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11-02-23 End of Day: Technical Selling Presses Corn Lower Despite Higher Beans and Wheat

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Despite decent ethanol production, lackluster export demand, harvest pressure, and continued technical selling dominated the corn market, pressing it to its lowest level since late September.

  • Firm export sales, record September crush numbers, and analysts’ expectations of lower yields ahead gave the soybean market a strong push to end higher on the day, despite a mixed close for the products and a loss of 17 cents in December Board crush margins.

  • Disappointing soybean meal exports likely led to profit taking and a lower close in front month meal after trading higher overnight, while reports of the lowest soybean oil stocks since 2017 and strong crude oil supported bean oil to a positive close after printing a new 4-month low.  

  • A weak US dollar, renewed supply concerns from Ukraine, and a reduction in Russian wheat exports, all added levels of support to the wheat complex that opened weak but settled on the positive side of unchanged in all three classes.

  • Falling treasury yields in the overnight, carried over to the day session and weighed heavily on the US dollar, which gapped lower as trading opened, giving up all of yesterday’s gains.  The lower dollar likely provided support to US commodity markets.

  • To see the November US Drought Monitor and weekly change maps, courtesy of the NDMC and the University of Nebraska, and the South American 1-week forecast precipitation maps for South America, 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:

  • Weak price action triggered by hedge pressure and technical selling weighed on corn futures during the session, despite overall commodity market strength on Thursday. December corn lost 5 cents and posted its lowest close since September 27, 2021.

  • Weekly export sales for corn were within expectations but lackluster. The USDA reported new sales of 748,000 mt (29,5 mb) for the current marketing year. Mexico was the top buyer of US corn last week. Year-over-year, corn export sales are up 26%, but still behind the pace needed to reach USDA’s marketing year export targets.

  • Ethanol margins should remain friendly and supportive of the corn market in the near term. Ethanol production has remained strong, but ethanol stocks are historically low. The combination should keep the ethanol processor active in the corn market, and in need of supply.

  • The weak price action and negative close will likely keep short sellers active in the corn market. The downside trend under the December contract points to a test of the fall low and possibly the 460 level if selling pressure continues.

  • South American weather is forecasted to stay hot and dry for areas of Brazil, and parts of Argentina are seeing signs of last year’s drought persist. While South American weather is still in its early stages, weather will grow of more importance in the weeks ahead. If soybean planting stays delayed, that could push planting of the key 2nd corn crop past the ideal weather window.

Above: The market has been drifting lower since trading up to 509 ½ and failing on October 20, and upside resistance has moved lower with it. Currently, nearby resistance rests between 476 and 486, with major support remaining near 460. Below 460, the next level of support may come in between 440 and 414.

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 rallied through resistance near 1287 on its way to the recent high of 1334 and testing the 50-day moving average. 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 and is currently testing the bottom end of that range. 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 following good export sales and some analyst expectations that the national soybean yield may decrease. Crude oil gained over two dollars a barrel today which, along with gains in palm oil, supported soybean oil. Soybean meal was bear spread with the front months lower but deferred contracts higher.

  • Soybean export sales have begun picking up with China as a more active buyer, and today’s export sales report showed increases of 37.1 mb for the 23/24 marketing year which was on the higher end of analyst expectations. Shipments were huge at 73.2 mb and much higher than the 32.6 mb needed on average to meet the USDA’s expectations.

  • Today’s Fats and Oils report showed September soybean crush at 175 mb, in line with analysts’ expectations and the largest September crush on record. Soybean oil stocks were down 25% from a year ago, but soybean meal stocks were reportedly 18% higher than a year ago despite the export demand.

  • In South America, excessive rain in the southern region and dryness in the northern regions of Brazil have some analysts expecting that the final soybean crop will be closer to 150 mmt rather than the 163 mmt that the USDA has estimated. Lower South American production coupled with tight US ending stocks could give soybeans momentum to rally.

Above: In the middle of October, the market traded up to 1334 and pierced the upper end of resistance, and the 50-day moving average, before retreating lower. If the market can maintain a close above resistance at 1334, it would be poised to make a run to test 1370. Otherwise, initial support to the downside may be found near 1300 and again near 1273. Key support for the move remains down near 1250.

Wheat

Market Notes: Wheat

  • Wheat managed to make small gains in all three US classes. The US Dollar Index gapped lower after yesterday’s Fed comments indicated that interest rates would be kept unchanged. This may have eased some pressure on the wheat market, allowing for small, but welcomed gains in price. If the US dollar continues to trend lower, the export market may begin to pick up, providing more long-term support.

  • The USDA reported export sales of 10.1 mb of wheat, bringing the 23/24 total to 417.5 mb, down 7% from last year. About 14.2 mb of wheat need to be shipped each week to meet the USDA’s export goal of 700 mb, but shipments last week of just 3.7 mb were well below that figure.

  • Rumors continue to circulate that China is looking for US SRW wheat pricing out of the Gulf, and so far there has been no confirmation of any purchases. However, they have recently purchased a combined total of 4.5 mmt from France and Australia.

  • There is renewed concern about grain flow out of Ukraine. Apparently, Russia has planted explosives along Black Sea shipping lanes. In addition, Ukraine has new export registration and license requirements that may slow down exports of wheat and corn.

