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Grain Market Insider: August 3, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Lackluster demand and favorable weather conditions for the next ten days helped to pressure the corn market lower as traders add to their short positions.

  • Strong weekly export sales and low yield estimates from StoneX’s August Survey helped to support the soybean market, with soybean meal following suit. Oil followed a lower palm oil, which was 2.3% weaker overnight.

  • Slow demand, no new headlines from the Black Sea and rumors that Russia would consider reinstating the Black Sea export corridor if his demands were met, all contributed to the negativity in the wheat market today, with K.C. leading Mpls and Chicago lower on the day.

  • After making new highs for the move and being overbought on the stochastic indicators, the U.S. dollar reversed and traded lower on the day. If the trend changes and trades lower, it could be supportive to U.S. grain prices by making them more competitive in the world market.

  • To see the current U.S. 7-day Precipitation Forecast and the 8- 14-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 recommends selling half of your DEC ‘23 580 puts at approximately 87 cents in premium minus fees and commission. 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 traded lower for the 8th consecutive session, as prices closed below the key $5.00 psychological level as the market is pricing in favorable weather and looking for bullish news.

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

  • The weather forecast going into the middle of August is tracking potentially cooler than normal temperatures and average to above average rainfall for most of the Corn Belt. This would be favorable weather to help fill out this year’s corn crop.

  • Overall, dry conditions are still a concern as 57% of the crop, down 2% from last week, is affected by drought. The lack of overall moisture keeps the need for timely rainfall, or the crop could see some production losses.

  • Weekly exports sales for corn were uneventful as the USDA reported new sales for last week totaling 4.2 mb of old crop, and 13.7 mb of new crop. These totals were within expectations, but still lacking the demand pace needed to meet USDA targets. Total new crop sales are trending 35% below last year’s levels currently.

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.

  • The soy complex was higher today with soybean meal following that same trend, but soybean oil was lower in all contracts. While export sales were supportive, the weather forecasts are suppressing rallies.

  • The USDA reported an increase of 3.3 mb of soybean export sales for 22/23, which was down 54% from the previous week and 16% from the prior 4-week average .There was an increase of 96.7 mb for the 23/24 marketing year, and exports were 12.7 mb, which was down 9% from the previous week but up 30% from the prior 4-week average.

  • StoneX released their August Survey results, and estimate final soybean yield at 50.5 bpa, down 1.5 from the USDA’s current estimate. If materialized, this could tighten 23/24 supplies and be supportive to prices.

  • Private exporters reported sales of 134,000 mt of soybeans for delivery to China during the 23/24 marketing year. China and unknown destinations have been active buyers of US soybeans over the past week.

  • The 7-day and 14-day forecasts are showing significant amounts of rain throughout the Corn Belt and northwestern Plains, along with much cooler temperatures from the previous week, with most expectations for the low 80’s. Good weather this month could really make the soybean crop despite dryness earlier in the season.

Above: On 7/27 the market posted a bearish reversal, turning the market lower. Initial support below the market may come in around the 1350 – 1318 level and again near the May low of 1270-3/4. Above the market heavy resistance remains around 1490 – 1505.

Wheat

Market Notes: Wheat

  • The USDA reported an increase of 15.5 mb of wheat export sales for the 23/24 marketing year and an increase of 0.5 mb for 24/25. Total commitments are now 215 mb for 23/24, which is down 29% from this time last year.

  • Putin is reportedly considering a reinstatement of the Black Sea Grain Initiative. However, Russian demands must first be met before they would agree to any new deal.

  • There are rumors that India is looking to import up to 9 mmt of wheat from Russia. Apparently, the Indian government is directly negotiating with the Russian government. If true, this could have big implications for the global wheat trade.

  • Funds are believed to be adding to their next short position in Chicago wheat. This is keeping pressure on the market, along with the fact that Matif wheat was lower for the 8th session in a row.

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: The September K.C. wheat contract posted a bearish reversal on 7/25 after testing heavy resistance near 920.  Since then, prices have retreated, with support below the market near 763 – 778. Should prices reverse higher, heavy resistance remains in the 920 – 930 area.

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 3, 2023

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn
SEP ’23 483.75 -4.5
DEC ’23 496.25 -4.25
DEC ’24 510.75 -2.5
Soybeans
NOV ’23 1325.5 4.25
JAN ’24 1334.75 4.75
NOV ’24 1251.75 2.5
Chicago Wheat
SEP ’23 628.25 -11.75
DEC ’23 655.75 -11.5
JUL ’24 701.75 -7.5
K.C. Wheat
SEP ’23 767.5 -19.5
DEC ’23 783 -18
JUL ’24 773 -13.75
Mpls Wheat
SEP ’23 837.25 -11.75
DEC ’23 852 -10.25
SEP ’24 813 -3.75
S&P 500
SEP ’23 4526.5 -10.75
Crude Oil
OCT ’23 80.64 1.51
Gold
OCT ’23 1954.5 -1

  • Corn is trading lower for the eighth consecutively lower day on favorable August weather forecasts and poor export sales that were released this morning.

  • The USDA reported an increase of 4.2 mb of corn export sales for 22/23, which was down 66% from the previous week and down from the prior 4-week average. There was an increase of 13.7 mb for 23/24, and exports of 24.7 mb were up 52% from the previous week and 26% from the prior 4-week average.

