This morning grain markets are recovering after yesterday’s risk off session that was caused by negative Chinese economic data, lower energy prices, and concern about US debt.
Private exporters reported sales of 270,000 mt of corn for delivery to Mexico during the 23/24 marketing year.
The average pre-report estimate for US corn yield comes in at 173.2 bpa vs 173.0 bpa in October. The average production number is pegged at 15.076 bb, up slightly from 15.064 bb last month.
The pre-report estimate for US 23/24 corn carryout is 2.129 bb, up slightly from 2.111 bb in October. And the world 23/24 ending stocks projection is 312.0 mmt vs 312.4 mmt last month.
The weather forecast for Brazil is now turning drier and hotter. They have already been struggling and this is causing planting to slow for both corn and soybeans.
The USDA announced that private exporters reported sales of 433,000 mt of soybeans for delivery to China and 132,000 mt for delivery to unknown, both during the 23/24 marketing year. The USDA also reported an additional set of sales to unknown destinations for the 23/24 marketing year totaling 344,500 mt as “received in the reporting period.”
The average pre-report estimate for US soybean yield comes in at 49.5 bpa vs 49.6 bpa in October. The average production number is pegged at 4.098 bb, down slightly from 4.104 bb last month.
The pre-report estimate for US 23/24 soybean carryout is 221 mb, up from 220 mb in October. And the world 23/24 ending stocks projection is 115.6 mmt, unchanged from last month.
Yesterday Paraguay saw temperatures between 100-115 degrees, and now that hot air is expected to move into central Brazil, adding to problems there.
Soybean meal made a new contract high yesterday, and another this morning. As of this writing December meal’s high for today is 464.20. This continues to offer support for soybean futures.
The pre-report estimate for US 23/24 wheat carryout is 670 mb, unchanged from October. And the world 23/24 ending stocks projection is 257.9 mmt, down slightly from 258.1 mmt last month.
There is more concern about US wheat demand, with recent tenders to Jordan and Algeria likely fulfilled at lower prices by Russia.
Tomorrow’s report is not expected to have much change in the wheat numbers, but the USDA could lower the Argentina crop by 1-2 mmt. They could potentially also raise the Russian crop and Russian exports.
According to Ukraine’s ministry of agriculture, their grain exports from July 1 to November 6 have totaled 9.8 mmt, but that is down from 14.3 mmt for the same timeframe 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.
Corn is trading higher this morning as the entire grain complex bounces back from yesterday’s selloff. The move higher comes even as crude oil is lower this morning.
Yesterday, open interest in corn futures jumped to the largest levels in almost two years which could indicate that the non-commercials are growing their net short position.
Estimates for ethanol production are being called higher than last week by analysts at 1.058m b/d with the stockpile expected to grow to around 21.222m bbl.
Yesterday, the USDA released their long-term baseline projections and estimated that the 24/25 corn crop will have 91 million acres of corn with 181 bpa.
Soybeans are sharply higher again this morning and have more than made up for yesterday’s losses taking out the high from yesterday with support from both soybean meal and oil.
Soybean oil is only slightly higher as it is being held back by lower crude oil, but soybean meal continues its rally making a new contract high thanks to very strong export demand.
In the driest areas of Brazil, some scattered showers are expected this week, but the most recent forecast significantly cut the chances of further showers in the following week.
Yesterday, China made the largest single day US soybean purchase in over three months in the amount of 10 cargoes or 600,000 metric tons for shipment out of the Gulf.
Wheat is trading higher this morning and has made back yesterday’s losses. Despite the sharp selloff in corn yesterday, wheat managed to stay above its recent lows.
Argentina is now set to produce just 14.5 mmt of wheat for 23/24, a 2 mmt decline from previous estimates due to extremely dry conditions.
In France, heavy rainfall over the past two weeks has brought grain sowing to a near halt, and lower wheat yields are now expected in some growing regions.
Although focus has largely shifted away from the Russian/Ukrainian war and towards the Middle East, exports from Ukraine between July 1 and November 6 have fallen from 14.3 mmt last year to 9.8 mmt this 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.
The quick harvest pace continues to add resistance to the corn market which was pressed lower on technical selling and carryover weakness after trading below yesterday’s low.
