nearby contract in corn has rolled from the December to the March, and while the chart looks like prices made a significant jump, it is in fact the premium in the March that is being represented on the chart. Nearby resistance remains near 755 with heavy resistance above the market near the September high of 791. Below the market initial support lies near 721, with major support down near 669, the May ’21 low.

Other Charts / Weather

US 7 day precipitation forecast courtesy of NOAA, Weather Prediction Center.

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

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11-15 Midday: Corn and Beans Consolidate After Yesterday’s Rally

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn

DEC ’23 473.25 -5
MAR ’24 490 -4.25
DEC ’24 514.5 -3.5

Soybeans

JAN ’24 1386.5 -3.25
MAR ’24 1399.75 -2.75
NOV ’24 1310 -1.5

Chicago Wheat

DEC ’23 564.25 -7.75
MAR ’24 592.75 -5
JUL ’24 623.25 -3.5

K.C. Wheat

DEC ’23 642.25 2.5
MAR ’24 650.75 1.25
JUL ’24 663.5 0.75

Mpls Wheat

DEC ’23 734.5 0
MAR ’24 747.25 0
SEP ’24 769 -2.25

S&P 500

DEC ’23 4532 21

Crude Oil

JAN ’24 77.01 -1.16

Gold

JAN ’24 1976.1 -0.9

  • Corn is trading lower near midday, after trading higher earlier this morning following friendly Producer Price Index data, which showed inflation receding. Yesterday’s CPI data was also friendly and brough the dollar to a two-month low.

  • This morning, private exporters reported a flash sale of 124,000 metric tons of corn for delivery to Japan during the 2023/2024 marketing year.

  • Values of corn on a FOB basis have shown a discount for US corn compared to Brazil, but Brazilian exports remain active with ANEC expecting November shipments at 8.3 mmt.

  • The severe drought in the Amazon region of Brazil has caused water levels on rivers used for grain transportation to fall lower than expected, which is limiting barge movement for corn and soybeans.

  • Soybeans are trading lower today, after giving up earlier strength from overnight. Soybean meal is slightly lower, while soybean oil is higher.

  • Brazilian soybean exports are expected to reach 5.106 million tons in November, which would compare to 1.918 in the same month a year ago.

  • NOPA October US soybean crush is expected to be a record 187.237 mb. If that number is realized, October crush would be up 13.2% from September’s crush of 165.456 mb.

  • Analysts are expecting that the El Nino weather pattern will support crude palm oil prices, as major palm oil producing countries’ output will likely decline in 2024.

  • Wheat is mixed today, with Chicago and Minneapolis are slightly lower, but KC higher after yesterday’s friendly CPI data, and today’s friendly PPI data caused the dollar to drop significantly, showing that inflation may be easing.

  • Ukrainian grain exports have fallen by 30% year over year due to Russia’s attacking of port cities with 5.2 mmt of wheat exported for the season, which is down 12% from last year.

  • Wheat production in Kazakhstan has fallen by an estimated 5.6% from the last update or 13.0 mmt due to heavy rains and a delayed harvest.

  • Russia continues to dominate global wheat exports with the cheapest wheat available, and US exports have fallen sharply to the lowest levels in 52 years.

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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11-15-23 Opening Update: Soybeans Higher on Brazil Weather Outlook

ByGrain Market Insider

All prices as of 6:30 am Central Time

Corn

DEC ’23 478 -0.25
MAR ’24 494 -0.25
DEC ’24 518.5 0.5

Soybeans

JAN ’24 1395.5 5.75
MAR ’24 1408.25 5.75
NOV ’24 1313 1.5

Chicago Wheat

DEC ’23 573.75 1.75
MAR ’24 599.25 1.5
JUL ’24 628.75 2

K.C. Wheat

DEC ’23 642 2.25
MAR ’24 653.25 3.75
JUL ’24 667 4.25

Mpls Wheat

DEC ’23 738.25 3.75
MAR ’24 749.5 2.25
SEP ’24 771.25 0.75

S&P 500

DEC ’23 4530.75 19.75

Crude Oil

JAN ’24 77.83 -0.34

Gold

JAN ’24 1987.4 10.4

  • Corn is trading near unchanged this morning with underlying support from higher trade in both soybeans and wheat.