  • SovEcon reduced their estimate of Russian wheat exports to 48.8 mmt from 49.2 mmt previously. Reportedly, wheat export sales have significantly declined recently, and it may be tied, in part, to the government’s attempt to limit exports at these recent low levels. In addition, the Russian agriculture ministry is proposing a six-month ban on durum wheat exports from December 1 – May 31.

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: Brazil 1-week forecast total 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.

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11-02-23 Midday: Export Sales as Expected; Corn Mixed; Beans and Wheat Higher

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn
DEC ’23 472.25 -2.75
MAR ’24 487.25 -2.5
DEC ’24 512.75 1.5
Soybeans
JAN ’24 1324.5 9.5
MAR ’24 1338.25 9.5
NOV ’24 1274.5 6.25
Chicago Wheat
DEC ’23 565.5 3.75
MAR ’24 592.5 3
JUL ’24 625.5 2
K.C. Wheat
DEC ’23 644.25 4.25
MAR ’24 655 4.5
JUL ’24 669.25 4.5
Mpls Wheat
DEC ’23 710 1
MAR ’24 730.25 1.75
SEP ’24 764.5 2.25
S&P 500
DEC ’23 4317.75 61.75
Crude Oil
JAN ’24 80.76 0.66
Gold
JAN ’23 1928.6 -0.5

  • Corn is trading slightly higher today but is struggling to gain much momentum as harvest accelerates with a clear 7-day forecast.

  • Today’s export sales report showed increases of 29.5 mb for 23/24, which was within trade expectations. Shipments of 19.9 mb were well below the 41.1 mb needed each week to meet the USDA’s estimated 2.025 bb.

  • StoneX has raised their estimates of the US corn yield amid reports of better-than-expected yields, with their estimate now sitting at 175.7 bpa from 175.5 bpa previously.

  • Yesterday, the US Department of Energy said that ethanol stocks fell by 1.8% to 21.012m bbl, and analyst expectations were 21.402. Production was slightly higher than the survey averages.

  • Soybeans are trading higher near midday, but have slipped a bit from their highs earlier in the day which saw prices at the top of the trading range. Soybean meal is trading higher while soybean oil is lower.

  • Soybean export sales were good for 23/24 at 37.1 mb, which was within trade expectations. Export shipments were very large last week at 73.2 mb, which was well above the 32.6 mb needed each week.

  • Chinese imports have been very strong with imports over the past three months estimated at 26 mmt and total imports at 105 mmt, which would be a record according to trade groups in China.

  • StoneX has lowered their estimate for the national soybean yield to 50.3 bpa from 50.4 bpa a month ago with production falling by 13 mb. These estimates are still higher than the USDA’s most recent guess.

  • All three wheat products are trading higher today, but KC and Minneapolis wheat are still near their contract lows as poor export sales suppress prices.

  • US export sales for the week ending October 26 were 10.1 mb for 23/24, which was below the low end of the average trade range. Shipments were very poor at 3.7 mb, which is well below the average 14.2 mb needed each week to reach the USDA’s estimate of 700 mb.

  • 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.

  • Russia continues to dominate global exports offering wheat as cheap as $230 per metric ton. US hard red winter wheat export sales are over 35% lower than a year ago.

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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11-02-23 Grain Market Insider Opening Update: Soybeans near top of recent trade range

ByGrain Market Insider

All prices as of 6:30 am Central Time

Corn

DEC ’23 476.25 1.25
MAR ’24 491.25 1.5
DEC ’24 513.5 2.25

Soybeans

JAN ’24 1326 11
MAR ’24 1339.25 10.5
NOV ’24 1276.75 8.5

Chicago Wheat

DEC ’23 561.5 -0.25
MAR ’24 589.5 0
JUL ’24 624.5 1

K.C. Wheat

DEC ’23 641.25 1.25
MAR ’24 651 0.5
JUL ’24 665.25 0.5

Mpls Wheat

DEC ’23 710.5 1.5
MAR ’24 730 1.5
SEP ’24 764.25 2

S&P 500

DEC ’23 4278.75 22.75

Crude Oil

JAN ’24 81.36 1.26

Gold

JAN ’23 1928.6 -0.5

  • Corn is trading slightly higher this morning as prices remain near their lows on a lack of fresh bullish news.

  • Export sales will be released today, and the average analyst guess is between 600k tons and 1,200k tons with an average of 920k. Sales will likely be below last weeks.

  • Yesterday, the US Department of Energy said that ethanol stocks fell by 1.8% to 21.012m bbl, and analyst expectations were 21.402. Production was slightly higher than survey averages.

  • There is virtually no rain on the radar this morning in the Corn Belt and the 7-day forecast is very dry which should see harvest activity pick up as crops dry out.

  • Soybeans are beginning the day higher with support from both soybean meal and oil, with crude oil higher as well. Soybeans are near the top of their recent trade range.

  • Yesterday’s US crush report was friendly with 175 mb of soybeans crushed in September, 4.3% higher than the same time last year.

  • Today’s export sales report is expected to show soybean sales between 900k tons and 1,500k tons with an average of 920k. There are rumors that China is purchasing soybeans out of the PNW.

  • StoneX has raised their outlook for US corn output but has cut their estimates for soybeans, and it is possible that the USDA might lower their estimate for yields in the next WASDE report.

  • Wheat is mixed this morning with Chicago and KC lower while Minneapolis is slightly higher. Both KC and Minn wheat remain near their recent lows.