After printing a fresh contract high, today’s selloff in soybean meal along with sharply lower bean oil, led to a bearish reversal in beans after the January soybean contract posted its own highest price since September 15.
Solid crop ratings, slow exports, cheap Russian prices, and weak Chinese economic data all weighed on the wheat complex with all three classes closing lower on the day. KC led the way lower.
Hawkish comments from the Minneapolis Federal Reserve Bank President Neel Kashkari indicated that more tightening of interest rates will be considered if needed. These comments likely led to the strength in the US dollar which gapped higher on the open of today’s trade and added to the pall of the US grain markets.
To see the US 8 – 14 day Temperature and Precipitation Outlooks, courtesy of the NWS, and CPC, and the South American GRACE-Based Root Zone Soil Moisture Drought Indicator, courtesy of NASA and the NDMC, scroll down to other Charts/Weather Section.
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Corn
Corn Action Plan Summary
No new action is recommended for 2023 corn. The Dec ’23 contract’s quick move above 500 on October 19, and then below the 50-day moving average of 485 just three sessions later, on October 24, signals that there is heavy resistance above the market near the 100-day moving average, and prices continue to be at risk of drifting sideways to lower. The next major level of support remains near the August low of 462 for front month corn. 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:
An overall weak tone in the commodity space helped push corn futures lower, testing last week’s price low at $4.68 for December futures. December corn lost 8 ¾ cents on the day and established its new lowest close since September 2021. The weak price action and selling pressure have December corn poised to challenge or establish a new September low.
Corn harvest continues to move along ahead of schedule. The USDA Crop Progress report posted that corn harvest was at 81% harvested versus the 5-year average of 77%. The northern corn producing states are showing the biggest delays due to wet weather.
The strong pace of harvest has increased harvest pressure as fresh bushels are in the pipeline. Talk of improved yields in the last half of harvested has limited the corn market’s upside potential.
On November 9, the USDA will release the next Crop Production report. Early expectations are for the USDA to slightly increase corn yield and production, which could add bushels back to an already heavy supply picture. The corn market may likely be pricing in potential negative news.
South American weather is still a focus of the market at this time. Current weather is likely more supportive of the soybean market, but potential delays or loss of production in the second crop corn in Brazil could support corn prices in the late summer with possible improved late season demand.
Above: On November 3, the December contract posted a bullish key reversal with a low of 468. The 50-day moving average is just above the market at 484, and the market is oversold. If prices can push over 484, they may move higher to test 500 – 509 ½. If not, support below the market rests between 468 and 460.
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 ended the day lower apart from the November contract which held onto some of its gains in thin delivery cycle trade. This followed an impressive start to the day where all the contract months were solidly higher thanks to big gains in soybean meal, but technical resistance, the selloff in meal from the highs, and a drop in crude oil caused prices to fade.
Crop progress saw the soybean harvest at 91% complete, slightly below the average trade guess, but still above the 5-year average of 86%. The main soybean producing states are closer to 95% complete, and the 7-day forecast for the central US remains dry and favorable to wrap up harvest.
On Thursday, the USDA will release its WASDE report, and it will be revealed how much yields are lowered (if at all). The average trade guess is that yields will be decreased by 0.1 bpa which would have a minimal impact on ending stocks unless export demand is adjusted.
Some bearish influence came from negative economic data from China today. While total Chinese imports were within expectations, total Chinese exports fell by 6.4% for the month of October which was much more than anticipated and caused some concerns regarding crude oil demand. Crude oil fell by over 3.50 a barrel today following the news.
Above: After posting a bearish reversal on November 7 and with the market showing signs of being overbought, further price erosion could take place unless more bullish input is received. Significant resistance now rests between the new recent high of 1380 and 1385, while initial support remains below the market between 1334 and the 50-day moving average, and again down near 1300.
Soybeans percent harvested (red) versus the 5-year average (green) and last year (brown).
Wheat
Market Notes: Wheat
Early gains faded into a risk-off session with lower closes in corn, soybeans, soybean oil, oats, wheat, and cattle. At the time of writing, metals and energies are also sharply lower. It is possible that in the grain markets there is some positioning going on ahead of Thursday’s WASDE report, but the bigger factor may be recent bearish economic news out of China.
