|

Opening Update: July 12, 2023

Bygmidev

All prices as of 6:30 am Central Time

Corn

SEP ’23 496.5 2
DEC ’23 503.25 1.75
DEC ’24 506 0.75

Soybeans

AUG ’23 1484.75 13.25
NOV ’23 1373 12.75
NOV ’24 1264.5 13.5

Chicago Wheat

SEP ’23 654.25 -6.25
DEC ’23 672.25 -5.75
JUL ’24 697 -5.25

K.C. Wheat

SEP ’23 817.25 0.25
DEC ’23 820.25 -0.25
JUL ’24 782 0.25

Mpls Wheat

SEP ’23 862.75 -1.25
DEC ’23 865.5 -2.5
SEP ’24 792.75 0

S&P 500

SEP ’23 4484.5 11

Crude Oil

SEP ’23 74.89 0.18

Gold

OCT ’23 1958.6 2.4

  • Corn is trading higher and near the top of its 5-cent range this morning in the December contract as traders ready themselves and cover short positions ahead of today’s 11 am USDA WASDE report.

  • Expectations for today’s USDA report are for corn yield to drop to 176.3 bpa, down 5.2 bpa from the June report.  Despite the yield drop, the additional acres and possible demand adjustment will likely keep new crop corn carryover near 2.250 billion bushels on the report.  The average trade guess for the 2022 crop ending stocks is 1.424 bil. bu, versus 1.452 bil. bu in June.

  • The weekly EIA report on ethanol production will be released today at 9:30 CST with some looking for weekly production to be down from last week’s pace of 1,060k barrels/day.

  • Over the next 10 days decent rain is expected through eastern Nebraska, southern Iowa, Missouri, and into Illinois and the eastern Corn Belt.  While the north/central Midwest and northern Plains are expected to see much lighter amounts.

  • Soybeans continue their march higher ahead of today’s 11 a.m. USDA report with soybean meal and oil also higher, with soybean oil likely getting a boost from higher Malayasian palm oil.

  • The average trade guess for 2022 carryover is up 2 mil bu. at 232 mbu. versus the USDA’s June estimate of 230, largely due to reduced export demand.   Due to lower acreage numbers from the June 30th report, the average trade estimate for 2023 carryover is 203 mil. bu with a 51.3 bpa, versus June’s 350 mil. bu estimate.

  • South American basis is improving which is allowing US soybeans to be more competitive in the world market, though they remain above SA offers.

  • According to Refinitiv, China has increased soybean imports from Brazil in response to concerns of tight US supplies.  China’s total Feb. – June soybean imports from Brazil were 40.74 million tons versus 31.6 mil. tons and 38.6 mil. tons for 2022 and 2021 respectively.

  • It has been rumored that China bought 10 – 14 cargoes of US soybeans off the PNW for October delivery for their reserves.  Though at this time there remains no confirmation from the USDA and New Crop commitments continue to be historically low.

  • The wheat complex is trading mixed this morning with Chicago lower, Minneapolis mixed, and K.C. near unchanged.

  • Average trade estimates for today’s USDA report have the 2023 US wheat crop at 1,683 mil. bu. versus June’s 1,665 mil. bu.  While 2023 total Winter Wheat is estimated at 1,154 mb versus 1,136 mb.  The first HRS estimate is near 477 mb versus 446 mb last year.  The average trade guess for 2023 wheat ending stocks is up 9 mb to 571 mb versus the USDA’s June estimate of 562 mb. 

  • In its first outlook of the year, the French agricultural ministry estimated the country’s soft-wheat harvest at a 2-year high of 35 mmt, 1.3 mmt higher than last year.  Yield was also reported to be the highest since 2019.

  • As the Black Sea Grain Initiative is set to expire next week, Russia has been targeting the Ukrainian port city of Odessa with drone attacks.  Though the attacks have largely been neutralized with relatively minor damage reported.  Additionally, the expiration of the BSGI will likely make it difficult for Ukraine to reach its export targets. 

  • According to Ukraine’s agricultural ministry, the country’s grain exports for the 23/24 season as July 12, rose to 894k tons versus 598k tons last season.  With wheat exports double and corn up 22% versus year ago levels.

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. 

|

Grain Market Insider: July 11, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • The corn market continues to hover and consolidate around the $5.00 December level as traders prepare for tomorrow’s July USDA report.

  • Lower than expected crop conditions and anticipation of a 200 mbu haircut to 2023 soybean production in tomorrow’s USDA report kept traders on the buy side of the soybean market today.

  • Soybean meal added support to soybeans as it followed through on yesterday’s strength to settle higher on the day, while soybean oil likely saw some profit taking from being overbought and settled lower in sympathy with lower palm oil.

  • A slow winter wheat harvest and deteriorating spring wheat conditions added to the bullishness in the wheat market as all three wheat classes closed higher on the day.

  • The grain markets may have gotten an extra boost of support as the US Dollar traded lower for the third day in a row, breaking through support and settling near 2-month lows.