  • Wheat export sales are expected to be lackluster again this week with trade expecting between 300k tons and 600k tons in sales.

  • Export demand remains a challenge for the US wheat market, and currently, US SRW prices are on par with the EU and Baltic offerings.  While US HRW is $30/tonne over Germany and $50/tonne over Russia.

  • 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.

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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11-01-23 End of Day: Wheat rebounds, soybeans higher, corn slides

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • Sellers remain a dominant force in the corn market with harvest pressure continuing to weigh on prices and a general lack of fresh bullish news to bring in new buying interest.

  • After trading lower on this morning’s open, soybeans recovered along with meal to close 10 ¼ cents off the low and 4 ½ cents higher, despite sharply lower bean oil.

  • While the improving weather outlook for Argentina spurred some profit taking in soybean meal, higher domestic demand, and the prospect for increased exports, it kept the market supported as it recovered from early losses to close the day just 60 cents below unchanged. Whereas, soybean oil resumed its slide lower as it broke through the June 22 low of 51.36, despite strong biofuel use numbers.

  • Despite strength in the US dollar and weakness in the corn market, the wheat complex staged a bit of a recovery today led by KC and Chicago, with short covering spread action possibly weighing on Minneapolis which finished mixed and near unchanged across the board.

  • The US dollar followed through on yesterday’s strong gains to post its highest level in four weeks before retreating and is within striking distance of testing October’s high. Much of the dollar’s strength is coming from generally weak economic data out of Europe.  

  • To see the November US Temperature and Precipitation Outlooks, and the South American 1-week total precipitation for South America, courtesy of the NWS, CPC, and NOAA, scroll down to other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  • No new action is recommended for 2023 corn. 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:

  • Corn prices saw weak price action as futures broke support under the most recent trading range. December futures lost 3 ¾ cents but held the next level of support at 475 on the close. Corn prices remain pressured by the ongoing harvest, and the lack of fresh news overall to bring buying into the market.

  • Weekly ethanol output rose to an 11-week high at 1.052 million barrels/day for the week ending October 27. This is up from last week and the multi-year average. Last week ethanol production used 101.7 mb of corn, up from last week, but slightly below last year’s levels. Ethanol stocks remain low at 21.0 million barrels. This was the lowest week for ethanol stocks since December 2021.

  • Demand overall remains a concern in the corn market. The USDA will release weekly export sales on Thursday morning. Last week saw a jump in sales to 1.35 mmt for corn. The market will be watching to see if that stronger sales trend can continue.

  • The weak price action and negative close will likely keep short sellers active in the corn market. The downside trend under the December contract points to a test of the fall low and possibly the 460 level if selling pressure continues.

  • South American weather is forecasted to stay dry and hot for areas of Brazil, and parts of Argentina are seeing signs of last year’s drought persist. While South American weather is still in its early stages, weather will grow more important in the weeks ahead. If soybean planting stays delayed, that could push planting of the key 2nd corn crop past the ideal weather window.

Above: The corn market has largely been rangebound since the beginning of August, with only minor short covering moving the market higher until recently. With the market trading up to 509 ½ and failing, the next major resistance level now sits at that recent high, with further resistance near the July 31 high of 516 ¼. If the market retreats, the next major support level remains near 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 rallied through resistance near 1287 on its way to the recent high of 1334 and testing the 50-day moving average. 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 and is currently testing the bottom end of that range. 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 traded either side of unchanged today but ultimately ended higher. There was early support from both soybean meal and oil, but both fell with soybean oil closing sharply lower due to a decline in crude oil that followed the Fed’s rate announcement.

  • The Federal Reserve announced today that it would keep the federal funds rate unchanged at 5.25% to 5.50% but indicated that another rate hike could be implemented in December, but that they need to see how the economy performs in the meantime. Crude oil took a hit from this news which dragged soybean oil lower.

  • NOPA crush numbers will be released later today with the average trade estimate at 175 mb. This would be above the 169 mb crushed in August, and also above the 167.6 mb a year ago. Crush margins have been very profitable lately and domestic demand has been firm.

  • In South America, excessive rain in the southern region and dryness in the northern regions of Brazil have some analysts expecting that the final soybean crop will be closer to 150 mmt rather than the 163 mmt that the USDA has estimated. Lower South American production coupled with tight US ending stocks could give soybeans momentum to rally.

Above: In the middle of October, the market traded up to 1334 and pierced the upper end of resistance, and the 50-day moving average, before retreating lower. If the market can maintain a close above resistance at 1334, it would be poised to make a run to test 1370. Otherwise, initial support to the downside may be found near 1300 and again near 1273. Key support for the move remains down near 1250.

Wheat

Market Notes: Wheat

  • Both Chicago and Kansas City put some green on the board today, despite the rise in the US Dollar Index and lower corn futures. Whereas Minneapolis futures ended with a mixed close. The relative weakness of Minneapolis in today’s trade could be the result of spread action.

  • Brazil continues to be too dry in the north and central areas, while the southern region has received too much rain and has had flooding issues. And though they received recent rains, the US ag attaché in Argentina is still predicting their wheat production to fall to 14.5 mmt.

  • China has reportedly made purchases of 2 mmt of wheat from Australia, with another 2.5 mmt from France. Floods are said to have damaged about 20% of China’s wheat crop, and they may look to import more down the road.