The wheat export inspections data yesterday at 2.6 mb was an all-time low for this time of year with records going back to 1983. This is in part due to Russia continuing to dominate on the export front. To make matters worse, the USDA could raise the Russian crop up from 85 mmt on this week’s report if Russia’s claims of a 93 mmt crop are to be believed.
According to the USDA, 90% of the winter wheat crop is planted, which is 1% above average but 1% below last year. Emergence is at 75%, and the crop is rated 50% good to excellent, up 3% from last week. For reference, last year at this time the crop was rated 30% good to excellent.
According to their agriculture ministry, Ukraine has left their estimate of the winter wheat planted area for the 2024 harvest unchanged at 4.36 million hectares, down from 4.46 million in 2023. As of November 6th, 3.87 million hectares or 88.8% of that area has been planted.
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 testing the 50-day moving average, the December contract posted a bearish reversal indicating that resistance is now near 582. Further resistance remains above the market near 604 ½. Without bullish input, the market is likely to trend sideways to lower with initial support near 554 and the next major support level between 547 and 540.
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, with minor resistance near 655.
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.
Southern Brazil has recently seen relief from heavy rains, but the next wave is forecast to hit at the end of the week and into the weekend, potentially causing more flooding and crop damage. Dry northern areas did get some beneficial precipitation this past weekend, but it looks like they will return to a dry and warm pattern.
Yesterday afternoon the USDA said that 81% of the corn crop is harvested, above the average of 77% but below 85% at this time last year.
Crude oil is currently trading lower, and below $80 per barrel. There seems to be less concern about the conflict in the Middle East affecting the flow of oil, and this is the first time it has been below the $80 level since late August. This may be in part what is weighing on corn this morning.
About two thirds of Brazil’s first corn crop is planted, but with the weather issues they are facing, there is concern that a significant amount will need to be replanted.
Private exporters reported sales of 110,000 mt of soybeans for delivery to China during the 23/24 marketing year.
This morning, December soybean meal made a new contract high, offering support to soybean futures.
Yesterday afternoon the USDA said 91% of the soybean crop is harvested, above the average of 86% but below 93% at this time last year.
Customs data showed Chinese soybean imports in October at 5.2 mmt. That represents a 28% decrease from September but is up 25% from October last year. Year to date, imports have reached 82.5 mmt, which is up 14.5% year on year.
Yesterday’s wheat inspections at 2.6 mb were an all-time low for this time of year for records going back to 1983.
Yesterday afternoon the USDA said 90% of the winter wheat crop is planted, above the average of 89% but down slightly from last year at 91%.
With 75% of the winter wheat crop emerged, the USDA rated the crop at 50% good to excellent, up 3% from last week, and well above the 30% rating at this time last year.
Russia continues to offer cheap wheat for export and that is limiting upside potential for the US market. With Russia estimating their crop higher than the USDA number, it is possible that there could be a revision on Thursday’s report that would further dampen upward price movement.
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.
Corn is trading lower this morning in what appears to be a risk off day for all commodities with the dollar higher and crude oil lower.
Yesterday evening, the USDA released the crop progress report which showed the corn crop at 81% harvested, slightly below the average trade guess but above the 5-year average of 77%.
On Thursday the USDA will release the WASDE report, and the average trade guesses are for yields to be slightly increased to 173.2 bpa, and for ending stocks to increase by 18 mb.
The USDA attaché in Brazil sees their 23/24 corn crop at 130 mmt. Planted acreage is expected to decline due to tight profit margins.
Soybeans are slightly lower with the rest of the grain complex this morning but remain elevated and are firmly above the 100-day moving average.
Soybean meal is bull spread with the two front months higher and deferred contracts lower, and soybean oil is lower with a decline in crude oil today. Crush margins remain supportive.
Crop progress saw the soybean harvest at 91% complete, slightly below the average trade guess, but still above the 5-year average of 86%.
Thursday’s WASDE report will be interesting and we will see how much, if at all, they lower yields. The average trade guess expects a decline in yields of just 0.1 bpa, so little change is expected.
All three wheat contracts are lower this morning in the general risk off environment today, but yesterday’s poor export inspections have added more pressure.
Export inspections were just 71,608 metric tons which was far below trade guesses, and was an all time low in records that date back as far as 1983.