  • A prominent Brazilian crop analyst lowered his Brazil corn production total to 121 million tons this week, this compares to the USDA’s November estimate at 129 million tons. 

  • The US weather outlook looks mostly favorable for harvest and fall field work conditions for the rest of this week before a system is expected this weekend and into early next week.

  • Private exporters announced the sale of 4 million bushels of corn for delivery to Mexico during the current marketing year yesterday, this was following Monday’s announced sale of 5.7 million bushels of Mexico. 

  • Soybeans are higher this morning leading the gains in the grain complex, soybean meal and oil are also higher. 

  • A large part of this rally has been due to South American weather, the afternoon weather model run yesterday backed off on rain totals and continued with a warmer than normal bias for currently stressed west and central regions of Brazil into the end of November.

  • NOPA soybean crush data set to be released later today is expected to show October’s US soybean crush at an all-time high of 187.237 million bushels. If realized this crush number would be up 13.2% from September and surpass the previous all-time monthly record crush of 186.438 million bushels set in December 2021. 

  • Though showing no sign of the resistance this morning, front month continuous soybean futures closed yesterday right at the 200-day moving average. Front month soybeans have not closed above the 200-day since April 20th.  

  • Wheat is trading slightly higher this morning after yesterday’s massive break lower in the US dollar index. 

  • The US dollar index posted it’s largest daily loss in nearly a year yesterday as US CPI data showed that underlying inflation slowed in October, increasing the odds that the Federal Reserve is done raising interest rates. 

  • The European Union’s soft-wheat exports since July 1st are down nearly 3 million tons compared to the same period last year. 

  • Beneficial rains for the US southern Plains are expected early next week, while amounts do not look heavy this should be a good boost to the recently planted wheat ahead of winter dormancy. 

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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11-14 Chicago and KC Wheat Post Losses Despite Gains Across the Grain Complex

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Another 102k bu of private sale to Mexico reported by the USDA, and short covering triggered by strength in soybeans helped the corn market to extend the gains from yesterday’s rally and settle higher on the day, following choppy back and forth trade.

  • After drifting lower overnight on profit taking, the soybean market regained upward momentum and support from strong soybean oil prices, rebounding meal, and the weak US dollar, to close the day just 1 ¾ cents off the high in a 23 cent range.

  • Soybean meal came back from a lower open to close higher alongside soybean oil, which also followed through on yesterday’s gains with support from higher palm and crude oil. The move also pushed January Board crush margins higher, showing a 10 ¾ cent improvement.

  • The sharp drop in the US dollar was no match for the sellers in the wheat market, as the complex settled the day mixed with Minneapolis the strong leg of the three, while Chicago and KC closed lower on the day, following two sided trade.

  • A better than expected report on the Consumer Price Index triggered massive selling in the US dollar, which traded to fresh 2-month lows on the possibility that the Federal Reserve may refrain from further rate hikes. The lower dollar likely lent support across the commodity sector.

  • To see the US 5-day precipitation forecast, the 8 – 14 day Temperature and Precipitation Outlooks, and the Brazil and Argentina average temperatures and 1-week precipitation forecasts, courtesy of NOAA, NWS, and the CPC, 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 November’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. So, for now, the thought process is to hold tight on any further sales recommendations until later this fall or early winter, with the objective of seeking out better pricing opportunities. If the market has not turned around by early winter, then Grain Market Insider may sit tight on the next sales recommendations until spring. If you end up harvesting more bushels than you can store this fall and must move them, consider protecting those sold bushels with either July or September ’24 call options.

  • No new action is recommended for 2024 corn. Since late February ’22, Dec ’24 has been bound by 489 ¾ on the bottom and 600 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 Dec ’23 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 lower trend without further bullish input. 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 560 and 610 Dec ’23 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:

  • Another strong close in the soybean market and short covering in the corn market helped push prices higher for the second consecutive day. December corn added 1 cent to $4.78 ¼. 

  • Price action could be deemed disappointing after the strong start to the week on Monday. The true lack of follow-through on Tuesday is reflective of the bearish overall tone in the corn market.  Resistance over the December contract is $4.80, which was tested and held during Monday’s trade.

  • Corn harvest is moving into the later stages as the USDA pegged harvest at 88% complete, which was 2% below the analyst expectations, but 2 % faster than the 5-year average. The eastern Corn Belt and Wisconsin looked to be the biggest areas of delay.

