Corn is trading lower near midday after the December contract gapped down overnight on weather forecasts that are trending cooler and wetter over the next seven days.
Over the weekend, rains fell near Wisconsin and Michigan, and today, those storms are moving into Nebraska, South Dakota, Missouri, and Arkansas. While there are bullish arguments to be made, it appears that traders are focusing on weather forecasts for now.
Crop progress will be released this afternoon, and good to excellent ratings for corn are expected to slip between 1 and 3% after last week’s heat wave. Last week’s good-to-excellent rating was 57%.
Black Sea ports are now reportedly blockaded, and the waters could be mined, and Russia attacked another Black Sea grain storage facility in Kherson, Ukraine over the weekend.
November soybeans gapped lower last night on better weather forecasts, and the next area of resistance is the 200-day moving average at 13.35.
Both soybean meal and oil are lower as Brazilian meal production estimates increase, Malaysian palm oil exports rise, and Chinese soybean meal fell by 9 dollars a ton today.
Export demand showed signs of life last week with 32 mb of old crop sales, which were to China and unknown destinations, but so far China has only booked less than 80 mb of new crop soybeans.
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.
All three wheat contracts are trading lower today with Partis milling wheat futures down for the fifth straight day and US contracts down 4 out of the last 5 days.
The Wheat Quality Tour has put out yield numbers that were higher than expected which has been the main bearish influence despite the conflict in Ukraine.
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.
With Ukraine essentially out of commission for grain exports, it was thought that demand may pick up more for US and EU wheat, but so far Russia has maintained control over exports.
Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing by Stewart-Peterson and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Stewart-Peterson Inc. Reproduction of this information without prior written permission is prohibited. Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Reproduction and distribution of this information without prior written permission is prohibited. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing.
Stewart-Peterson Inc., Stewart-Peterson Group Inc., and SP Risk Services LLC are each part of the family of companies within Total Farm Marketing (TFM). Stewart-Peterson Inc. is a publishing company. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services LLC is an insurance agency. A customer may have relationships with any or all three companies.
Corn is trading lower this morning as temperatures begin to decline from last week’s highs and rain chances for the Corn Belt improve over the next 7 days.
Crop conditions will be released this afternoon and between last week’s heat and dryness, it is expected that corn’s good to excellent rating will fall from last week’s 57%.
In Brazil, the corn harvest is advancing quickly which is putting pressure on prices globally. As of July 22, 47.9% of the national crop has been harvested.
Last week, funds were buyers of corn and bought 73,529 contracts which took them from a net short position to a net long position of 26,603 contracts.
Soybeans are significantly lower this morning along with soybean meal and oil as the 8 to 14-day forecast is showing a cooler, wetter pattern that would be beneficial for yields.
In Brazil, demand for soybeans internationally has been rising with their discounted prices. Processors there are showing higher needs for the raw material in the spot market because of expectations for higher demand abroad.
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.
Friday’s CFTC data showed funds as buyers last week, increasing their let long position by 24,925 contracts to 120,739 contracts.
Wheat futures are lower this morning with Chicago leading the way despite more military activity reported in the way of a strike on another grain facility in Kherson.
Traders seem unmoved by happenings in Russia and Ukraine lately and as a result, much of the war premium has dropped off of futures prices.
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, and this news is likely adding bearish pressure.
Friday’s CFTC showed funds buying back 14,086 contracts which still maintains a short position, but decreased it to 40,332 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.
The corn market traded on both sides of unchanged, but settled near the lower end of the range, and below most major moving averages as traders began to focus on more favorable weather ahead.
Despite another round of flash sales totaling 33 mb, soybeans closed lower on the day as slow 23/24 export demand, down 60% from year ago levels, weighs on prices.
Weakness from soybean meal also carried over to pressure the soybean market lower, as meal saw follow through selling following yesterday’s bearish reversal, while New Crop prices for soybean oil saw gains on reports of increased usage for biofuel.
All three wheat markets closed weaker, though mid-range, after trading on both sides of unchanged. The market spiked higher momentarily, possibly on rumors of explosions at a Russian port, but settled back lower on a lack of confirmation.
