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Opening Update: August 9, 2023

Bygmidev

All prices as of 6:30 am Central Time

Corn

SEP ’23 486 0.25
DEC ’23 499.25 0.5
DEC ’24 516.5 1

Soybeans

NOV ’23 1314.5 8.5
JAN ’24 1322.75 7
NOV ’24 1262.25 4.75

Chicago Wheat

SEP ’23 646.25 -10
DEC ’23 671.25 -10.25
JUL ’24 712.75 -11

K.C. Wheat

SEP ’23 764.75 -5.75
DEC ’23 775.25 -6.25
JUL ’24 765.25 -10.5

Mpls Wheat

SEP ’23 826 -4.75
DEC ’23 840.25 -5.25
SEP ’24 830 0

S&P 500

SEP ’23 4524.5 6

Crude Oil

OCT ’23 83.04 0.68

Gold

OCT ’23 1938 -2.5

  • Corn is trading slightly higher this morning as prices found support yesterday at the 4.90 area in December futures and some short covering kicked in.

  • Corn has not wanted to drop much further in price despite the frequent rains lately and improving yield estimates which is a good sign.

  • This morning’s radar is showing rain in Kansas and western Iowa and fronts that are expected to move into Missouri, Ohio, and Tennessee later in the day.

  • DTN’s Digital Yield Tour continued yesterday and pegged corn yields for Illinois at 197 bpa, a massive jump from the previous guess of 140 bpa in June thanks to the rain. Indiana is expected at 191 bpa. 

  • Soybeans have also rebounded after touching support at the 100-day moving average. Nov has moved over 25 cents higher after meeting support yesterday morning. Both soybean meal and oil are trading higher as well.

  • Day two of the DTN yield tour showed estimates of 60.2 bpa for Illinois, 58.8 for Indiana, and 58.7 for Ohio. If the yield estimate for Illinois holds, it would be a new record high, a further testament to the significance of August rains.

  • The average trade guess for Friday’s USDA report is a soybean yield of 51.2 bpa which is very close to DTN’s guess of 51.0.

  • November soybean prices in China are holding the highest levels of the year with the last trade at the equivalent of $17.85 a bushel. This has helped export demand from the US.

  • Wheat is trading lower this morning but like corn and soybeans, has found some support above the lows in early May. Winter wheat harvest is making rallies difficult.

  • Friday’s USDA report will give updates of US wheat production, but big changes aren’t expected. The WASDE report will update production estimates.

  • Ukraine has said that if Russia continues to target Ukrainian ports and export routes that they would begin picking targets that would “prevent their waters from being blocked”.

  • Ukraine’s 23/24 grain exports have totaled 2.76 mmt for far in the June/July season, but exports have been affected since Russia stepped up their attacks on export routes.

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

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

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

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Grain Market Insider: August 8, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • A lack of fresh headline news from the Black Sea or word of new export sales kept the corn market in consolidation mode as traders began to even up positions ahead of Friday’s USDA report, which left the market to close in the upper part of the trading range.

  • Despite the favorable weather forecasts and improving crop conditions, November soybeans reversed to close higher after trading nearly 20 cents lower on the day and testing the 100-day moving average.

  • The wheat market was able to shake off earlier losses with Minneapolis leading the way higher, as crop conditions for spring wheat dropped 1% from last week, while two-sided trade led to a mixed close in the Chicago and KC contracts with Chicago contracts mostly higher and KC mostly lower, with relatively minor losses.

  • There were reports of downgrades for ten US banks that weighed on the equity markets, which could have also carried over to the commodity sector with less appetite for risk. Additionally, import/export data out of China was lower than expected, possibly adding some resistance to commodities.

  • To see the current US 6 – 10-day Temperature and Precipitation Outlooks courtesy of the Climate Prediction Center, scroll down to the 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

  • For the 2023 corn crop, Grain Market Insider sees an active opportunity to sell half of the previously recommended DEC ‘23 580 puts. At the end of June, Insider recommended buying DEC ’23 580 puts for approximately 30 cents in premium, plus fees and commission. At the time, the US Drought Monitor was showing dryness across the Midwest and weather forecasts were calling for hot and dry conditions. Since then, forecasts have turned more favorable and DEC ’23 corn has dropped over 100 cents, with the recommended 580 puts gaining nearly 200% in value. The growing season isn’t over yet, and the Drought Monitor still shows dry conditions. Following the recent market drop and pick up in export sales, any further yield loss could rally prices. Insider recommends selling half of the previously recommended DEC ’23 580 puts to lock in gains in case prices rally back and holding the remainder, which will continue to protect any unsold bushels if prices erode further going into harvest.  

  • No action is recommended for New Crop 2023 corn. The future price potential for Dec 23 corn continues to be at the mercy of each new weather forecast. Dryness and dry weather forecasts pushed Dec corn from the May low to the June high with a gain of 137 cents, which was promptly erased and then some by mid-July, leaving the market 149 cents off that June high, with a surprise jump in acres and more favorable forecasts. During the runup in early June, we warned that any change in the forecast to wetter weather could erase all the gains as corn didn’t have much of a bullish fundamental story without a supply side shock fueled by lower yields. Overall, our thought process has not changed from a month ago and with the tremendous uncertainty, and subsequent volatility still in front of us, we continue to recommend holding the Strangle options position, comprised of the previously bought Dec 610 calls and Dec 580 puts. A turn back to wetter weather and we wouldn’t be surprised to see sub-500 corn again, and if dry weather persists, we wouldn’t be surprised to see corn prices north of 700. Under either of these scenarios the Strangle will benefit and doesn’t require trying to outguess the weather.  

  • No Action is currently recommended for 2025 corn. 2025 markets are very illiquid right 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. 

  • The corn market traded on both sides of unchanged today to settle in the upper end of the day’s range, with no new flash export sales reported or news from the Black Sea to move the market significantly in either direction. With the USDA’s August Supply and Demand report slated for Friday, the market continues to consolidate as traders begin to square positions ahead of its release.

  • The USDA raised crop condition ratings 2% from last week to 57% good to excellent. While improvements were seen in Illinois and the Dakotas, states like Kansas, Minnesota, and Michigan remain below 50% g/e.

  • DTN kicked off their digital yield tour on Monday and estimated the national corn yield at 177 bpa, close to the USDA’s July yield estimate of 177.5. The tour is set to conclude on Friday with details from a different region each day.

  • China’s imports and exports for the month of July fell by 12.4% and 14.5% respectively versus last year, which was faster than expected. The slowdown may indicate a slowing economy and could lead to fewer ag imports.

Above: Since mid-July, the market retraced about 62% of the prior down move, hit resistance around the 50-day moving average, and turned lower. The market is approaching oversold status on the stochastic indicator with key support near the September contract’s 474 low. If the market receives more bullish input and turns back higher, heavy resistance lies near 555 – 565.