  • Weather forecasts stay extremely hot and dry for Brazil grain producing areas into the end of the week, but some potential rains over the weekend into next week. The accuracy of longer-range models is questionable. These forecasted rains will be key and extended models bring warm and dry conditions back through the end of November.

  • Demand will stay in the focus of the market as export sales and shipments are below expectations.  The USDA announced a flash sale of 101,745 mt (4 MB) of corn to Mexico for the current marketing year this morning. These sales are routine, and still are not the totals needed to ease the demand concerns for U.S. corn on the global export market.

Above: Front month corn posted a bullish key reversal after printing a new low for the move on Nov. 13. The market continues to show signs of being oversold, which is supportive to the reversal. If prices can push through overhead resistance near 484, prices could move higher to test 500 – 509 ½. If not, support below the market remains 460, with the next major area of support near 415.

Corn percent harvested (red) versus the 5-year average (green) and last year (brown).

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. At the end of August, the soybean market turned lower and didn’t find any significant buying interest until it traded down to 1251 in early October. Since then, the nearby contract has traded through nearby resistance and the 50-day moving average and may be poised to test the August high. Looking back, since last May, nearby soybeans have been in a range from 1435 up top to 1251 down below. Last summer, Grain Market Insider did make two sales recommendations in the 1310 – 1360 price window versus Nov ’23. Given that those sales recommendations were made and given that now is not the time of year to be making many sales, if any, Grain Market Insider is content to hold tight on any further sales recommendations until later this fall or early winter. The focus for strategy right now is to be on the lookout for any call option buying opportunities. If you end up harvesting more bushels than you can store this fall, consider protecting any sold bushels with July or Aug ’24 call options. 

  • 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. And 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 July. 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 soonest. 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 started off nearly 11 cents lower, but ultimately, finished the day higher thanks to strength in both soy products, strong Chinese demand, and hot and dry South American weather.

  • Yesterday, soybean meal made new contract highs and was briefly limit up. A new high was made today in December, but the biggest gains were in soybean oil after Malaysian palm oil futures surged by 2.7%. India also increased its imports of palm and sunflower oil by 24% and 54% respectively from the previous year.

  • As the meeting between Biden and Chinese President Xi approaches, there has been a sharp increase in the amount of soybeans purchased by China. In the past week, 106 mb of soybeans have been sold to China and unknown destinations with another sale of 7.5 mb reported yesterday.

  • Brazil is reportedly 61% complete with soybean planting, but have endured very dry and hot weather with little relief in the forecast. It is estimated that at least 20% of the crop will be replanted and could be a large factor in non-commercials establishing a net long position recently of over 70,000 contracts.

Above: January soybeans closed sharply higher following a gap higher open on Nov. 13. The development is bullish, though resistance remains overhead between 1385 and 1410, and the market may seek to fill the gap left from 1349 ¾. If the market can close above 1410, it would be poised to make a run toward 1490 – 1505. If not, initial support below the market rests between 1336 and the 50-day moving average near 1317.

Soybeans percent harvested (red) versus the 5-year average (green) and last year (brown).

Wheat

Market Notes: Wheat

  • After a two sided trade, Chicago and KC wheat closed in the red, while Minneapolis held gains. This is despite the sharply lower US Dollar Index, which at the time of writing is down 1.46 at 104.17. This huge move down is a result of today’s Consumer Price Index data that was unchanged for October, with expectations for a 0.1% increase. Additionally, the year on year increase of 3.2% was 0.1% lower than what was anticipated. This data suggests that the Federal Reserve may pause another interest rate increase.

  • According to the USDA, the US winter wheat crop is now 93% planted, which is in line with the average, but down just slightly from last year. Also, 81% of the crop is emerged, but conditions were lowered 3% from last week to 47% good to excellent.

  • The weather conditions in southern Brazil have been far too wet and it is affecting their wheat crop in terms of quality and production. According to CONAB, Brazil’s wheat crop projection comes in at 9.63 mmt – this is a 7.9% decrease from the October estimate. It is also down from the last crop of 10.55 mmt.

  • Although France raised their corn crop estimate to 12.5 mmt (from 12.1 mmt), they kept their soft wheat crop production unchanged at 35.1 mmt. Europe has been too wet overall, but this does not seem to have affected wheat all that much. 

