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Opening Update: July 26, 2023

Bygmidev

All prices as of 6:30 am Central Time

Corn

SEP ’23 550.75 -6.75
DEC ’23 558.75 -6.5
DEC ’24 539.5 -2

Soybeans

AUG ’23 1518.5 3
NOV ’23 1421 1
NOV ’24 1307 -1

Chicago Wheat

SEP ’23 742.75 -17.5
DEC ’23 763.25 -17.5
JUL ’24 775.5 -12.75

K.C. Wheat

SEP ’23 900 -12.75
DEC ’23 909 -11.75
JUL ’24 860 -9.25

Mpls Wheat

SEP ’23 927.25 -4.75
DEC ’23 935.25 -6.75
SEP ’24 860.5 -7

S&P 500

SEP ’23 4589.75 -6.25

Crude Oil

SEP ’23 78.79 -0.84

Gold

OCT ’23 1994.1 11

  • Corn is trading lower this morning as scattered showers appear on the radar for Minnesota and Wisconsin with heavier rains to be expected there over the next few days, but the Corn Belt’s forecast remains hot and dry.

  • In Brazil, September corn on the Bovespa exchange is trading near the US equivalent of 5.07 a bushel due to their record 2023 corn crop, and the US is struggling to compete with exports.

  • Estimates for ethanol production and stockpiles sees production lower than last week at 1.058 million barrels per day, and the stockpile estimates slightly higher than a week ago.

  • Brazilian corn exports were seen reaching 6.43 mmt in July compared to an estimated 6.8 mmt forecast the previous week.

  • Soybeans are trading higher this morning led by gains in soybean meal while soybean oil trades lower. The weather outlook into August has trade worried about final yields which has helped support prices.

  • While Brazil’s record soy crop has made US soy exports difficult, good demand for soy products domestically has been a very bearish factor sending new crop contracts nearly to contract highs.

  • The current incentive to crush soybeans is near its highest levels on record due to big boosts in the values of soybean meal and oil.

  • 19% of the Midwest is in D2 to D4 drought conditions with soy crops also dealing with hot temperatures. Some analysts believe that the USDA’s estimate for 52.0 bpa soybeans is too high.

  • Wheat is trading lower this morning as traders tire of news out of the Black Sea and focus on the crop at home with new yield estimates from the wheat tour.

  • It is day 2 of the Wheat Quality Council’s Spring Wheat and Durham Tour, and yesterday’s tour ended with a yield estimate of 48.1 bpa which is below last year, but was higher than the USDA’s estimate of 47 bpa.

  • The International Monetary Fund said that the suspension of the Black Sea grain deal could drive global prices up by 10-15%, but much of this is likely already priced in.

  • The Russian wheat harvest has been slowed by heavy rains, and only 14% of planted areas have been harvested as of July 20, compared to 22% last year.

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

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

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

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Grain Market Insider: July 25, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • After trading both sides of unchanged in the overnight session, the corn market succumbed to “turn around Tuesday”, as the market consolidated following choppy trade in the wheat market.

  • Despite lower crop ratings and a strong soybean meal market, soybeans consolidated from yesterday’s gains and followed soybean oil lower, although the November contract was able to close 17 cents off the day’s low.

  • Choppy trade in the wheat markets with no new headlines of Russian attacks on Ukrainian grain facilities led the complex to close mixed. Chicago showed small gains, while both K.C. and Minneapolis contracts settled mixed with front months weaker and deferred months stronger.

  • To see the current 5-Day Mean Temperature Forecast and 5-day precipitation forecast 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 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. 

  • Corn futures saw consolidative trade on Tuesday as the market took a pause with choppy trade, as the wheat market led over the direction of the corn trade. Despite trading lower on the day, corn futures traded near the top end of the trading range towards the close on favorable price action.

  • The USDA released weekly crop ratings on Monday afternoon. U.S. crop was rated 57% good to excellent, which was unchanged with last week and slightly below expectations. The rating was 4% below last year’s 61% good to excellent rating for the week.

  • Hot weather forecasts support the market as high temperatures pushing into the 100-degree range will work into the Corn Belt. The excessive heat could impact yield with 68% of the corn crop in the silking stage. These high temperatures arrive in the key pollination window for many corn acres. Temperatures are expected to moderate next week.

  • The wheat market is leading the corn market direction. Chicago wheat prices had a volatile session, but close above key resistance. The ongoing conflict in the Ukraine and the improved technical picture could trigger additional strength in the wheat market, which could spill over into the corn market, triggering additional short covering in the corn market.