2023/24 Corn condition percent good-excellent (red) versus the 5-year average (green) and last year (pink).

Soybeans

Soybeans Action Plan Summary

  • No new action is being recommended for Old Crop. Any remaining old crop bushels should be getting priced into this rally. We won’t have any “New Alerts” for 2022 Soybeans (Cash, Calls, or Puts) as we have moved focus onto 2023 and 2024 Crop Year Opportunities. 

  • No action is recommended for 2023 soybeans. The USDA injected a lot of volatility into this market beginning with a much lower-than-expected planted acreage estimate, followed by a much larger-than-expected 300mb carryout estimate in its July WASDE. While demand has been weak, we have a bona fide weather market during a crucial period for soybeans and there is little wiggle room for lost yield in this year’s crop. While a drier forecast can still maintain upside potential, plenty of time remains for rain to come and push prices lower, much like in 2012, when July was dry. Then the pattern changed in August, and decent rain fell in parts of the western Corn Belt and IL, sending Nov ’12 soybeans down 20%. For now, Insider may not consider suggesting any additional sales until after harvest. Although, we will continue to monitor the market for any upside opportunities in the coming weeks.

  • No Action is currently recommended for 2025 Soybeans. 2025 markets are very illiquid right 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.

  • Soybeans began the day lower but finished higher after trading below the 100-day moving average. Front month soybean meal ended the day lower with deferred months higher, while soybean oil was weak following a decline in palm oil.

  • Lower prices earlier in the day were partially caused by weak economic data out of China that saw their July exports declining by the largest amount since February 2020. China has been an active buyer of US soybeans over the last week and another sale of 4.9 mb was announced yesterday for the 23/24 marketing year.

  • Yesterday’s Crop Progress report showed soybean ratings improving after the recent rains. The good to excellent rating rose by 2 points, above the average trade guess, to 54%. Illinois showed the highest improvement with an increase of 12 points to 58% after the significant rainfall totals.

  • 66% of the soybean crop is setting pods which is ahead of the 5-year average, but yield numbers are still up in the air. The USDA’s most recent estimate was 52 bpa and they will release a revised estimate in the report on Friday, while DTN’s Digital Yield Tour has pegged yields at 51 bpa.

Above: The market posted a bullish reversal on 8/08 after trading through 1350 support and trending lower since 7/27. Additionally, the fact that the market is showing signs of being oversold is supportive to prices. If prices continue to the upside, resistance can be found near 1400 and again around 1450. If not, support below the market may be found between 1318 and the psychological 1300 level. 

2023/24 Soybeans condition percent good-excellent (red) versus the 5-year average (green) and last year (pink).

Wheat

Market Notes: Wheat

  • After a two-sided trade today, wheat managed a mostly positive close. Early weakness, which affected most commodities, likely came from Chinese trade data which showed that their economic activity may be slowing. Their imports and exports in July were lower than expected.

  • The USDA rated the US spring wheat crop 41% good to excellent. This is a 1% drop from last week, and it is possible the USDA will lower production in Friday’s report due to recent declines in condition.

  • Though it has been mentioned before, it is worth reiterating that India’s wheat crop could be below 100 mmt. With their domestic usage usually around 108 mmt, this would reinforce the talk that they are looking to import 9 mmt of Russian wheat. Despite recent price increases, Russian wheat is still the world’s cheapest.

  • SovEcon increased their estimate of Russian wheat exports for 23/24 to 48.1 mmt, an all-time high, versus 47.2 mmt previously. There is some question about the logistics though, as this assumes Russia will have no problems exporting the wheat due to the war. In addition, IKAR increased the Russian 2023 wheat crop estimate to 88 mmt (vs 86.5 mmt previously).

Chicago Wheat Action Plan Summary

  • No new action is recommended for 2023 New Crop. The wheat market has seen a great amount of volatility in recent weeks and has primarily been a follower of corn, which has been driven by weather.  Although demand remains weak, the closure of the Black Sea corridor, and the continued supply uncertainty, which that brings to the market, still leaves many supply questions unanswered. While Grain Market Insider will continue to monitor the downside for any violation of major support following the recent sales recommendation, it may be after harvest or near the end of summer before we consider recommending any additional sales for the 2023 crop.

  • No action is currently recommended for 2024 Chicago wheat. Since the middle of June, price volatility has risen with updated USDA reports, changing weather forecasts, and current events in the Black Sea.  While prices continue to be volatile, plenty of time remains to market the 2024 crop. The war continues in the Black Sea region, major exporting countries’ stocks are at 11-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties. For now, after recommending making a sale for the 2024 crop, and while keeping an eye on the market to see if any major support is broken, Grain Market Insider would need to see prices north of 800 before considering recommending any additional sales.

  •  No Action is currently recommended for 2025 Chicago Wheat. 2025 markets are very illiquid right 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.

Above: Since testing the June high on 7/25, the market has retreated and support near 620 has held. September wheat is oversold and appears to be consolidating at the lower end of the 622 – 777 range. If the market breaks out to the downside, psychological support could be found near 600 with key support near 573, while heavy resistance remains above the market around 777 – 808.

KC Wheat Action Plan Summary

  • We continue to look for better prices before making any 2023 sales. As harvest winds down and more becomes known about this year’s crop with some reports of better-than-expected yields, questions remain about the world wheat supply. The war continues in the Black Sea region, Ukraine’s export capabilities remain uncertain, and dryness continues in key production areas of the world. With world supplies currently seen at 11-year lows, we continue to target 950 – 1000 in the July futures as a potential level to suggest the next round of New Crop sales.

  • No action is currently recommended for the 2024 crop.  Demand and supply concerns out of the Black Sea continue to dominate the market right now, and Insider suggested making a sale as prices closed below 817 to protect from further downside erosion due to a potential change in trend with cheap supplies continuing to flow from Russia and Ukraine hampering US export demand. While prices continue to be volatile, plenty of time remains to market the 2024 crop. The war continues in the Black Sea region, major exporting countries’ stocks are at 11-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties. For now, after recommending making a sale for the 2024 crop, Grain Market Insider would need to see prices north of 850 before considering recommending any additional sales, while also keeping an eye on the market to see if any major support is broken.

  • No Action is currently recommended for 2025 KC Wheat. 2025 markets are very illiquid right 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.

Above: September K.C. wheat has retreated following the key reversal on 7/25 and is poised to test the 735 – 745 support area, which coincides with this year’s lows.  Additionally, the market is showing signs of being oversold, and is considered supportive if prices reverse higher.  If prices do reverse to the upside, overhead resistance lies near 830.

2023/24 Winter wheat percent harvested (red) versus the 5-year average (green) and last year (purple).