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.
To see the current 1–7-day precipitation outlook courtesy of the Weather 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. Now, the threat of dry weather and heightened tensions in the Black Sea region has rallied Dec corn sharply off that July 13 low. 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.
Friday saw selling pressure in the corn market, as the market moved past the hot weather and focused on a more friendly overall forecast. Price broke through key support levels, closing below the 40, 50, and 100-day moving averages on the day. December corn traded 6 cents lower on the week, but a disappointing 40 cents off the week’s high of $5.72-¼.
Friday morning started with rain on the radar, which saw moderately good coverage from western Illinois through the Ohio River valley. Additional forecasts are looking for more precipitation to build on Friday night into Saturday.
Argentina saw good producer movement in their latest “Pesos for Maize” program, providing incentive for producers to sell grain. The three-day program netted nearly 100 mb of sales for the export market. U.S. corn exports still struggle to be competitive versus cheaper Brazil and competitive Argentina corn prices.
The wheat market saw additional long liquidation as prices have fallen off the most recent highs and global wheat prices are keeping U.S. wheat at a competitive disadvantage. The weakness in wheat spilled over into the corn market.
Weekend weather will be closely watched. With the weak price action on Friday, a wet forecast will likely bring additional selling pressure to start the week.
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 if it breaks through the 520 support level, there may not be much support above the 474 low. 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 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 lower with front month August posting significant losses while deferred months were down, but not by as much. Soybean meal ended lower by over 2%, but soybean oil was bear spread with the two front months closing lower while deferred months were higher. Some of the extreme price action in the August contracts could be because they will be entering the delivery phase with the first notice day for delivery on long position holders being Monday, July 31.
Today, pressure came from overnight scattered showers in the Midwest and more favorable forecasts for August with more rain and more forgiving temperatures. August will be a critical time for soybean yields and weather will be a large focus for many traders.
Soybeans have gotten some friendly news this week with three flash sales to unknown destinations, but prices were unable to hold. With current 23/24 sales 60% behind last year’s pace, it is possible that Nov soybeans met with resistance after coming very close to the contract highs and spurred selling.
While Brazil is dominating global exports, the US will become more competitive in October, which could explain the recent sales for 23/24. Even with poor exports, domestic demand has been firm with profitable crush margins.
Above:
Add Comment Below Following the market’s roll from the August to September contract, it rallied to and tested the 1490 – 1505 heavy resistance level on the Continuous chart and posted a bearish reversal on 7/28. If the trend turns lower, initial support may be found near 1390 – 1410, with further support coming in near 1350.
Wheat
Market Notes: Wheat
Wheat traded both sides of unchanged, but struggled to hold onto any gains. All three US futures classes closed lower, alongside Paris milling wheat futures, which were lower for the fourth session in a row.
The spring wheat crop tour in North Dakota came up with a final yield of 47.4 bpa. This compares with the USDA’s projected yield of 47, last year’s yield of 49.1 and the average of 40 bpa.
The Buenos Aires Grain Exchange kept their 23/24 wheat crop planted area unchanged at 6.0 million hectares.
There is some concern starting to develop about the wheat crop in the dry areas of Australia. In Canada, the spring wheat crop could be affected by dry conditions, and here in the U.S., 43% of spring wheat and 47% of winter wheat are said to be experiencing drought.
The US Dollar Index continues to trend higher after bottoming in mid-July. This is keeping pressure on the export market, and thus, futures.
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: Rising tensions in the Black Sea have fed the rally that tested the June high. Prices have become overbought and retreated. New bullish input will likely be needed to turn prices back higher and test the heavy resistance area of 777 – 807-1/2 between the recent high and the February high. If prices do retreat, initial support may be found near 690 – 700, and again around 610 – 650.
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.
Patience is warranted for the 2024 crop. With continued issues in the Black Sea region and with major exporting countries’ stocks at 11-year lows,we are willing to be patient with further sales of New Crop HRW wheat. We are targeting just below the 900 level on the upside while keeping an eye on recent lows for any violation of support.
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 830 – 842, with further support near 763 – 778. Should prices reverse higher, heavy resistance remains in the 920 – 930 area.