  • To see the current NOAA US 6 – 10 day Temperature and Precipitation outlooks, 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. December corn rallied 139 cents from its May 18 low to its high on June 21 on weather and production concerns. The market is currently off that high on poor export sales figures and a forecast that shows increased chances of rain in the next couple of weeks. When Dec corn was trading over 620, Grain Market Insider recommended making a cash sale and buying Dec 580 puts to cover more downside. The Dec 580 puts, paired with the previously recommended Dec 610 calls, yields a combination of options commonly known as a Strangle, which benefits from dramatic market moves either up or down. Considering it is still early in the season, with drought and crop production uncertainty it is too soon to know if the market high is in or not. Either way, the Strangle position is prepared. If conditions improve from here and prices make new lows, unsold bushels will be protected with the 580 puts. If it doesn’t rain again and prices skyrocket to new highs, already sold bushels will be protected by the 610 calls.

  • Grain Market Inside recommends selling New Crop 2024 Corn. While the market has seen some extreme volatility in recent weeks, we are entering a time of year when prices tend to have more headwinds than tailwinds to the upside. Also, with last week’s surprise acreage jump, continued rain in the forecast and slow demand, the size of the 2023 crop still has the potential to yield a carryout north of 2 billion bushels. A large 2023 carryout in the US, combined with the large corn crop in Brazil, could pose greater headwinds for 2024 prices. With it being the time of year to start getting early sales for next year on the books, and no recent bullish catalyst from the Stocks or Acreage reports, we are suggesting making a sale for the 2024 corn crop using either a DEC ’24 HTA contract or DEC ’24 futures, so the basis can be set at a later more advantageous date. While $5.00 futures is not the $6.00 or $7.00, we’ve become accustomed to the last few years, it’s still historically a good price to be getting some early sales on the books at.

  • Corn prices consolidated again around the $5.00 price level as futures were firmer on Tuesday. December corn traded around the $5.00 area for the seventh consecutive session as traders square positions before Wednesday’s USDA report.

  • The USDA will release the July Supply/Demand report on Wednesday at 11:00 CST. Expectations are for corn yield to drop to 176.6 bushels/acre, down 4.9 bushels/acres from the June report. Despite the yield drop, the additional acres and possible demand adjustment will likely keep new crop corn carryover near 2.250 billion bushels on the report.

  • Improved weather across the Corn Belt was reflected in the weekly USDA crop rating released on Monday afternoon. The USDA crop ratings on Monday afternoon gained 4% to 55% good/excellent, slightly above analyst expectations. Nebraska saw the largest improvement, gaining 12% week over week. Illinois gained 6% in the good/excellent category but is still well behind the 5-year average at 39% good/excellent.

  • The weather forecast will limit any near-term rally and rainfall chances and above-normal temperature should help additional crop recovery in some areas and stabilize the crop into pollination.

Above: The USDA added a bearish 4 million acres to its planted acreage estimate on June 30. The September contract is now extremely oversold and consolidating in the 480 – 505 support level that has been in place since January 2021. The oversold condition of the market would be considered supportive to higher prices if reversal action occurs; if not, there may not be much support until 390 – 415. Overhead lies strong resistance between 595 and 625. 

Above: 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 being recommended for New Crop 2023 soybeans. No action is being recommended for New Crop 2023 soybeans. While changing weather forecasts will continue to dominate price action, a potentially much lower than anticipated 2023 carryout looms over the market due to low crop condition ratings and a reduced planted acreage estimate. Grain Market Insider is still eyeing a rally to the 1400 – 1450 area before considering any additional 2023 cash sales. Yet given the time of year and how fast prices can change direction, we’re willing to change that plan at a moment’s notice. In view of the current crop conditions and carryout situation and that we recently recommended making a cash sale, we suggest holding tight on further cash sales for now. 

  • 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 USDA rated the US soybean crop as of Sunday, July 9, at 51% good to excellent, a 1% increase from last week, but also 1% below trade expectations and 11% below year-ago levels. Although soybean crop conditions improved, they remain at their lowest levels since 2012.

  • The average trade guess for 2022 ending stocks on tomorrow’s USDA WASDE report is 232 mbu, up 2 mbu versus the June estimate of 230 mbu, largely due to reduced demand. For 2023, due to much reduced acres, the average estimate for ending stocks is 203 mbu with a 51.3 bpa, versus a 350 mbu estimate last month.

  • The trade estimates Brazil’s soybean production to come in at 156.2 mmt in Wednesday’s USDA report, up slightly from the June estimate of 156 mmt. For Argentina’s production, the average trade guess is 23.6 mmt, 1.4 mmt lower than in June.

  • South American basis is improving which is allowing US soybeans to be more competitive in the world market, though they remain above SA offers.

  • It has been rumored that China bought 10-14 cargoes of US soybeans off the PNW for October delivery for their reserves.