  • For this marketing year that began July 1st, as of October 27th the EU’s soft wheat exports are down 24% from last year, representing a decline from 12.6 to 9.6 mmt.

  • According to their agriculture ministry, as of October 31st, Ukraine has planted 4.2 million hectares of winter grain. This includes 3.7 million hectares of wheat, a year-over-year increase of 6%.

  • Russia’s wheat export duty has reportedly dropped 14%, as of November 1st, to 4,923.4 rubles per metric ton, down from 5,297.7 rubles. This could help Russia maintain their dominance in the world wheat market.

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 is now testing minor support near 630, with the next level of major support remaining 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 beginning of October, the market has been consolidating, with the upper end of the range acting as resistance. Initial support below the market lies near the October 2 low, between 711 and 707, with major support remaining near 665. If prices turn higher, initial resistance remains between 745 – 760.

Other Charts / Weather

Above: Brazil 7-day total accumulated 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.

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11-01-23 Midday: Markets mixed at midday, corn lower, beans and wheat higher

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn
DEC ’23 475.5 -3.25
MAR ’24 490 -3
DEC ’24 510.5 -2.5
Soybeans
JAN ’24 1318 7.5
MAR ’24 1331.5 6.75
NOV ’24 1271.25 4.5
Chicago Wheat
DEC ’23 561.25 5
MAR ’24 589 3.75
JUL ’24 622.75 3.5
K.C. Wheat
DEC ’23 636.25 7
MAR ’24 647.25 6
JUL ’24 662 6
Mpls Wheat
DEC ’23 711 1.75
MAR ’24 730.5 2
SEP ’24 762.25 -0.25
S&P 500
DEC ’23 4233.5 21.25
Crude Oil
JAN ’24 82 1.5
Gold
JAN ’23 1928.6 -0.5

  • Corn is trading lower near midday and has dropped below the bottom range of the recent trading range. March corn is currently just 5 cents above its contract low.

  • US ethanol output last week rose to an 11-week high, reaching normal to above normal levels for the date. Ethanol stocks at 21M barrels last week is the lowest for any week since December 2021.

  • In South America, rain chances are improved for northern Brazil and Argentina, but Mato Grosso, a key soybean growing area in central Brazil, has remained very dry.

  • US corn offers out of the Gulf are now at parity with Brazil, but demand has been sluggish anyway with little activity from China and the bulk of exports to Mexico.

  • Soybeans are trading higher today with support from soybean oil, but soybean prices remain rangebound and will likely need more bullish news to break out of the range.

  • Crude oil is trading higher as the fighting between Israel and Hamas escalates. Israel is in the middle of a ground invasion in Gaza, and US bases in Syria and Iraq have reportedly been the target of drone attacks.

  • NOPA crush numbers will be released later today with the average trade estimate at 175 mb. This would be above the 169 mb crushed in August and also above the 167.6 mb a year ago.

  • ANEC has reported that Brazilian soy shipments in October are likely to be near 6 mmt which compares to 3.6 mmt just a year ago as they primarily ship to China.

  • Wheat is mostly higher with the front months gaining on the deferreds in all three classes. Minneapolis wheat has sold off significantly and is only a few cents off its contract lows.

  • Russia continues to dominate global exports offering wheat at a cheap $230 per metric ton. US hard red winter wheat export sales are over 35% lower than a year ago.

  • There have been early reports that China has purchased 2 mmt of wheat from Australia and 2.5 mmt of French wheat after 20% of China’s wheat crop was reportedly damaged by flooding.

  • Argentina recently got some relief with showers in key areas, but the US attaché there is projecting that Argentinian wheat production could slip to 14.5 mmt.

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

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

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

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11-01-23 Grain Market Insider Opening Update: Latest production estimate on South American crops

ByGrain Market Insider

All prices as of 6:30 am Central Time

Corn

DEC ’23 479.25 0.5
MAR ’24 493.75 0.75
DEC ’24 513 0

Soybeans

JAN ’24 1308.5 -2
MAR ’24 1321.75 -3
NOV ’24 1262.5 -4.25

Chicago Wheat

DEC ’23 561 4.75
MAR ’24 589.5 4.25
JUL ’24 622.5 3.25

K.C. Wheat

DEC ’23 637.25 8
MAR ’24 649 7.75
JUL ’24 662.5 6.5

Mpls Wheat

DEC ’23 714.5 5.25
MAR ’24 734 5.5
SEP ’24 765.5 3

S&P 500

DEC ’23 4195.25 -17

Crude Oil

JAN ’24 81.93 1.43

Gold

JAN ’23 1928.6 -0.5

  • With little fresh news to move the market, corn is trading slightly higher this morning within a tight 1 1/2-2 cent range.

  • The EIA will release its weekly ethanol production report today, estimates for production range from 1,030k bbl/day to 1,052k bbl/day versus 1,040k bbl/day the previous week.

  • South American crop watcher, Dr. Michael Cordonnier adjusted his Brazilian corn production estimate down 2 mmt to 123 mmt, based on the lower plantings due to delays and lower domestic prices.  While he lowered Brazilian production, Cordonnier left Argentine corn production unchanged 52 mmt. For comparison, the current USDA estimates 129 mmt and 55 mmt for Brazil and Argentina respectively.

