Corn is a bit stronger near midday with December trading slightly higher to the deferred months, as the overall pattern remains mostly rangebound, and December corn being unable to move above 5 dollars.
Other than some light showers from Illinois through to Indiana, the Corn Belt is mostly dry and should allow for good harvest progress this week.
For today’s export sales, the USDA reported an increase of 34.7 mb of corn for 23/24 and an increase of 0.4 mb for 24/25, both in line with expectations. Last week’s export shipments of 20.3 mb were below the 40.2 mb needed each week to meet the USDA’s expectations.
China has been purchasing the bulk of its corn from Brazil, but Chinese imports have fallen significantly with corn imports down 10% from a year ago in the January through September period, a decline of 653 mb.
Soybeans began the day higher but have slipped despite a good export sales report. November found resistance at the 100-day moving average near $13.17. Soybean meal is higher, while soybean oil is lower due to losses in palm and crude oil.
This morning, the USDA reported an increase of 50.4 mb of soybean export sales for 23/24, which was in line with expectations. Top purchasers were China, Spain, and Mexico.
Last week’s export shipments of 73.1 mb were well above the 34.6 mb needed each week to meet the USDA’s expectations, and top destinations were also to China, Mexico, and Spain.
Brazilian grain exporters are being forced to re-route some cargoes of grain as the drought lowers water levels on Amazonian rivers causing barges to get stuck.
Wheat is mixed near midday with Chicago trading higher, but KC and Minneapolis are lower. Trade is looking for China to purchase more US wheat, but so far none has come across the wire.
The Australian wheat crop is expected to fall by 40% to 45% this year due to drought, and India’s production is expected to fall as well, which may cause them to become a net importer.
Today, the USDA reported an increase of 23.3 mb of wheat export sales for 23/24, and an increase of 1.1 mb for 24/25, both on the high side of expectations.
Last week’s export shipments of 14.1 mb were just above the 13.9 mb needed each week to meet the USDA’s estimates, and top destinations were to Japan, Nigeria, and South Korea.
Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing by Stewart-Peterson and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Stewart-Peterson Inc. Reproduction of this information without prior written permission is prohibited. Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Reproduction and distribution of this information without prior written permission is prohibited. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing.
Stewart-Peterson Inc., Stewart-Peterson Group Inc., and SP Risk Services LLC are each part of the family of companies within Total Farm Marketing (TFM). Stewart-Peterson Inc. is a publishing company. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services LLC is an insurance agency. A customer may have relationships with any or all three companies.
Corn is beginning the day slightly lower after yesterday’s gains. Outside influences such as the war in Israel and fears about the economy could be creating some risk off mentality.
Yesterday’s EIA report showed ethanol production increasing to 1.035 billion barrels per day, and stocks still managed to fall to the lowest levels since 2021 despite the higher production.
The trade range for today’s export sales report in corn is between 500 and 1,100k tons with an average guess of 835k tons. The majority of US corn exports have gone to Mexico.
China is moving closer to planting commercial GMO corn after having 37 GMO seed varieties approved in a further effort to be more self sustainable.
Soybeans are mixed this morning with front months higher and back months slightly lower. Support is coming from an impressive move in soybean meal with big gains yesterday while soybean oil is slightly lower.
After Argentina’s drought last season and production of soybean meal cut so much, it seems like the US has picked up some of that business after all as shown by the tick up in futures prices.
With meal prices now up over $50/ton since October, crush margin has improved by over 60 cents per bushel in the past two weeks.
Brazilian grain exporters are being forced to re-route some cargoes of grain as the drought lowers water levels on Amazonian rivers causing barges to get stuck.
Wheat is trading slightly lower this morning along with corn as markets trade cautiously with an eye on the lower crude oil today.
Yesterday, wheat posted solid gains with world weather in wheat growing countries adding to the bullishness. Funds were likely covering a portion of their large short position yesterday.
The Australian wheat crop is expected to fall by 40 to 45% this year due to drought, and India’s production is expected to fall as well which may cause them to become a net importer.
Export sales of wheat in today’s report are expected to be between 350 and 800k tons with the average guess at 585k tons. Rumors have been circulating that China is looking for more US 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.
Double digit gains in soybeans and a 5-year high in weekly ethanol production more than offset any harvest pressure that came into the corn market, as December corn held onto modest gains following choppy trade.
Follow through buying from yesterday’s rally faded and then surged into the close as sharply higher soybean meal and another flash sale to China supported the soybean market to end the day with double-digit gains.
Soybean meal continues to be supported by demand, driven by the dry Argentine weather and additional technical buying above the 400 support level. Soybean oil, on the other hand, closed lower on the day after failing to trade through the 20-day moving average for the third day in a row.
Rising tensions in the Middle East and production concerns in the southern hemisphere led the wheat complex to close higher on the day in all three wheat classes.
To see the current U.S. 7-day precipitation forecast, the 8 – 14 day Temperature and Precipitation Outlooks, and the 2 week precipitation forecast for South America from the NWS 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. The supportive USDA Supply and Demand report from October 12 had Dec ’23 corn testing that 500 psychological price level, yet so far Dec ’23 has been unable to close above it. That 500 level remains an important resistance area for the trend, and without a close over it, the market remains at risk of continuing to trend sideways to lower, and worst-case scenarios could entail sideways-to-lower trends into the late November to early January window. If Dec ’23 can close above 500, it may aim to test the next resistance near 547. Otherwise, the first support on the downside is the August low of 461. 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 a 28-cent premium over Dec ’23. This bear spreading has 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:
A buying tone in the grain markets helped lift the corn market higher on the day. Even as harvest pressure limited gains, December corn futures gained 3 cents on the session.