Mpls Wheat Action Plan Summary

  • No action is currently recommended for the 2023 New Crop. Weather has been a dominant feature to price volatility this growing season with continued dryness concerns in not only the US, but also Canada and Australia. As we enter harvest season, there isn’t a strong likelihood of higher prices until after harvest, although both weather and geopolitical events can change suddenly to move prices higher. Insider will consider making sales suggestions if prices improve, while also continuing to watch the downside for any further violations of support.

  • No action is currently recommended for the 2023 New Crop. Weather dominates the market right now, and though much of the growing season remains, Grain Market Insider suggested making a sale as prices closed below 822 to protect from further downside erosion due to a potential trend change.  Seasonally, there isn’t a strong likelihood of higher prices until after harvest, although both weather and geopolitical events can change suddenly to shock the market higher. Insider will consider making sales suggestions if prices improve through this growing season, while also continuing to watch the downside for any further violations of support.

  • No Action is currently recommended for the 2025 Minneapolis wheat crop. 2025 markets are very illiquid right 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.

Above: Following the bearish reversal on 7/25, the market has retreated and is oversold, which could be supportive if prices reverse higher. For now, support below the market may be found near the psychological support level of 800, while resistance remains above the market near 950.

2023/24 Spring wheat condition percent good-excellent (red) versus the 5-year average (green) and last year (pink).

Other Charts / Weather

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Midday Update: August 8, 2023

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn
SEP ’23 484.25 2
DEC ’23 497.75 2
DEC ’24 515 1
Soybeans
NOV ’23 1298.75 -3.25
JAN ’24 1308.75 -3
NOV ’24 1249.5 0
Chicago Wheat
SEP ’23 656.25 -1.25
DEC ’23 681 0
JUL ’24 721 -0.25
K.C. Wheat
SEP ’23 774.5 4.75
DEC ’23 787.25 5
JUL ’24 779 1.5
Mpls Wheat
SEP ’23 833 8.75
DEC ’23 848.5 8
SEP ’24 816.75 1.75
S&P 500
SEP ’23 4490 -47.75
Crude Oil
OCT ’23 81 -0.49
Gold
OCT ’23 1942.4 -8.1

  • The USDA rated the corn crop at 57% good to excellent, up 2% from last week.

  • The DTN digital yield tour estimated the national corn yield at 177 bushels per acre.

  • Heavy rains and flooding in some of China’s main growing regions may cause significant crop damage.

  • Chinese trade data showed that imports and exports in July fell faster than expected. This may indicate that economic activity is slowing, and this is weighing on commodities in general today.

  • The USDA rated the soybean crop at 54% good to excellent, up 2% from last week.

  • The DTN digital yield tour estimated the national soybean yield at 51 bushels per acre.

  • Malaysian palm oil is near the lowest level in six weeks, offering weakness to the soybean oil market this morning.

  • September soybeans on China’s Dalian Exchange remain expensive, around the equivalent of $18.19 per bushel.

  • The USDA rated the spring wheat crop at 41% good to excellent, down 1% from last week.

  • Russia’s wheat export values continue to be the world’s cheapest offer, despite recent increases.

  • Dryness in Canada, Argentina, and the interior of Australia are all bullish to the wheat market.

  • India typically utilizes about 108 mmt of wheat domestically. With talk that their crop could be sub 100 mmt, this lines up with rumors that they may be looking to import about 9 mmt of Russian wheat.

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

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

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

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Opening Update: August 8, 2023

Bygmidev

All prices as of 6:30 am Central Time

Corn

SEP ’23 479.25 -3
DEC ’23 492.5 -3.25
DEC ’24 511 -3

Soybeans

NOV ’23 1289.25 -12.75
JAN ’24 1299.5 -12.25
NOV ’24 1239.5 -10

Chicago Wheat

SEP ’23 649.75 -7.75
DEC ’23 675 -6
JUL ’24 718 -3.25

K.C. Wheat

SEP ’23 765.75 -4
DEC ’23 778 -4.25
JUL ’24 771.75 -5.75

Mpls Wheat

SEP ’23 823 -1.25
DEC ’23 837.75 -2.75
SEP ’24 816.75 1.75

S&P 500

SEP ’23 4505.5 -32.25

Crude Oil

OCT ’23 80.2 -1.29

Gold

OCT ’23 1947.5 -3

  • Corn is trading lower again this morning after recent rains added pressure and the crop progress report showed an improvement in crop ratings.

  • Crop progress showed corns good to excellent rating improving by 2 points to 57%, above the average trade guess. 47% of corn is doughing and 93% is silking.

  • Corn inspections yesterday totaled 14.8 mb which brought total inspections for 22/23 to 1.3486 bb, down 33% from the previous year.

  • Brazil’s winter corn harvest is now 64% complete as of August 3 compared with 55% complete a week earlier but 80% last year. The winter corn production estimate was raised to 105.6 mmt.

  • Soybeans are lower again this morning with both soy products lower as rains help the crop during pod fill. November soybeans broke below the 100-day moving average.

  • DTN’s Digital Yield Tour has pegged the US soybean yield at 51 bpa which may not be so far off with all the rain expected during August.

  • Yesterday’s crop progress saw soybean good to excellent ratings increase beyond the average trade guess with an improvement of 2 points to 54%. Illinois improved by 12 points to 58%.

  • Yesterday there was another flash sale of soybeans to China of 4.85 mb for 23/24 which follows a recent string of sales and points to an improvement in demand despite Brazil. 

  • Wheat is trading lower this morning after yesterday’s small rally as war in Ukraine escalated. French wheat was down 1% this morning and the US often watches that market at the beginning of the day.

  • Russia sent more missiles to eastern Ukraine overnight but traders are accustomed to this news so far, but now that they backed out of the grain deal, Russia is having more difficulty shipping grain as their insurance costs increase.

  • Yesterday’s crop progress showed spring wheat decline by 1 point to 41% good to excellent while the harvest is at 11%. The winter wheat harvest is 87% complete vs 80% last week.

  • Russian wheat exports for 23/24 are estimated at 48.1 mmt by SovEcon which is up from 47.2 mmt, but shipping issues may put a dent in that number.

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

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

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

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Grain Market Insider: August 7, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Favorable precipitation across much of the Midwest, and rising tensions between Russia and Ukraine created a tug-of-war between market bulls and bears, with the corn market finishing near the middle of its range but on the negative side of unchanged.

  • Solid rains through much of the Midwest weighed heavily on the soybean market as concerns for crop stress were eased for now.

  • Both soybean meal and oil followed soybeans lower on the day, soybean oil had added pressure come from lower palm oil prices which approached 6-week lows on rising Malaysian supplies.