  • The CFTC report was released yesterday, delayed from Friday due to the Veteran’s Day holiday. The data showed that as of November 7th, funds reduced their net short position in Chicago wheat by 9,313 contracts to 92,262. Though nearly a 10% reduction, it remains a hefty, short position that keeps the market primed for a short covering rally if there is friendly news to support it.

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. After making a high in late July, the Dec ’23 contract trended lower until finding support at 540 on September 29, from which it rallied back, briefly piercing 600 and the 50-day moving average. The market now appears to be finding value in the 540 – 616 range established since early September, as weak US export demand, driven by cheap Russian exports, remains the dominant headwind to higher prices. Grain Market Insider made sales recommendations in the late June rally around 720 and again earlier this fall near 604. With those two sales, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales in the 625 – 650 range. 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 Chicago wheat. The July ’24 contract has been trading at a premium to the Dec ’23 contract since late April, which has steadily increased to about 55 cents, September 29, it traded as far out as 71 ¾ cents. Fund positioning and weak fundamentals have driven Dec ’23 closer to the mid to upper 500 range, and July ’24 to the low to mid 600s. The market risk for July ’24 remains the same as for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for this possibility, 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 some 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 a year 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 Chicago wheat recommendations:

Above: After trading toward the October highs on November 8, the wheat market has been consolidating. If it can press through nearby upside resistance and close above 604 ½, it may then be able to run and test resistance near 618. If the market turns back lower, support below the market may be found between 564 and 554.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since late July the Dec ’23 contract has been in a downtrend that has had periods of relative stability, but not any significant reversals higher. The market once again found nearby support as it traded to, and held, its recent low of 625 ½. Currently, weak US export demand, driven by cheap Russian exports, remains the dominant headwind, and the market is in need of bullish input to stabilize and rally prices back higher. If a bullish catalyst enters the market to push prices above 700, it may signal that a fall low is in place and would line up with the historical tendency for prices to appreciate into winter and early spring. Grain Market Insider’s strategy is to look for price appreciation going into this winter, as weather becomes a more prominent market mover with an eye on considering additional sales near 750 – 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 KC wheat. The July ’24 contract is currently trading near a 25-cent premium to July ’23, which is up significantly from last July’s 60-cent discount. Weak fundamentals have driven spread activity to push July ’23 toward its contract lows, while July ’24 has been able to maintain more of its value. The risk for the July ’24 contract is much like that for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July 660 puts to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 800 to take advantage of elevated prices before they eroded further. If the market receives the needed impetus to move prices back toward 750 – 800, Grain Market Insider is prepared to recommend adding to current sales levels. 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 some of the original cost and move toward a net neutral cost for the remaining position.

  • 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 a year from now. 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 breaking through the bottom of the consolidation range at 655, the market has drifted lower and tested minor support which has held so far with the low at 625 ½. The next level of major support below that remains near 575. Major resistance above the market remains around 690 – 700.

Winter wheat percent planted (red) versus the 5-year average (green) and last year (brown).

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

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop. After making highs in July, and the subsequent downtrend to the October 2 low of 707 ½, the Dec ‘23 contract has traded mostly sideways with no significant reversal higher. With weak US export demand still the primary impediment to higher prices, the market remains at risk of trending lower if September’s low close of 709 is violated to the downside unless another bullish impetus enters the scene. If that happens and prices begin to push back toward 775, 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 going into this winter with an eye on considering additional sales around 750 – 800, and again north of 825. 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. Even though the primary strategy is to look for higher prices, Grain Market Insider may also consider a “plan b” in the next couple of weeks if prices grind sideways to lower.

  • No new action is currently recommended for 2024 Minneapolis wheat. In the last three months, the Sep ’24 contract has gone from a 60 – 80 discount to Dec ’23, to a 50-cent premium. Weak fundamentals led bear spreading to drive Dec ’23 in search of new contract lows, while Sep ’24 remains off its low from last May. The risk for the Sep ’24 contract is much like that of Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July KC 660 puts (for their greater liquidity, and correlation to Minneapolis pricing) to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 815 to take advantage of elevated prices. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further. Grain Market Insider will then be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

  • 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: On November 7 the December contract posted a bearish reversal, which may indicate lower prices ahead unless bullish information enters the market to turn prices higher. Currently, upside resistance now lies between 735 and 755, with initial support below the market near 703. The next major level of support is near 669, the May ’21 low.