The soybean market and soybean meal led the grain markets higher, as some weather concerns are adding weather premium into prices. Key northern and central areas of Brazil are experiencing hot and dry weather, which is slowing the soybean planting pace. A slow soybean planting pace narrows the window for the second crop of Brazil corn, which could tighten longer-term global supplies.
Weekly ethanol production rose to a 5-year high last week at 1.035 million barrels/day; this was slightly higher than the previous week’s total. Ethanol stocks slipped to a 9-year low at 21.1 million barrels for the week ending October 13. Ethanol producers used 100.1 mb of corn last week as the yearly pace is 3.9% ahead of last year’s levels.
US weather is supporting harvest pace in some regions, but longer-term forecasts may add concern for the corn market in the northern Corn Belt. A potential series of storms going into the end of October could limit the harvest pace and possibly damage the mature crop.
The USDA will release the export sales report on Thursday morning. Expectations are for the 23/24 marketing year sales to range from 500,000-1,100,000 mt as corn export demand has improved with freshly harvested supplies.
Above: The corn market has largely been rangebound since the beginning of August, with some minor short covering lifting prices in recent days. Resistance remains between 490 – 516, with initial support between 475 – 480 and then near 460.
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, 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 1256 ¾ 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 continues to trade at a discount to Nov ’23. That discount was over 90 cents in late summer yet has stabilized lately to around the 10-20 cent range. Since July, the Nov ’24 contract has largely traded between 1250 and 1320, so this contract 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:
After trading on both sides of unchanged, soybeans surged higher to close out the day 14 ¼ cents in the green. This is the first close above 1300 since the end of September, as dryness continues in Argentina and the northern and central parts of Brazil.
Soybean meal traded sharply higher, gaining 14 dollars in the December, as technical buying ensued once the 400 level held after being tested midday. Soybean oil was the weak link of the complex that failed to successfully trade through its 20-day moving average, which brought out selling and profit taking from last week’s rally.
Northern and central Brazil are expected to remain dry for the rest of October, while southernmost region continues to be wet. Argentina, the world’s largest soybean meal exporter, is expected to see some much needed rain in the next two weeks, but the totals aren’t expected to break the current dryness.
This morning the USDA reported a flash sale to China for the 23/24 marketing year totaling 132,000 mt.
Abiove came out with its first estimate for Brazil’s 23/24 soybean crop and put it at a record 164.7 mmt, 7 mmt higher than the 22/23 crop. The group also estimated that Brazil would crush 54 mt and export 100 mt of soybeans in 2024.
Despite the robust harvest pace, basis levels have been seen rising at river terminals and processors due to slow farmer selling. Strong demand from crushers to maintain their vigorous processing pace and rising river levels on some regional rivers have helped to underpin basis.
Above: Front month soybeans have pierced the upper end of the 1285 – 1323 resistance area and are testing close in resistance at the 50-day moving average. If the market can maintain upward momentum, it would be poised to make a run to test mid-September prices around 1370. Otherwise, to the downside initial support may be found near 1300 and again near 1273. Key support for the move remains down near 1250.
Wheat
Market Notes: Wheat
More war premium is being factored into the grain markets, especially wheat, as the tensions rise in the Middle East. President Biden is in Israel to meet with foreign leaders, but following an attack on a hospital in Gaza, his meetings were cancelled.
So far in Australia, wheat yields are coming in a little better than what the USDA was estimating despite their drought issues. However, the impact may be minimal, with many analysts still looking for a decline in production of 40% or more. Argentina is also facing the implications of drought that may curb their production. They are expected to get some showers soon, but it will not be enough to reverse the current dry pattern.
Paris milling wheat futures closed higher for the fourth time in the past five sessions, with the front month December gaining 4.5 Euros to 240.50 per mt. This may indicate that they are finally breaking out of the sideways pattern, which should also lend support to the US market. Both US and French wheat are on an even playing field, in terms of export price for Nov – Jan, and there are rumors that China may be looking to purchase more US wheat. This is supported by the fact that China’s wheat imports this year so far are at 10.2 mmt, which is up 54% from last year.
Wheat harvest in southern Brazil, including the states of Rio Grande do Sul and Parana, has begun to ramp up. However, the southern regions have received too much rain, which has led to quality and disease concerns. According to CONAB, they are looking for Brazilian wheat output at 10.46 mmt. That is down 3.3% from the September projection, as well as down 0.9% from last year.
According to China’s National Bureau of Statistics, this year’s grain production may be a record due to rainfall received in the north. Additionally, China’s GDP data came out 0.5% better than expected at 4.9%. This may indicate that their economic situation is improving and that they will import more commodities – this may be in part why US grains rallied today. Conversely, there was also news that China approved new GMO corn and soybean seeds in an effort to become more self-sufficient, which may mean fewer imports in the future.