The hot and dry weather conditions remain a concern in Brazil and Argentina, and wheat volume available to export are expected to shrink. Argentinian production may total just 14.5 mmt.
Crop progress showed winter wheat at 90% planted, 75% emerged, and rated 50% good to excellent. The crop rating was above the trade guess, and above the 30% a year ago at this time.
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.
After trading a tight 4-cent range and failing to hold the day’s highs despite strength in both wheat and soybeans, the corn market closed nearly unchanged following choppy trade with the quick harvest pace and hedge pressure limiting any gains.
South American weather concerns and sharply higher soybean oil aided the soybean market to double-digit gains and the fifth higher close in a row.
Soybean meal was the weak leg of the complex today as traders likely lifted some long positions to take profits from the rally that began in early October. Soybean oil, on the other hand, likely saw some short covering that was sparked by higher energy prices.
Despite weak export inspections that were the lowest in 54 weeks and lower Matif wheat futures, all three classes closed the day on the positive side of unchanged, led by Minneapolis. Additionally, after posting large managed fund positions in Friday’s Commitment of Traders report and record large in Minneapolis wheat, a level of short covering may have been at play today and added to the markets’ strength.
To see the US 6 – 10 day Temperature and Precipitation Outlooks, and the South American 1-week forecast precipitation maps as a percent of normal, courtesy of the NWS, and 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. The Dec ’23 contract’s quick move above 500 on October 19, and then below the 50-day moving average of 485 just three sessions later, on October 24, signals that there is heavy resistance above the market near the 100-day moving average, and prices continue to be at risk of drifting sideways to lower. The next major level of support remains near the August low of 462 for front month corn. 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. The Dec ’24 contract has held up better than Dec ’23 as bear spreading over the last several months has brought increased buying interest into Dec ’24 and other further out contract months. Back in late July, the Dec ’23 contract traded up to a 25-cent premium over Dec ’24. Now, Dec ’24 holds about a 30-cent premium over Dec ’23. This bear spreading has held the Dec ’24 price up about 28 cents from its year-to-date low. 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 choppy session in the corn market as prices failed to follow through Friday’s strong technical close. December corn finished the day unchanged with disappointing price action, failing to hold the highs of the session. Hedge pressure still limits the corn market, despite strength seen in both the soybean and wheat market.
Corn export demand is still a concern for the market. The USDA did announce a flash sale of corn to Mexico; Mexico bought 289,575 mt (11.4 mb) for the current marketing year. Mexican demand has been good, but these sales are routine and fail to move the market overall.
Weekly export inspections for corn were within expectations. Last week, the US inspected 535,000 MT (21.1 mb) for shipment. Total inspections are at 216 mb for the current marketing year, up 23% from last year, and slightly ahead of expected USDA export pace.
USDA will release the harvest pace on Monday afternoon with the USDA crop progress report. Last week, 71% of the corn crop was harvested, and expectation should have moved into the last 20% remaining for this week. The harvest pace and selling pressure has limited the corn market.
On November 9, the USDA will release the next Crop Production report. The market could be choppy this week with position squaring going into the report. Early expectations are for the USDA to slightly increase corn yield and production, which could add bushels back to an already heavy supply picture.
Above: On November 3, the December contract posted a bullish key reversal with a low of 468. The 50-day moving average is just above the market at 484, and the market is oversold. If prices can push over 484, they may move higher to test 500 – 509 ½. If not, support below the market rests between 468 and 460.
Corn Managed Money Funds net position as of Tuesday, Oct. 31. Net position in Green versus price in Red. Managers net sold 44,002 contracts between Oct. 25 – 31, bringing their total position to a net short 144,432 contracts.
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 firmly higher for the fifth consecutively higher close. Support has mainly come from higher soybean meal, tight US ending stocks, and a concerning forecast for South American weather. Soybean oil was higher today but overall has trended lower since August.
Export sales have picked up in this period that Brazil is running low on soybeans to ship as they are planting, and another sale was reported today of 126,000 metric tons for delivery to China during the 23/24 marketing year. The increase in export demand has been complemented by the uptick in domestic crush demand.
Export inspections today were also strong with 2,085k tons reported for soybeans which was near the upper range of analyst expectations. Thursday’s WASDE report may, however, show a decrease in exports as they are still behind last year. Analysts are expecting that the USDA might decrease the national soybean yield but also decrease exports which would leave the carryout potentially unchanged at 220 mb.