Above: In mid-July the corn market was oversold and posted a double bottom at 474. Since then, it has rallied significantly toward the 50-day moving average. While the market has upward momentum, it may run into resistance near the 50-day MA. If the market closes above the 50-day MA, it could signal a change in trend to higher, though heavy resistance remains up towards 595 – 625 and it would need further bullish news to break through. Below the market, key support lies near the recent 474 low. 

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 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, but came back significantly from the overnight lows. Soybean meal ended higher, while soybean oil was mixed with the two front months closing higher and the deferred months lower.

  • The lows earlier in the day were partially a result of palm oil, which ended the day 2.3% lower, which then dragged down soybean oil. Soybean oil recovered on news that the number one veg oil importer, India, would import 46% more edible oils in July than the previous month.

  • With the Black Sea grain deal ended and the fighting between Russia and Ukraine escalating, exporting sunflower meal and oil out of the region will be difficult, which should give support to soybean meal and oil, as India and other countries appear to be stocking up.

  • The USDA released their Crop Progress report yesterday afternoon, which showed the soybean crop’s good to excellent rating slip by 1 point to 54% after heat and periods of dryness. 70% of the crop is blooming and 35% are setting pods, both figures are ahead of the yearly average. Missouri and Michigan received good to excellent ratings of only 27% and 33%, and the upcoming hot and dry forecast could significantly impact yields.

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. To fill the gap, the market will need additional bullish news to continue higher and trade through the heavy resistance area of 1490 – 1505. If not, and prices retreat, initial support below the market is near 1400 with further support being in the 1350 – 1390 area.

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

Wheat

Market Notes: Wheat

  • According to the USDA, the winter wheat crop is 68% harvested, still behind the average of 77% complete. Additionally, the spring wheat crop condition declined 2% from last week, now seen at 49% good to excellent.

  • After trading both sides of unchanged, Chicago wheat posted small gains today. For the second day in a row, December Chicago wheat closed above the 200 day moving average, which it has not closed above since November 2022 (though it did trade above that level on June 26th).

  • The market may have taken a bit of a breather today, with no headlines of new Russian attacks. The grain warehouses and infrastructure that were recently damaged along the Danube River does raise the question as to how much grain Ukraine will be able to export though. After the attacks, 30 vessels are said to be stranded along the river.

  • Russia’s internal wheat prices are said to be surging, but they remain the world’s cheapest source of wheat, now seen at $242 per metric ton.

  • Russia’s Deputy Foreign Minister, Sergei Vershinin, stated that there are currently no talks in regard to resuming the Black Sea Grain initiative. Since the closure of the deal, Ukraine has asked the European Union for an increased volume of shipments via alternative routes / methods. Several surrounding nations still have a ban on Ukrainian grain imports, however.

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. Though the market is becoming overbought, further uncertainty or bullish input could push prices towards resistance near February’s high of 807-1/2. 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: K.C. wheat continues to be volatile and is testing the upper end of the trading range established back in May. With heavy resistance remaining near 920, the market will need additional bullish input to push higher and test the 966 – 991 range.  Below the market, initial support is near 830 – 842, with further support near 763 – 778.

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

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.

  • Grain Market Insider sees an active opportunity to sell a portion of your 2024 spring wheat crop. So far this year we have seen some of the volatility from the 2023 crop, with its challenges from late planting and now dryness, be carried over to the 2024 crop. We are now at that time of year where there are typically more headwinds to prices than tailwinds, and to begin getting some early sales on the books. Now that the market has rallied to within 15 cents of the June high where there is significant overhead resistance, Insider recommends making a sale on a portion of your 2024 spring wheat production by using either SEPT ’24 Minneapolis Wheat futures contracts or a SEPT ’24 HTA contract, so basis can be set a later, more advantageous time. While $8 prices are not the $9 or $10+ that we have seen in recent years, and weather and geopolitical disruptions can still shock the market higher, they still represent historically good prices to begin making sales.

Above: The September contract has rallied in excess of 100 cents from the July low and is showing signs of being overbought, while pushing into the 889 – 940 resistance area. If the market cannot push higher, initial support may be found near 865 – 845 and again around 800.

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: July 25, 2023

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn
SEP ’23 554 -6.5
DEC ’23 561.5 -6.75
DEC ’24 543.5 -1.5
Soybeans
AUG ’23 1505.75 -17.5
NOV ’23 1406.5 -18
NOV ’24 1298.5 -15.5
Chicago Wheat
SEP ’23 754.25 -3.25
DEC ’23 774.5 -3
JUL ’24 781 -5.75
K.C. Wheat
SEP ’23 907 -11.5
DEC ’23 914.25 -11
JUL ’24 860 -5
Mpls Wheat
SEP ’23 928 -8
DEC ’23 937.5 -7
SEP ’24 864.25 -1
S&P 500
SEP ’23 4588.75 5.25
Crude Oil
SEP ’23 79.11 0.37
Gold
OCT ’23 1983.1 1.5

  • The US corn crop was rated 57% good to excellent, the same as last week.