  • Reports of Ukrainian attacks on Russian ports and an oil tanker sparked all three wheat classes to trade higher in today’s session as the rising tensions raised concern about the risks of commercial shipping through the region.

  • To see the current U.S. 7-day precipitation forecast and 8 – 14-day Temperature and Precipitation Outlooks courtesy of the Climate Prediction Center, scroll down to the 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

  • For the 2023 corn crop, Grain Market Insider sees an active opportunity to sell half of the previously recommended DEC ‘23 580 puts. At the end of June, Insider recommended buying DEC ’23 580 puts for approximately 30 cents in premium, plus fees and commission. At the time, the US Drought Monitor was showing dryness across the Midwest and weather forecasts were calling for hot and dry conditions. Since then, forecasts have turned more favorable and DEC ’23 corn has dropped over 100 cents, with the recommended 580 puts gaining nearly 200% in value. The growing season isn’t over yet, and the Drought Monitor still shows dry conditions. Following the recent market drop and pick up in export sales, any further yield loss could rally prices. Insider recommends selling half of the previously recommended DEC ’23 580 puts to lock in gains in case prices rally back and holding the remainder, which will continue to protect any unsold bushels if prices erode further going into harvest.  

  • No action is recommended for New Crop 2023 corn. The future price potential for Dec 23 corn continues to be at the mercy of each new weather forecast. Dryness and dry weather forecasts pushed Dec corn from the May low to the June high with a gain of 137 cents, which was promptly erased and then some by mid-July, leaving the market 149 cents off that June high, with a surprise jump in acres and more favorable forecasts. During the runup in early June, we warned that any change in the forecast to wetter weather could erase all the gains as corn didn’t have much of a bullish fundamental story without a supply side shock fueled by lower yields. Overall, our thought process has not changed from a month ago and with the tremendous uncertainty, and subsequent volatility still in front of us, we continue to recommend holding the Strangle options position, comprised of the previously bought Dec 610 calls and Dec 580 puts. A turn back to wetter weather and we wouldn’t be surprised to see sub-500 corn again, and if dry weather persists, we wouldn’t be surprised to see corn prices north of 700. Under either of these scenarios the Strangle will benefit and doesn’t require trying to outguess the weather.  

  • No Action is currently recommended for 2025 corn. 2025 markets are very illiquid right 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. 

  • Corn futures were choppy as the market weighed the support from the wheat market, but non-threatening weather forecasts, and strong selling in the soybean market limited any upside potential. December corn futures still managed to post a new low for this move and has traded negative 8 out of the last 9 sessions.

  • Increased tensions in the Black Sea region over the weekend triggered buying strength in the wheat market, which provided spillover strength in corn futures, limiting downside potential.

  • Good precipitation fell across a large portion of the Corn Belt over the weekend, which pressured the soybean market and limited the upside in corn. The extended forecasts are still not threatening as temperatures are looking to remain seasonal and precipitation average to above average across the Corn Belt.

  • The USDA will release weekly crop ratings on Monday afternoon, expectations are for a 1% gain for the good/excellent category for corn to 56% G/E.

  • Weekly export inspections were lackluster at 14.8 mb. This total is down 33% from last year’s levels with only 3 weeks remaining in the current marketing year.

Above: Since mid-July, the market retraced about 62% of the prior down move, hit resistance around the 50-day moving average, and turned lower. The market is approaching oversold status on the stochastic indicator with key support near the September contract’s 474 low. If the market receives more bullish input and turns back higher, heavy resistance lies near 555 – 565.

Above: Money Corn Managed Money Funds net position as of Tuesday, Aug. 1. Net position in Green versus price in Red. Managers net sold 9,862 contracts between July 25 – Aug. 1, bringing their total position to a net long 16,741 contracts.

Soybeans

Soybeans Action Plan Summary

  • No new action is being recommended for Old Crop. Any remaining old crop bushels should be getting priced into this rally. We won’t have any “New Alerts” for 2022 Soybeans (Cash, Calls, or Puts) as we have moved focus onto 2023 and 2024 Crop Year Opportunities. 

  • No action is recommended for 2023 soybeans. The USDA injected a lot of volatility into this market beginning with a much lower-than-expected planted acreage estimate, followed by a much larger-than-expected 300mb carryout estimate in its July WASDE. While demand has been weak, we have a bona fide weather market during a crucial period for soybeans and there is little wiggle room for lost yield in this year’s crop. While a drier forecast can still maintain upside potential, plenty of time remains for rain to come and push prices lower, much like in 2012, when July was dry. Then the pattern changed in August, and decent rain fell in parts of the western Corn Belt and IL, sending Nov ’12 soybeans down 20%. For now, Insider may not consider suggesting any additional sales until after harvest. Although, we will continue to monitor the market for any upside opportunities in the coming weeks.

  • No Action is currently recommended for 2025 Soybeans. 2025 markets are very illiquid right 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.

  • Soybeans ended the day lower, along with both soy products, after heavy rains fell throughout the Midwest this weekend with more forecast into the month. November beans seemed to find support at the 100-day moving average.

  • The Crop Progress report will be released later today, and expectations are for the good to excellent rating to be steady to 1 point higher. Last week, that rating sat at 52%, but after the recent rains it is possible that the ratings will have improved even more.

  • The prices of soy products have not been falling as much as the prices of soybeans, so crush incentives remain profitable which is good for domestic demand. There were 11 soybean deliveries against the expiring August soybean futures but none against soybean meal or oil.

  • Corn didn’t decline by as much as soybeans percentage-wise today as soybeans are not as sensitive to the escalation of the Russian and Ukrainian war, and the rains received so far this month, along with those forecasts to come, are far more likely to help with soybean yields rather than some of the corn crop, which has already taken damage from the heat and drought.

Above: On 7/27 the market posted a bearish reversal, turning the market lower. Since then, September soybeans have consolidated and found support just above 1360 with further support near the June low around 1350. If prices break out to the upside, heavy resistance remains in the 1490 – 1505 area. If not, and prices trade through 1350, additional support could be found near 1318.

Above: Soybeans Managed Money Funds net position as of Tuesday, August 1. Net position in Green versus price in Red. Money Managers net sold 26,246 contracts between July 25 – August 1, bringing their total position to a net long 94,493 contracts.

Wheat

Market Notes: Wheat

  • All three US wheat futures classes, as well as Matif wheat futures, closed higher today on increased aggression in the Black Sea region. News outlets have reported that Ukraine bombed two key bridges used for supplying Russian troops, as well as a Russian oil tanker. Headlines also suggest that Russia may have launched some type of chemical projectile near the Zaporizhzhia Oblast region.

  • Weekly wheat export inspections of 10.1 mb bring the 23/24 total inspections to 111 mb, which is down 15% from last year.