  • Yesterday evening, StoneX revised their estimates for US corn yields higher to 177 bpa, a lofty estimate, but below the USDA’s last estimate of 177.5 bpa.

  • Although the USDA predicted that Brazil would overtake the US as the world’s leading exporter of corn, the National Corn Growers Association has said that Brazil’s growth this season may not be sustainable in the coming years.

  • Soybeans are trading higher today despite the favorable August weather forecasts after export sales were released and saw good activity, as well as the report of another flash sale today.

  • Private exporters reported sales of 134,000 mt of soybeans for delivery to China during the 23/24 marketing year. China and unknown destinations have been active buyers of US soybeans over the past week.

  • The USDA reported an increase of 3.3 mb of soybean export sales for 22/23, which was down 54% from the previous week and 16% from the prior 4-week average. There was an increase of 96.7 mb for the 23/24 marketing year, and exports were 12.7 mb, which was down 9% from the previous week but up 30% from the prior 4-week average.

  • Crop trader Bunge is expecting tightness in US soybean oil as renewable diesel usage ramps up and increases demand for the product.

  • Wheat is lower again today and has been pulled down by disappointing export sales as well as Paris milling wheat futures that are lower for the eighth consecutive day.

  • The USDA reported an increase of 15.5 mb of wheat export sales for 23/24, which was up 81% from the previous week and 40% from the prior 4-week average but increases for 24/25 were just 0.5 mb. Exports of 18.6 mb were above the 14.4 mb needed each week to meet the USDA’s export estimate.

  • India is seeking to import 9 mmt of wheat from Russia in an attempt to boost their domestic stockpiles and fight rising prices in the country.

  • Vladimir Putin seems to be floating the idea of reinstating the Black Sea grain deal, but only if their requirements are met, but last time they renewed the deal they still made it difficult for Ukraine to get ships moving.

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 3, 2023

Bygmidev

All prices as of 6:30 am Central Time

Corn

SEP ’23 487.75 -0.5
DEC ’23 500.25 -0.25
DEC ’24 512.75 -0.5

Soybeans

NOV ’23 1329 7.75
JAN ’24 1338 8
NOV ’24 1257.25 8

Chicago Wheat

SEP ’23 643 3
DEC ’23 670.5 3.25
JUL ’24 711 1.75

K.C. Wheat

SEP ’23 787.75 0.75
DEC ’23 803 2
JUL ’24 786.5 -0.25

Mpls Wheat

SEP ’23 855.5 6.5
DEC ’23 872 9.75
SEP ’24 816.75 -6

S&P 500

SEP ’23 4528.75 -8.5

Crude Oil

OCT ’23 79.19 0.06

Gold

OCT ’23 1952.6 -2.9

  • Corn is trading unchanged to lower on a lack of fresh news and with traders focusing on the forecast which is wet and cool over the next two weeks.

  • Yesterday’s ethanol production report was a highlight with production being the best on this date compared to the past five years. Stocks fell on good demand.

  • The average estimate for today’s export sales in corn is 658k tons, but may be less as export demand has been very sluggish.

  • Yesterday evening, StoneX revised their estimates for US corn yields higher to 177 bpa, a lofty estimate, but below the USDA’s last estimate of 177.5 bpa.

  • Soybeans are higher this morning after yesterday’s sharp selloff in anticipation of the export sales report which will reflect a solid number of flash sales to China and unknown destinations that occurred recently.

  • Soybean meal is trading higher this morning while soybean oil is lower on pressure from crude oil and world veg oil prices.

  • The average trade guess for today’s export sales report is 2,115k tons which would be one of the strongest weeks the US has seen in a awhile.

  • While StoneX increased their estimate for the corn yield, they surprisingly lowered their estimate for the soybean yield to 50.5 bpa despite the friendly August forecast.

  • Wheat is mixed this morning with Chicago and Minn slightly higher and KC wheat lower despite more attacks on Ukraine’s port cities.

  • Today’s export sales report is expected to show another slow week for wheat with the average trade guess at 300k tons as Russia dominates global sales.

  • Vladimir Putin seems to be floating the idea of reinstating the Black Sea grain deal but only if their requirements are met, but last time they renewed the deal they still made it difficult for Ukraine to get ships moving.

  • India is seeking to import 9 mmt of wheat from Russia in an attempt to boost their domestic stockpiles and fight rising prices in the country.

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 2, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Reports of additional Russian drone attacks on Ukrainian Danube River grain terminals spiked the markets higher in the overnight session, but the news was shrugged off since the terminals remain functional.

  • After trading higher in the overnight session, favorable weather forecasts and continued demand concerns dominated the trade to reverse the corn market and close in negative territory for the 7th consecutive day.

  • A friendly weather forecast for the next 10 days weighed on prices and led soybeans to post losses in excess of 100 cents over the last week.

  • Despite the closure of the Black Sea corridor and Russian attacks on Danube River terminals, the fact that other nations are working with Ukraine to increase their export capacity via land routes continues to weigh on the three wheat markets.