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.
About 59% of the US corn crop is still said to be experiencing drought conditions.
Some weather premium might be taken out of the marketplace, with the forecast looking for better conditions next week in the Midwest.
September corn on Brazil’s Bovespa exchange is trading near the equivalent of $5.11 per bushel, which is close to the lowest level in two years.
Argentina recently announced a new corn / peso exchange rate incentive to increase farmer selling. This could pressure futures as more supply enters the export market.
About 53% of the US soybean crop is still said to be experiencing drought conditions.
Private exporters reported 325,000 mt of soybeans for delivery to China, 171,460 mt for delivery to Mexico, and 413,000 mt for delivery to unknown (all during the 23/24 marketing year).
April biofuel use by soybean oil was a record 927 million pounds (up 10% from last year).
Malaysian palm oil is down for the fourth session in a row, however, soybean oil is trading higher at midday.
About 43% of the US spring wheat crop, and 47% of the winter wheat crop are still said to be experiencing drought conditions.
Due to dryness, the Canadian wheat crop could be closer to 30 mmt (vs the USDA at 35 mmt).
The final yield of the spring wheat tour in North Dakota came out at 47.4 bpa. The average is 40, last year was 49.1, and the USDA is currently using a yield of 47.
Paris milling wheat futures are headed for a fourth lower close in a row, and a gap remains below the market that may eventually be filled. French soft wheat harvest is reported to be 83% complete.
Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing by Stewart-Peterson and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Stewart-Peterson Inc. Reproduction of this information without prior written permission is prohibited. Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Reproduction and distribution of this information without prior written permission is prohibited. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing.
Stewart-Peterson Inc., Stewart-Peterson Group Inc., and SP Risk Services LLC are each part of the family of companies within Total Farm Marketing (TFM). Stewart-Peterson Inc. is a publishing company. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services LLC is an insurance agency. A customer may have relationships with any or all three companies.
Corn is trading lower this morning after scattered showers fell across the Midwest. Radar is showing rain falling over northern Illinois this morning with more expected in Wisconsin and Michigan.
For states in the Corn Belt that have not received these showers and are dealing with triple digit temperatures, crops are struggling, but NOAA is predicting a wetter and cooler forecast for August.
In Brazil, September corn on the Bovespa exchange is trading near the equivalent of $5.11 a bushel, near the lowest level in 2 years and serious competition for US exports.
The new drought monitor was released and showed corn crops experiencing drought rose by 4 points from the previous week to 59% following three consecutive weeks of decline.
Soybeans are trading lower this morning, perhaps finding some technical resistance after the rally. Soybean meal is lower while soybean oil is trading higher.
According to the drought monitor, 20% of soybean areas are dealing with D2 drought conditions 0r worse, and if the weather doesn’t improve in August, yields could be very poor.
Only 83.5 million acres of US soybeans were planted in 2023 and with crop conditions poor, this year’s production will likely fall short of demand. At least there is Brazil with seemingly enough s0ybeans for everyone.
A silo blast in southern Brazil killed 8 people and 1 is still missing. The cause of the explosion is unknown, and the people killed were foreign workers, mostly Haitian.
Wheat is trading lower this morning along with the rest of the grain complex, likely due to the spring wheat tour which is seeing yields at 47.4 bpa, not great, but above the USDA’s estimate of 47.0 bpa.
Big concerns are in South Dakota, Montana, and the southern half of the Canadian Prairies as they deal with extremely dry conditions and very little rain forecast over the next 7 days.
The way things are looking right now, Ukraine will hardly be able to export any grain now that the Black Sea and Danube River route are closed to them. 73% of Ukraine’s grain was shipped out of the Black Sea.
The Eu has cut their soft wheat crop estimate by 2.5 mmt and harvest is now seen at 126.4 mmt, below a June estimate for 128.9 mmt.
Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing by Stewart-Peterson and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Stewart-Peterson Inc. Reproduction of this information without prior written permission is prohibited. Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Reproduction and distribution of this information without prior written permission is prohibited. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing.