  • Over the next 10 days, Minnesota, the Dakotas, Wisconsin, and northern Iowa are all expected to be mostly dry, with decent rain expected through eastern Nebraska, southern Iowa and Missouri, and into Illinois and the eastern Corn Belt.

Above: The USDA’s Stocks and Acreage estimate came in well below expectations and gave the market a solid push to the upside. The market has now fallen back and is struggling to continue higher without additional bullish input. If the market can rebound, resistance above the market continues to rest between 1500 – 1550, while support below the market could be found between 1340 and 1300 with further support near 1270.

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

Wheat

Market Notes: Wheat

  • Yesterday afternoon’s USDA Crop Progress report kept winter wheat condition unchanged at 40% good to excellent, with harvest still well behind at 46% complete versus the average of 59%.

  • Spring wheat conditions declined 1% to 47% good to excellent. The northern Plains could use some more rain to help this crop, but little is in this week’s forecast. Canda’s crop is also in a similar situation where more moisture is needed.

  • According to CONAB, as of July 1st, Brazil’s wheat crop is 79.6% planted, with Argentina’s reported to be 81.4% planted.

  • Japan is tendering for 60,000 mt of feed wheat. While it is possible this may stir up some US export business, Russia continues to offer cheap wheat FOB exports at $235-$240 per ton. However, interior Russian wheat prices are said to have recently rallied.

  • Paris milling wheat futures posted gains for the first time in three sessions, which offered some support to the US market today. Additionally, the US Dollar continues to fade off of recent highs, allowing more upside potential for wheat futures.

  • Daily stochastic indicators show that Chicago wheat is technically oversold and is close to a crossover signal. Barring any surprises in tomorrow’s USDA report, this would indicate that it could be due for more of a correction to the upside.

Chicago Wheat Action Plan Summary

  • No new action is recommended for 2023 New Crop. In the month of June, the September Chicago wheat contract posted a 163-cent range and has largely been a follower of the corn market which has been mostly driven by weather. While demand remains weak, production concerns in parts of the country remain, as does uncertainty surrounding the Black Sea region and the potential for major exporting countries’ inventory to hit 16-year lows. 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. Price volatility has risen in the last couple of weeks due to the changing weather forecasts and current events in the Black Sea. While prices have fallen off their recent highs, plenty of time remains to market next year’s crop. War continues in the Black Sea region, major exporting countries’ stocks expected to fall to 16-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties.  For now, after recently 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: September wheat rallied nearly 200 cents from the May low to its June high when it encountered heavy resistance and posted a bearish reversal. This technical formation on the price chart is considered bearish and momentum may be adding to the bearish tone. Support below the market may be found between 650 – 610, while resistance above the market rests between 770 – 810.

KC Wheat Action Plan Summary

  • We continue to look for better prices before making any 2023 sales. While Crop ratings have improved and the Black Sea export corridor remains open, questions remain about the size of the HRW crop, whether Russia will continue to agree to keep the Black Sea corridor open, and what production looks like in Europe and Australia. 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 expected to fall to 16-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 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: Balancing both production and demand concerns, the September contract continues to trade within the 736 – 919 range established in May. The recent downturn in the market has established heavy resistance above the market between 890 – 920, with initial support coming in between 778 – 763 and key support near the May low of 736.

Above: 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.

  • We continue to hold on pricing the 2024 crop. With the September ‘24 contract about 60 cents from its May 22 low, continued issues in the Black Sea region and major exporting countries’ stocks expected to fall to 16-year lows, we are entering the time frame where we would consider suggesting making sales recommendations while also keeping an eye on the recent lows for any violation of support. 

Above: The September contract rallied out of its congestion area on the Front Month Continuous chart towards the 200-day moving average and into resistance between 889 and 940, the April and December highs respectively.  With the market off those highs, it will need additional bullish news to be able to trade through them. Should the market continue to fall, support may be found between 770 and 730. 

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

Other Charts / Weather

|

Midday Update: July 11, 2023

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn
SEP ’23 492.25 0
DEC ’23 499.75 0.25
DEC ’24 502.75 -0.5
Soybeans
AUG ’23 1460.75 5.25
NOV ’23 1351.25 5.75
NOV ’24 1243.5 2.5
Chicago Wheat
SEP ’23 656.75 10.5
DEC ’23 674.5 11
JUL ’24 701 10.5
K.C. Wheat
SEP ’23 818.75 7.5
DEC ’23 821.75 7.5
JUL ’24 782 9
Mpls Wheat
SEP ’23 859.25 9
DEC ’23 867.75 11
SEP ’24 792.75 -5.75
S&P 500
SEP ’23 4454.25 10
Crude Oil
SEP ’23 74.39 1.44
Gold
OCT ’23 1956.5 6.4

  • The USDA rated the corn crop at 55% good to excellent (up 4% from last week). Despite the increase, this is still the worst rating for this time of year since 2012.