  • Temperatures will be hot this week in the western Corn Belt, but parts of the northcentral Midwest have chances for rain over the next five days or so.

  • The Fed is expected to issue another interest rate increase tomorrow afternoon, which may ultimately affect commodity prices, as well as renew concerns about recession.

  • Crude oil is higher at midday, and is at the highest level since April.

  • The US soybean crop was rated 54% good to excellent, down 1% from last week.

  • August soybean oil closed at 71.99 yesterday. This is the highest close in over a year.

  • India will reportedly import 46% more edible oils in July than in June, and are building supplies with exports of Ukrainian sunflower oil being cut off.

  • China’s purchase of US soybeans yesterday was the first by them since late June.

  • The US spring wheat crop was rated 49% good to excellent, down 2% from last week.

  • The US winter wheat harvest is 68% complete, vs 77% average.

  • Russia attacked grain warehouses and infrastructure at the port of Reni in Ukraine (near Romania). There is still much uncertainty as to how much grain they will be able to export at this point. Reportedly, 30 vessels have been stranded along the Danube river.

  • Despite their domestic wheat prices surging, Russia still is the cheapest source of wheat globally.

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: July 25, 2023

Bygmidev

All prices as of 6:30 am Central Time

Corn

SEP ’23 549 -11.5
DEC ’23 556.75 -11.5
DEC ’24 539.5 -5.5

Soybeans

AUG ’23 1509.25 -14
NOV ’23 1409.25 -15.25
NOV ’24 1297.5 -16.5

Chicago Wheat

SEP ’23 747 -10.5
DEC ’23 766.25 -11.25
JUL ’24 776.25 -10.5

K.C. Wheat

SEP ’23 916.25 -2.25
DEC ’23 923.25 -2
JUL ’24 864 -1

Mpls Wheat

SEP ’23 933.5 -2.5
DEC ’23 942 -2.5
SEP ’24 871.5 6.25

S&P 500

SEP ’23 4589 5.5

Crude Oil

SEP ’23 79.03 0.29

Gold

OCT ’23 1974.4 -7.2

  • Corn is trading lower this morning after yesterday’s rally that was led by more attacks by Russia in Ukraine and the hot and dry forecast.

  • Yesterday, the USDA said that 57% of the corn crop is rated good to excellent compared to 57% last week and 61% a year ago. 68% of the crop is silking.

  • Temperatures for most apart from northeastern areas of the Corn Belt will reach the 90’s today, and triple digits are expected in Kansas. Drought remains a big concern.

  • On Monday, Russia destroyed grain warehouses on the Danube River, and now nearly 30 ships have dropped anchor near Ukraine’s Izmail port city.

  • Soybeans are trading lower this morning and have given back most of yesterday’s gains as prices meet resistance near their December high and not far from their contract high.

  • Yesterday’s crop progress report showed soybeans at a 54% good to excellent rating which was down slightly from last week’s 55% and below last year’s 59%. 70% of soybeans are blooming compared to 56% last week, and 35% are setting pods.

  • Weather in the northwestern Plains and Midwest have better rain chances over the 6 to 10-day forecast along with milder temperatures that could help soybeans that are setting pods.

  • Yesterday’s export inspections report showed soybean inspections at 10.4 mb which puts total inspections at 1.844 bb, down 5% from last year.

  • Wheat is faring better than corn and soybeans this morning with Chicago only down slightly and KC a bit higher after yesterday’s rally.

  • A Russian diplomat has said that there are no talks on restoring the grain deal, and based on Russia’s actions in targeting grain facilities, it does not seem like an agreement will be struck anytime soon.

  • USDA’s crop progress was released yesterday afternoon and showed 49% of spring wheat rated good to excellent vs 51% last week. The winter wheat harvest advanced to 68% complete vs 56% last week.

  • Ukraine has asked the EU for more export transit with the Black Sea deal ended and Ukraine struggling to export what grain they have left.

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: July 24, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Rising tensions in the Black Sea region and hot weather led to short covering and nearly 6% gains in the December corn futures.

  • A hot and dry week ahead and Russian attacks on the Danube River lead traders to add weather and war premium to prices.

  • Higher crude oil and sharply higher Malaysian palm oil helped lead soybean oil to gain more than 3% and gave additional support to soybeans and meal which were up 1.6% and 0.76% respectively in the November and December contracts.