Stewart-Peterson Inc., Stewart-Peterson Group Inc., and SP Risk Services LLC are each part of the family of companies within Total Farm Marketing (TFM). Stewart-Peterson Inc. is a publishing company. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services LLC is an insurance agency. A customer may have relationships with any or all three companies.
Corn futures closed mixed with nearby months lower and deferred contracts higher, as rainfall chances increased for this coming weekend across the I-states compared to early week forecasts.
Despite a daily flash sale of soybeans to unknown destinations this morning, soybeans, soybean meal and soybean oil all closed lower on the day.
A Russian submarine attack on a Ukrainian port overnight was not enough to rally the entire wheat complex. Chicago wheat posted losses; Kansas City wheat closed mixed, while spring wheat closed higher across the board.
A potential bullish reversal in the US Dollar Index today could have aided in the general weakness across the commodity complex.
To see the current 1–7-day precipitation outlook courtesy of the Weather 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. Now, the threat of dry weather and heightened tensions in the Black Sea region has rallied Dec corn sharply off that July 13 low. 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.
Corn futures saw mixed to mostly lower trade on Thursday, as improved rainfall forecasts and ongoing concerns regarding demand had sellers in control in the market.
Weather models are forecasting improved rain chances into the weekend across Iowa, Illinois, and into Indiana, as potential storm clusters could build overtop of the heat ridge.
Weekly export sales were lackluster, as the USDA reported new sales of 12.4 mb of old crop and 13.2 mb of new crop sales last week. These totals were within market expectations. China remains inactive in the U.S. corn export market.
An above normal temperature forecast is still of concern into next week in large areas on the Corn Belt. The overall lack of moisture and heat may potentially stress the crop as the majority of the crop has moved into the pollination and ear fill stages.
The USDA reported that 59% of U.S. corn acres are experiencing drought. This was a 4% increase week over week. This will likely increase with the current forecast in next week’s report.
Above: In mid-July the corn market was oversold and posted a double bottom at 474. Since then, it has rallied and retraced about 62% of the prior down move toward the 50-day moving average. While the short-term trend remains up, the market is consolidating and becoming overbought. More bullish news will be needed for the market to forge through the recent highs toward the 595 – 625 resistance area. Below the market, nearby support may be found near 520, with key support near the recent 474 low.
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 began the day higher and were 13 cents away from the Nov contract high in the overnight, but ultimately closed lower along with lower soybean meal and oil despite a flash sale and decent export sales.
A private sale of 256,000 metric tons of new crop soybeans was reported to unknown destinations, which makes the third flash sale in the past two days. All three sales were to unknown destinations and were for the 23/24 marketing year. It is possible that the purchaser is China.
Today’s export sales report showed soybean exports at 27 mb, which was in line with expectations. Old crop commitments were at 1.939 bill, down 11% from last year’s pace, which is more than the USDA forecast of down 8%.
Weather forecasts may have added some pressure to the soy complex today. While the next week is still slated to be hot and dry, forecasts for the second week and beyond are showing lower temperatures and better chances for rain into the crucial pod fill timeframe.
Above: The soybean charts rolled from the August to the September contract on 7/17 with the 75-cent discount to the September represented by the 52 cent gap on the chart between 7/14 and 7/17. Since the roll the September contract has rallied to fill the gap and is poised to test the 1490 – 1505 resistance area of the recent highs. If prices retreat, initial support below the market is near 1400 with further support being in the 1350 – 1390 area.
Wheat
Market Notes: Wheat
On today’s export sales report, the USDA reported wheat export sales of 8.6 mb for 23/24.
After a two-sided trade, Chicago wheat closed the session with losses, KC was mixed, but MPLS posted gains. This could be due to the mounting concern about the spring wheat crop in Canda. While they might be getting some rain soon, that moisture may be too late to help the crop much.
A Russian submarine fired missiles overnight, attacking the Odessa port in Ukraine. The wheat market did not seem to care much about this news though. It is worth noting that NATO said they will be increasing surveillance in the Black Sea with aircraft and drones.
Argentina is still dry – it remains to be seen how that will impact their wheat planted acreage. Elsewhere, Agritel is estimating French soft wheat production up 1.1 mmt from last year at 34.8 mmt. This is a 1.3% increase from the five-year average.