Chicago Wheat Action Plan Summary
No new action is currently recommended for 2023 Chicago wheat. The Dec ’23 contract has been in a downtrend since making highs in late July but has found support near 541 following the September 29 Production report and has since been rangebound between 541 and 581 ½. With weak U.S. export demand driven by cheap Russian exports being the dominant headwind, it appears that prices may be finding value in the current trading range. If a bullish catalyst were to enter the market and push prices over 616, it may signal that a fall low is in place, which would line up with the historical tendency for prices to appreciate into the winter months. If you are a newer subscriber, 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 600 – 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. Currently, July ’24 is trading at a 68-cent premium to the Dec ’23 contract as bear spreading, due to fund positioning and weak fundamentals, has driven the Dec ’23 contract closer to 550, while the July ’24 contract remains near 625. The risk for the July ’24 contract 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: After its push lower on Sept. 29, December wheat has slowly regained its value and is trading in the same 570 – 618 range it did prior to its break lower. For the market to push through the top side of the range, more bullish input will be needed. If so, the market would be poised to test the 645 – 664 area. If not and the market retreats, initial support could be found near 568 and then down between 547 and 540.
KC Wheat Action Plan Summary
No new action is recommended for 2023 K.C. wheat crop. The Dec ’23 contract has been in a downtrend since making highs in late July and continues to search for support while trading about 40 cents off the contract lows from July ’21. 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 750 it may signal that a fall low is in place, which would line up with the historical tendency for prices to appreciate into winter and early spring. Earlier this year, Grain Market Insider made a sales recommendation in the late May rally around 1170. With that sale, 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 700, and again around 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 K.C. wheat. Currently, July ’24 is trading at an 18-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, and in mid-August, Grain Market Insider recommended purchasing July 660 puts to prepare for this possibility. Also, 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 K.C. 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, K.C. wheat has been consolidating with initial support just below the market near the September 12 low of 655. If the market retreats lower and breaks through 655, the next levels of support come in around 630 and 575. Initial resistance to the upside may be found around 700 and again near 722.
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 60-cent premium. Weak fundamentals led bear spreading to drive Dec ’23 in search of new contract lows, while Sep ’24 remains nearly 30 cents 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 K.C. 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: For much of September, December Minneapolis wheat was rangebound, and the breakout to the downside on September 29 set the market up to test support near 665, the May ’21 low. Since then, the market has been consolidating upward, with initial support between 711 and 708. If prices continue higher, initial resistance remains between 745 – 760.
Other Charts / Weather
US 7-day precipitation forecast courtesy of NOAA, Weather Prediction Center.
Brazil 2 week forecast total precipitation courtesy of the National Weather Service, Climate Prediction Center.
Argentina 2 week forecast total precipitation courtesy of the National Weather Service, Climate Prediction Center.
Grain markets opened higher this morning as more war premium was factored in following an attack on a hospital in Gaza that increased tension in the Middle East. President Biden is in Israel to offer support, but due to the attack, some of his meetings were cancelled.
The US weather forecast two weeks out, is calling for rain in the Midwest. Though it will not be enough to help with the navigation issues on the Mississippi River, rain will still likely cause some harvest delays.
As of this writing, crude oil futures are up over a dollar per barrel due to the uncertainty in the Middle East, which is supporting corn and soybean futures. Iran has reportedly proposed an embargo of oil shipments to Israel.
ANEC is estimating that Brazil’s October corn shipments will total 8.5 mmt, as compared to 6.2 mmt last year.
Private exporters reported sales of 132,000 mt of soybeans for delivery to China during the 23/24 marketing year.
Chinese GDP data for the third quarter came in at 4.9%, 0.5% higher than expected. This is bolstering Asian markets and may be in part why US grain futures opened higher this morning.
Despite the record September crush shown in this week’s NOPA report, stocks of soybean oil were much lower than anticipated, indicating strong biofuel demand.
As Argentina is struggling with drought, US soybean meal exports have risen to a 20-year high at 10.7 mmt. However, soybean export sales are still down 32% from a year ago, leaving some room for improvement.
Despite the drought in western Australia, wheat yields so far are coming in slightly better than what the USDA is forecasting. In any case, most analysts are looking for a drop in their production by 40% or more.
India’s domestic wheat prices have reached an eight-month high. With their food inflation on the rise, some analysts think India will be forced to eliminate import taxes in order to tame prices.
This morning, Paris milling wheat futures are higher for the fourth out of the past five sessions. But with French and US wheat priced the same in the export market for Nov – Jan, there is talk that China may be looking to buy more US wheat. This year so far, China’s wheat imports are up 54% from last year, at 10.2 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.
Corn is trading higher this morning following overnight strength in soybeans.
With only isolated showers expected though the weekend for much of the Corn Belt harvest progress should be able to push well beyond the 45% complete as estimated in Monday’s crop progress report.
Ethanol production set to be released today is expected to come in higher than last week at 1.024 million barrels per day according to estimates gathered by Bloomberg.
Safras and Mercado estimate Brazil’s 1st crop corn is 59% planted, this is 6% ahead of last year’s pace and the five-year average. 1st crop corn in Brazil historically accounts for about 25% of their total corn production.
Soybeans are trading higher again this morning as dryness concerns continue to build for major producing regions of Northern and Central Brazil.