  • A Turkish grain elevator suffered an explosion. However, this is believed to be an isolated incident caused by a grain dust explosion and not related to the war.

  • The wheat market may also be getting some strength from talk that India’s crop could be below 100 mmt. Previous estimates were around 105 mmt, and there is talk that India may be working with Russia to import 9 mmt of wheat, an indication that they need supply. India is also said to be considering eliminating their wheat import tax.

  • Flooding continues to be an issue in northeastern China, where much of their agricultural land is. Crop damage could be significant and may result in China needing to import more grain down the road.

Chicago Wheat Action Plan Summary

  • No new action is recommended for 2023 New Crop. The wheat market has seen a great amount of volatility in recent weeks and has primarily been a follower of corn, which has been driven by weather.  Although demand remains weak, the closure of the Black Sea corridor, and the continued supply uncertainty, which that brings to the market, still leaves many supply questions unanswered. While Grain Market Insider will continue to monitor the downside for any violation of major support following the recent sales recommendation, it may be after harvest or near the end of summer before we consider recommending any additional sales for the 2023 crop.

  • No action is currently recommended for 2024 Chicago wheat. Since the middle of June, price volatility has risen with updated USDA reports, changing weather forecasts, and current events in the Black Sea.  While prices continue to be volatile, plenty of time remains to market the 2024 crop. The war continues in the Black Sea region, major exporting countries’ stocks are at 11-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties. For now, after recommending making a sale for the 2024 crop, and while keeping an eye on the market to see if any major support is broken, Grain Market Insider would need to see prices north of 800 before considering recommending any additional sales.

  •  No Action is currently recommended for 2025 Chicago Wheat. 2025 markets are very illiquid right 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.

Above: Since testing the June high on 7/25, the market has retreated and support near 620 has held. September wheat is oversold and appears to be consolidating at the lower end of the 622 – 777 range. If the market breaks out to the downside, psychological support could be found near 600 with key support near 573, while heavy resistance remains above the market around 777 – 808.

Above: Chicago Wheat Managed Money Funds net position as of Tuesday, August 1. Net position in Green versus price in Red. Money Managers net sold 10,093 contracts between July 25 – August 1, bringing their total position to a net short 50,428 contracts.

KC Wheat Action Plan Summary

  • We continue to look for better prices before making any 2023 sales. As harvest winds down and more becomes known about this year’s crop with some reports of better-than-expected yields, questions remain about the world wheat supply. The war continues in the Black Sea region, Ukraine’s export capabilities remain uncertain, and dryness continues in key production areas of the world. With world supplies currently seen at 11-year lows, we continue to target 950 – 1000 in the July futures as a potential level to suggest the next round of New Crop sales.

  • No action is currently recommended for the 2024 crop.  Demand and supply concerns out of the Black Sea continue to dominate the market right now, and Insider suggested making a sale as prices closed below 817 to protect from further downside erosion due to a potential change in trend with cheap supplies continuing to flow from Russia and Ukraine hampering US export demand. While prices continue to be volatile, plenty of time remains to market the 2024 crop. The war continues in the Black Sea region, major exporting countries’ stocks are at 11-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties. For now, after recommending making a sale for the 2024 crop, Grain Market Insider would need to see prices north of 850 before considering recommending any additional sales, while also keeping an eye on the market to see if any major support is broken.

  • No Action is currently recommended for 2025 KC Wheat. 2025 markets are very illiquid right 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.

Above: September K.C. wheat has retreated following the key reversal on 7/25 and is poised to test the 735 – 745 support area, which coincides with this year’s lows.  Additionally, the market is showing signs of being oversold, and is considered supportive if prices reverse higher.  If prices do reverse to the upside, overhead resistance lies near 830.

Above: K.C. Wheat Managed Money Funds net position as of Tuesday, August 1. Net position in Green versus price in Red. Money Managers net sold 5,912 contracts between July 25 – August 1, bringing their total position to a net long 17,233 contracts.

Mpls Wheat Action Plan Summary

  • No action is currently recommended for the 2023 New Crop. Weather has been a dominant feature to price volatility this growing season with continued dryness concerns in not only the US, but also Canada and Australia. As we enter harvest season, there isn’t a strong likelihood of higher prices until after harvest, although both weather and geopolitical events can change suddenly to move prices higher. Insider will consider making sales suggestions if prices improve, while also continuing to watch the downside for any further violations of support.

  • No action is currently recommended for the 2023 New Crop. Weather dominates the market right now, and though much of the growing season remains, Grain Market Insider suggested making a sale as prices closed below 822 to protect from further downside erosion due to a potential trend change.  Seasonally, there isn’t a strong likelihood of higher prices until after harvest, although both weather and geopolitical events can change suddenly to shock the market higher. Insider will consider making sales suggestions if prices improve through this growing season, while also continuing to watch the downside for any further violations of support.

  • No Action is currently recommended for the 2025 Minneapolis wheat crop. 2025 markets are very illiquid right 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.

Above: Following the bearish reversal on 7/25, the market has retreated and is oversold, which could be supportive if prices reverse higher. For now, support below the market may be found near the psychological support level of 800, while resistance remains above the market near 950.

Above: Minneapolis Wheat Managed Money Funds net position as of Tuesday, August 1. Net position in Green versus price in Red. Money Managers net sold 1,374 contracts between July 25 – August 1, bringing their total position to a net long 7,592 contracts.

Other Charts / Weather

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

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Midday Update: August 7, 2023

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn
SEP ’23 483.5 -0.75
DEC ’23 496.75 -0.5
DEC ’24 512.5 -0.5
Soybeans
NOV ’23 1300 -33.25
JAN ’24 1309.75 -33
NOV ’24 1242 -22.5
Chicago Wheat
SEP ’23 652 19
DEC ’23 676.5 16.25
JUL ’24 716.75 10
K.C. Wheat
SEP ’23 761 8.5
DEC ’23 777.25 8
JUL ’24 774.25 7.75
Mpls Wheat
SEP ’23 822 -0.25
DEC ’23 838.5 0.75
SEP ’24 811.5 -3.5
S&P 500
SEP ’23 4516.25 18.25
Crude Oil
OCT ’23 81.43 -0.84
Gold
OCT ’23 1950.1 -6.5

  • Private exporters reported 251,460 mt of corn for delivery to Mexico during the 23/24 marketing year.

  • The weather outlook for the next 10 days has rains mostly in the eastern Midwest and temperatures close to the norm.

  • Recent heavy rains in China have caused flooding and may have also caused significant crop damage.

  • Brazil’s harvest of the safrinha crop continues to make progress but is expected to be slowed by rain this week in the southern regions. Brazil export values of corn remain below US, offering resistance to the market.