The spring wheat tour’s second day in North Dakota resulted in a yield estimate of 45.7 bpa. This is down 2 bpa from last year for the same area, and the USDA is projecting North Dakota yield at 47 bpa).
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: Rising tensions in the Black Sea have fed the rally that tested the June high. Prices have become overbought and retreated. New bullish input will likely be needed to turn prices back higher and test the heavy resistance area of 777 – 807-1/2 between the recent high and the February high. If prices do retreat, initial support may be found near 690 – 700, and again around 610 – 650.
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.
Patience is warranted for the 2024 crop. With continued issues in the Black Sea region and with major exporting countries’ stocks at 11-year lows,we are willing to be patient with further sales of New Crop HRW wheat. We are targeting just below the 900 level on the upside while keeping an eye on recent lows for any violation of support.
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 830 – 842, with further support near 763 – 778. Should prices reverse higher, heavy resistance remains in the 920 – 930 area.
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.
The USDA reported corn export sales of 12.4 mb for 22/23 and 13.2 mb for 23/24.
The Fed did raise interest rates yesterday, however, they did not say anything about what they may do down the road. This has traders wondering what they might do in September in terms of pausing or issuing another increase.
Hot temperatures will hit the Corn Belt today, with 90-100 degrees in South Dakota, Iowa, and Illinois.
European nations have said they will help Ukraine to export their grain via truck and railway, but there is question as to how much can be transported this way.
The USDA reported soybean export sales of 7.3 mb for 22/23 and 20.0 mb for 23/24.
Private exporters reported sales of 256,000 mt of soybeans for delivery to unknown during the 23/24 marketing year.
Chinese Dalian soybean meal prices are making new contract highs.
Lower palm oil continues to weigh on US soybean oil futures.
The USDA reported wheat export sales of 8.6 mb for 23/24.
Overnight, Russia launched missiles from a submarine into the Odesa port, keeping the wheat market volatile.
Day two of the spring wheat tour in North Dakota found a yield of 45.7 bpa (the USDA is projecting 47 bpa for North Dakota).
Taiwan Flour Millers booked 108,000 mt of US milling wheat overnight.
Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing by Stewart-Peterson and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Stewart-Peterson Inc. Reproduction of this information without prior written permission is prohibited. Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Reproduction and distribution of this information without prior written permission is prohibited. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing.
Stewart-Peterson Inc., Stewart-Peterson Group Inc., and SP Risk Services LLC are each part of the family of companies within Total Farm Marketing (TFM). Stewart-Peterson Inc. is a publishing company. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services LLC is an insurance agency. A customer may have relationships with any or all three companies.
Corn is trading just slightly higher this morning but was lower overnight as weather forecasts remain mixed with showers for some parts of the Corn Belt but mostly hot and dry.
US ethanol stocks rose by 0.3% to 23.228m bbl, and analyst were expecting 23.17 mln bbl. Plant production was 1.09 m b/d compared to survey averages of 1.058.
Last night, Russia struck port infrastructure in Ukraine’s Odesa region again, killing a security guard and damaging a cargo terminal.
A severe dry spell in Indonesia has spurred farmers there to switch from rice to corn with the government planning to import rice.
Soybeans are higher this morning and overnight the Nov contract got 13 cents away to reaching the contract high at 14.48. Soybean meal is higher but soybean oil is bear spread with the two front months lower and deferred months higher.
Analysts have raised their projections for 2024 palm oil prices on tight supplies amid the El Nino weather pattern. This could be supportive for soybean oil.
The Midwest is expected to have two more days of extreme heat before temperatures drop, and there is not much rain forecast outside of Wisconsin and Michigan over the next 7-days.
The National Weather Service and DTN’s forecasts for August are a bit at odds with NOAA expecting above normal rains in the southern Midwest while DTN sees better chances in the western Plains with above normal temperatures. The USDA’s last yield guess was 52.0 bpa which may be too high.
Wheat is trading higher this morning with KC leading the way up followed by Minn after Russia struck the port city of Odesa again and the crop tour data is released.