  • Reports of Russian attacks damaging grain infrastructure along the Danube River in Ukraine led to short covering in the Chicago contracts with a limit up close in the September contract, while K.C. and Minneapolis were not far behind in the rally.

  • The US dollar continued its rally for the fifth day in a row as traders expect the Fed to raise short-term interest rates 0.25% at this week’s meeting. The dollar is also thought to be gaining support on thoughts that the EU recovery may be stymied by additional, potentially unnecessary rate hikes in that region. Nevertheless, the grain markets so far are overcoming any bearish influence a rising dollar may have.

  • To see the current 7-day precipitation forecast and 6-10 Day Temperature and Precipitation Outlooks courtesy of the Climate Prediction Center, scroll down to the other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  • 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 added weather and war premium as wheat futures traded limit higher, fueling strong double-digit gains in the corn market.

  • Russian attacks of Ukraine ports on the Danube River triggered a short covering rally in the corn and wheat markets, and the market added war premium on the potential of additional escalation in the Black Sea region. 

  • Demand remains a concern. Weekly export inspections for corn were within expectations at 300,000 MT. Overall export shipment pace is still disappointing and trending down 33% below last year’s levels with the marketing year ending on August 30.

  • Above average temperature and limited rainfall supported the corn market, but the market may shift its focus to the early August weather forecast, which is looking toward overall cooler temperatures and average rainfall for the majority of the corn belt. 

  • USDA is expected to see weekly crop ratings improve to 58% good/excellent for corn on this week’s crop ratings, up 1% from last week’s estimates. This will make four consecutive weeks of improved corn crop ratings as July weather has been more favorable.

Above: In mid-July the corn market was oversold and posted a double bottom at 474. Since then, it has rallied significantly toward the 50-day moving average. While the market has upward momentum, it may run into resistance near the 50-day MA. If the market closes above the 50-day MA, it could signal a change in trend to higher, though heavy resistance remains up towards 595 – 625 and it would need further bullish news to break through. Below the market, key support lies near the recent 474 low. 

Money Corn Managed Money Funds net position as of Tuesday, July 18. Net position in Green versus price in Red. Managers net bought 16,126 contracts between July 11 – 18, bringing their total position to a net short 46,926 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. 

  • The soybean complex traded higher today, led by a strong meal and sharply higher soybean oil, as the market priced in additional weather and war premium to prices.

  • US export inspections released this morning for the week ending July 20 were on the high side of expectations at 283,000 mt, and 77% higher than last week, though still behind the pace needed to reach the USDA’s goal. This brings the annual total to 50,177 mt, which is down 5% from the same time last year.

  • Adding further support to the market, the USDA reported a flash sale to China totaling 121,000 tonnes of soybeans for the 23/24 marketing year. The last reported sale of soybeans to China was June 30, nearly one month ago.

  • There were reports of a Russian drone attack on Ukrainian Danube River ports. The attack reportedly lasted over 4 hours, destroying one grain storage facility, and injuring 4 workers. The Danube River remains a key artery for grain exports following the closure of the Black Sea corridor, and reports of the attack likely added bullish support to world veg oil prices and soybean oil, because Ukraine is a key sunflower meal and oil exporter.

  • Weather is also a factor for soybeans, and this week warm dry temperatures will continue to stress the crop throughout much of the Midwest. There are better rain chances in the 6-10 day forecast, however.

  • Seasonal maintenance for crush facilities has slowed crush pace somewhat, which has tightened soybean meal supplies and been supportive to meal basis values and prices.

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. To fill the gap, the market will need additional bullish news to continue higher and trade through the heavy resistance area of 1490 – 1505. If not, and prices retreat, initial support below the market is near 1400 with further support being in the 1350 – 1390 area.

Soybeans Managed Money Funds net position as of Tuesday, July 18. Net position in Green versus price in Red. Money Managers net bought 13,066 contracts between July 11 – 18, bringing their total position to a net long 95,814 contracts.

Wheat

Market Notes: Wheat

  • September Chicago wheat closed limit up (60 cents higher) today after headlines reported that Russia attacked the Danube River area in Ukraine. Destruction of grain and infrastructure was significant; after the closure of the Black Sea corridor, this was one of the key remaining methods for Ukraine to export grain. Reportedly, they planned for 2-3 mmt of grain exports per month via the Danube River, but that amount may now be severely limited if possible.

  • Weekly wheat inspections of 13.2 mb bring the 23/24 total inspections to 79 mb, still down 17% from last year. So far, wheat inspections are behind the pace needed to meet the USDA’s 725 mb export goal.

  • Paris milling wheat futures also settled sharply higher, with the front month September gaining 17.50 Euros per ton. This contract is approaching the 200-day moving average, around 267, which it has not traded above since November of 2022.