A large part of this recent rally can likely be attributed to poor weather conditions in South America with Argentina and northern Brazil still dry, but southern Brazil receiving too much rain and flooding. So far, weather models are forecasting more of the same with hotter temperatures to come. Some Brazilian producers are either replanting their soybeans or opting to rip them up in favor of planting cotton.
Above: On November 3, January soybeans maintained strength above the 50-day moving average and closed above 1334 resistance, which now has become support. With the strong close, the market is poised to test 1370 – 1385. Below the market support is now between 1334 and the 50-day moving average, and again down near 1300.
Soybean Managed Money Funds net position as of Tuesday, Oct. 31. Net position in Green versus price in Red. Money Managers net bought 15,400 contracts between Oct. 25 – 31, bringing their total position to a net long 23,153 contracts.
Wheat
Market Notes: Wheat
After trading both sides of unchanged, wheat managed a positive close despite a slightly higher US Dollar, poor export inspections (71,068 mt), and lower Matif futures. This may signal that wheat is trying to find a bottom and support at these lower levels.
Traders are anticipating this week’s USDA report. With Russia estimating their own wheat crop at 93 mmt as of last week, it is possible that the USDA could make an upward revision from their 85 mmt crop estimate.
Brazil is said to have 2.5 mmt of feed wheat on hand that is very competitive on the export market. Reportedly, it is around $212 per mt on a FOB basis for December shipment.
According to the UN Food and Agricultural Organization, winter wheat growing areas in the northern hemisphere are expected to shrink in 2024 as a reflection of lower crop prices.
Odesa was again attacked by Russia with missiles and drones. This damaged the port and wounded eight people, but the market seemed to brush it off as old news.
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 600’s. 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 June’s highs, 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 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: On October 20, the December contract posted a bearish reversal after making a new recent high of 604 ½. The market has retreated and solidified resistance above the market that now stands between 604 ½ and 618. Without bullish input, the market is likely to trend sideways to lower with the next major support level between 547 and 540.
Chicago Wheat Managed Money Funds net position as of Tuesday, Oct. 31. Net position in Green versus price in Red. Money Managers net sold 9,321 contracts between Oct. 25 – 31, bringing their total position to a net short 101,575 contracts.
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, with minor resistance near 655.
KC Wheat Managed Money Funds net position as of Tuesday, Oct. 31. Net position in Green versus price in Red. Money Managers net sold 3,628 contracts between Oct. 25 – 31, bringing their total position to a net short 32,622 contracts.
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: Since the last week of October, the December contract has resumed the downward trend that has been in place since the end of July and found nearby support near 703. If fresh bullish news doesn’t enter the market, prices could slide to the next level of support near 669, the May ’21 low. If prices turn higher, initial resistance remains between 745 – 760.
Minneapolis Wheat Managed Money Funds net position as of Tuesday, Oct. 31. Net position in Green versus price in Red. Money Managers net sold 3,801 contracts between Oct. 25 – 31, bringing their total position to a net short 28,882 contracts.
Other Charts / Weather
Brazil 1-week forecast precipitation, percent of normal, courtesy of the National Weather Service, Climate Prediction Center.
Argentina 1-week forecast precipitation, percent of normal, courtesy of the National Weather Service, Climate Prediction Center.
Private exporters reported sales of 289,575 mt of corn for delivery to Mexico during the 23/24 marketing year.
Crude oil is higher this morning, possibly due to talk that both Saudi Arabia and Russia reaffirmed supply cuts. This may in turn offer support to the grain markets.
In Brazil, poor emergence of the safrinha corn crop may result in the need for replanting. This may affect total production because the replant will take place during a less optimal timeframe.
December corn may have formed a double bottom chart pattern on Friday. Additionally, stochastics are showing a buy crossover signal in the oversold region. Both of these technical indicators point to a potential upside in corn futures.
Cold weather and snowstorms in northeastern China are causing corn harvest delays. This could also affect drying, storage, and transport logistics of grain.
Private exporters reported sales of 126,000 mt of soybeans for delivery to China during the 23/24 marketing year.