Other Charts / Weather

US 7 day precipitation forecast courtesy of NOAA, Weather Prediction Center.

Brazil average temperature courtesy of the National Weather Service, Climate Prediction Center.

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

Argentina average temperature courtesy of the National Weather Service, Climate Prediction Center.

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

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11-14 Midday: Sharply Lower US Dollar Supports Wheat; Corn Mixed and Beans Lower

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn
DEC ’23 478.25 1
MAR ’24 493.75 1
DEC ’24 517 -0.5
Soybeans
JAN ’24 1378.5 -4
MAR ’24 1391.25 -3.75
NOV ’24 1301.5 -5.5
Chicago Wheat
DEC ’23 580 1
MAR ’24 604.75 2.5
JUL ’24 633 3
K.C. Wheat
DEC ’23 645.25 3.75
MAR ’24 654.25 2.25
JUL ’24 668 3.25
Mpls Wheat
DEC ’23 737 8.25
MAR ’24 750 6
SEP ’24 774 3.5
S&P 500
DEC ’23 4515.5 90.25
Crude Oil
JAN ’24 79.19 1
Gold
JAN ’24 1980.3 19.7

  • Corn is trading mixed near midday on the heels of yesterday’s rally, but prices are nearing resistance at the 40 and 50-day moving averages which are near $4.97 in March.

  • Today, private exporters reported a flash sale in the amount of 101,745 metric tons of corn for delivery to Mexico during the 23/24 marketing year.

  • For the week ending November 9, the U.S. inspected 609k tons of corn for export which compared to 575k tons a week prior and 536k a year ago.

  • France raised its estimates for its corn crop due to beneficial weather and is now seeing the crop at 12.5 million tons which is up from October’s estimate of 12.1 mmt.

  • Soybeans are trading lower today after yesterday’s impressive soybean meal led the rally, as chances for rain in northern Brazil over the next 7 days are reportedly improved.

  • Soybean meal is trading slightly lower today, but is not far from yesterday’s contract high, as strong meal exports support the futures. Soybean oil is trading higher, along with palm oil and crude oil.

  • Analysts are expecting that the El Nino weather pattern will support crude palm oil prices, as major palm oil producing countries’ output will likely decline in 2024.

  • Brazilian soybean planting is reportedly 61% complete for 23/24, which compares with 51% the prior week. Due to the dry weather in Mato Grosso, Ag Rural has cut the state’s output by 1.1 million tons.

  • Wheat has turned higher after a lower start and now all three contracts are higher, with the most gains in the Minneapolis contract. Prices remain just off their recent lows.

  • Crop progress showed that 93% of the winter wheat crop was planted and 81% emerged, but the good to excellent rating slipped by 3 points to 47% and 17% rated poor to very poor.

  • The Consumer Price Index increased by less than expected, which could cause the Fed to abstain from another rate hike. This has caused the stock market to rally and the US dollar to fall sharply, which is supportive for wheat.

  • Prices remain near contract lows due to poor export sales. Yesterday, weekly export inspections were a meager 207k tons, down 26% from the previous year.

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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11-14-23 Opening Update: Grains Lower as Brazil receives better rain chances

ByGrain Market Insider

All prices as of 6:30 am Central Time

Corn

DEC ’23 473.75 -3.5
MAR ’24 489.25 -3.5
DEC ’24 514 -3.5

Soybeans

JAN ’24 1371.5 -11
MAR ’24 1384.25 -10.75
NOV ’24 1297.25 -9.75

Chicago Wheat

DEC ’23 574.75 -4.25
MAR ’24 598.75 -3.5
JUL ’24 627 -3

K.C. Wheat

DEC ’23 637 -4.5
MAR ’24 647.75 -4.25
JUL ’24 661.75 -3

Mpls Wheat

DEC ’23 729 0.25
MAR ’24 743.75 -0.25
SEP ’24 770 -0.5

S&P 500

DEC ’23 4427.5 2.25

Crude Oil

JAN ’24 78.09 -0.1

Gold

JAN ’24 1960.3 -0.3

  • Corn is trading lower this morning due to a new forecast for driest areas of central and northeastern Brazil that is showing moderate rain amounts over the next 7 days.