  • Soybeans are showing minor losses this morning along with soybean meal, though bean oil is slightly higher along with higher palm and crude oil.

  • The EIA reported on biodiesel and renewable diesel capacity yesterday and while both numbers steady for Aug’23 at 2.080 bil. gal and 3.704 bil. gal respectively from last month, renewable diesel capacity increased 74% from Aug. last year.  For use, the amount of soybean oil consumed in Aug ’23 fell 6% from the previous month but was 29% higher than Aug ’22.

  • South American crop watcher Cordonnier lowered his estimate for Brazil’s soybean production down 2 mmt to 160 mmt, due to lower yields and the potential of lower acres from replanting.  The USDA’s current estimate is 163 mmt.   He kept his Argentine estimate unchanged at 50 mmt, which remains above the USDA’s 48 mmt estimate.

  • Argentina is seeing much needed rains, while Brazil continues to be a mixed bag with too much rain in the south, too little in the north and east, with showers in the central areas.

  • There is also talk that Argentina may see some corn acres switched to soybeans.

  • Led by KC, the wheat complex is higher this morning as the markets try to recover some of yesterday’s losses.

  • There is talk that China’s milling wheat supplies are low and that they are buying French and Australian wheat.  While it’s not new to the market, it’s been reported that China will likely import a record 12 mmt of wheat in 2023.  The question is, how much of the business will the US receive if Australia and others run low on supplies.

  • Export demand remains a challenge for the US wheat market, and currently, US SRW prices are on par with the EU and Baltic offerings.  While US HRW is $30/tonne over Germany and $50/tonne over Russia.

  • Russia continues to dominate the world wheat market with prices in the $220-$230 range.

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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10-31-23 End of Day: Lack of bullish news weighs on corn & wheat; flash sale & rebounding meal support beans

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • A swift harvest pace and a lack of bullish news kept the corn futures caught between a firmer soybean market and weak wheat complex, to show only minor gains for its 5th day of consolidation.

  • Bolstered by a 239k mt flash sale to Mexico, soybeans ended the day with relatively minor gains following a volatile trade that saw a 24-cent range and lower prices in the overnight.

  • Though Argentina may be seeing some improvement, their available supplies remain low and continue to support soybean meal and soybeans. Bean oil, on the other hand, added resistance to soybeans as it retreated nearly 2% on weaker palm and crude oil.

  • Solid crop ratings, poor exports, and a lack of fresh bullish news pressed the wheat complex lower again today as Russia continues to export wheat at discount prices.

  • To see the updated US 3-4 week Temperature and Precipitation Outlooks, the South American 1-week precipitation forecast, and the GRACE-Based Root Zone Soil Moisture Drought Indicator courtesy of the NWS, CPC, NASA and the National Drought Mitigation 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. 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:

  • Another sideways day of trade in the corn market as December futures gained ½ cent on the session.  The Dec contract had a 5 ½ cent trading range on the day, trading within this narrow range for the 5th consecutive day as the market lacks fresh news.

  • Corn harvest has moved to 71% complete as stated in the USDA Crop Progress report. This was slightly higher than market expectations and 5% above the 5-year average of 66%.

  • South American weather is forecasted to stay dry and hot for areas of Brazil, and areas of Argentina are seeing signs of last year’s drought persist. While South American weather is still in its early stages, weather will grow more in importance in the weeks ahead. If soybean planting stays delayed, that could push planting of the key 2nd corn crop past the ideal weather window.

  • The lack of fresh news and ongoing harvest pressure will likely keep the path of least resistance lower in the corn market unless some more friendly news were to develop in the near term

  • Last week, managed money funds were reported as net short 100,430 corn contracts, reducing their short positions by 8,440 contracts. Global and US corn supplies are still heavy, and funds will still need a reason to exit those remaining short positions, which is lacking at this time.

Above: The corn market has largely been rangebound since the beginning of August, with only minor short covering moving the market higher until recently. With the market trading up to 509 ½ and failing, the next major resistance level now sits at that recent high, with further resistance near the July 31 high of 516 ¼. If the market retreats, the next major support level remains near 460.

Above: 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 rallied through resistance near 1287 on its way to the recent high of 1334 and testing the 50-day moving average. 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 and is currently testing the bottom end of that range. 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 slightly higher after a volatile day in which they opened lower overnight, gained as much as 15 cents in the November contract near midday, then faded into the close. Support came from higher soybean meal while soybean oil was lower along with lower crude and palm oil.

  • Yesterday evening’s Crop Progress report showed that the soybean harvest is ahead of the normal pace at 85% complete. The 5-year average is 78%, and Illinois and Iowa are both far ahead of the average pace at 89% and 93% complete respectively.

  • Today, private exporters reported sales of 239,492 metric tons of soybeans for delivery to Mexico during the 23/24 marketing year. This comes after multiple sales to China last week and impressive export inspections on Monday.

  • In South America, planting is pressing on as chances for rain in central Brazil and Argentina improve slightly, but southern Brazil remains too wet. Argentina’s soybean production will very likely be much higher than last year’s drought ridden crop which will eventually impact the large US exports of soybean meal.

Above: In the middle of October, the market traded up to 1334 and pierced the upper end of resistance, and the 50-day moving average, before retreating lower. If the market can maintain a close above resistance at 1334, it would be poised to make a run to test 1370. Otherwise, initial support to the downside may be found near 1300 and again near 1273. Key support for the move remains down near 1250.