  • The Fitch credit rating agency lowered the U.S.’ credit rating to AA+ from AAA due to growing debt and the possibility of a slowing economy. The surprise move led to a “risk-off” mood possibly adding downward pressure to the grain markets.

  • To see the current Monthly Drought Outlook and the 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

  • No new action is recommended for Old Crop. The market had a nearly 140-cent swing from the May low to the June high and back on weather. Use any remaining bounces in the market to price what Old Crop bushels you may have, if any. We won’t have any “New Alerts” for 2022 Corn (Cash, Calls, or Puts) as we have moved focus onto 2023 and 2024 Crop Year Opportunities.

  • 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. 

  • Even with a surge in overnight prices after the most recent attack by Russia on Ukraine export infrastructure, corn futures failed to hold gains, reversing to close lower on the session as weather forecasts and demand concerns drive the market sentiment.

  • December corn futures had a 26 cent trading range on the session, closing just above the psychological $5.00 level, but at the bottom of the trading range.  The weak technical picture will likely keep selling pressure in the market in the near term.

  • The weather forecasts are non-threatening as August weather is expected to stay cooler than normal with average to above average rainfall. This forecast will help fill the recently pollinated corn crop.

  • Demand will be the focus on Thursday morning with the release of USDA’s weekly export sales report. Expectations are for corn sales to range from 150,000MT-500,000 MT for old crop, and 200,000-700,000 MT for new crop for last week.no Export demand is still well behind last year’s levels at this time.

  • Outside markets added to selling pressure as the credit rating agency, Fitch, lowered the U.S. credit rating from AAA to AA+, sending a “risk-off” trade across equity and commodity markets on Wednesday.

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 appears to be correcting from being overbought and broke through the 520 support level.  Key support lies near the 474 low, and should the market turn 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 lower after trading slightly higher overnight, while soybean meal ended lower and soybean oil was bull spread, with front months higher and deferred contracts lower despite a sharp decline in crude oil.

  • Soybeans have lost over $1.10 in the past 7 days as weather shifted from hot and dry to a forecast of cool and wet, with temperatures expected to be in the low 80’s and above normal rains for the entire Corn Belt and northwestern Plains.

  • Due to the upcoming El Nino pattern, northern Brazil may experience drier than normal conditions next year, which could impact their total production and support prices, but the same pattern may show Argentina receiving more rains.

  • The current USDA yield estimate for the soy crop is 52.0 bpa, and while that number seemed far away a few weeks ago, it may be achievable if these August forecasts hold up. Illinois, Minnesota, North Dakota, and Michigan all had some of the worst good to excellent ratings last week, but all four states are forecast to get higher than normal rains over the next two weeks.

Above: On 7/27 the market posted a bearish reversal, turning the market lower. Initial support below the market may come in around the 1350 – 1318 level and again near the May low of 1270-3/4. Above the market heavy resistance remains around 1490 – 1505.

Wheat

Market Notes: Wheat

  • Wheat was higher overnight after a new round of Russian attacks hit Danube River terminals in Ukraine. However, this was not enough to sustain a rally; all three US wheat futures classes closed lower in tandem with Paris milling wheat.

  • Slovakia is planning to increase the capacity of railway transport for Ukrainian grain. Funding was reportedly approved for two projects to increase the amount that can be transported through these lanes.

  • The US credit rating was lowered from AAA to AA+ due to large amounts of debt and the possibility of a slowing economy. This put pressure on the financial markets today, some of which may have spilled over into commodities. Additionally, the US Dollar Index continues to trend higher, likely limiting the upside in wheat.

  • Egypt’s wheat tender resulted in a purchase of 300,000 mt from Russia and 60,000 mt from Romania. Russia continues to dominate exports – another negative factor affecting the market. In addition to Egypt, recent tenders by Algeria and Tunisia have also been fulfilled by Russia.

  • Kazakhstan’s grain union is estimating their wheat crop at 14.5 mmt, which would allow for exports of about 8.5-9.0 mmt in 23/24.

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.

  • Grain Market Insider sees an active opportunity to sell a portion of your 2024 K.C. Wheat crop. Weather and supply concerns from the Black Sea have dominated the market, and recent news of rising tensions in the Black Sea region pushed the market higher. With little follow-through to the upside on talk that Ukrainian supplies should still be able to enter the world market, prices have retreated below the 817 support level. Closing below that 817 support signals that the uptrend from the recent July low may have ended, which poses the risk that a change in trend could erode prices further.  First, prices could drop to the July low of 758-1/2. If support there doesn’t hold, there is a risk that prices could further erode to the 740 – 724 level near the April low. Although making a sale in a down market may be uncomfortable, it’s important at times to have a Plan B with the objective of trying to avoid having to sell bushels at even lower prices in the future if a downtrend takes hold.  Insider recommends making a sale on a portion of your 2024 K.C. wheat production by using either JUL ’24 K.C. Wheat futures or a JUL ’24 HTA contract, so basis can be set at a later, more advantageous time.  

  • 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: The September K.C. wheat contract posted a bearish reversal on 7/25 after testing heavy resistance near 920. Since then prices have retreated, with support below the market near 763 – 778. Should prices reverse higher, heavy resistance remains in the 920 – 930 area. 