  • Though it has taken a back seat to the war news, the US Dollar Index continues to claw back from the recent low. At this week’s FOMC meeting, the Fed is expected to issue a 25 basis point interest rate increase; this could affect the US Dollar, which may in turn affect wheat.

  • The Taiwan Flour Miller’s Association is tendering for 108,000 mt of wheat to be sourced from the US.

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 are off their recent highs, 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: In June, when September wheat posted a bearish reversal it left significant resistance near 730 – 770. Rising tensions in the Black Sea have triggered a rally which is testing this area, and the market will need additional bullish input to rally beyond and test the 800 level. If prices do retreat, support below the market may be found around 650 – 610, and again near 570, the May low.  

Chicago Wheat Managed Money Funds net position as of Tuesday, July 18. Net position in Green versus price in Red. Money Managers net sold 2,290 contracts between July 11 – 18, bringing their total position to a net short 54,418 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.

  • 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: KC wheat continues to be volatile and trade within the broad 736 – 919 range established back in May. Momentum favors higher prices, though heavy resistance remains between 890 – 920 and the market will need additional bullish input to push higher. Below the market, initial support remains near 778 – 763 with key support around the May low of 736.

K.C. Wheat Managed Money Funds net position as of Tuesday, July 18. Net position in Green versus price in Red. Money Managers net sold 1,934 contracts between July 11 – 18, bringing their total position to a net long 12,650 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.

  • Grain Market Insider sees an active opportunity to sell a portion of your 2024 spring wheat crop. So far this year we have seen some of the volatility from the 2023 crop, with its challenges from late planting and now dryness, be carried over to the 2024 crop. We are now at that time of year where there are typically more headwinds to prices than tailwinds, and to begin getting some early sales on the books. Now that the market has rallied to within 15 cents of the June high where there is significant overhead resistance, Insider recommends making a sale on a portion of your 2024 spring wheat production by using either SEPT ’24 Minneapolis Wheat futures contracts or a SEPT ’24 HTA contract, so basis can be set a later, more advantageous time. While $8 prices are not the $9 or $10+ that we have seen in recent years, and weather and geopolitical disruptions can still shock the market higher, they still represent historically good prices to begin making sales.

Above: The September contract has rallied nearly 100 cents from the July low and is showing signs of being overbought while pushing into the 889 – 940 resistance area. If the market cannot push higher, initial support may be found near 865 – 845 and again around 800. 

Minneapolis Wheat Managed Money Funds net position as of Tuesday, July 18. Net position in Green versus price in Red. Money Managers net bought 2,304 contracts between July 11 – 18, bringing their total position to a net long 6,587 contracts.

Other Charts / Weather

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Midday Update: July 24, 2023

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn
SEP ’23 553.25 26.25
DEC ’23 561 24.75
DEC ’24 539.25 10.75
Soybeans
AUG ’23 1521 20
NOV ’23 1418 16.25
NOV ’24 1305.5 11.25
Chicago Wheat
SEP ’23 756.25 58.75
DEC ’23 775 57.25
JUL ’24 785.5 46.5
K.C. Wheat
SEP ’23 915.75 55.5
DEC ’23 920.75 54
JUL ’24 861.5 42.5
Mpls Wheat
SEP ’23 936.5 49.5
DEC ’23 944.75 48.25
SEP ’24 864.75 31.25
S&P 500
SEP ’23 4586.75 22
Crude Oil
SEP ’23 78.59 1.52
Gold
OCT ’23 1981.5 -4.3

  • The nearby weather forecast for the Midwest looks dry with temperatures warmer than normal. Areas west of the Mississippi could see 95-100 degree temperatures, though it may be a little cooler to the east.

  • The next FOMC meeting is this week, and the Fed is expected to raise interest rates again by 25 basis points.

  • Escalation between Russia and Ukraine has prices sharply higher this morning.

  • Brazil is in the process of harvesting the safrinha crop, with the International Grains Council saying that 68% has been harvested in Mato Grosso.

  • The USDA announced a sale of 121,000 mt of soybean for delivery to China for the 23/24 marketing year.

  • Weather is also a factor for soybeans, and the warm dry temperatures will continue to stress the crop throughout much of the Midwest. There are better rain chances in the 6-10 day forecast, however.

  • Both soybean meal and oil are higher this morning, offering a boost to soybeans. Strong domestic demand for these products, as well as profitable crush margins, should continue to provide support.

  • October palm oil futures are also supportive; they are near the contract high and the highest level since November.

  • Wheat is near limit up after Russia attacked the Danube River locations in Ukraine. After the closure of the Black Sea deal, this was the outlet for their domestic exports, which could have allowed 2-3 mmt of grain per month to be transported out of the country on the river. Now that ability has been severely reduced or possibly eliminated.