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

Wheat

Market Notes: Wheat

  • The wheat market continues to see a lack of new bullish headlines, and that is keeping it under pressure. All three US futures classes, alongside Paris futures, closed with losses on the day. There have been no major updates regarding the war in the Middle East or the Black Sea, but Russia does continue to offer cheap wheat for export, around $230 per metric ton, further undercutting US offers.

  • Yesterday afternoon the USDA said 84% of the winter wheat crop is planted, down just 1% from average. And with emergence at 64% (in line with the average), the crop was rated 47% good to excellent. While this may be just slightly lower than what the trade was looking for, it is well above last year’s initial rating of 28% GTE. This can be attributed to improved soil moisture and easing drought in the southern Plains.

  • The US Dollar Index was on the rise again today and is close to testing the 107 level again. This, along with yesterday’s poor inspections data, a good crop rating, and no fresh news, all combined to offer weakness to the market. The silver lining may be Chinese demand, as they are reportedly ready to import a record amount of wheat due to damage to their crop. Recently they have been making purchases from Australia and France.

  • In Brazil, unfavorable weather has impacted the quality of their wheat crop. This has caused their internal prices to recently increase. Additionally, a fire that broke out at one of the key ports in Brazil is causing grain shipping delays. The port in Paranagua is Brazil’s second largest, and this just adds to the logistics issues they have been facing recently with low river water levels.

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 the end of September, KC wheat has been consolidating and recently broke through the bottom of the range at 655. The market is now poised to test minor support near 630, with the next level of major support remaining near 575.  Resistance above the market remains around 690 – 700.

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

Above: 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 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 beginning of October, the market has been consolidating, with the upper end of the range acting as resistance. Initial support below the market lies near the October 2 low, between 711 and 707, with major support remaining near 665. If prices turn higher, initial resistance remains between 745 – 760.

Other Charts / Weather

Above: Brazil 1-week forecast total 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.

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10-31-2023 Midday: Corn and beans are both higher and near the upper end of their ranges, while wheat slides lower.

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn
DEC ’23 481.25 3
MAR ’24 495.25 2.5
DEC ’24 514 2.75
Soybeans
NOV ’23 1298 15.25
JAN ’24 1318.25 11
NOV ’24 1271.5 6.5
Chicago Wheat
DEC ’23 559.25 -6.75
MAR ’24 588.25 -6
JUL ’24 621.5 -6
K.C. Wheat
DEC ’23 637.75 -7.25
MAR ’24 649 -7.5
JUL ’24 662.75 -8
Mpls Wheat
DEC ’23 711 -6.75
MAR ’24 730.25 -6.5
SEP ’24 764.25 -3.25
S&P 500
DEC ’23 4189.25 3.5
Crude Oil
DEC ’23 82.26 -0.05
Gold
DEC ’23 2003.1 -2.5

  • Corn is trading slightly higher near midday, with prices closer to the upper end of the day’s range. December corn has traded lower for 6 of the past 7 trading days after failing at the 100-day moving average at 5.09.

  • Yesterday’s Crop Progress report said that 71% of the corn harvest is complete, which is 5 points higher than the 5-year average. Illinois is 81% complete and Iowa is 77% complete.

  • In South America, weather in Argentina and central and northern Brazil has been too dry for seeding, but rain chances are now improving. Southern Brazil has been too wet however and heavy rains continue to be forecast.

  • There has been some support from the ethanol market with ethanol margins now at the best levels since 2021 and production climbing. The USDA Co-Products report said that corn processing values were at $8.56 per bushel in the eastern belt.

  • Soybeans have been rangebound for over a week and are trading higher today, near the upper end of their trading range. More favorable South American weather forecasts have been negative while demand has been supportive.

  • Yesterday, soybean meal gave back all of the gains from the previous day due to overbought technicals and profit taking, but export demand remains firm for meal which should continue to support soybeans.

  • Yesterday’s Crop Progress report showed the soybean harvest at 85% complete which is above the 5-year average of 78%. Illinois is 89% complete and Iowa is 93% complete.

  • November soybeans expire on November 14, but there have already been 438 deliveries against the November contract, higher than expected.

  • All three wheat products are lower today, but KC wheat has taken the brunt of the selloff over the past few months. The lack of export demand has been a big bearish factor.

  • Russia continues to dominate global exports offering wheat at a cheap $230 per metric ton. US hard red winter wheat export sales are over 35% lower than a year ago.

  • Yesterday, the USDA said that 84% of the crop has been planted with 64% emerged, on track with its average pace. The USDA also said that 47% of the crop was rated good to excellent, up from 28% last year.

  • China is set to import record volumes of wheat this year due to damage to their crop, and they have been purchasing large amounts of Australian and French wheat. 

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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10-31-23 Grain Market Insider Opening Update: Info from latest Crop Progress report

ByGrain Market Insider

All prices as of 6:30 am Central Time

Corn

DEC ’23 478.75 0.5
MAR ’24 492.75 0
DEC ’24 511.25 0

Soybeans

NOV ’23 1280 -2.75
JAN ’24 1306.25 -1
NOV ’24 1261.5 -3.5

Chicago Wheat

DEC ’23 560 -6
MAR ’24 589 -5.25
JUL ’24 622 -5.5

K.C. Wheat

DEC ’23 637.25 -7.75
MAR ’24 649.25 -7.25
JUL ’24 663.25 -7.5

Mpls Wheat

DEC ’23 712.75 -5
MAR ’24 732 -4.75
SEP ’24 767.5 -1.75

S&P 500

DEC ’23 4197.5 11.75

Crude Oil

DEC ’23 82.75 0.44

Gold

DEC ’23 2008 2.4

  • Corn is trading unchanged this morning but near the bottom of its range with little fresh news to go on.