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: September Mpls wheat’s rally of nearly 180 cents to test last winter’s highs culminated in a bearish reversal on 7/25 after the contract became mildly overbought. Prices have since retreated and are testing the 865 – 845 initial support area where both the 50-day and 100-day moving averages converge. Further support below the market may be near 800.  If more bullish input is received, the market could turn higher again to retest the heavy resistance area near 950.

Other Charts / Weather

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Midday Update: August 2, 2023

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn
SEP ’23 487.75 -9.25
DEC ’23 499 -8.25
DEC ’24 508 -7.25
Soybeans
NOV ’23 1321.5 -19.75
JAN ’24 1330.25 -19.5
NOV ’24 1247.25 -10.75
Chicago Wheat
SEP ’23 640.75 -11.5
DEC ’23 667.75 -10.5
JUL ’24 706.25 -12.25
K.C. Wheat
SEP ’23 780.5 -24
DEC ’23 795 -22.75
JUL ’24 779.5 -19.5
Mpls Wheat
SEP ’23 844 -10.75
DEC ’23 858.25 -11.25
SEP ’24 811.75 -11
S&P 500
SEP ’23 4540.25 -61
Crude Oil
OCT ’23 79.12 -1.8
Gold
OCT ’23 1951.5 -7.7

  • Corn is trading lower near midday after retreating from gains made overnight due to Russia attacking a Ukrainian port on the Danube River. Trade is mostly focused on the favorable 2-week forecast.

  • December corn has fallen by 67 cents in the past seven days, as weather turned from hot and dry to a forecast of cooler and wetter. Today, heavy rains have fallen in Nebraska, Iowa, Missouri, and southern Illinois.

  • The June Crushings report showed that corn used in ethanol production was 441.5 mb, up slightly from May and in line with expectations. Ethanol margins have improved since June.

  • While Brazil has dominated global export sales in corn, China purchased 11 mmt of Ukrainian corn last year, and they will likely have to turn to the US to make up some of that grain.

  • Soybeans are lower again today, along with lower soybean meal, but soybean oil is bull spread with the front two contracts higher and deferred contracts lower. Favorable weather forecasts are pressuring soybeans.

  • November soybeans have lost approximately $1.05 in the past 7 days as a result of recent rains, along with a good looking forecast for the next two weeks, which shows steady rains and temperatures in the 80’s for the Corn Belt.

  • June soybean crush was released and showed 174.6 mb crushed, slightly higher than a year ago, but below trade expectations. 

  • Following the recent selloff, US FOB soybean meal is currently $4/ton cheaper than Argentine offers, but no new sales have been reported.

  • Wheat is trading lower and has shown the biggest reversal from overnight highs as a result of the Russian attack on Ukraine’s Danube River port.

  • Traders have become a bit numb to attacks on Ukrainian ports at this point, and although the market might rally, focus quickly turns back to winter wheat harvest and weather.

  • There has been some supportive news as Canada’s spring wheat areas have been drier than normal, while Argentina’s topsoil and subsoil moisture are very short with no rain in the forecast.

  • The quarterly Flour Milling report was released and all wheat ground for flour was at 222 mb, down 2% from the first quarter grind and down 4% from the second quarter of 2022.

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 2, 2023

Bygmidev

All prices as of 6:30 am Central Time

Corn

SEP ’23 499.5 2.5
DEC ’23 510.5 3.25
DEC ’24 516.75 1.5

Soybeans

NOV ’23 1332 -9.25
JAN ’24 1340.5 -9.25
NOV ’24 1253 -5

Chicago Wheat

SEP ’23 660 7.75
DEC ’23 685.75 7.5
JUL ’24 723.5 5

K.C. Wheat

SEP ’23 812.75 8.25
DEC ’23 823.25 5.5
JUL ’24 806.75 7.75

Mpls Wheat

SEP ’23 858.5 3.75
DEC ’23 873.5 4
SEP ’24 828 5.25

S&P 500

SEP ’23 4579.25 -22

Crude Oil

OCT ’23 81.58 0.66

Gold

OCT ’23 1969.7 10.5

  • December corn is trading slightly higher but has backed off of gains in the overnight that were caused by a new attack by Russia on Ukraine’s Danube port.

  • The 7-day forecast has turned wetter since yesterday with nearly the entire Corn Belt and northwestern Plains expected to receive a good drink.

  • The June Crushings report showed that corn used in ethanol production was 441.5 mb, up slightly from May and in line with expectations. Ethanol margins have improved since June.

  • Slovakia is planning to expand its capacity for Ukrainian grain transit with its rail border crossings, but Russia seems intent on targeting Ukrainian grain storage and transportation.

  • Soybeans are trading lower this morning along with soybean meal and oil as trade focuses almost entirely on the August forecast which is showing much cooler and wetter conditions.

  • If this favorable two week forecast holds up, it will be difficult for soybeans to rally very much as the conditions will significantly impact yields.

  • June soybean crush was released and showed 174.6 mb crushed, slightly higher than a year ago but below trade expectations. 

  • Ukrainian vegetable oil exports totaled 549,400 mt in July, 7% higher than the previous month, but now with exports nearly impossible, that number should be much lower this month.

  • Wheat is trading higher this morning although it did back off highs from overnight which were also caused by the attack on Ukraine’s Danube port.