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

  • Good rains over the weekend hit the Dakotas, Minnesota, Iowa, Illinois, and Indiana. This is likely what is weighing on soybeans this morning, as higher yields become more probable.

  • September soybeans on China’s Dalian exchange are near the highest level since February, trading around the equivalent of $18.36 per bushel.

  • Today the DTN digital yield tour will begin, and traders will soon receive national yield estimates for corn and soybeans.

  • Wheat is rallying after news that Ukraine bombed two bridges that supply Russian troops. A Russian oil tanker was also struck. These attacks are cause for concern that Russia may retaliate.

  • Reports of an explosion at a Turkish grain elevator is believed to be an isolated incident not related to the war. It was most likely a grain dust explosion.

  • On Friday’s WASDE report, there is a chance that the USDA will reduce the spring wheat production estimate after crop ratings declined last week.

  • There is talk that India’s wheat crop could be below 100 mmt, when it was previously estimated at 105 mmt. India is also believed to be in talks with Russia to purchase 9 mmt of wheat.

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

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

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

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Opening Update: August 7, 2023

Bygmidev

All prices as of 6:30 am Central Time

Corn

SEP ’23 483.75 -0.5
DEC ’23 496 -1.25
DEC ’24 510.25 -2.75

Soybeans

NOV ’23 1309 -24.25
JAN ’24 1318.5 -24.25
NOV ’24 1248.25 -16.25

Chicago Wheat

SEP ’23 645.5 12.5
DEC ’23 672.75 12.5
JUL ’24 714.5 7.75

K.C. Wheat

SEP ’23 763.5 11
DEC ’23 779.75 10.5
JUL ’24 774.75 8.25

Mpls Wheat

SEP ’23 824.5 2.25
DEC ’23 840.5 2.75
SEP ’24 815 4.25

S&P 500

SEP ’23 4509.75 11.75

Crude Oil

OCT ’23 81.54 -0.73

Gold

OCT ’23 1949.8 -6.8

  • Corn is trading relatively unchanged this morning as news that Ukraine’s attacks against Russia have ramped up offset the news that most of the Corn Bely received significant rains over the weekend.

  • On Friday, Ukraine attacked a Russian naval ship and then followed that up with attacks on an oil tanker and two bridges leading into Crimea. Russia attacked more Ukrainian grain ports along the Danube River.

  • Over the weekend, beneficial rains fell in South Dakota, Minnesota, Iowa, Illinois, and Indiana, with more rain forecast over the eastern Corn Belt today.

  • Friday’s CFTC report showed funds exiting some of their long position by selling 9,862 contracts leaving them net long 16,741 contracts.

  • Soybeans are sharply lower to begin the day with both soy products lower as well as a result of the beneficial weekend rains.

  • These August rains could not have come at a better time following the heat and dryness and could really set the crop up with better yields as the crop starts to fill pods.

  • The prices of soy products have not been falling as much as the prices of soybeans, so crush incentives remain profitable which is good for domestic demand.

  • Friday’s CFTC report showed funds exiting long positions and selling 26,246 contracts bringing their net long position down to 94,493 contracts.

  • Wheat is having the most positive reaction to the escalation of fighting between Russia and Ukraine over the weekend with both Chicago and KC wheat higher.

  • As Ukraine begins to target Russian naval infrastructure near ports, trade may be concerned that Ukraine will target Russian export infrastructure which would shake up the world supply of available wheat.

  • Russia has said that JPMorgan has stopped processing payments for the Russian Agriculture Bank and Russia is pressuring Washington to step in.

  • Last week’s CFTC report showed funds adding to their net short position by 10,096 contracts leaving them net short 50,428 contracts.

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

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

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

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Grain Market Insider: August 4, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • A Ukrainian drone attack on a Russian port spiked the grain markets higher overnight, and concern over the escalation in tensions gave the corn market strength to close higher on the day breaking its 8-day run of lower closes.

  • Following Monday’s selloff, export sales picked up offering support to the soybean complex, which continued to consolidate today and closed mixed, with soybeans and soybean oil on the positive side of unchanged, while meal was lower on the day. 

  • The wheat markets also rallied initially following the reports of the Ukrainian drone attack, and while the K.C. and Minneapolis contracts closed lower, it’s likely that the attack triggered some short covering in the Chicago contracts to keep prices firm into the close.

  • To see the current U.S. 6 – 10-day Precipitation and Temperature Outlooks courtesy of the Climate Prediction Center, scroll down to the 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

  • For the 2023 corn crop, Grain Market Insider sees an active opportunity to sell half of the previously recommended DEC ‘23 580 puts. At the end of June, Insider recommended buying DEC ’23 580 puts for approximately 30 cents in premium, plus fees and commission. At the time, the US Drought Monitor was showing dryness across the Midwest and weather forecasts were calling for hot and dry conditions. Since then, forecasts have turned more favorable and DEC ’23 corn has dropped over 100 cents, with the recommended 580 puts gaining nearly 200% in value. The growing season isn’t over yet, and the Drought Monitor still shows dry conditions. Following the recent market drop and pick up in export sales, any further yield loss could rally prices. Insider recommends selling half of the previously recommended DEC ’23 580 puts to lock in gains in case prices rally back and holding the remainder, which will continue to protect any unsold bushels if prices erode further going into harvest.  

  • No action is recommended for New Crop 2023 corn. The future price potential for Dec 23 corn continues to be at the mercy of each new weather forecast. Dryness and dry weather forecasts pushed Dec corn from the May low to the June high with a gain of 137 cents, which was promptly erased and then some by mid-July, leaving the market 149 cents off that June high, with a surprise jump in acres and more favorable forecasts. During the runup in early June, we warned that any change in the forecast to wetter weather could erase all the gains as corn didn’t have much of a bullish fundamental story without a supply side shock fueled by lower yields. Overall, our thought process has not changed from a month ago and with the tremendous uncertainty, and subsequent volatility still in front of us, we continue to recommend holding the Strangle options position, comprised of the previously bought Dec 610 calls and Dec 580 puts. A turn back to wetter weather and we wouldn’t be surprised to see sub-500 corn again, and if dry weather persists, we wouldn’t be surprised to see corn prices north of 700. Under either of these scenarios the Strangle will benefit and doesn’t require trying to outguess the weather.  

  • No Action is currently recommended for 2025 corn. 2025 markets are very illiquid right 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. 

  • Corn futures held onto some of the overnight gains, breaking the streak of eight consecutive negative trading sessions. Despite the small gains on Friday, corn futures finished the week down 33 cents for the December futures.

  • Corn futures saw some buying strength on the overnight session as Ukraine military triggered a drone attack against a military vessel in the Russian port of Novorossiysk. This caused the port to be closed for a short time, triggering buying strength in wheat and corn markets.