  • The average pre-report estimate for US corn production is 15.149 bb, with a yield of 175.8 bpa.

  • Tomorrow’s report may reflect a boost in Brazil corn production, with traders looking for a crop of 132.8 mmt.

  • December corn is building technical support around the $4.90-$5.00 level, but the improving crop conditions could limit upside potential.

  • On tomorrow’s report, 2023 corn carryout is expected to come in around 2.2 bb.

  • The USDA rated the soybean crop at 51% good to excellent (up 1% from last week). Like corn, this is the poorest rating for this time period since 2012.

  • The average pre-report estimate for US soybean production is 4.250 bb, with a yield of 51.4 bpa.

  • Yesterday’s close in soybean oil was the highest so far this year, likely due to influence from palm oil as well as anticipated demand for biofuels.

  • Over the next 10 days, Minnesota, the Dakotas, Wisconsin, and northern Iowa are all expected to be mostly dry.

  • Tomorrow’s report is expected to show a drop in 2023 soybean carryout to around 200 mb.

  • The USDA said only 46% of the winter wheat crop has been harvested (vs 59% average). Winter wheat condition was unchanged at 40% good to excellent.

  • The USDA rated the spring wheat crop at 47% good to excellent (down 1% from last week)

  • Spring wheat areas in the northern US remain in need of moisture, but not much is expected this week. 

  • Reportedly, interior Russian wheat prices have rallied, but they are still offering wheat for export at $235-$240 per metric ton FOB.

  • According to CONAB, 79.6% of Brazil’s wheat crop has been planted as of July 1st.

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. 

|

Opening Update: July 11, 2023

Bygmidev

All prices as of 6:30 am Central Time

Corn

SEP ’23 498.25 6
DEC ’23 505.25 5.75
DEC ’24 507 3.75

Soybeans

AUG ’23 1480.25 24.75
NOV ’23 1366.25 20.75
NOV ’24 1251.5 10.5

Chicago Wheat

SEP ’23 657.75 11.5
DEC ’23 675 11.5
JUL ’24 702 11.5

K.C. Wheat

SEP ’23 825.25 14
DEC ’23 828.5 14.25
JUL ’24 775 2

Mpls Wheat

SEP ’23 866.5 16.25
DEC ’23 873 16.25
SEP ’24 792.75 -5.75

S&P 500

SEP ’23 4454.5 10.25

Crude Oil

SEP ’23 73.42 0.47

Gold

OCT ’23 1959.3 9.2

  • There’s not much turn around on this turn around Tuesday as corn follows through this morning with higher prices and traders square positions ahead tomorrow’s USDA WASDE report with an anticipated 2023 carryout in excess of 2.1 bil bu.

  • Crop conditions as of Sunday, July 9 for the US corn crop were 55% good to excellent, 2% above expectations and a 4% increase from last week.

  • Basis for nearby bids on corn shipped to the US Gulf firmed yesterday on limited supplies and rising barge freight.  While bids for the deferred months softened on rising futures prices.

  • While Brazil’s safriha corn crop appears to be quite bountiful, harvest is behind.  One of Brazil’s crop watchers AgRural, estimates the harvest to be 27% complete compared to 41% last year, which may be helping strengthen the domestic basis. 

  • The soybean complex is mixed this morning with soybeans and soybean meal higher in anticipation a near 200 mb 2023 carryout in tomorrow’s USDA report.  While soybean oil is lower, following lower palm oil prices.

  • The USDA rated the US soybean crop as of Sunday, July 9 at 51% good to excellent, a 1% increase from last week, but also 1% below trade expectations and 11% below year ago levels.

  • Spot basis bids at river terminals, processors and elevators were mostly weaker yesterday as strong farmer sales fed the short-term demand on rising Board prices.

  • China has adopted new regulations to require imported soybeans to be quarantined in specific warehouses prior to entering the domestic market.  While these new regulations will likely slow the importation process into China, it remains unclear what affects they will have on the overall market.

  • All three wheat classes are firmer to start the day with Minneapolis contracts leading the way higher as crop conditions came in below expectations.

  • As of Sunday July 9, the US Winter Wheat crop was estimated to be 46% harvested, 5% behind trade expectations of 51%, which also compares to 62% last year and 59% complete on average.  The USDA also rated the Spring Wheat crop at 47% good to excellent, which was 2% below expectations.

  • The President of Turkey is expected to meet with Vladimir Putin to discuss the Black Sea Grain Initiative with hopes of extending the arrangement past July 18, but the Kremlin has yet to confirm whether a meeting is scheduled.

  • According to IKAR, Russian wheat export prices are trading at $231/mt, keeping Russia the dominant player in world wheat 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. 

|

Grain Market Insider: July 10, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Consolidation ahead of Wednesday’s USDA WASDE report continues as traders square positions in the corn market, with prices not veering far from $5.00 in the December contract.

  • Sharply higher soybean oil prices and anticipation of lower production and ending stocks numbers in Wednesday’s upcoming USDA report drove the soybean market higher.