  • Traders have become a bit numb to attacks on Ukrainian ports at this point, and although the market might rally, focus quickly turns back to winter wheat harvest and weather.

  • The quarterly flour milling report was released and all wheat ground for flour was at 222 mb, down 2% from the 1st quarter grind and down 4% from the 2nd quarter of 2022.

  • The US has heard rumors that Russia is prepared to return to talks on renegotiating the Black Sea grain deal, but there is no evidence yet.

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 1, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Carryover weakness from the wheat market and a cooler, wetter forecast kept the pressure on the corn market with follow through selling as traders extract more weather premium.

  • Lower good/excellent crop ratings helped to incentivize the soybean market to consolidate from Monday’s sharply lower close in classic turnaround Tuesday fashion.

  • Record soybean oil use for biofuel production reported for the month of May in Monday’s EIA report gave support to the oil leg of the soybean complex, while soybean meal also consolidated from Monday’s losses.

  • Reports that Ukraine is discussing using Croatian ports to export grain likely pressured the wheat complex lower, while a 7% drop in spring wheat’s good/excellent crop condition ratings limited the losses for the Minneapolis contracts.

  • The U.S. dollar continued its rally today as it tested the 50-day and 100-day moving averages for the first time since early July, likely adding some downward pressure to commodities.

  • To see the current Monthly 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

  • No new action is recommended for Old Crop. The market had a nearly 140-cent swing from the May low to the June high and back on weather. Use any remaining bounces in the market to price what Old Crop bushels you may have, if any. We won’t have any “New Alerts” for 2022 Corn (Cash, Calls, or Puts) as we have moved focus onto 2023 and 2024 Crop Year Opportunities.

  • 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. 

  • December corn futures closed the day lower, posting a new low for this most recent move as selling pressure in the wheat market and the prospects of improving August weather kept sellers active.

  • Short term weather models are keeping temperature cool with mixed rain forecasts, which should help fill out the recently pollinated corn crop.

  • USDA weekly crop rating saw a drop of 2% good/excellent to 55% good/excellent. Northern and western states saw the biggest impacts of the heat on crop conditions, while late in the week rainfall helped support central and eastern crops. Illinois has improved its crop ratings for five consecutive weeks.

  • Crude oil is trading over $80.00 a barrel, and with lower corn prices, ethanol margins should be improved, which should help support the corn market.

  • The corn market is weak technically, with psychological support likely at the $5.00 level, but if weather forecasts are realized, and the market lacks bullish news, a test of the July $4.81 low for December futures could be a possible 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 appears to be correcting from being overbought and broke through the 520 support level.  Key support lies near the 474 low, and should the market turn 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 on August forecasts showing wetter and cooler weather, but ultimately ended the day higher, thanks to gains made in both soybean meal and oil. Yesterday’s crop progress report may have added support.

  • The Crop Progress reports showed soybean ratings declining more than the average guess with good to excellent ratings falling 2 points to 52%. 83% of the crop is blooming and 50% is setting pods. If forecasts hold up for August, soybean ratings could easily improve.

  • Monday’s EIA report showed soybean oil use for biofuel production was a record 1.141 bil. lbs. in May, which was up 23% from April’s numbers and a 33% increase from May 2022. Year to date usage also increased 13% from year ago levels to 7.6 bil. lbs.

  • There has been some export activity in soybeans, which has been supportive over the past few days, and another new crop sale was announced as sold to China on Monday of 4.9 mb. The one-week total of new soybean sales to China and unknown destinations is now 70.5 mb.

  • Census crush will be released today, and the average trade guess is 175.5 mb for June, which would compare to 189.3 mb in May. Despite the slip, domestic demand has been stout, thanks to profitable crush margins.

Above: On 7/27 the market posted a bearish reversal, turning the market lower. Initial support below the market may come in around the 1350 – 1318 level and again near the May low of 1270-3/4. Above the market heavy resistance remains around 1490 – 1505.

2023/24 Soybeans percent planted (red) versus the 5-year average (green).

Wheat

Market Notes: Wheat

  • While there have not been any major new headlines regarding the Black Sea conflict, Ukraine is said to be talking about using Croatian ports for exports of grain. There is still much uncertainty though, given last week’s Russian attacks on the river terminals.

  • The Crop Progress report said winter wheat harvest is 80% complete. It also showed a 7% drop in spring wheat condition to 42% good to excellent, versus 70% at this time last year. This is likely why MPLS futures had more support today compared with Chi and KC.

  • According to CONAB, as of July 22, 97.9% of Brazil’s wheat crop has been planted. Argentina is said to have 96.4% of their wheat crop planted as of July 26, according to Bolsa de Cereales.

  • The weather bureau in Australia said that the El Nino weather pattern remains likely to bring hotter and drier weather. This could reduce rain in the eastern part of the country, threatening the wheat crop.

  • Algeria finalized a tender for 700-800 metric tons of milling wheat for fall shipment. However, this is likely to be sourced from Russia as they continue to dominate the export market with cheap offers.

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.  Key support may be found below the 600 psychological support level 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.