  • Overall, weather forecasts are still non-threatening for the corn market. Weather models are forecasting the next 10 days to be cooler and wetter than normal for many areas of the Corn Belt.

  • The on-going Brazilian corn harvest will keep fresh supplies of corn on the export market. This week, analysts raised production expectations for the Brazil crop, which will have a large impact on potential U.S. export corn business.

  • The technical picture and price action remains weak in the corn market, as the path of least resistance is lower with December corn, failing to push back above the $5.00 level on Friday. The July $4.81 low in the December contract looks to be the next downside target.

Above: Since mid-July, the market retraced about 62% of the prior down move, hit resistance around the 50-day moving average and turned lower. The market is approaching oversold status on the stochastic indicator with key support near the 474 low. If the market receives more bullish input and turns back higher, heavy resistance lies near 555 – 565.

Soybeans

Soybeans Action Plan Summary

  • No new action is being recommended for Old Crop. Any remaining old crop bushels should be getting priced into this rally. We won’t have any “New Alerts” for 2022 Soybeans (Cash, Calls, or Puts) as we have moved focus onto 2023 and 2024 Crop Year Opportunities. 

  • No action is recommended for 2023 soybeans. The USDA injected a lot of volatility into this market beginning with a much lower-than-expected planted acreage estimate, followed by a much larger-than-expected 300mb carryout estimate in its July WASDE. While demand has been weak, we have a bona fide weather market during a crucial period for soybeans and there is little wiggle room for lost yield in this year’s crop. While a drier forecast can still maintain upside potential, plenty of time remains for rain to come and push prices lower, much like in 2012, when July was dry. Then the pattern changed in August, and decent rain fell in parts of the western Corn Belt and IL, sending Nov ’12 soybeans down 20%. For now, Insider may not consider suggesting any additional sales until after harvest. Although, we will continue to monitor the market for any upside opportunities in the coming weeks.

  • No Action is currently recommended for 2025 Soybeans. 2025 markets are very illiquid right 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.

  • Soybeans ended the day higher, but backed off the highs made in the overnight after Ukraine attacked a Russian warship near a Black Sea port. The attack did little damage, but shut the port down for a few hours and it was the first attack by Ukraine on a Russian port.

  • Soybean meal ended the day lower, while soybean oil caught support from higher crude oil and a jump in Malaysian palm oil. Palm oil futures have fallen for eight days on expectations of record production and huge stocks, but Malaysia is beginning to export that palm oil.

  • Brazil’s 23/24 soybean crop is now being estimated at a whopping 165.9 mmt compared to 157.3 mmt the previous year.

  • Yesterday, the USDA reported a new sale of 4.9 mb of US soybeans to China, and export sales for last week were an impressive 97 mb of new crop beans, with primary destinations to China and unknown destinations.

Above: On 7/27/23, the market posted a bearish reversal, turning the market lower.  Since then, September soybeans have consolidated and found support just above 1360 with further support near the June low around 1350. If prices break out to the upside, heavy resistance remains in the 1490 – 1505 area.  If not, and prices trade through 1350, additional support could be found near 1318.

Wheat

Market Notes: Wheat

  • Wheat was higher overnight after reports of a Ukrainian drone strike on military vessel in a Russian port. Most of these gains were given up by the close, but did allow Chicago wheat to stop the recent bleeding, with a close in positive territory today. The Minneapolis and Kansas City contracts did not fare as well though, ending with double digit losses.

  • Putin has apparently said that he is willing to re-open the Black Sea grain export deal. The catch is that it would require sanctions to be eliminated and Russia let back into the SWIFT banking program.

  • According to the Foreign Agricultural Service, the EU’s total grain harvest estimate has been reduced to 270.9 mmt, from its previous estimate of 281.3 mmt. Weather extremes have been cited as the main issue affecting production. Wheat production in particular is expected to be 134.6 mmt versus 138 mmt previously.

  • Recent heavy rains in China’s grain growing regions have caused flooding issues that may damage crops and have already displaced thousands of people.

Chicago Wheat Action Plan Summary

  • No new action is recommended for 2023 New Crop. The wheat market has seen a great amount of volatility in recent weeks and has primarily been a follower of corn, which has been driven by weather.  Although demand remains weak, the closure of the Black Sea corridor, and the continued supply uncertainty, which that brings to the market, still leaves many supply questions unanswered. While Grain Market Insider will continue to monitor the downside for any violation of major support following the recent sales recommendation, it may be after harvest or near the end of summer before we consider recommending any additional sales for the 2023 crop.

  • No action is currently recommended for 2024 Chicago wheat. Since the middle of June, price volatility has risen with updated USDA reports, changing weather forecasts, and current events in the Black Sea.  While prices continue to be volatile, plenty of time remains to market the 2024 crop. War continues in the Black Sea region, major exporting countries’ stocks are at 11-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties. For now, after recommending making a sale for the 2024 crop, and while keeping an eye on the market to see if any major support is broken, Grain Market Insider would need to see prices north of 800 before considering recommending any additional sales.

  •  No Action is currently recommended for 2025 Chicago Wheat. 2025 markets are very illiquid right 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.

Above: Since testing the June high on 7/25, the market has retreated and is poised to test support near the 620 – 610 area between the July and June lows respectively. Below the 600 psychological support level, key support may be found near 573.  Heavy resistance remains above the market around 777 – 808.

KC Wheat Action Plan Summary

  • We continue to look for better prices before making any 2023 sales. As harvest winds down and more becomes known about this year’s crop with some reports of better than expected yields, questions remain about the world wheat supply. War continues in the Black Sea region, Ukraine’s export capabilities remain uncertain, and dryness continues in key production areas of the world. With world supplies currently seen at 11 year lows, we continue to target 950 – 1000 in the July futures as a potential level to suggest the next round of New Crop sales.

  • No action is currently recommended for the 2024 crop.  Demand and supply concerns out of the Black Sea continue to dominate the market right now, and Insider suggested making a sale as prices closed below 817 to protect from further downside erosion due to a potential change in trend with cheap supplies continuing to flow from Russia and Ukraine hampering U.S. export demand.   While prices continue to be volatile, plenty of time remains to market the 2024 crop.  War continues in the Black Sea region, major exporting countries’ stocks are at 11-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties.  For now, after recommending making a sale for the 2024 crop, Grain Market Insider would need to see prices north of 850 before considering recommending any additional sales, while also keeping an eye on the market to see if any major support is broken.

  • No Action is currently recommended for 2025 KC Wheat. 2025 markets are very illiquid right 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.

Above: September K.C. wheat has retreated following the key reversal on 7/25 and is poised to test the 735 – 745 support area, which coincides with this year’s lows.  Additionally, the market is showing signs of being oversold, and is considered supportive if prices reverse higher.  If prices do reverse to the upside, overhead resistance lies near 830.