  • Yesterday afternoon, the USDA said that 88% of the corn crop has been harvested which was slightly below trade expectations but above the 5-year average of 86%.

  • Yesterday, Brazilian corn futures went limit up due to a lack of farmer selling and a a major decline in the purchases of safrinha corn seed.

  • Yesterday’s CFTC data showed non-commercials adding to their short position by 24,156 contracts for the week ending November 7 increasing their net short position to 168,588 contracts.

  • Soybeans are lower this morning along with corn after yesterday’s impressive rally lead by soybean meal. Today, soybean meal is lower while soybean oil is higher.

  • A large part of this rally has been due to South American weather, so this wetter change in the forecast may pressure prices. On the other hand, the already wet parts of southern Brazil will be in worse shape.

  • Yesterday’s crop progress report showed 95% of the soybean crop harvested which was slightly below the average trade guess but still higher than the 5-year average.

  • Yesterday’s CFTC data showed funds as net buyers as of November 7 adding 45,445 contracts to their net long position bringing it to 68,598 contracts.

  •  Wheat is trading lower this morning and although it closed higher yesterday, it did not get as much support from the rest of the grain complex as trade would have liked to see.

  • Prices remain near contract lows due to poor export sales. Yesterday, weekly export inspections were a meager 207k tons, down 26% from the previous year.

  • Crop progress showed 93% of the winter wheat crop planted which was in line with the 5-year average. 81% of the crop is emerged, and 47% was rated good to excellent, down 3 points from last week.

  • Yesterday’s CFTC report showed non-commercials offsetting some of their net short position by 9,313 contracts reducing their net short position to 92,262 contracts.

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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11-13 Sharply Higher Soybeans Lifts Corn and Wheat

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Sharply higher soybeans and Brazilian weather concerns supported the corn market into the close with a bullish reversal and some likely short covering, after making a fresh new low for the move.

  • A slow planting pace due to hot and dry weather in Brazil, along with sharply higher soybean meal, took soybeans to a 35 cent gain on the day, after a 6 ¼ cent gap open Sunday night.

  • Expectations of strong US meal demand due to potentially shrinking South American crops continues to underpin soybean meal, which printed a new contract high as it briefly locked limit up. Meanwhile, spillover strength from soybeans and meal rallied bean oil 1.71 cents off its low to close .34 cents higher on the day.

  • Carryover support from corn and soybeans rallied most of the wheat complex to close in positive territory, except for December Minneapolis. Though the closing gains were minor, the market collectively settled between 6 and 11 cents off the respective lows, and may have triggered some short covering on the rally.

  • To see the US 5-day precipitation forecast, the 8 – 14 day Temperature and Precipitation Outlooks, and the Brazil and Argentina 2-week precipitation forecasts, courtesy of NOAA, NWS, and the CPC, 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 November’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. So, for now, the thought process is to hold tight on any further sales recommendations until later this fall or early winter, with the objective of seeking out better pricing opportunities. If the market has not turned around by early winter, then Grain Market Insider may sit tight on the next sales recommendations until spring. If you end up harvesting more bushels than you can store this fall and must move them, consider protecting those sold bushels with either July or September ’24 call options.

  • No new action is recommended for 2024 corn. Since late February ’22, Dec ’24 has been bound by 489 ¾ on the bottom and 600 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 Dec ’23 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 lower trend without further bullish input. 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 560 and 610 Dec ’23 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:

  • It was a strong day in the corn market to start the week, as concerns over Brazil weather and heavy buying in the soybean market spilled over into the corn market, triggering short covering. The strong close and positive price action could lead to some additional follow-through buying going into tomorrow’s session.

  • Weather forecasts stay extremely hot and dry for Brazil grain producing areas for the next 10-days.  Weather models are looking at some potential rains at the end of that time period, but accuracy of longer-range models is questionable. Brazilian corn futures traded sharply higher on the day, trying to encourage producers to plant the important 2nd crop Brazil corn.

  • Weekly corn export inspections were within analysts’ expectations during Monday’s USDA Inspections report.  Last week, U.S. exports shipped 609,000 mt of corn (24 mb), year to date, total inspections are at 6.161 mmt, up 23% over last year.