  • On Friday, the word was that Turkey and the UN would try to broker a deal to re-open Ukraine exports. Given the new attacks and escalation, it does not seem likely Russia will allow that to happen.

  • Matif wheat is also sharply higher on the war news, with some contracts having gapped higher and approaching the 200-day moving average. Matif futures have not been above the 200-day moving average since November 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: July 24, 2023

Bygmidev

All prices as of 6:30 am Central Time

Corn

SEP ’23 551.25 24.25
DEC ’23 560.5 24.25
DEC ’24 537.5 9

Soybeans

AUG ’23 1518.75 17.75
NOV ’23 1419.75 18
NOV ’24 1305.5 11.25

Chicago Wheat

SEP ’23 737.5 40
DEC ’23 757.25 39.5
JUL ’24 770.5 31.5

K.C. Wheat

SEP ’23 897 36.75
DEC ’23 903.25 36.5
JUL ’24 844.5 25.5

Mpls Wheat

SEP ’23 920.75 33.75
DEC ’23 926.25 29.75
SEP ’24 850 16.5

S&P 500

SEP ’23 4574 9.25

Crude Oil

SEP ’23 77.55 0.48

Gold

OCT ’23 1987.6 1.8

  • Corn is trading higher this morning on hot and dry weather this week and Russian strikes on Ukrainian infrastructure.

  • Temperatures this week are expected to reach 90 and 100 degree temps this week with little rain expected, which will likely stress the corn crop during pollination.

  • According to Ukraine’s agricultural minister, Russia trying to make it difficult to export grain via the Danube River, which is now one of Ukraine’s primary export channels. 

  • Grain shipping traffic in the Black Sea has fallen 35% in the last week, since Russia has declared that all ships heading for Ukrainian waters could be deemed as carrying weapons.

  • Soybeans and soybean meal are trading higher this morning, gaining support from sharply higher soybean oil, and hot and dry weather.

  • Temperatures this week are expected to reach 90 and 100 degree temps this week with little rain expected, which will likely add stress to the already struggling areas.

  • Soybean oil this morning is following a sharply higher Malaysian palm oil market which saw over 3% gains yesterday’s trade.

  • The added war premium that is being injected into the corn and wheat markets is also likely affecting world veg oil prices due to Ukraine’s role as a lead sunflower oil and meal exporter.

  • Wheat is trading higher this morning, erasing Friday’s losses, as it gains support from the corn market and adds war premium.

  • Grain shipping traffic in the Black Sea has fallen 35% in the last week, since Russia has declared that all ships heading for Ukrainian waters could be deemed as carrying weapons.

  • According to Ukraine’s agricultural minister, Russia trying to make it difficult to export grain via the Danube River, which is now one of Ukraine’s primary export channels. 

  • Many insurers have suspended coverage for grain shipments from Ukraine except from smaller ports along the Danube.

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: July 21, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Corn closed lower as traders likely took profits ahead of the weekend. Hefty losses in wheat also added pressure throughout the session.

  • The soybean market closed mixed, with Old Crop higher and New Crop slightly lower.

  • Soybean oil closed higher likely following crude, and soybean meal, like soybeans, saw higher trade in the nearby contracts with slightly lower trade in the deferred contracts.

  • Wheat prices were unable to shake off weakness in the overnight trade as all three classes posted double-digit losses but still managed to hang onto weekly gains.

  • To see the current 6-10 Day Temperature and Precipitation Outlooks courtesy of the Climate Prediction Center, and maps showing the percentage of crops in drought, courtesy of the USDA and US Drought Monitor, 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. 

  • Corn futures saw additional profit taking to end the week as prices traded between the 100-day and 50-day moving averages. Selling pressure in the wheat market and expiration of August options influenced the corn market to end the week. Despite Friday’s weakness, December corn futures still traded 22-1/2 cents higher on the week.

  • Weather forecasts are still a main focus. Forecasts of above-normal temperatures with limited rainfall are likely to promote some crop stress next week. The market will be focusing on those forecasts going into August to monitor the length of the heat.

  • Talk of improved Brazilian producers selling corn may have limited the upside. With more grain movement in Brazil, export premiums to purchasers dropped sharply, making Brazilian corn cheaper on the world market versus US supplies.

  • Next week the corn market will watch crop conditions score closely on Monday afternoon, and the long-range forecast to see if the overall dry conditions are reflected in the weekly crop conditions.