Northern and central Brazil look to remain mostly dry over the next 10 days, while southern Brazil is still getting too much rain. Due to the weather issues, it is being said that they may need to replant as much as 20%-30% of their soybean crop. According to Ag Rural, their planting is currently 51% complete (down from the average 57%).
Currently, US soybeans (vs Brazil) are competitive to China December forward, until the March timeframe when Brazil’s harvest begins.
Although conditions have improved in Argentina with recent rains, their supply of old crop soybeans is still limited, which should keep US meal demand strong.
Brazil’s supply of feed wheat is large at 2.5 mmt and is competitive on exports, said to be around $212 per mt FOB for December shipment.
With wheat trading both sides of neutral this morning, the market seems to have brushed off news of a new Russian attack on Odessa that caused damage to the port and wounded eight people.
The current USDA estimate of the Russian wheat crop stands at 85 mmt. However, Russia’s estimate last week comes in at 93 mmt. It is possible that the USDA will make a revision on this week’s WASDE report.
The US Dollar Index gapped lower last week and is now well below the recent high (which was over 107). If the downtrend continues it should offer support to the wheat market, as exports become more competitive.
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.
Corn is trading slightly higher this morning as they find support from a lower dollar, higher crude oil, and higher soybeans.
Weather in the US is dry, and the seven day forecast for the Corn Belt is very dry as well which should help wrap up harvest. South America remains dry and is becoming a concern.
This Thursday, the USDA will release their WASDE report, and many analysts are expecting that the national corn yield will be increased closer to 173.3 bpa as reports of good yields are coming in.
Friday’s CFTC data showed funds as net sellers for the week ending October 31 increasing their net short position by 44,002 contracts to 144,432 contracts.
Soybeans are firmly higher again this morning after two consecutive days of strong gains. The November contract has broken solidly above the 100-day moving average which had been tough resistance.
Soybean meal is bear spread this morning with the two front months lower, but still near contract highs. Soybean oil is higher thanks to higher palm oil and crude oil.
South American weather has been a key part in this rally with the northern areas of Brazil and Argentina very dry with hotter conditions incoming which will force some to replant. Southern Brazil is far too wet and continues to flood.
Friday’s CFTC report showed non-commercials as buyers of 15,400 contracts which increased their net long position to 23,153 contracts.
Wheat is lower this morning with KC and Minneapolis slightly off their recent lows. Both contracts did manage to put in a small reversal last week.
Over the weekend, Russian air strikes hit the Ukrainian port of Odesa wounding eight, damaging the port, and a nearby museum. This type of news has done little to get traders excited lately.
The expansion of winter wheat planted acreage in the northern hemisphere is expected to be limited in 2024 due to depressed prices.
Friday’s CFTC report showed non-commercials continuing to add to their short position. They sold 9,321 contracts increasing their net short position to 101,575 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.
Technical buying and short covering dominated the corn market as money flow moved into the grain markets, sparked by a sharply lower US dollar, and led December corn to post a bullish reversal on the day.
Despite the sharp drop in soybean oil and lower crude oil, the report of another sale totaling 131k mt of soybeans to unknown destinations, along with sharply higher soybean meal and the lower US dollar helped soybeans rally to double-digit gains across the board.
Carryover strength from corn and beans, a reduction in world wheat stocks by FAO-AMIS, and the weak US dollar all contributed to the gains in the wheat complex that may have posted near-term lows if the rally can be sustained.
A weaker than expected US employment report rallied the stock market and interest rate futures (lowered int. rates) and pressed the US dollar lower to its lowest level since late mid-September. The break in the dollar in turn lent support to the grain markets. The weaker employment report reflects a weaker economy and reduces the need for additional rate hikes by the Federal Reserve.