  • Grain Market Insider sees an active opportunity to sell a portion of your 2024 K.C. Wheat crop. Weather and supply concerns from the Black Sea have dominated the market, and recent news of rising tensions in the Black Sea region pushed the market higher. With little follow-through to the upside on talk that Ukrainian supplies should still be able to enter the world market, prices have retreated below the 817 support level. Closing below that 817 support signals that the uptrend from the recent July low may have ended, which poses the risk that a change in trend could erode prices further.  First, prices could drop to the July low of 758-1/2. If support there doesn’t hold, there is a risk that prices could further erode to the 740 – 724 level near the April low. Although making a sale in a down market may be uncomfortable, it’s important at times to have a Plan B with the objective of trying to avoid having to sell bushels at even lower prices in the future if a downtrend takes hold.  Insider recommends making a sale on a portion of your 2024 K.C. wheat production by using either JUL ’24 K.C. Wheat futures or a JUL ’24 HTA contract, so basis can be set at a later, more advantageous time.  

  • 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: The September K.C. wheat contract posted a bearish reversal on 7/25 after testing heavy resistance near 920.  Prices have become over bought and retreated.  Support below the market is near 763 – 778. Should prices reverse higher, heavy resistance remains in the 920 – 930 area.

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 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: September Mpls wheat’s rally of nearly 180 cents to test last winter’s highs culminated in a bearish reversal on 7/25 after the contract became mildly overbought. Prices have since retreated and are testing the 865 – 845 initial support area where both the 50-day and 100-day moving averages converge. Further support below the market may be near 800.  If more bullish input is received, the market could turn higher again to retest the heavy resistance area 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 1, 2023

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn
SEP ’23 498.25 -5.75
DEC ’23 507 -6
DEC ’24 514.75 -2.5
Soybeans
NOV ’23 1331 -0.75
JAN ’24 1339.5 -1
NOV ’24 1252.25 0.5
Chicago Wheat
SEP ’23 645.25 -20.5
DEC ’23 671.25 -20.5
JUL ’24 711.5 -15.75
K.C. Wheat
SEP ’23 792.5 -20.25
DEC ’23 808.5 -21
JUL ’24 790.25 -14.25
Mpls Wheat
SEP ’23 847 -8.75
DEC ’23 861.75 -7.75
SEP ’24 820 -4
S&P 500
SEP ’23 4594.5 -20
Crude Oil
OCT ’23 80.56 -0.76
Gold
OCT ’23 1960.9 -28.4

  • Corn is trading relatively unchanged at midday, but has seen a 10-cent range throughout the day. Crop conditions worsened yesterday, but that was expected, and the upcoming forecast includes more moisture.

  • Yesterday’s crop ratings showed corn’s good to excellent rating slip by 2 points to 55% vs the average trade guess of 56%. 84% of the crop is silking compared to 68% last week and 77% a year ago at this time.

  • This crop is currently the fifth lowest rated crop since 1988, but if this August forecast holds up with cooler temperatures and more rain, conditions could come back.

  • US corn inspections were a bit better last week at 20.3 mb, but are still 33% below a year ago, as Brazil keeps control of the world export market.

  • Soybeans have been trading either side of unchanged so far today, but are currently slightly higher with support from soybean meal, while soybean oil is lower.

  • Crop progress data showed good to excellent ratings, falling by 2 points from last week to 52%, which was below the average trade guess and below 60% a year ago. 83% of the crop is blooming and 50% is setting pods.

  • The 6 to 10-day forecast is showing showers for Iowa, Minnesota, and the Dakotas, with expectations for 1 to 3 inches of rain between Sunday and Tuesday.

  • Brazilian 2024 soybean meal production is expected to reach 42.3 mmt, 3% above the previous year. Total soy crushing is seen at 55 mmt for 2024.

  • Wheat is trading lower despite a bigger than expected drop in good to excellent ratings and is being pressured by Paris milling wheat, which is lower for the sixth consecutive day.

  • The spring wheat crop is reportedly 2% harvested with a good to excellent rating that fell by 7 points to 42%, which compares to 70% a year ago. Winter wheat harvest was slightly above trade expectations at 80% harvested compared with 68% a week ago.

  • SovEcon raised the Russian wheat crop forecast to 87.1 mmt, as yields are now expected to improve. The previous projection for the Russian crop was 86.8 mmt.

  • Ukraine is reportedly discussing using Croatian ports for grain exports on the Danube River and the Adriatic Sea.

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 1, 2023

Bygmidev

All prices as of 6:30 am Central Time

Corn

SEP ’23 503.25 -0.75
DEC ’23 512 -1
DEC ’24 519.25 2

Soybeans

NOV ’23 1332.25 0.5
JAN ’24 1341.75 1.25
NOV ’24 1263.25 11.5

Chicago Wheat

SEP ’23 657 -8.75
DEC ’23 683.75 -8
JUL ’24 722 -5.25

K.C. Wheat

SEP ’23 806 -6.75
DEC ’23 822.25 -7.25
JUL ’24 802 -2.5

Mpls Wheat

SEP ’23 854.75 -1
DEC ’23 869 -0.5
SEP ’24 824 -24.5

S&P 500

SEP ’23 4605 -9.5

Crude Oil

OCT ’23 80.98 -0.34

Gold

OCT ’23 1971.6 -17.7

  • Corn is trading unchanged to slightly lower this morning as temperatures will remain mild and rain chances will increase for much of the Midwest through this weekend.