  • Crude oil is up slightly after yesterday’s selloff which could be supportive to ethanol, but ethanol margins have also been mostly rangebound.

  • Yesterday’s crop progress report showed corn at 71% harvested which was above the average trade guess and up from 59% a week ago.

  • A fire at a key Brazilian port is delaying grain shipments which have already struggled to be transported due to low water levels in Amazonian rivers.

  • Soybeans are mixed with the Nov contract lower, Jan slightly higher, and deferred contracts unchanged. Weather has improved slightly in South America, but in the US, poor yields are being reported in the western Plains.

  • Yesterday’s crop progress report said that the soybean crop was 85% harvested which was in line with trade guesses and above the 5-year average of 78%.

  •  Brazil’s 23/24 soybean planting has reached 40% completion of the expected area, but this pace is behind last year’s 46% at this time.

  • With reports of poor soybean yields coming in in the US, it is possible that the USDA may reduce their production estimate of 4.104 bb. Ending stocks are already tight at 220 mb.

  • All three wheat contracts are trading lower this morning, but December KC has not taken out its contract low from yesterday. The lack of export demand has significantly pressured wheat prices.

  • The US winter wheat crop is looking promising with good weather conditions, and yesterday, the USDA said that 84% of the crop has been planted with 64% emerged, on track with its average pace. The USDA also said that 47% of the crop was rated good to excellent, up from 28% last year.

  • In Brazil, unfavorable weather conditions during their wheat harvest have led to quality concerns and have caused prices to move higher.

  • China is set to import record volumes of wheat this year due to damage to their crop, and they have been purchasing large amounts of Australian and French wheat. 

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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10-30-2023: Markets are mostly lower on lack of fresh bullish news, lower crude, and potential SA weather improvement.

ByGrain Market Insider

All prices as of 2:00 pm Central Time

Grain Market Highlights

  • A lack of any fresh bullish news, along with weakness in soybeans and the crude oil market, gave sellers what they needed to keep corn below unchanged for much of the day and settle with minor losses, despite stronger prices in the overnight session.

  • Sharply lower soybean meal dragged the soybean market to double-digit losses for old crop despite export inspections that were well above the pace needed to reach the USDA’s goal. The losses were also felt in December and January Board crush margins, which were down 19 ¼ and 14 ¾ cents respectively, though to a still very strong 231 ¾ for December, and 171 ½ for January.

  • After making new contract highs on Friday, the prospect of improving conditions in South America weighed heavily on soybean meal, which sold off through the day as traders took profits from the recent run-up and unwound long meal-short oil spreads. The spreading also helped to support bean oil despite lower crude and palm oil prices.

  • Despite all three wheat classes trading above unchanged earlier in the session, only KC was able to settle higher on the day while Chicago and Minneapolis both closed lower on the day as weekly export inspections failed to reach the pace needed for the USDA to reach its forecast, and supplies continue to flow through Ukraine’s “humanitarian corridor.”

  • To see the updated US 5-day precipitation forecast, 6 to 10-day Temperature and Precipitation Outlooks, and the South American 1-week precipitation forecast 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. 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:

  • The corn market lacking very little fresh bullish news, saw weak price action trading 2 ½ cents lower in the December futures on Monday. Selling in the soybean market and a drop in crude oil prices limited upside potential in corn futures.

  • Within expectations, weekly export inspections totaled 20.9 mb for the week ending October 26. Total export inspections for the current marketing year are 195 mb, up 17% versus last year. The USDA is targeting total exports for the year at 2.025 billion bushels, up 22% year-over-year.

  • Corn harvest is expected to reach 69% complete on Monday’s USDA Crop Progress report. This would be up 10% over last week. Although progress may have slowed week over week due to rainfall in the covered areas of the Corn Belt in the past 7 days, harvest pressure has also limited corn prices.

  • South American weather is forecasted to stay dry and hot for areas of Brazil, and areas of Argentina are seeing signs of last year’s drought persist. While South American weather is still in its early stages, weather will grow more in importance in the weeks ahead.

  • Last week, managed money funds were reported as net short 100,430 corn contracts, reducing their short positions by 8,440 contracts. Global and US corn supplies are still heavy, and funds will still need a reason to exit those remaining short positions, which is lacking at this time.

Above: The corn market has largely been rangebound since the beginning of August, with only minor short covering moving the market higher until recently. With the market trading up to 509 ½ and failing, the next major resistance level now sits at that recent high, with further resistance near the July 31 high of 516 ¼. If the market retreats, the next major support level remains near 460.

Corn Managed Money Funds net position as of Tuesday, October 24. Net position in Green versus price in Red. Managers net bought 8,440 contracts between October 18 – 24, bringing their total position to a net short 100,430 contracts.