To see the US 7-day precipitation forecast, the South American 7-day total accumulated precipitation and 1-week forecast precipitation maps, courtesy of the NWS, and 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. On October 19, December corn closed above 500 for the first time since the end of July. While the market was unable to follow through to the upside, the overall trend remains positive with successively higher lows, from mid-August. If the market can maintain a close above 500 and the 100-day moving average, it may aim to test resistance near 547. Otherwise, if the market closes below the 50-day moving average near 485, it may run the risk of continuing to trend sideways to lower, with a worst-case scenario being a sideways to lower trend into late November, or even early January. 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. The Dec ’24 contract has held up better than Dec ’23 as bear spreading over the last several months has brought increased buying interest into Dec ’24 and other further out contract months. Back in late July, the Dec ’23 contract traded up to a 25-cent premium over Dec ’24. Now, Dec ’24 holds about a 30 cent premium over Dec ’23. This bear spreading has held the Dec ’24 price up about 28 cents from its year-to-date low. 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:
Short covering and technical buying helped pull corn futures higher to end the week, as grain markets saw good money flow during Friday’s session. Overnight, December corn futures tested and held the September low and a strong break in the US dollar triggered fund short liquidation. Dec corn gained 7 ¼ cents on the day but was 3 ½ cents lower on the week.
The US dollar broke over a full basis point lower on Friday as the move lower in the dollar was triggered by weakness in today’s employment report and a more dovish (friendly) tone by the Fed regarding interest rates going forward. The Dollar Index posted a weekly bearish reversal on charts, which could lead to additional long liquidation.
Corn futures did post a technical reversal on daily charts during today’s session but failed at nearby overhead resistance. Trade early next week and the potential follow-through in price gains will be very key or sellers could take over the market again.
Price gains in the corn market were limited by continued hedge pressure. With harvest moving into the last 15% to be completed, fresh supplies of better-than-expected yields in some areas are hitting the cash market.
On November 9, the USDA will release the next crop production report. The market could be choppy next week with position squaring going into the report. Early expectations are for the USDA to slightly increase corn yield and production, which could add bushels back to an already heavy supply picture.
Above: On November 3, the December contract posted a bullish key reversal with a low of 468. The 50-day moving average is just above the market at 484, and the market is oversold. If prices can push over 484, they may move higher to test 500 – 509 ½. If not, support below the market rests between 468 and 460.
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. Nov ’24 has traded at a discount to the 2023 crop for nearly its entire contract life and that discount extended out to 142 versus the Jan ’24 contract in late July, with it recently trading between 17 ¾ and 66 cents. Since July, the Nov ’24 contract has mostly traded between 1250 and 1320. 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 closed firmly higher to end the week following strong gains yesterday, as well. The US dollar moved sharply lower which helped support the grain complex today. Soybean meal posted huge gains with the Jan contract up 4%. For the week, Nov soybeans gained 30-1/4, Dec meal lost 0.30, and Dec bean oil lost 2.91.
This was a good week for export demand with a solid export inspections number, good export sales yesterday of 37.1 mb for 23/24, and huge shipments of 73.2 mb which were primarily to China. Today, private exporters also reported sales of 131,150 mt of soybeans for delivery to unknown destinations for the 23/24 year.
US soybean yields are coming under more scrutiny as many producers report better than expected corn yields, but subpar soybean yields. StoneX recently revised their bean yield estimates lower than their last month’s guess, and next week the USDA will update their estimate in the WASDE report, which has the potential to be reduced.
In Brazil, weather is still a concern with the 10-day forecast turning very dry again. Argentina has received some beneficial rains, but southern Brazil is still too wet. There have been reports in Brazil of producers recently tearing up planted soybeans in favor of cotton.
Above: On November 3, January soybeans maintained strength above the 50-day moving average and closed above 1334 resistance, which now has become support. With the strong close, the market is poised to test 1370 – 1385. Below the market support is now between 1334 and the 50-day moving average, and again down near 1300.
Wheat
Market Notes: Wheat
The US Dollar Index was sharply lower today. As of this writing, it is down 1.07 at 105.05; this is quite a dip and certainly helped the grain markets to rally today with strong gains in corn and wheat. Soybeans were the leader with more than 20-cent gains and helped to pull wheat higher too.
All three US wheat futures classes could be considered at or near oversold levels, and with today’s move higher stochastics are indicating potential buy signals. If the rally can be sustained on Monday, a near-term bottom might be in.
Also helping wheat today was a cut to the estimate of world wheat stocks by FAO-AMIS. For 23/24 the projection is now at 315.1 mmt vs 319.3 mmt last month. With the next USDA report due for release this upcoming Thursday, traders will have to wait and see if they make any sort of similar revision.
While they have received recent rains that have benefited soil moisture levels, it hasn’t been enough to reverse the drought in Argentina. According to the Buenos Aires Grain Exchange, Argentina’s wheat crop is now forecasted down 4.9% to 15.4 mmt, vs 16.2 mmt previously. There could also be further cuts if the frost in the forecast is accurate.