  • Higher Malaysian palm oil prices which were up 2.32% in the overnight added to the bullish sentiment in soybean oil, which closed up 248 points (4.75%). December soybean meal with $2.60 in gains and the strong bean oil market drove Board Crush in the December contracts to a 5-1/4 cent gain, adding support to soybeans.

  • Despite better than expected wheat export inspections, overall exports lag last year’s and weighed on prices with Paris Milling Wheat futures adding pressure to the Winter Wheats, while Minneapolis was able to close on the positive side, possibly in anticipation of lower crop conditions in this afternoon’s report.

  • The US dollar slid lower for the third day in a row and is trading near the June lows.  If the dollar breaks further, it could add support to commodities.

  • To see the current US 7 day precipitation forecast and NOAA US 8 – 14 day Temperature and Precipitation outlooks, 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. December corn rallied 139 cents from its May 18 low to its high on June 21 on weather and production concerns. The market is currently off that high on poor export sales figures and a forecast that shows increased chances of rain in the next couple of weeks. When Dec corn was trading over 620, Grain Market Insider recommended making a cash sale and buying Dec 580 puts to cover more downside. The Dec 580 puts, paired with the previously recommended Dec 610 calls, yields a combination of options commonly known as a Strangle, which benefits from dramatic market moves either up or down. Considering it is still early in the season, with drought and crop production uncertainty it is too soon to know if the market high is in or not. Either way, the Strangle position is prepared. If conditions improve from here and prices make new lows, unsold bushels will be protected with the 580 puts. If it doesn’t rain again and prices skyrocket to new highs, already sold bushels will be protected by the 610 calls.

  • Grain Market Inside recommends selling New Crop 2024 Corn. While the market has seen some extreme volatility in recent weeks, we are entering a time of year when prices tend to have more headwinds than tailwinds to the upside. Also, with last week’s surprise acreage jump, continued rain in the forecast and slow demand, the size of the 2023 crop still has the potential to yield a carryout north of 2 billion bushels. A large 2023 carryout in the US, combined with the large corn crop in Brazil, could pose greater headwinds for 2024 prices. With it being the time of year to start getting early sales for next year on the books, and no recent bullish catalyst from the Stocks or Acreage reports, we are suggesting making a sale for the 2024 corn crop using either a DEC ’24 HTA contract or DEC ’24 futures, so the basis can be set at a later more advantageous date. While $5.00 futures is not the $6.00 or $7.00, we’ve become accustomed to the last few years, it’s still historically a good price to be getting some early sales on the books at.

  • Corn prices continue to consolidate around the $5.00 price levels as futures were firmer to start the week. December corn traded around the $5.00 area for the sixth consecutive session as traders begin to square positions before Wednesday’s USDA report.

  • The USDA will release the July Supply/Demand report on Wednesday at 11:00 CST.  Expectations are for corn yield to drop to 176.3 bushels/acre, down 5.2 bushels/acres from the June report. Despite the yield drop, the additional acres and possible demand adjustment will likely keep new crop corn carryover near 2.250 billion bushels on the report.

  • Demand remains a concern as weekly export inspections were 341,000 mt last week, below trade expectations. This total is down 50% from last week and year-over-year, export inspections lagged last year by 32%.

  • Weather forecast will limit any near-term rally and rainfall chances and above normal temperatures should help additional crop recovery in some area and stabilize the crop into pollination.

  • Improved weather across the Corn Belt has analysts looking for improvement in the corn crop.  USDA crop ratings on Monday afternoon are expected to rise 2% to 53% good/excellent.  Rainfall reduced the areas of corn acres in drought from 70% to 67% week over week.

Above: The USDA added a bearish 4 million acres to its planted acreage estimate on June 30. The September contract is now extremely oversold and consolidating in the 480 – 505 support level that has been in place since January 2021. The oversold condition of the market would be considered supportive to higher prices if reversal action occurs; if not, there may not be much support until 390 – 415. Overhead lies strong resistance between 595 and 625. 

Corn Managed Money Funds net position as of Monday, July 3. Net position in Green versus price in Red. Money Managers net sold 52,845 contracts between June 27 – July 3, bringing their total position to a net short 18,209 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 being recommended for New Crop 2023 soybeans. No action is being recommended for New Crop 2023 soybeans. While changing weather forecasts will continue to dominate price action, a potentially much lower than anticipated 2023 carryout looms over the market due to low crop condition ratings and a reduced planted acreage estimate. Grain Market Insider is still eyeing a rally to the 1400 – 1450 area before considering any additional 2023 cash sales. Yet given the time of year and how fast prices can change direction, we’re willing to change that plan at a moment’s notice. In view of the current crop conditions and carryout situation and that we recently recommended making a cash sale, we suggest holding tight on further cash sales for now. 

  • 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 finished the day solidly on the positive side with additional support coming from both soybean meal and oil.