Soybeans

Soybeans Action Plan Summary

  • No new action is recommended for 2023 soybeans. Front month soybeans have been finding buying interest around the June 2023 low of 1256 ¾ in the Nov ’23 contract, and since the beginning of October, they have also traded largely between 1260 and 1280. The close over 1287 ¼ on October 12 could be a signal that a harvest/fall low is in. In the big picture, since May 2023, Nov ’23 has traded in a range from 1251 on the downside to 1435 on the topside. 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 and is currently testing the bottom end of that range. 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 due to pressure from lower soybean meal, lower world veg oils, and a selloff in crude oil. Soybean meal made new contract highs on Friday but gave back those gains today as the market became very overbought.

  • Soybean export inspections for the week ending Thursday, October 26, totaled 69.5 mb and were within the average trade range. Total inspections for 23/24 are now at 366 mb, which is down 3% from last year. Overall, soybean exports have improved over the past few months.

  • While export demand has picked up, domestic demand has been stout as well with crush margins increasing significantly and incentivizing processors. Exports of soybean meal have increased greatly as the world turned to the US in place of Argentina, and the use of soybean oil as biofuel has been gaining more traction as well.

  • Weather in South America has not improved much with the central and northern regions of Brazil remaining dry along with Argentina, but planting is pressing on anyway after previous delays. The 10-day forecast is still very dry, but there are better rain chances for Argentina and the main growing area of Mato Grosso, in Brazil. Southern Brazil remains far too wet with reports of flooding.

Above: In the middle of October, the market traded up to 1334 and pierced the upper end of resistance, and the 50-day moving average, before retreating lower. If the market can maintain a close above resistance at 1334, it would be poised to make a run to test 1370. Otherwise, initial support to the downside may be found near 1300 and again near 1273. Key support for the move remains down near 1250.

Soybean Managed Money Funds net position as of Tuesday, October 24. Net position in Green versus price in Red. Money Managers net bought 9,737 contracts between October 18 – 24, bringing their total position to a net long 7,753 contracts.

Wheat

Market Notes: Wheat

  • Wheat had a mixed close with losses in Chicago and Minneapolis, but small gains in KC. Bear spreading was a noted feature in the Chicago contracts – nearby months were under more selling pressure compared to deferred ones. This may be a result of the recent rains in Argentina (with more in the forecast) that are leading some to think their production may improve.

  • Also weighing on wheat today were poor export inspections. The USDA said only 7 mb of wheat were inspected, bringing the 23/24 total to 261 mb, and below the pace needed to meet their estimate. That is down 26% from last year, and the USDA is estimating 700 mb of exports.

  • Despite Israel sending ground troops into Gaza, the fighting seems to currently be contained to that area and has not spread into the wider region. Along with profit taking, this may explain why crude oil is nearly three dollars per barrel lower as of this writing. Regardless, crude trending lower throughout the session also pressured the grain markets.

  • Ukraine shipments through the Black Sea were temporarily paused last week due to tax and customs issues, according to officials. There were also rumors of explosives and / or threats from Moscow. However, vessels are said to be moving through the corridor again with most of the ag goods headed for the EU and Africa.

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.

Chicago Wheat Managed Money Funds net position as of Tuesday, October 24. Net position in Green versus price in Red. Money Managers net bought 12,153 contracts between October 18 – 24, bringing their total position to a net short 92,254 contracts.

KC Wheat Action Plan Summary

  • No new action is recommended for 2023 KC wheat crop. With prices falling below the Oct. 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 towards 750, 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 north of 800.  If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.

  • No new action is recommended for 2024 KC wheat. Currently, July ’24 is trading near a 25-cent premium to the Dec ’23 contract, up from a 60-cent discount last July, as bear spreading due to weak fundamentals has driven the Dec ’23 contract closer to its contract lows, while the July ’24 contract remains more elevated as it tests Feb ’22 lows. 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 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, 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 K.C. recommendations:

Above: Since the end of September, KC wheat has been consolidating and recently broke through the bottom of the range at 655. The market is now poised to test minor support near 630, with the next level of major support remaining near 575.  Resistance above the market remains around 690 – 700.

KC Wheat Managed Money Funds net position as of Tuesday, October 24. Net position in Green versus price in Red. Money Managers net sold 2,043 contracts between October 18 – 24, bringing their total position to a net short 28,994 contracts.

Mpls Wheat Action Plan Summary

  • No new action is currently recommended for the 2023 New Crop. The Dec ’23 contract has been in a downtrend since making highs in late July and continues to search for support while showing signs of being oversold. With weak U.S. export demand driven by cheap Russian exports being the dominant headwind, the market is in need of bullish input to stabilize and rally prices back higher. If a bullish catalyst were to enter the market and push prices towards 800, it may signal that a fall low is in place, which would line up with the historical tendency for prices to appreciate into winter. Earlier this year, Grain Market Insider made a sales recommendation during the July rally near 820. With that sale, 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.

  • 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 nearly 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 June. 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 beginning of October, the market has been consolidating, with the upper end of the range acting as resistance. Initial support below the market lies near the October 2 low, between 711 and 707, with major support remaining near 665. If prices turn higher, initial resistance remains between 745 – 760.

Minneapolis Wheat Managed Money Funds net position as of Tuesday, October 24. Net position in Green versus price in Red. Money Managers net bought 648 contracts between October 18 – 24, bringing their total position to a net short 25,081 contracts. 

Other Charts / Weather

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

Above: Brazil 1-week forecast total 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.