River levels along the Amazon River basin have fallen to their lowest levels in over 100-years due to drought conditions. Rains are expected to be minimal in West Central Brazil for at least the next 7 days, replanting is likely due to the dryness in some key producing regions.
S&P Global forecasts US soybean acreage for 2024 will reach 86 million acres, up from 83.6 million in 2023.
Basis bids for soybeans at both US river terminals and processors have been steady to firmer recently despite harvest progress.
Wheat is trading higher this morning following corn and soybean prices which are rallying mostly on Brazilian weather worries.
S&P Global Commodity Insights projects 2024 US all wheat acreage at 48.7 million acres, if realized this would be 875,000 acres lower than the 2023 planted area.
European Union soft wheat exports since July 1st have reached 8.81 million tons, down 22% from exports at this same time last year.
According to Chinese Customs data September wheat imports were over 66% higher than September of 2022. Year to date Chinese wheat imports are up 53.6%.
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.
Harvest pressure and resistance just above the market continue to weigh on the corn market with the December contract seeing choppy trade before settling just 1 ¼ cents off the low of the day.
Following through on Monday’s strength and with support from soybean meal, November soybeans punched through the 1300 level for the first time this month before falling back but still settling near the upper third of the range.
Soybean meal gained on oil today as spread traders likely took profits from long oil/short meal positions. December meal traded over 400 for the first time in a month before settling back below, as basis remains firm from strong export demand.
After trading on both sides of unchanged, the wheat complex settled near their respective lows of the day on continued demand concerns. SovEcon lowered its estimate of the Russian wheat crop by 0.2 mmt but still kept it well above the USDA’s current estimate. EU soft wheat exports remain behind year ago levels.
To see the current U.S. 7-day precipitation forecast, the 8 – 14 day Temperature and Precipitation Outlooks, and the average temperatures for South America from the NWS 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. The supportive USDA Supply and Demand report from October 12 had Dec ’23 corn testing that 500 psychological price level, yet so far Dec ’23 has been unable to close above it. That 500 level remains an important resistance area for the trend, and without a close over it, the market remains at risk of continuing to trend sideways to lower, and worst-case scenarios could entail sideways-to-lower trends into the late November to early January window. If Dec ’23 can close above 500, it may aim to test the next resistance near 547. Otherwise, the first support on the downside is the August low of 461. 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 a 28-cent premium over Dec ’23. This bear spreading has 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:
Harvest pressure limited the corn market on the session, despite positive money flow into the soybean market, and the lack of fresh news kept corn buyers on the sidelines. December corn lost 1 cent on the session.
As of Sunday, the USDA saw corn harvest move to 45% complete, slightly below expectations, and limited by rainfall the second half of last week. With over half of the harvest to go, the market stayed pressured expecting additional fresh supplies.
Soybean futures tried to provide some support with double-digit gains and an increase in weather premium due to difficult conditions for some South American soybeans that helped lift the market but only could provide minimal support for the corn market.
Corn futures are trading in a range, bound between $4.90 and $4.80 in the short term. The market is looking for some news in either direction to trigger some price movement.
Above: The corn market has largely been rangebound since the beginning of August, with some minor short covering lifting prices in recent days. Resistance remains between 490 – 516, with initial support between 475 – 480 and then near 460.
Corn percent harvested (red) versus the 5-year average (green) and last year (purple).
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, 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 1256 ¾ 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 continues to trade at a discount to Nov ’23. That discount was over 90 cents in late summer yet has stabilized lately to around the 10-20 cent range. Since July, the Nov ’24 contract has largely traded between 1250 and 1320, so this contract 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 higher and briefly broke above the 13-dollar mark. Support came from strong gains in soybean meal, while soybean oil was slightly lower. The trend has been higher since last week’s bullish WASDE report, with dry South American weather adding to the support.
Yesterday’s Crop Progress report showed the soybean harvest reaching 62% completion which is 10 points above the average pace as many producers get soybeans wrapped up ahead of corn. Iowa is 74% complete and Illinois 61% done. Crop ratings also improved by 1 point to 53%.
Yesterday’s NOPA crush report also bled into the bullishness of today after it was reported that 165.456 mb of soybeans were crushed in September, creating a new record high. Soybean oil stocks are also at their lowest levels since 2014 at a time when demand is increasing for use in biodiesels.
Attention is beginning to shift to South American weather and planting. Slight showers are forecast for the dry areas of Argentina and Brazil later in the week, but so far planting has not gotten off to a good start with conditions either too dry or too wet.
Above: October 12 soybeans were shocked higher and traded into the resistance area of 1285 – 1323. If the market can maintain upward momentum, it would be poised to make a run to test mid-September prices around 1370. Otherwise, initial support below the market remains near 1250, with key support coming in between 1180 – 1200.
Soybeans percent harvested (red) versus the 5-year average (green) and last year (purple).
Wheat
Market Notes: Wheat
Wheat closed mostly lower. Bear spreading was a noted feature in the Chicago contracts, as traders sold the nearby months and bought the deferred. This may be a reflection of the supply concerns down the road in South America and Australia caused by drought. It is noted, however, that there are better prospects for rain in Argentina this weekend which should bring some relief, though more will be needed.