Above: In mid-July the corn market was oversold and posted a double bottom at 474. Since then, it has rallied significantly toward the 50-day moving average. While the market has upward momentum, it may run into resistance near the 50-day MA. If the market closes above the 50-day MA, it could signal a change in trend to higher, though heavy resistance remains up towards 595 – 625 and it would need further bullish news to break through. Below the market, key support lies 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 front months August and September closing higher but deferred contracts lower. Soybean meal followed the same pattern with the two front months higher and the rest lower, while soybean oil maintained its gains ending higher.

  • November soybean ended the week with a 31-cent gain, December meal was 7.50 higher on the week, and December soybean oil ended up 2.04. The withdrawal of Russia from the Black Sea grain deal supported soy products this week as Ukraine exports a large amount of sunflower meal and oil.

  • Brazil’s record soybean crop is being exported in large numbers that were higher than previous estimates. Exports are seen at 97.5 mmt which is up 0.5% from the previous estimate, and total production for 2023 is seen at 156.5 mmt. The domestic crush estimate was raised by 0.6% to 53.5 mmt.

  • In the US, weather forecasts are mixed. DTN forecasts are calling for drier and warmer temperatures to come, while NOAA released a 30-day forecast yesterday that points to improved conditions into August. It is a long way out to predict, but traders may be looking at that forecast as a reason to ease up on buying.

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. To fill the gap, the market will need additional bullish news to continue higher and trade through the heavy resistance area of 1490 – 1505. If not, and prices retreat, initial support below the market is near 1400 with further support being in the 1350 – 1390 area.

Wheat

Market Notes: Wheat

  • Wheat posted sharp losses today despite new Russian attacks on Ukraine for the fourth day in a row. Additionally, it has been reported that Russia is practicing seizing ships in the Black Sea. On the other side of the coin, Russia’s ambassador in Washington DC did state that Russia is not planning to attack civilian ships in the Black Sea.

  • The International Grains Council lowered its estimate of world wheat production due to declines in Argentina. Overall global grain production was increased, however, to an estimated 2.297 billion tons.

  • The US Dollar Index is continuing to climb higher, which likely added to pressure on wheat futures today.

  • Paris milling wheat futures were sharply lower in tandem with US markets. From a technical perspective, Paris futures are losing momentum and have a gap under the market; both of these things would point to continued downside.

  • Egypt is reported to have over five months of wheat reserves. But the Ukraine war has greatly affected their economy. They reportedly will be signing a $100 million load deal to fund future grain purchases.

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 are off their recent highs, 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: In June, when September wheat posted a bearish reversal it left significant resistance near 730 – 770. Rising tensions in the Black Sea have triggered a rally which is testing this area, and the market will need additional bullish input to rally beyond and test the 800 level. If prices do retreat, support below the market may be found around 650 – 610, and again near 570, the May low.  

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: KC wheat continues to be volatile and trade within the broad 736 – 919 range established back in May. Momentum favors higher prices, though heavy resistance remains between 890 – 920 and the market will need additional bullish input to push higher. Below the market, initial support remains near 778 – 763 with key support around the May low of 736.

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.

  • Grain Market Insider recommends selling a portion of your 2024 spring wheat crop. So far this year we have seen some of the volatility from the 2023 crop, with its challenges from late planting and now dryness, be carried over to the 2024 crop. We are now at that time of year where there are typically more headwinds to prices than tailwinds, and to begin getting some early sales on the books. Now that the market has rallied to within 15 cents of the June high where there is significant overhead resistance, Insider recommends making a sale on a portion of your 2024 spring wheat production by using either SEPT ’24 Minneapolis Wheat futures contracts or a SEPT ’24 HTA contract, so basis can be set at a later, more advantageous time. While $8 prices are not the $9 or $10+ that we have seen in recent years, and weather and geopolitical disruptions can still shock the market higher, they still represent historically good prices to begin making sales.

Above: The September contract has rallied nearly 100 cents from the July low and is showing signs of being overbought while pushing into the 889 – 940 resistance area. If the market cannot push higher, initial support may be found near 865 – 845 and again around 800. 

Other Charts / Weather

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Midday Update: July 21, 2023

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn
SEP ’23 532.25 -5
DEC ’23 540.75 -5.5
DEC ’24 532.25 -3.25
Soybeans
AUG ’23 1499.5 4.5
NOV ’23 1403.25 -1.5
NOV ’24 1297.75 0.5
Chicago Wheat
SEP ’23 704.25 -22.75
DEC ’23 724.5 -21.75
JUL ’24 744 -16.75
K.C. Wheat
SEP ’23 855.75 -19
DEC ’23 862.75 -18
JUL ’24 822 -13.75
Mpls Wheat
SEP ’23 885 -17
DEC ’23 894.75 -17
SEP ’24 841.75 3.25
S&P 500
SEP ’23 4579.25 13.75
Crude Oil
SEP ’23 76.58 0.93
Gold
OCT ’23 1981.6 -8.6

  • Corn is trading lower at midday but has come off its early morning lows. The 30-day weather forecast has shown more rain chances and lower temperatures into August for the Corn Belt.