  • Export inspections for the week ending July 6 came in at 8.754 mbu, about 900 mbu lower than last week, bringing the total for the year to 1.825 bil. bu, and 5% behind last year at this time. Although the number was within expectations, it remains well below the 22 mbu needed per week to meet the USDA’s goal.

  • Friday’s COT report still show the funds long the soybean complex, although they did reduce their soybean holdings by an estimated 10,000 contracts to 89,000.  For soybean meal and oil, the funds are reportedly long 53,000 meal and 43,000 oil.

  • China has adopted new regulations to require imported soybeans to be quarantined in specific warehouses prior to entering the domestic market.

  • The average trade guess for 2022 ending stocks is up 5 mil bu. at 235 mbu. versus the USDA’s June estimate of 230, largely due to reduced export demand. As for 2023, due to 4 million fewer planted acres, the average trade estimate is 206 mil. bu with a 51.4 bpa compared to 49.5 last year.

  • The trade estimates Brazil’s soybean production to come in at 156.2 mmt in Wednesday’s USDA report, up slightly from the June estimate of 156 mmt.  For Argentina’s production, the average trade guess is 23.6 mmt, 1.4 mmt lower than in June.

Above: The USDA’s Stocks and Acreage estimate came in well below expectations and gave the market a solid push to the upside. The market has now fallen back and is struggling to continue higher without additional bullish input. If the market can rebound, resistance above the market continues to rest between 1500 – 1550, while support below the market could be found between 1340 and 1300 with further support near 1270.

COT – Soybeans Managed Money Funds net position as of Monday, July 3. Net position in Green versus price in Red.  Money Managers net sold 10,338 contracts between June 27 – July 3, bringing their total position to a net long 89,142 contracts.

Wheat

Market Notes: Wheat

  • After starting higher this morning, wheat could not hold onto those gains and traded lower for the rest of the session. Some pressure may be coming from the European markets, where Paris milling wheat futures closed lower for the third session in a row.

  • Wheat export inspections of 15.4 mb bring the 23/24 total inspections to 56 mb; this is down 21% from this time a year ago.

  • Funds are said to remain net short Chicago wheat by about 56,000 contracts. If Wednesday’s WASDE report is friendly this could trigger some short covering.

  • Next week the Black Sea Grain Initiative will expire – so far there has not been any new agreement reached. Turkey is reportedly trying to broker a deal to extend the corridor again, however Russia seems adamant that they have no reason to extend the deal.

  • According to their Agriculture Ministry, Russia’s wheat export tax is set to increase to 2,990 Rubles per ton next week, up from 2,610 Rubles.

Chicago Wheat Action Plan Summary

  • No new action is recommended for 2023 New Crop. In the month of June, the September Chicago wheat contract posted a 163-cent range and has largely been a follower of the corn market which has been mostly driven by weather. While demand remains weak, production concerns in parts of the country remain, as does uncertainty surrounding the Black Sea region and the potential for major exporting countries’ inventory to hit 16-year lows. 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. Price volatility has risen in the last couple of weeks due to the changing weather forecasts and current events in the Black Sea. While prices have fallen off their recent highs, plenty of time remains to market next year’s crop. War continues in the Black Sea region, major exporting countries’ stocks expected to fall to 16-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties.  For now, after recently 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: September wheat rallied nearly 200 cents from the May low to its June high when it encountered heavy resistance and posted a bearish reversal. This technical formation on the price chart is considered bearish and momentum may be adding to the bearish tone. Support below the market may be found between 650 – 610, while resistance above the market rests between 770 – 810.

COT – Chicago Wheat Managed Money Funds net position as of Monday, July 3. Net position in Green versus price in Red. Money Managers net sold 1,838 contracts between June 27 – July 3, bringing their total position to a net short 54,006 contracts.

KC Wheat Action Plan Summary

  • We continue to look for better prices before making any 2023 sales. While Crop ratings have improved and the Black Sea export corridor remains open, questions remain about the size of the HRW crop, whether Russia will continue to agree to keep the Black Sea corridor open, and what production looks like in Europe and Australia. 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 expected to fall to 16-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 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: Balancing both production and demand concerns, the September contract continues to trade within the 736 – 919 range established in May. The recent downturn in the market has established heavy resistance above the market between 890 – 920, with initial support coming in between 778 – 763 and key support near the May low of 736.

K.C. Wheat Managed Money Funds net position as of Monday, July 3. Net position in Green versus price in Red. Money Managers net bought 1,341 contracts between June 27 – July 3, bringing their total position to a net long 13,760 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.

  • We continue to hold on pricing the 2024 crop. With the September ‘24 contract about 60 cents from its May 22 low, continued issues in the Black Sea region and major exporting countries’ stocks expected to fall to 16-year lows, we are entering the time frame where we would consider suggesting making sales recommendations while also keeping an eye on the recent lows for any violation of support. 