Yesterday afternoon’s Crop Progress report indicated that US winter wheat planting was 68% complete, in line with the average pace, and 39% was emerged versus 43% on average. Elsewhere, Ukraine’s agriculture ministry is reporting that 65.2% of their 3.3 million hectares of winter grains are planted. Of that total, 3.02 million is reported to be winter wheat, with the rest made up of mostly barley and rapeseed.
In Russia, Sov Econ slightly lowered their wheat crop estimate, but it is still higher than what the USDA is using. And the fact that Russia continues to offer cheap wheat to the world will keep US exports and futures prices under pressure for some time to come.
South American weather is becoming more of a concern for corn and soybeans, as well as wheat. Central and northern Brazil are seeing continued dryness with certain areas along the Amazon River said to be at the lowest levels in over 100 years. And as long as the Amazon River basin remains dry, central Brazil should also remain dry. This has some analysts thinking that Brazil’s wheat production could be down by about 3.3% even though the planted area is 12.1% above last year.
India is reportedly dealing with its own weather problems and wheat supply concerns, which had internal wheat prices at an eight-month high. They will potentially need to increase imports down the road. China seems to be doing the same with rumors continuing to swirl that the country is looking to purchase more US soft wheat.
Chicago Wheat Action Plan Summary
No new action is currently recommended for 2023 Chicago wheat. The Dec ’23 contract has been in a downtrend since making highs in late July but has found support near 541 following the September 29 Production report and has since been rangebound between 541 and 581 ½. With weak U.S. export demand driven by cheap Russian exports being the dominant headwind, it appears that prices may be finding value in the current trading range. If a bullish catalyst were to enter the market and push prices over 616, it may signal that a fall low is in place, which would line up with the historical tendency for prices to appreciate into the winter months. If you are a newer subscriber, 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 600 – 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. Currently, July ’24 is trading at a 68-cent premium to the Dec ’23 contract as bear spreading, due to fund positioning and weak fundamentals, has driven the Dec ’23 contract closer to 550, while the July ’24 contract remains near 625. The risk for the July ’24 contract 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: December wheat has been consolidating since the break on September 29. The market’s previous range of 570 – 618 is an area of resistance which will need more bullish input to rally through. If the market retreats lower, support below the market resides between 540 – 533.
Winter wheat percent planted (red) versus the 5-year average (green) and last year (purple).
KC Wheat Action Plan Summary
No new action is recommended for 2023 K.C. wheat crop. The Dec ’23 contract has been in a downtrend since making highs in late July and continues to search for support while trading about 40 cents off the contract lows from July ’21. 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 750 it may signal that a fall low is in place, which would line up with the historical tendency for prices to appreciate into winter and early spring. Earlier this year, Grain Market Insider made a sales recommendation in the late May rally around 1170. With that sale, 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 700, and again around 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 K.C. wheat. Currently, July ’24 is trading at an 18-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, and in mid-August, Grain Market Insider recommended purchasing July 660 puts to prepare for this possibility. Also, 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 K.C. 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, K.C. wheat has been consolidating with initial support just below the market near the September 12 low of 655. If the market retreats lower and breaks through 655, the next levels of support come in around 630 and 575. Initial resistance to the upside may be found around 700 and again near 722.
Winter wheat percent planted (red) versus the 5-year average (green) and last year (purple).
Winter wheat percent emerged (red) versus the 5-year average (green) and versus last year (purple).
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 60-cent premium. Weak fundamentals led bear spreading to drive Dec ’23 in search of new contract lows, while Sep ’24 remains nearly 30 cents 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 K.C. 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: For much of September, December Minneapolis wheat was rangebound, and the breakout to the downside on September 29 set the market up to test support near 665, the May ’21 low. Since then, the market has been consolidating, and while support below the market remains near 665, initial support may also be found near 700. If prices turn higher, initial resistance remains between 745 – 760.
Other Charts / Weather
US 7-day precipitation forecast courtesy of NOAA, Weather Prediction Center.
Brazil average temperature courtesy of the National Weather Service, Climate Prediction Center.
Argentina average temperature courtesy of the National Weather Service, Climate Prediction Center.
Corn is trading lower at midday as it remains in its slight uptrend on the daily chart but with resistance at the 5-dollar level in December. Some support is coming from hot and dry conditions in South America.
Crop progress showed the corn harvest at 45% complete, which was in line with expectations but a bit slow for the week as rains delayed field work. 95% of the corn crop is mature.
There is little in the way of fresh news since Thursday’s WASDE report, and although conflict between Israel and Hamas is escalating, it has not seemed to have had much effect on the markets.
Export inspections were mediocre yesterday at 17 mb as most of the corn export business seems contained to North America with Mexico picking up another 7.9 mb yesterday.
Soybeans are trading higher at midday with support from soybean meal and the hot and dry conditions in South America. Prices have continued to move higher following the WASDE report last week.
The Crop Progress report showed harvest at 62% completed, which is 10% above the 5-year average with Iowa and Illinois leading the pace at 74% and 61% respectively. Good to excellent ratings improved by 1 point.
The NOPA crush report showed 165.456 mb of soybeans crushed in September, higher than expectations and a new record for the month.
Crush margins have begun to improve which should give a boost to demand, and in yesterday’s NOPA report, it was revealed that soybean oil stocks are at the lowest levels since 2014 at 1.108 billion pounds.