Mpls Wheat Action Plan Summary

  • No action is currently recommended for the 2023 New Crop. Weather has been a dominant feature to price volatility this growing season with continued dryness concerns in not only the U.S., but also Canada and Australia.  As we enter harvest season, there isn’t a strong likelihood of higher prices until after harvest, although both weather and geopolitical events can change suddenly to move prices higher. Insider will consider making sales suggestions if prices improve, while also continuing to watch the downside for any further violations of support.

  • No action is currently recommended for the 2023 New Crop. Weather dominates the market right now, and though much of the growing season remains, Grain Market Insider suggested making a sale as prices closed below 822 to protect from further downside erosion due to a potential trend change.  Seasonally, there isn’t a strong likelihood of higher prices until after harvest, although both weather and geopolitical events can change suddenly to shock the market higher. Insider will consider making sales suggestions if prices improve through this growing season, while also continuing to watch the downside for any further violations of support.

  • No Action is currently recommended for the 2025 Minneapolis wheat crop. 2025 markets are very illiquid right 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.

Above: Following the bearish reversal on 7/25, the market has retreated and is oversold, which could be supportive if prices reverse higher. For now, support below the market may be found near the psychological support level of 800, while resistance remains above the market near 950.

Other Charts / Weather

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Midday Update: August 4, 2023

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn
SEP ’23 482.5 1.75
DEC ’23 495.75 2.25
DEC ’24 511.5 1.5
Soybeans
NOV ’23 1334 8.75
JAN ’24 1343.5 9.25
NOV ’24 1264.25 10
Chicago Wheat
SEP ’23 632.5 5.5
DEC ’23 659.75 4.75
JUL ’24 705.25 0.75
K.C. Wheat
SEP ’23 760.5 -7
DEC ’23 774.75 -7.25
JUL ’24 770 -5.5
Mpls Wheat
SEP ’23 832.5 -1
DEC ’23 846.5 -1
SEP ’24 817 6.25
S&P 500
SEP ’23 4545.25 23.5
Crude Oil
OCT ’23 81.85 0.77
Gold
OCT ’23 1956.4 7

  • Corn is finally trading higher after eight consecutively lower closes after Ukraine attacked a Russian warship near a Black Sea port overnight, which temporarily shut the port down.

  • Last night’s attack by the Ukrainians was the first time in the war that a Russian port was attacked and has traders concerned that Russian exports could be affected.

  • Today’s gains may be dampened by the increasingly friendly looking 7 day and 2-week forecasts for the entire Corn Belt, and essentially all corn growing areas, but with the crop having been so stressed, it is unclear how much some of the worst hit areas can improve.

  • Next week on August 11, the USDA will release their updated yield estimates. StoneX recently put out their own private estimate at 177 bpa which seems a bit high.

  • Soybeans are higher today, but have backed significantly off their overnight highs, which were caused by the attack on the Russian warship. Soybean meal is lower, while soybean oil is higher, along with crude oil.

  • Malaysian palm oil futures are trading higher after a sharp selloff over the last week, which was due to surging palm oil stocks as production reached the highest levels in 7 months.

  • Yesterday, the USDA reported a new sale of 4.9 mb of US soybeans to China, and export sales for last week were an impressive 97 mb of new crop beans with primary destinations to China and unknown destinations.

  • While the US has finally picked up on some of the export action, Brazil still dominates globally with 12 mmt of soybeans exported in July compared to 7.5 mmt a year ago.

  • Wheat futures are mixed at midday and have come well off their highs from the escalation in the Black Sea region. Chicago wheat and Minn are still higher, but KC wheat has backed off and is now lower on the day.

  • Russia has recently sold 300,000 mt of wheat to Egypt and covered a large portion of an 800,000 mt sale to Algeria, but Russian wheat prices have been inching higher.

  • Russia recently said that it would offer cheaper wheat to “friendly” countries, ones that have not imposed sanctions, which is further proof that Russia is using food as a leveraging tool in the war.

  • Heavy rains in northern France and Germany have slowed harvest and raised concerns about quality. Germany’s crop is 40% harvested, while France is 87% complete. Ukraine has harvested 12.5 mmt so far but may not be able to export it.

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

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

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

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Opening Update: August 4, 2023

Bygmidev

All prices as of 6:30 am Central Time

Corn

SEP ’23 491.75 11
DEC ’23 505 11.5
DEC ’24 518 8

Soybeans

NOV ’23 1339.5 14.25
JAN ’24 1348.75 14.5
NOV ’24 1266.5 12.25

Chicago Wheat

SEP ’23 645 18
DEC ’23 672.75 17.75
JUL ’24 719 14.5

K.C. Wheat

SEP ’23 778.25 10.75
DEC ’23 792.5 10.5
JUL ’24 790 14.5

Mpls Wheat

SEP ’23 843.25 9.75
DEC ’23 857 9.5
SEP ’24 817 6.25

S&P 500

SEP ’23 4527.75 6

Crude Oil

OCT ’23 81.41 0.33

Gold

OCT ’23 1948.3 -1.1

  • Corn is trading higher after a Russian warship was damaged in a Ukrainian attack on the Novorossiysk naval base in Russia near the Black Sea.

  •  The Russian ship that was attacked was offshore of a Russian port that also exports grain, and the port was briefly closed to shipping.

  • The Brazilian 23/24 corn crop is now expected to be 139.1 mmt compared to the previous year of 135.4 mmt.

  • Dryness and heat are fueling uncertainty for Argentina’s next corn crop as soil moisture levels remain low and the forecast doesn’t contain much rain.

  • Soybeans are trading higher this morning along with corn and wheat after Ukraine’s attack. Sep soybean meal is slightly lower while deferred contracts and soybean oil are higher.

  • The Black Sea attack has given some support, but yesterday’s good export sales and the export activity of soybeans sold to China has been friendly.

  • Brazil’s 23/24 soybean crop is now being estimated at a whopping 165.9 mmt compared to 157.3 mmt the previous year.

  • Palm oil stocks in Malaysia are seen surging to five month highs as production reaches the highest levels in seven months. Exports have increased as well.

  • Wheat is trading higher after last nights attack on the Russian warship. Trade may grow concerned not just about Ukrainian exports but also Russian exports if Ukraine decides to start damaging their grain infrastructure.

  • Floods have hit China’s grain belt as the storms following Doksuri head northeast. In the crop growing region of Jilin, 19 inches of rain have fallen in the past 3 days.

  • Ukraine’s 23/24 grain exports for August were up 29% from last year at almost 2.4 mmt, but those numbers are expected to fall as shipping lanes become unusable.

  • Russia is signaling that it will offer cheaper grain exports to countries that have been friendlier and have not imposed sanctions.

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.