  • The US Seasonal Drought Outlook has been changed to expect significant drought removal from the central Corn Belt after the recent beneficial rains.

  • Brazil’s second crop corn is now seen at a record 54 mmt which would be up 16% from last season and secures Brazil’s new spot as the top corn exporter.

  • The 7-day forecast is expected to be rough with little rain expected throughout the Corn Belt and higher-than-normal temperatures.

  • Soybeans are mixed at midday and have come back from early morning lows. Front months August and September are trading higher while the deferred months are lower. Front month meal is higher, while those deferred contracts are lower, and soybean oil is higher.

  • Yesterday, NOAA released their 30-day forecast that shows a friendlier forecast for soybeans into August. This may have put the brakes on this rally a bit alongside overbought technicals.

  • The withdrawal of Russia from the grain deal has had impacts on soybean prices due to Ukraine’s exports of sunflower oil and meal, and with those exports halted, other world veg oils have moved higher. October palm oil was up 3.9% today and soybean oil is following suit.

  • Palm oil futures have rallied nearly 23% since the lows made in late May, and soybean oil is up about 50% in that same time, so a correction is not surprising.

  • Wheat is trading lower this morning with most of the losses in Chicago followed by KC despite a fresh attack of farm storage buildings in the Odesa region of Ukraine by Russia.

  • As spring wheat harvest continues along and fresh supplies hit the market, it becomes harder for wheat to rally even with the war escalating in Ukraine.

  • Since the beginning of the Black Sea Grain Initiative on July 27, 2022, over 31.1 mmt of grains and veg oils have shipped from three Ukrainian ports to 46 countries.

  • The IGC raised global grain production and the stockpiles estimate with world grain production now seen at 2.297 billion tons, but wheat production itself has shrunk.

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: July 21, 2023

Bygmidev

All prices as of 6:30 am Central Time

Corn

SEP ’23 525 -12.25
DEC ’23 533.5 -12.75
DEC ’24 527.25 -8.25

Soybeans

AUG ’23 1488.75 -6.25
NOV ’23 1391.25 -13.5
NOV ’24 1290.5 -6.75

Chicago Wheat

SEP ’23 707.75 -19.25
DEC ’23 726.75 -19.5
JUL ’24 740.25 -20.5

K.C. Wheat

SEP ’23 845 -29.75
DEC ’23 850.75 -30
JUL ’24 816.25 -19.5

Mpls Wheat

SEP ’23 889 -13
DEC ’23 899.25 -12.5
SEP ’24 841.75 3.25

S&P 500

SEP ’23 4577.25 11.75

Crude Oil

SEP ’23 76.54 0.89

Gold

OCT ’23 1984.7 -5.5

  • Corn is trading lower this morning after a rally that lasted five days that was driven by dry weather and the Russian attacks on Ukraine’s port cities.

  • Yesterday the National Weather Service released a 30-day forecast which showed lower temperatures and above normal chances of precipitation for the Corn Belt.

  • The 7-day forecast is expected to be rough with little rain expected throughout the Corn Belt and higher than normal temperatures.

  • After the recent rains of the past few weeks, the US drought monitor showed moderate to intense drought falling by 9 points from the previous week to 55%. The previous high was 70%.

  • Soybeans are trading lower along with soybean meal, and soybean is lower with the exception of the August contract which is slightly higher.

  • Yesterday’s 30-day forecast which showed more rain and less heat was more of a suppressant on soybean’s rally as the August timeframe is very important weather-wise.

  • Palm oil futures have rallied nearly 23% since the lows made in late May, and soybean oil is up about 50% in that same time, so a correction is not surprising.

  • Indonesian palm oil exports rose by 4.5% month over month to 2.23 mmt in May from 2.13 mmt in April as output increased.

  • Wheat is trading lower this morning with KC wheat leading the way followed by Chicago. News of attacks out of the Black Sea seem to have worn off as futures got overbought.

  • Ukrainian exports out of the Black Sea are over at this point with Russia threatening any vessels found there, and they have also started conducting live fire exercises in the Black Sea.

  • The damage done my Russia’s drone and missile strikes on all of the Ukrainian port cities is not completely known, but Odessa seemingly got the worst of it with large amounts of grain destroyed.

  • The IGC raised global grain production and the stockpiles estimate with world grain production now seen at 2.297 billion tons, but the wheat crop itself has shrunk. 

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.