  • The USDA Crop Progress report will likely show that corn harvest is in the last legs. Last week, the harvest was 81% complete. That total should be closer to the 90% window with just the northern states lagging in harvest.

  • With the bump in prices, rallies may stay limited due to harvest pressure and large supplies available after the completion of a potential near record 2023 corn crop.

Above: Front month corn posted a bullish key reversal after printing a new low for the move on Nov. 13. The market continues to show signs of being oversold, which is supportive to the reversal. If prices can push through overhead resistance near 484, prices could move higher to test 500 – 509 ½. If not, support below the market remains 460, with the next major area of support near 415.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. At the end of August, the soybean market turned lower and didn’t find any significant buying interest until it traded down to 1251 in early October. Since then, the nearby contract has traded through nearby resistance and the 50-day moving average and may be poised to test the August high. Looking back, since last May, nearby soybeans have been in a range from 1435 up top to 1251 down below. Last summer, Grain Market Insider did make two sales recommendations in the 1310 – 1360 price window versus Nov ’23. Given that those sales recommendations were made and given that now is not the time of year to be making many sales, if any, Grain Market Insider is content to hold tight on any further sales recommendations until later this fall or early winter. The focus for strategy right now is to be on the lookout for any call option buying opportunities. If you end up harvesting more bushels than you can store this fall, consider protecting any sold bushels with July or Aug ’24 call options. 

  • 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. And 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 July. 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 soonest. 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 with big gains thanks to a sharp rally in soybean meal, as export demand heats up. Hot and dry conditions in Brazil have been very supportive, while southern Brazil deals with excessive rains. Soybean oil managed to close slightly higher, along with crude oil.

  • China has become a much more active buyer of US soybeans since Brazil’s stores began getting emptied with China and unknown destinations purchasing nearly 100 mb of soybeans just last week. A flash sale was also reported today of 204,000 metric tons of soybeans for delivery to China during the 23/24 marketing year.

  • Soybean planting in Brazil is now estimated at 57% complete by Safras & Mercado, which is behind last year’s pace of 67%. There are also estimates that 20-25% of Brazilian soybeans will need to be replanted due to the dry conditions.

  • Last week’s WASDE report was slightly bearish, but received a much more negative reaction, which may have been offset today. Yields were increased by 0.3 bpa to 49.9 bpa, which increased production by 25 mb and that went right to increasing the ending stocks to 245 mb.

Above: January soybeans closed sharply higher following a gap higher open on Nov. 13. The development is bullish, though resistance remains overhead between 1385 and 1410, and the market may seek to fill the gap left from 1349 ¾. If the market can close above 1410, it would be poised to make a run toward 1490 – 1505. If not, initial support below the market rests between 1336 and the 50-day moving average near 1317.

Wheat

Market Notes: Wheat

  • Wheat closed in positive territory, despite trading lower this morning. Today’s gains in wheat were minimal, and it was likely pulled higher by corn and especially the sharply higher soybean market. If  the wheat export inspections were better, there may have been more of a rally. However, inspections of just 7.6 mb were poor; this brings the total 23/24 inspections to 274 mb, still down 26% from last year.

  • Russia’s wheat FOB export values are said to have risen by about $5-$7 per metric ton. For now, they are still very competitive and getting much of the world’s export business. However, this change could indicate that wheat prices may begin to rise globally. On the other hand, the USDA report last week did result in a 5 mmt increase to Russia’s crop to 90 mmt, so they will likely remain competitive on exports.

  • Although there are problems in Brazil, Argentina’s weather has turned more favorable. According to the Buenos Aires Grain Exchange, Argentina’s wheat production is estimated at 15.4 mmt, with their harvest now 14.4% complete, compared with 9.3% last week.

  • China looks like it will remain the world’s top wheat importer for the second year in a row. On last week’s report, the USDA estimated that China will purchase 12 mmt of wheat for the 23/24 season. Elsewhere, Egypt is struggling with economic issues that are curbing their wheat imports, as a result of their currency losing about half its value since the beginning of 2022.

  • According to FranceAgriMer, as of November 6th, 67% of the French soft wheat crop has been planted. That is behind both the average and last year’s pace. The slowdown is attributed to wet weather and muddy fields. The heavy rainfall they have seen could reduce the planted acreage and lead to an increase in prices. 