Above: The September contract rallied out of its congestion area on the Front Month Continuous chart towards the 200-day moving average and into resistance between 889 and 940, the April and December highs respectively.  With the market off those highs, it will need additional bullish news to be able to trade through them. Should the market continue to fall, support may be found between 770 and 730. 

Minneapolis Wheat Managed Money Funds net position as of Monday, July 3. Net position in Green versus price in Red. Money Managers net sold 1,009 contracts between June 27 – July 3, bringing their total position to a net long 1992 contracts. 

Other Charts / Weather

/imge

|

Midday Update: July 10, 2023

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn
SEP ’23 494 6.75
DEC ’23 501 6.5
DEC ’24 502.5 4.75
Soybeans
AUG ’23 1462.25 34.5
NOV ’23 1349 31.25
NOV ’24 1245.25 18
Chicago Wheat
SEP ’23 648.25 -1.25
DEC ’23 665.5 -1
JUL ’24 689.75 -3.75
K.C. Wheat
SEP ’23 818.5 0.25
DEC ’23 819.5 0
JUL ’24 774.25 -2
Mpls Wheat
SEP ’23 855.5 7.75
DEC ’23 861 6.5
SEP ’24 798.5 -7
S&P 500
SEP ’23 4432 -2
Crude Oil
SEP ’23 73.57 -0.2
Gold
OCT ’23 1946.4 -5.2

  • Correction to morning comments – a reduction in corn acres was inadvertently mentioned. On the June 30th report, corn acres were increased  by roughly 2 million.

  • The weather forecast for the next 10 days is drier for much of the western Corn Belt, but there could be showers farther to the East (including central Illinois).

  • Given the weather so far, this growing season, many believe that the USDA could reduce their corn yield estimate on this Wednesday’s WASDE report.

  • China is said to be experiencing dryness and elevated temperatures, which could reduce their crops.

  • July corn on Brazil’s Bovespa exchange is near the equivalent of $4.64 per bushel, keeping pressure on US exports.

  • Soybeans are sharply higher this morning, possibly in anticipation of friendly data on Wednesday’s USDA report. Traders expect 23/24 carryout to fall near to 200 mb.

  • Both soybean oil and palm oil are higher, offering support to soybeans. Bean oil may be rallying due to the anticipated increase in biofuel demand, while palm oil saw lower production and higher exports in June.

  • Crop conditions may be improving due to recent rain in eastern areas, including central Illinois, and parts of Nebraska and Indiana.

  • Funds remain net long soybeans, meal, and oil as of July 3rd.

  • Canda is seeing drier than normal conditions that will likely impact the spring wheat crop. Globally, there could be lower production in Russia and northern China as well.

  • Wheat has traded both sides of steady so far today, but weakness may stem from lower Matif futures. Paris milling wheat is on track for what will be the third lower close in a row.  

  • Expiration of the Black Sea Grain Initiative is next week. There is still much uncertainty of what will happen, given the fact that Russia has said they see no reason for an extension, but Turkey is trying to encourage an agreement.

  • As of July 3rd, managed funds remain net short 56,000 contracts of Chicago wheat.

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

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

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

|

Opening Update: July 10, 2023

Bygmidev

All prices as of 6:30 am Central Time

Corn

SEP ’23 494 6.75
DEC ’23 501 6.5
DEC ’24 501 3.25

Soybeans

AUG ’23 1456.75 29
NOV ’23 1340.25 22.5
NOV ’24 1241.5 14.25

Chicago Wheat

SEP ’23 654 4.5
DEC ’23 671 4.5
JUL ’24 696.5 3

K.C. Wheat

SEP ’23 820.5 2.25
DEC ’23 821.25 1.75
JUL ’24 777.5 1.25

Mpls Wheat

SEP ’23 853.5 5.75
DEC ’23 860.5 6
SEP ’24 798.5 -7

S&P 500

SEP ’23 4432.75 -1.25

Crude Oil

SEP ’23 73.29 -0.48

Gold

OCT ’23 1948 -3.6

  • The corn market is mostly higher this morning as it continues to consolidate following the USDA’s surprise increase in acres and ahead of Wednesday’s USDA July supply and demand update.

  • Expectations call for increased 2023 corn production in Wednesday’s report.  The average estimate is for a 15,149 bil. bu. crop versus 13,730 in 2022, with an average yield guess of 175.8 bpa versus the USDA’s June estimate of 181.5 bpa.  

  • The average guess for 2022 ending stocks is a reduction of 42 mil. bu. from the June estimate to 1,406 mil. bu., with an average guess for 2023 ending stocks coming in at 2,166 mil. bu.

  • The managed funds were big sellers following the USDA’s Stocks and Acreage report.  Friday’s Commitment of Traders report showed as of Wednesday, July 5, Funds sold 71,000 contracts to flip their positions from net long 53k to net short 18k contracts.