Wheat is mixed at midday but has come back from early morning lows with only the Chicago contract trading lower. Trade is looking for another purchase of soft red wheat by China from the US.
Crop progress showed that winter wheat seeding is now 68% complete in the US, which is in line with the 5-year average with Kansas now 70% planted. 39% of the crop is emerged, 4 points below average.
Wheat prices in India rose to a an 8-month high today as they deal with a limited supply on weather problems and higher demand than anticipated.
Wheat harvest in Brazil is beginning, but rains in major wheat growing areas are concerning growers and could see output cut by 3.3% despite the total growing area being 12.1% larger than last year.
Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing by Stewart-Peterson and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Stewart-Peterson Inc. Reproduction of this information without prior written permission is prohibited. Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Reproduction and distribution of this information without prior written permission is prohibited. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing.
Stewart-Peterson Inc., Stewart-Peterson Group Inc., and SP Risk Services LLC are each part of the family of companies within Total Farm Marketing (TFM). Stewart-Peterson Inc. is a publishing company. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services LLC is an insurance agency. A customer may have relationships with any or all three companies.
Corn is trading slightly lower this morning on harvest pressure and a technical resistance level for December corn at the 5 dollar mark.
Yesterday’s crop progress report showed that 45% of the crop has been harvested compared to last week at 34% and the trade guess of 46%. 95% of the crop is mature.
Export inspections for corn yesterday were below expectations at 434k tons vs 804k tons the previous week, but yesterday a sale of 7.8 mb was reported to Mexico.
Chinese corn prices are slipping down near their two year lows on poor demand from the processing sector and low feed demand within the country.
Soybeans are trading higher again this morning despite harvest pressure as markets continue to see follow through from last week’s WASDE report which showed a carryout of just 220 mb.
Yesterday’s crop progress showed soybean harvest at 62% complete which was above the average trade guess of 57%, and 43% from a week ago. 97% of the bean crop is mature.
Export inspections were excellent for soybeans yesterday at 2.012 mmt, and inspections have now exceeded the seasonal pace needed to hit the USDA’s target by 28 mb. In addition, yesterday, a sale of 183,000 mt of soybean meal was reported to the Philippines for 23/24.
In more friendly news from yesterday, the NOPA crush report showed 165.456 mb of soybeans crushed in September, higher than expectations and a new record for the month.
Wheat is trading lower this morning with little fresh news to keep prices moving higher. The excitement from Chinese wheat purchases has died down with the lack of any new ones.
Export inspections for wheat were mild at 355k tons and within the average trade guess. Crop progress showed 68% of winter wheat planted vs 57% last week.
Ukraine has harvested about 65.2% of their 2023 winter grains which is around 3.3 million hectares, and 3.02 million hectares of that area was winter wheat. Exporting will likely continue to be a challenge.
Wheat harvest in Brazil is beginning, but rains in major wheat growing areas are concerning growers and could see output cut by 3.3% despite the total growing area being 12.1% larger than last year.
Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing by Stewart-Peterson and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Stewart-Peterson Inc. Reproduction of this information without prior written permission is prohibited. Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Reproduction and distribution of this information without prior written permission is prohibited. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing.
Stewart-Peterson Inc., Stewart-Peterson Group Inc., and SP Risk Services LLC are each part of the family of companies within Total Farm Marketing (TFM). Stewart-Peterson Inc. is a publishing company. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services LLC is an insurance agency. A customer may have relationships with any or all three companies.
The corn market followed through on Friday’s small losses and sold off in the day session after trading higher early on Sunday evening. Low export inspections, that came in well below expectations and at a marketing year low, added to the pall of the market.
Record September crush from today’s NOPA crush report and a marketing year high for export inspections kept the soybean market supported through the day, though neighboring corn and wheat likely added resistance.
Today’s sharp gains in soybean oil are likely due to the record crush numbers and lower than expected bean oil stocks that imply that much of the crushing activity is for oil, and that demand from the biofuel sector remains strong. While on the flip side, the resulting excess meal production weighed on meal prices, producing only modest gains near unchanged.
While export inspections were in line with expectations, they still fell below the pace required to meet the USDA’s estimates, and are 28% behind year ago levels, versus the USDA’s forecast of an 8% decline. This in addition to higher Russian wheat production estimates dragging on the wheat complex, which had a strong start overnight trade but finished on the weak side. Minneapolis contracts settled in the green, with Chicago and K.C. lower.
To see the current U.S. 5-day precipitation forecast, the 6 – 10 day Temperature and Precipitation Outlooks, and the 1 week precipitation forecasts for South America from the NWS 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. Last week’s supportive USDA Supply and Demand report had Dec ’23 corn testing that 500 psychological price level, yet so far Dec has been unable to close over that resistance. That 500 level remains an important resistance for the trend, and without a close over it, the market remains at risk of continuing to trend sideways-to-lower. The worst-case scenarios from a timing perspective, could entail sideways-to-lower into the late November to early January window. If Dec ’23 can reverse the slide of the last two days and close over 500, the next resistance would be 547. First support on the downside is the August low of 461. If you’re new to Grain Market Insider and were not a subscriber during this summer’s rally, Grain Market Insider did recommend making sales into that rally 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 next 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 a 28-cent premium over Dec ’23. This bear spreading has 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 futures failed to find any traction to start the week as prices consolidated at the top of last week’s trading range. Dec corm lost 3 ¼ cents to $4.90 on the session. The grain market lacked any true momentum to start the week.