Chicago Wheat Action Plan Summary

  • No new action is currently recommended for 2023 Chicago wheat. After making a high in late July, the Dec ’23 contract trended lower until finding support at 540 on September 29, from which it rallied back, briefly piercing 600 and the 50-day moving average. The market now appears to be finding value in the 540 – 616 range established since early September, as weak US export demand, driven by cheap Russian exports, remains the dominant headwind to higher prices. Grain Market Insider made sales recommendations in the late June rally around 720 and again earlier this fall near 604. With those two sales, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales in the 625 – 650 range. 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 Chicago wheat. The July ’24 contract has been trading at a premium to the Dec ’23 contract since late April, which has steadily increased to about 55 cents, September 29, it traded as far out as 71 ¾ cents. Fund positioning and weak fundamentals have driven Dec ’23 closer to the mid to upper 500 range, and July ’24 to the low to mid 600s. The market risk for July ’24 remains the same as for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for this possibility, 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 some 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 a year 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 Chicago wheat recommendations:

Above: December wheat rejected the bearish reversal from November 7 and traded sharply higher. It is now in range to test the October high of 604 ½ and possibly resistance near 618. If the market turns back lower, support below the market, may be found between 564 and 554.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. Since late July the Dec ’23 contract has been in a downtrend that has had periods of relative stability, but not any significant reversals higher. The market once again found nearby support as it traded to, and held, its recent low of 625 ½. Currently, weak US export demand, driven by cheap Russian exports, remains the dominant headwind, and the market is in need of bullish input to stabilize and rally prices back higher. If a bullish catalyst enters the market to push prices above 700, it may signal that a fall low is in place and would line up with the historical tendency for prices to appreciate into winter and early spring. Grain Market Insider’s strategy is to look for price appreciation going into this winter, as weather becomes a more prominent market mover with an eye on considering additional sales near 750 – 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 KC wheat. The July ’24 contract is currently trading near a 25-cent premium to July ’23, which is up significantly from last July’s 60-cent discount. Weak fundamentals have driven spread activity to push July ’23 toward its contract lows, while July ’24 has been able to maintain more of its value. The risk for the July ’24 contract is much like that for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July 660 puts to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 800 to take advantage of elevated prices before they eroded further. If the market receives the needed impetus to move prices back toward 750 – 800, Grain Market Insider is prepared to recommend adding to current sales levels. 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 some of the original cost and move toward a net neutral cost for the remaining position.

  • 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 a year from now. 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 breaking through the bottom of the consolidation range at 655, the market has drifted lower and tested minor support which has held so far with the low at 625 ½. The next level of major support below that remains near 575. Major resistance above the market remains around 690 – 700.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop. After making highs in July, and the subsequent downtrend to the October 2 low of 707 ½, the Dec ‘23 contract has traded mostly sideways with no significant reversal higher. With weak US export demand still the primary impediment to higher prices, the market remains at risk of trending lower if September’s low close of 709 is violated to the downside unless another bullish impetus enters the scene. If that happens and prices begin to push back toward 775, 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 going into this winter with an eye on considering additional sales around 750 – 800, and again north of 825. 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. Even though the primary strategy is to look for higher prices, Grain Market Insider may also consider a “plan b” in the next couple of weeks if prices grind sideways to lower.

  • No new action is currently recommended for 2024 Minneapolis wheat. In the last three months, the Sep ’24 contract has gone from a 60 – 80 discount to Dec ’23, to a 50-cent premium. Weak fundamentals led bear spreading to drive Dec ’23 in search of new contract lows, while Sep ’24 remains off its low from last May. The risk for the Sep ’24 contract is much like that of Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July KC 660 puts (for their greater liquidity, and correlation to Minneapolis pricing) to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 815 to take advantage of elevated prices. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further. Grain Market Insider will then be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.

  • 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: On November 7 the December contract posted a bearish reversal, which may indicate lower prices ahead unless bullish information enters the market to turn prices higher. Currently, upside resistance now lies between 735 and 755, with initial support below the market near 703. The next major level of support is near 669, the May ’21 low.

Other Charts / Weather

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

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

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

Argentina 2 week forecast precipitation, percent of normal, courtesy of the National Weather Service, Climate Prediction Center.