  • Crop conditions released Monday afternoon reported US corn good to excellent ratings at 55% down 2% from last week and down 6% from the same week last year.

  • 84% of the US corn crop was in the pollination stage of production as of Sunday, this is 2% ahead of the five-year average. 

  • December 2023 corn futures were 18-1/4 cents higher in the month of July.

  • Soybeans are slightly higher this morning as prices look to rebound after Monday’s sharply lower trade. 

  • Private exporters reported the sale of 132,000 tons of soybeans for delivery to China during the 23/24 marketing year on Monday. This continued the trend of export sales from last week.

  • US soybeans were rated 52% good to excellent as of Sunday July 30th, this was down 2% from last weeks rating and 8% below ratings the same week a year ago.

  • 50% of the US soybean crop was setting pods according to Monday’s crop progress report, above normal precipitation forecast for the entire Midwest into mid-August should aid in filling pods. 

  • Wheat futures are lower across the board again this morning with Chicago futures leading the way lower.

  • US Spring wheat condition ratings fell 7% from last week coming in at 42% good to excellent as of Sunday July 30th, this is down from 70% in the same week last year. 

  • US winter wheat harvest was 80% complete as of this week, this is 3% behind the five-year average. 

  • In the week ending July 27th the US inspected 581,000 tons of wheat, this up 220,000 tons from the previous week. 

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

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Grain Market Insider: July 31, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Good weekend rains, an improving weather forecast and a Brazilian safrinha harvest that is moving along, all weighed heavily on the corn market.

  • Despite strong export inspections, soybeans closed sharply lower as traders moved to extract weather premium following better than expected weekend rains and a more favorable forecast ahead.

  • Soybean meal and oil also closed sharply lower on the day, with December meal down 2.4%, while soybean oil was down 3.9%, pressured from weaker palm oil.

  • Spillover weakness from the corn market and an agreement to use Croatia’s ports to export Ukrainian grain, far outweighed the positive influence of export inspections that were above the 14 mb/week needed to reach the USDA’s forecast.

  • To see the current 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

  • No new action is recommended for Old Crop. The market had a nearly 140-cent swing from the May low to the June high and back on weather. Use any remaining bounces in the market to price what Old Crop bushels you may have, if any. We won’t have any “New Alerts” for 2022 Corn (Cash, Calls, or Puts) as we have moved focus onto 2023 and 2024 Crop Year Opportunities.

  • 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 2024 corn. In 2012, the best pricing opportunities for Dec 2013 corn were during the 2012 summer runup. Despite the significant yield losses to the 2012 crop, and the fear of running out of corn, the Dec 2013 contract peaked in the summer of 2012, and by January 2, 2013, the price was already down about 12% from the high. We continue to watch the calendar for 2024 corn as this 2023 summer volatility could provide some additional opportunities to get some good early sales on the books in the event of a 2013-type repeat. Insider recently recommended making a sale on your 2024 crop, and we’ll be watching for another opportunity to suggest adding to prior early sales levels between now and the beginning of September. 

  • The corn market broke apart technically and saw strong selling pressure triggered by weekend rains and August forecast that should allow for good overall development of the corn crop.

  • The entire grain complex was under pressure on the day, corn futures opened with a price gap lower on the overnight session and the selling pressure was maintained as market prices dropped through key moving averages. Dec corn posted its lowest close since July 18. The weak technical picture and lack of bullish news may have Dec corn poised to retest the July lows near $4.80.   

  • Weekly export inspections were within trade expectations at 20.6 mb. Total inspection for old crop exports is still running 33% behind last year, but equal to the pace to reach the USDA target with one month left in the marketing year.

  • Brazilian corn harvest continues to progress, analyst estimate that this year’s Brazil corn harvest is near 50% complete, which is running nearly 20% behind last yeas pace.  The influence of the fresh Brazil supplies pressures global corn prices.

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 appears to be correcting from being overbought and broke through the 520 support level.  Key support lies near the 474 low, and should the market turn back higher, heavy resistance lies near 555 – 565.

Corn Managed Money Funds net position as of Tuesday, July 25. Net position in Green versus price in Red. Managers net bought 73,529 contracts between July 18 – 25, bringing their total position to a net long 26,603 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 recommended for 2024 crop. Grain Market Insider continues to monitor any developments for the 2024 crop, though it may not be until after harvest or toward year’s end before we will consider recommending any 2024 crop sales. 

  • Soybeans ended the day sharply lower with large losses in soybean meal and oil. Weather forecasts over the weekend turned cooler and wetter for the next 7 days and potentially longer, which was likely the main pressuring factor.

  • Exports were surprisingly active today considering the price action with 132,000 mt sold to China and 183,300 mt of soy cake and meal sold to the Philippines. There have been friendly underlying fundamentals that are being overshadowed by the current forecasts.

  • Soybean inspections totaled 12.1 mb for the week ending Thursday, July 27 which puts total inspections for 22/23 at 1.856 bb, which is down 6% from the previous year. Brazil is maintaining their lead in soy exports, but the US should become more competitive later this year.