Weekly export inspections released by the USDA on Monday morning saw soft action last week at 435,000 mt (17.1 mb), which was below market expectations. Total inspections for the marketing year are at 155 mb, up 19% year-over-year, but still behind pace to reach the USDA target for the marketing year at 2.025 billion bushels.
Demand news overall has helped support prices with an uptick in activity. USDA announced a flash sale of 200,000 mt (7.87 mb) to Mexico on the overnight, as Mexico has remained active in the corn export market with routine purchases.
Despite end of week rainfall, US corn harvest is expected to move to 46% complete on the weekly USDA crop progress report. Weather forecasts give a window for some progress again early this week, but good rainfall over the weekend may limit some field activity.
Harvest pressure still limits the corn market with less than 50% of the harvest completed. Potential rallies in the corn market are limited by producer selling.
Above: The corn market has largely been rangebound since the beginning of August, with some minor short covering lifting prices in recent days. Resistance remains between 490 – 516, with initial support between 475 – 480 and then near 460.
Corn Managed Money Funds net position as of Tuesday, Oct.10. Net position in Green versus price in Red. Managers net bought 46,742 contracts between Oct. 4 – 10, bringing their total position to a net short 112,691 contracts.
Soybeans
Soybeans Action Plan Summary
No new action is recommended for 2023 soybeans. The Nov ’23 contract has been finding buying interest around the June 2023 low of 1256 ¾, and since the beginning of October, it has 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. The bigger picture, since May 2023, Nov ’23 has traded in a range from 1256 ¾ 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 continues to trade at a discount to Nov ’23. That discount was over 90 cents in late summer yet has stabilized lately to around the 10-20 cent range. Since July, the Nov ’24 contract has largely traded between 1250 and 1320, so this contract 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 closed higher today after trading lower earlier in the day. Support came from the NOPA crush report which saw soybean oil stocks lower than expected. Export inspections today were supportive as well. Both soybean meal and oil finished the day higher.
Weekly soybean inspections came in at an impressive 2,011,589 tons which was well above the high end of the trade guesses. This comes as a larger number of soybeans are getting shipped out of the PNW to China and other countries with Brazilian soybean supplies tight.
Today’s NOPA crush report saw 165.456 million bushels of soybeans crushed in September, above the average trade guess of 161.683 mb and a new record for September. Soybean oil stocks came in at 1.108 billion pounds which is the lowest soybean oil stocks number since December 2014 and below the average trade guess.
For the week ending October 10, non-commercial traders were sellers of 2,831 contracts of soybeans reducing their net long position to 2,170 contracts. In the wake of the bullish WASDE report last Thursday, it is more likely that those funds began buying and increased their net long position since the report which showed soybean yields at just 49.6 bpa and ending stocks at 220 mb.
Above: October 12 soybeans were shocked higher and traded into the resistance area of 1285 – 1323. If the market can maintain upward momentum, it would be poised to make a run to test mid-September prices around 1370. Otherwise, initial support below the market remains near 1250, with key support coming in between 1180 – 1200.
Soybean Managed Money Funds net position as of Tuesday, Oct. 10. Net position in Green versus price in Red. Money Managers net sold 2,835 contracts between Oct. 4 – 10, bringing their total position to a net long 2,166 contracts.
Wheat
Market Notes: Wheat
Although it was a relatively quiet session, wheat closed mostly negative. This may be due in part to IKAR increasing their estimate of Russian grain production to 141.6 mmt. Despite this increase that should keep Russia competitive on exports, there are rumors that China is looking to potentially buy more US wheat after last week’s 181,000 mt purchase. China is expecting heavy rains over the next week or so in their grain regions, and this has the potential to affect their corn and wheat crops.
Weekly wheat inspections of 13 mb bring the total 23/24 inspections to 248 mb. That is down 28% from last year, and so far, inspections are running behind the pace needed to meet the USDA’s export estimate of 700 mb.
Argentina is already struggling with drought that will affect their crops, and as long as the Amazon basin stays dry, central Brazil should remain dry as well. While central and northern Brazil are experiencing dry conditions, southern Brazil remains too wet. Additionally, with Australia having their own drought problems, there is talk that in 2024, wheat stocks of the major exporting countries will be the lowest in 16 years, which should be bullish for the market.
From a technical standpoint, even though December Chicago wheat has closed over the 21-day moving average for the second day since the end of July, significant resistance remains at the six dollar level. Aside from the negative influence of last week’s report, the uncertainty in the Middle East could also affect the wheat market as the conflict ramps up given that wheat is more of a staple in that part of the world.
According to the Ukrainian government, since July, Russia has destroyed about 300,000 mt of grain during their attacks on port infrastructure and vessels.