Rain in France is slowing fieldwork, and as of October 30th, an estimated 62% of their soft wheat crop is planted. According to FranceAgriMer, that is down from both last year and the five-year average. The short-term forecast may call for more rain, causing continued delays.
Chicago Wheat Action Plan Summary
No new action is currently recommended for 2023 Chicago wheat. Since making a mid-summer high in late July, the Dec ’23 contract has been in a downtrend, but after finding support at 540 on September 29, the market has steadily rallied, briefly piercing 600 and the 50-day moving average. With weak US export demand driven by cheap Russian exports being the dominant headwind, it appears that prices may be finding value in the 540 – 616 range established since early September. 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 600’s. 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 June’s highs, 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 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: On October 20, the December contract posted a bearish reversal after making a new recent high of 604 ½. The market has retreated and solidified resistance above the market that now stands between 604 ½ and 618. Without bullish input, the market is likely to trend sideways to lower with the next major support level between 547 and 540.
KC Wheat Action Plan Summary
No new action is recommended for 2023 KC wheat crop. With prices falling below the October 12 low of 655 ¼, the Dec ’23 contract continues to search for support as it resumes the downtrend that has been in place since late July. 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 has now tested minor support near 630, which has held so far. The next level of major support below that remains near 575. Major resistance above the market remains around 690 – 700, with minor resistance near 655.
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 707 ½ 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: Since the last week of October, the December contract has resumed the downward trend that has been in place since the end of July and found nearby support near 703. If fresh bullish news doesn’t enter the market, prices could slide to the next level of support near 669, the May ’21 low. If prices turn higher, initial resistance remains between 745 – 760.
Other Charts / Weather
Above: US 7-day precipitation forecast courtesy of NOAA, Weather Prediction Center.Above: Brazil 7-day total accumulated precipitation courtesy of the National Weather Service, Climate Prediction Center.Above: Brazil 1-week forecast total precipitation courtesy of the National Weather Service, Climate Prediction Center.Above: Argentina 7-day total accumulated precipitation courtesy of the National Weather Service, Climate Prediction Center.Above: Argentina 1-week forecast total precipitation courtesy of the National Weather Service, Climate Prediction Center.
Corn is trading higher at midday after coming within a tick of the September low at 4.68 in December. Support is coming from a decline in the dollar and higher soybeans and wheat.
Yesterday, the USDA reported corn export sales at 29.5 mb which was on the low side, and Mexico was a top buyer picking up more than half of the total sales.
Outside markets are also supporting the grain complex today with the Dow higher after the Jobs report was released that showed 150,000 jobs added in October which was less than expected. This may keep the Fed from raising interest rates in December.
After reports of better-than-expected yields in some areas, StoneX has increased their estimate for the national corn yield to 175.7 bpa. This is higher than the USDA’s guess, but this could point to the USDA decreasing their estimate in next week’s WASDE report.
Soybeans are firmly higher again today following yesterday’s gain of 13 cents in the January contract. Jan beans broke out above their 100-day moving average and reached their highest level since September 18.
January soybean meal is up 1.37% on strong export demand, and soybean oil is higher as well despite lower crude today. The lower US dollar and higher equity market is likely supporting the entire soy complex.
Private exporters reported sales of 131,150 metric tons of soybeans for delivery to unknown destinations during the 2023/2024 marketing year.
In Brazil, many soybean growing areas are still too dry, and there have been some reports of large fields of recently planted soybeans being ripped up in order to plant cotton instead. This would also limit those areas from plantings of corn.
Wheat is higher today as Chicago rebounds from oversold technicals, and KC and Minneapolis wheat rebound from contract lows. The lower US dollar is supportive for wheat.
FAO-AMIS has cut its estimate of the world wheat stockpiles for 23/24 to 315.1 mmt which is down from last month’s 319.3 mmt.
Despite Australia’s smaller-than-anticipated wheat crop due to drought, China has been an active buyer as it leaves US wheat as a last resort.
Ukrainian food exports have risen by 15% in October to 4.8 mmt due to the creation of their own humanitarian corridor which primarily shipped grains to Europe and Africa.
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