Day 2 of the crop tour covers North Dakota which was hit by drought and therefore shows an average yield of 45.7 bpa compared to last years tour data of 47.7 bpa.
Russia has said that it will provide free grain to six African countries over the next three to four months in the amounts of between 25,000 and 50,000 tons each.
Agritel sees France soft wheat production up 3% year over year in 2023 with production at 34.8 mmt, 1.1 mmt higher than the previous year.
Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing by Stewart-Peterson and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Stewart-Peterson Inc. Reproduction of this information without prior written permission is prohibited. Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Reproduction and distribution of this information without prior written permission is prohibited. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing.
Stewart-Peterson Inc., Stewart-Peterson Group Inc., and SP Risk Services LLC are each part of the family of companies within Total Farm Marketing (TFM). Stewart-Peterson Inc. is a publishing company. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services LLC is an insurance agency. A customer may have relationships with any or all three companies.
Beneficial rain in parts MN, WI, and northern IL, a lack of fresh bullish news, and carryover weakness from the wheat market led to weakness and profit taking in the corn market.
The soybean market closed wildly mixed with August and September likely getting support from strong crush margins, while November and the deferred contracts were unchanged on weakness from soybean oil and neighboring grain markets.
Despite the mixed close in soybeans, strong demand for soybean meal continues to support meal prices, while reports of a 51% increase in Indonesian palm oil exports vs last month weighed on soybean oil.
High initial spring wheat yield estimates from the North Dakota spring wheat tour, and no new reports of Russian attacks on Ukrainian grain terminals led to a sharply lower close in all three wheat classes with K.C. leading the way.
Some of the general weakness in the markets today could be contributed to the anticipation of today’s .25% interest rate increase by the Federal Reserve. While it has been generally thought that the Fed would pause any further increases after today, the Fed left the door open for another rate hike down the road.
To see the current US 6-10 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
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. Now, the threat of dry weather again has rallied Dec corn more than 80 cents off that July 13 low. 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 likely saw some profit taking following the recent runup and yesterday’s choppy price action since there was little fresh news to help the bull camp push prices higher. Additionally, pressure from a sharply lower wheat market spilled over into the corn market and helped lead prices lower.
Ethanol production for the week ending July 21 in today’s EIA report was friendly at 1.094 mil. barrels/day, 36k b/d above expectations and exceeded the 2018 record of 1.074 mil. b/d. Corn used for ethanol production reached 110 mb, which is above the pace needed to reach the USDA’s forecast. Despite the strong production numbers, ethanol stocks were steady at 23.2 mil. barrels, suggesting strong gasoline demand.
The lack of any reports of new attacks on Ukrainian grain facilities along the Danube River likely contributed to the selling in the corn and wheat markets as participants took out some near-term risk premium. Also in response to the recent attacks on the Danube River facilities, the EU has also pledged to help Ukraine export almost all its grain via road and rail connections through bordering countries.
According to Britain’s UN ambassador Barbara Woodward, Russia may have laid new mines in the waters near Ukrainian ports in the Black Sea and that the Russian military may target civilian ships in the area.
Parts of Minnesota, Wisconsin, and northern Illinois received between 1.5” – 3” of rain over the last 24 hours. Michigan and Wisconsin again are expected to receive decent amounts over the next few days, while much less is expected for the rest of the Midwest, with hot temperatures expected in the Western Corn Belt.
Above: In mid-July the corn market was oversold and posted a double bottom at 474. Since then, it has rallied and retraced about 62% of the prior down move toward the 50-day moving average. While the short-term trend remains up, the market is consolidating and becoming overbought. More bullish news will be needed for the market to forge through the recent highs toward the 595 – 625 resistance area. Below the market, nearby support may be found near 520, with key support near the recent 474 low.
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 mixed with August and September posting significant gains, while the deferred contracts ended relatively unchanged. Soybean meal supported soybeans today with a higher close, while soybean oil ended lower. While August Board Crush was down 32 cents, closing at 249 cents/bu today, soybean crush incentives have also been very high, adding to the support of nearby soybeans.