  • Apart from updated weather forecasts adding pressure to prices, November soybeans are in a bearish ascending wedge pattern which would put the next downside target area near 12.55, but the overnight trade also left a gap on the chart above the market at 13.79 which the market may look to fill.

Above: On 7/27 the market posted a bearish reversal, turning the market lower. Initial support below the market may come in around the 1350 – 1318 level and again near the May low of 1270-3/4. Above the market heavy resistance remains around 1490 – 1505.

Soybean Managed Money Funds net position as of Tuesday, July 25. Net position in Green versus price in Red. Money Managers net bought 24,925 contracts between July 18 – 25, bringing their total position to a net long 120,739 contracts.

Wheat

Market Notes: Wheat

  • All three US wheat markets closed sharply lower alongside Paris milling wheat futures. This is the fourth consecutive lower close for Chicago wheat. A lack of follow through attacks in Ukraine put the market on the defensive. News that Ukraine launched a drone strike on Moscow was not enough to trigger a rally either.

  • Weekly wheat inspections of 21.4 mb bring the 23/24 total inspections to 101 mb, which is down 5% from last year. Currently, the USDA is estimating wheat exports at 725 mb.

  • According to SovEcon, Russia’s wheat harvest is now projected to be 87.1 mmt. Previously, the estimate was 86.8 mmt, and this revision higher may have also offered weakness to wheat today. 

  • Possibly adding more pressure to the market was the spring wheat tour last week that found yields higher than expected.

  • As of last Tuesday, the CFTC said the funds were still short 40,000 contracts of Chicago wheat. Given market action at the end of last week and to begin this week, it is likely they are adding to short positions.

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 recent closure of the Black Sea corridor, and continued weather concerns in the northern Plains, Canada, Europe, and Russia, still leave 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.  Key support may be found below the 600 psychological support level near 573.  Heavy resistance remains above the market around 777 – 808.

Chicago Wheat Managed Money Funds net position as of Tuesday, July 25. Net position in Green versus price in Red. Money Managers net bought 14,086 contracts between July 18 – 25, bringing their total position to a net short 40,332 contracts.

KC Wheat Action Plan Summary

  • We continue to look for better prices before making any 2023 sales.  While crop conditions have improved and there are reports of better-than-expected US yields, questions remain about the world wheat supply with the closure of the Black Sea corridor, dryness in Russia, the Canadian Prairies/Northern US Plains, and Europe. 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.

  • Grain Market Insider recommends selling a portion of your 2024 K.C. Wheat crop today. Weather and supply concerns from the Black Sea have dominated the market and recent news of rising tensions in the Black Sea region pushed the market higher. With little follow-through to the upside on talk that Ukrainian supplies should still be able to enter the world market, prices have retreated below the 817 support level. Closing below that 817 support signals that the uptrend from the recent July low may have ended, which poses the risk that a change in trend could erode prices further.  First, prices could drop to the July low of 758-1/2. If support there doesn’t hold, there is a risk that prices could further erode to the 740 – 724 level near the April low. Although making a sale in a down market may be uncomfortable, it’s important at times to have a Plan B with the objective of trying to avoid having to sell bushels at even lower prices in the future if a downtrend takes hold.  Insider recommends making a sale on a portion of your 2024 K.C. wheat production by using either JUL ’24 K.C. Wheat futures or a JUL ’24 HTA contract, so basis can be set at a later, more advantageous time. 

  • 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: The September K.C. wheat contract posted a bearish reversal on 7/25 after testing heavy resistance near 920.  Prices have become over bought and retreated.  Support below the market is near 763 – 778. Should prices reverse higher, heavy resistance remains in the 920 – 930 area.

K.C. Wheat Managed Money Funds net position as of Tuesday, July 25. Net position in Green versus price in Red. Money Managers net bought 10,495 contracts between July 18 – 25, bringing their total position to a net long 23,145 contracts.

Mpls Wheat Action Plan Summary

  • No new action for 2022 Old Crop MINNEAPOLIS Wheat. The market had a nearly 116-cent swing from the May low to the June high and back on weather. While weather and geopolitical events can still affect Old Crop prices, the marketing year for Old Crop is quickly winding down, and any additional upside opportunities may be more difficult to come by before New Crop harvest. Use any remaining bounces in the market to price what Old Crop bushels you may have, if any. We won’t have any “New Alerts” for the 2022 crop (Cash, Calls, or Puts) as we have moved focus onto 2023 and 2024 Crop Year opportunities.

  • 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 recommended for the 2024 crop. This year has been marked with volatility from adverse weather to geopolitical disruptions and has given us historically good prices to begin making early sales. 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 will continue to consider making sales recommendations if prices improve while also keeping an eye on the downside should prices break support. 

Above: September Minn. wheat’s rally of nearly 180 cents to test last winter’s highs culminated in a bearish reversal after the contract became mildly overbought.  Prices have since retreated and may test the 865 – 845 initial support area, with further support near 800.  If more bullish input is received, the market could turn higher again to retest the heavy resistance area near 950.

Minneapolis Wheat Managed Money Funds net position as of Tuesday, July 25. Net position in Green versus price in Red. Money Managers net bought 2,379 contracts between July 18 – 25, bringing their total position to a net long 8,966 contracts. 

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