Chicago Wheat Action Plan Summary
No new action is currently recommended for 2023 Chicago wheat. The Dec ’23 contract has been in a downtrend since making highs in late July but has found support near 541 following the September 29 Production report and has since been rangebound between 541 and 581 ½. With weak U.S. export demand driven by cheap Russian exports being the dominant headwind, it appears that prices may be finding value in the current trading range. If a bullish catalyst were to enter the market and push prices over 616, it may signal that a fall low is in place, which would line up with the historical tendency for prices to appreciate into the winter months. If you are a newer subscriber, 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 600 – 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. Currently, July ’24 is trading at a 68-cent premium to the Dec ’23 contract as bear spreading, due to fund positioning and weak fundamentals, has driven the Dec ’23 contract closer to 550, while the July ’24 contract remains near 625. The risk for the July ’24 contract 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: December wheat has been consolidating since the break on September 29. The market’s previous range of 570 – 618 is an area of resistance which will need more bullish input to rally through. If the market retreats lower, support below the market resides between 540 – 533.
Chicago Wheat Managed Money Funds net position as of Tuesday, Oct. 10. Net position in Green versus price in Red. Money Managers net sold 5,547 contracts between Oct. 4 – 10, bringing their total position to a net short 104,335 contracts.
KC Wheat Action Plan Summary
No new action is recommended for 2023 K.C. wheat crop. The Dec ’23 contract has been in a downtrend since making highs in late July and continues to search for support while trading about 40 cents off the contract lows from July ’21. 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 750 it may signal that a fall low is in place, which would line up with the historical tendency for prices to appreciate into winter and early spring. Earlier this year, Grain Market Insider made a sales recommendation in the late May rally around 1170. With that sale, 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 700, and again around 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 K.C. wheat. Currently, July ’24 is trading at an 18-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, and in mid-August, Grain Market Insider recommended purchasing July 660 puts to prepare for this possibility. Also, 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 K.C. 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, K.C. wheat has been consolidating with initial support just below the market near the September 12 low of 655. If the market retreats lower and breaks through 655, the next levels of support come in around 630 and 575. Initial resistance to the upside may be found around 700 and again near 722.
K.C. Wheat Managed Money Funds net position as of Tuesday, Oct. 10. Net position in Green versus price in Red. Money Managers net sold 2,043 contracts between Oct. 4 – 10, bringing their total position to a net short 25,870 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 60-cent premium. Weak fundamentals led bear spreading to drive Dec ’23 in search of new contract lows, while Sep ’24 remains nearly 30 cents 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 K.C. 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: For much of September, December Minneapolis wheat was rangebound, and the breakout to the downside on September 29 set the market up to test support near 665, the May ’21 low. Since then, the market has been consolidating, and while support below the market remains near 665, initial support may also be found near 700. If prices turn higher, initial resistance remains between 745 – 760.
Minneapolis Wheat Managed Money Funds net position as of Tuesday, Oct. 10. Net position in Green versus price in Red. Money Managers net sold 2,520 contracts between Oct. 4 – 10, bringing their total position to a net short 23,506 contracts.
Other Charts / Weather
Brazil 1 week forecast precipitation, percent of normal, courtesy of the National Weather Service, Climate Prediction Center.
Argentina 1 week forecast precipitation, percent of normal, courtesy of the National Weather Service, Climate Prediction Center.
Corn is trading lower near midday following a higher open in the overnight on harvest pressure and potentially some risk-off mentality with the direction of the war between Israel and Hamas relatively unknown.
Last week in the US, harvest was delayed a bit due to rains covering most of the Midwest, but the 7-day forecast is looking very dry, and good progress will likely be made in the coming week.
Focus is beginning to shift to South American weather with Argentina still very dry from last season along with northern Brazil, while southern Brazil is too wet. Plantings are around 35% complete in the main growing area of Mato Grosso.
Crop progress will be released later today, and the expectations are that the corn harvest will be between 45 and 47% complete.
Soybeans have been slipping since their higher open overnight and slight gains earlier this morning and are currently trading near unchanged. Soybean meal is lower, but soybean oil is steadily higher with support from higher palm oil prices.
Palm oil is higher for the third consecutive day with exports for Malaysian palm oil significantly higher. Soybean oil in the US is benefitting from strong domestic demand in the way of renewable diesel.
The September NOPA crush report will be released today, and estimates are calling for 161.7 mb of soybeans crushed which compares to 161.5 mb in August. If these estimates are correct, it would be a record large crush for September.
As with corn, some attention is shifting to South American weather and planting. Slight showers are forecast for the dry areas of Argentina and Brazil later in the week, but so far planting has not gotten off to a good start with conditions either too dry or too wet. A main river in the Amazon is dealing with backed up barge traffic due to low water levels from the drought.
Wheat has slipped from its gains this morning with Chicago and KC now trading lower, while Minneapolis remains slightly higher. The trend in wheat has moved higher following unexpected sales of wheat to China.
Last week, a flash sale of 181,000 mt of soft red wheat was sold to China, and now there are rumors that China is seeking more US, French, and Australian wheat. This sales activity is interesting given their relationship with Russia and Russia’s large wheat supplies.
The Russian wheat crop has yet again been estimated higher by IKAR to 141.6 mmt, but in Argentina, production is being estimated lower at 16.2 mmt. Australia’s production in being called 35% lower than last year due to drought.
Heavy rains are forecast to hit China’s largest grain producing areas over the next 10 days, which will mainly affect wheat and corn crops. This adverse weather could be behind China’s purchases from the US and France.
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