Soybeans also received support from news on the export wire with two soybean sales reported today. The first sale was for 272,000 metric tons sold to unknown destinations for 23/24 and the second sale was for 229,000 metric tons again to unknown destinations for the 23/24 marketing year. The purchaser could have been China stocking up on supplies.
Soybean oil was dragged lower by another poor close in palm oil futures, but soybean meal closed higher for the ninth time in the past ten trading days on good export sales and new crop sales that are reportedly 32% higher than a year ago.
Weather forecasts are hot and dry into Saturday for most of the Midwest, but some northern states have been receiving rain, and the 2-week forecast is showing precipitation levels closer to normal. Private yield scouts are estimating yields between 50.5 bpa and 51 bpa, below the USDA’s estimate of 52.0 bpa.
Above: The soybean charts rolled from the August to the September contract on 7/17 with the 75-cent discount to the September represented by the 52 cent gap on the chart between 7/14 and 7/17. Since the roll the September contract has rallied to fill the gap and is poised to test the 1490 – 1505 resistance area of the recent highs. If prices retreat, initial support below the market is near 1400 with further support being in the 1350 – 1390 area.
Wheat
Market Notes: Wheat
Wheat closed sharply lower in all three US futures classes. Ealy weakness may have stemmed from anticipation that the Fed would issue another interest rate increase today. This afternoon it was announced that they did in fact raise rates to help tame inflation, but this also renewed recession fears by leaving the door open for another rate hike.
The first day of the spring wheat crop tour in North Dakota resulted in a yield estimate of 48 bushels per acre. While the average is around 40 bpa and last year’s yield was 48.9 bpa.
Putin met with African leaders to discuss grain exports to their nations. Meanwhile, Ukraine continues to ask the EU for alternative methods of exporting their grain. So far, there have been no additional headlines of Russian attacks on Ukrainian ports or grain facilities.
Russia remains the world’s cheapest source of wheat and is reportedly $50 per ton below that of Baltic or European offers.
According to the International Monetary Fund, Russia’s withdrawal from the Black Sea grain deal could result in grain prices increasing by 10-15%.
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: Rising tensions in the Black Sea have fed the rally that tested the June high. Prices have become overbought and retreated. New bullish input will likely be needed to turn prices back higher and test the heavy resistance area of 777 – 807-1/2 between the recent high and the February high. If prices do retreat, initial support may be found near 690 – 700, and again around 610 – 650.
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.
Patience is warranted for the 2024 crop. With continued issues in the Black Sea region and with major exporting countries’ stocks at 11-year lows,we are willing to be patient with further sales of New Crop HRW wheat. We are targeting just below the 900 level on the upside while keeping an eye on recent lows for any violation of support.
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 830 – 842, with further support near 763 – 778. Should prices reverse higher, heavy resistance remains in the 920 – 930 area.
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.
Michigan and Wisconsin are expected to get decent rains over the next few days, but much less is expected for the remainder of the Midwest. The western Corn Belt is also expected to be hot.
Weakness in commodities this morning may be tied to anticipation of another interest rate increase by the Fed this afternoon.
Several crop scouts are lowering their estimates of corn yield to around 173-174 bpa.
Last year, China imported 11 mmt of corn from Ukraine. Given recent circumstances, they might now need to look for alternative sources.
Private exporters reported two sales of soybeans for delivery to unknown during the 23/24 marketing year. One sale was for 229,000 mt and the other was 272,000 mt.
India is said to be considering dropping the import duty on edible vegetable oils.
There is talk that Chinese domestic crush margins on soybeans are improving.
New crop US soybean meal exports are up 32% from last year, while Argentina meal exports are down 30%.
Day one of the spring wheat crop tour in North Dakota found a yield of 48 bpa. This compares with 48.9 bpa last year and an average of around 40 bpa.
Next week, Canada will receive rain, but it may be too late to offer much help to their spring wheat crop.
A lack of new attacks on Ukraine ports may have wheat on the defensive. However, it is being reported that Russia has planted sea mines and may consider attacks on civilian vessels in the Black Sea.
Russia is still the cheapest source of wheat globally, said to be $50 per ton less than Baltic or European offers.
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.