  • The most current US 6 – 10 day forecast calls for mostly normal precipitation in northern Corn belt with slightly above in the southern Corn Belt, southern Plains and Southeast.  While below average temperatures are called for in much of the central Corn Belt and Minnesota, Wisconsin, Nebraska, and Kansas.  The extended 8 – 14-day forecast shows above normal temperatures moving in for most of the US with normal precipitation in Midwest and slightly above normal precipitation in Southeast.

  • Soybeans are higher across the board led largely by soybean oil with 1.42 cent gains in December, with meal up $4.50 per ton, as warm temperatures are expected to move in across the US in the 8 – 14-day forecast.

  • The market may likely continue to consolidate ahead of Wednesday’s USDA July WASDE report.  The trade is expecting slightly lower 2023 production at 4,250 mil. bu. versus 4,276 for 2022 with a 51.4 bpa compared to 49.5 last year.

  • The average trade guess for 2022 ending stocks is up 5 mil bu. at 235 mbu. versus the USDA’s June estimate of 230, largely due to reduced export demand.  As for 2023, the average trade estimate is for 206 mil. bu. due to lower acreage and production.

  • In Friday’s COT report, managed funds were sellers of soybeans, but not to the extent of corn.  The report showed Funds sold a total of about 10,000 contracts, reducing their net long to an estimated 89,000 contracts as of Wednesday July 5.

  • The wheat market is mixed as we come out of the overnight session with Chicago and K.C. mostly higher and Minneapolis mixed with the deferred contracts trading lower.  While nearby contracts are higher.

  • Trade estimates for Wednesday’s USDA report have the 2023 US wheat crop at 1,683 mil. bu. versus June’s 1,665 mil. bu.  While 2023 total Winter Wheat is estimated at 1.154 mil. bu. versus 1,136 mil. bu.  The first HRS estimate is near 477 mil. bu. versus 446 mil bu. last year. 

  • The average trade guess for 2022 ending stocks for all wheat is down 15 mil bu. to 583 mbu. versus the USDA’s June estimate of 598 mil. bu.  As for 2023, the average trade estimate is for 565 mil. bu., up 3 mil. from June’s estimate.

  • Last Friday’s COT report didn’t show a large overall change in the fund’s Chicago wheat position.  In total, as of Wednesday July 5, the funds added 2,000 contracts to their short positions bring their total net short to 54,000 contracts.

  • The expected moisture in the 6 – 10 day forecast in the southern Plains may add a level of concern for additional delays and quality issues for any unharvested HRW wheat in the region.  While there remains a level of concern for wheat crops in Canada, Central Russia and Northern China.

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. 

|

Grain Market Insider: July 7, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Disappointing weekly export sales and a more favorable weather forecast for the Corn Belt continue to add pressure to corn prices.

  • A friendly forecast for rain in the central Midwest, including much of Iowa and Illinois, helped to pressure the soybean complex lower across the board.

  • Percentage losses in soybean meal nearly equaled those of soybeans. Higher energy markets were unable to rescue soybean oil from its losses today, as it followed suit along with lower palm oil prices.

  • Despite a huge break in the US dollar, better than expected yields in France and a meeting between Turkish and Ukrainian leaders to discuss the Black Sea Export deal helped press all three wheat classes lower.

  • Today’s jobs numbers showed fewer than expected US jobs created in June, while also revising the number of jobs created in May down by 33,000. The news may have weighed negatively on commodities with the perception of a slowing economy, even though the US dollar traded sharply lower.

  • To see the current NOAA US 6 – 10 day and 8 – 14 day Temperature and Precipitation outlooks, 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. December corn rallied 139 cents from its May 18 low to its high on June 21 on weather and production concerns. The market is currently off that high on poor export sales figures and a forecast that shows increased chances of rain in the next couple of weeks. When Dec corn was trading over 620, Grain Market Insider recommended making a cash sale and buying Dec 580 puts to cover more downside. The Dec 580 puts, paired with the previously recommended Dec 610 calls, yields a combination of options commonly known as a Strangle, which benefits from dramatic market moves either up or down. Considering it is still early in the season, with drought and crop production uncertainty it is too soon to know if the market high is in or not. Either way, the Strangle position is prepared. If conditions improve from here and prices make new lows, unsold bushels will be protected with the 580 puts. If it doesn’t rain again and prices skyrocket to new highs, already sold bushels will be protected by the 610 calls.

  • Grain Market Inside recommends selling New Crop 2024 Corn. While the market has seen some extreme volatility in recent weeks, we are entering a time of year when prices tend to have more headwinds than tailwinds to the upside. Also, with last week’s surprise acreage jump, continued rain in the forecast and slow demand, the size of the 2023 crop still has the potential to yield a carryout north of 2 billion bushels. A large 2023 carryout in the US, combined with the large corn crop in Brazil, could pose greater headwinds for 2024 prices. With it being the time of year to start getting early sales for next year on the books, and no recent bullish catalyst from the Stocks or Acreage reports, we are suggesting making a sale for the 2024 corn crop using either a DEC ’24 HTA contract or DEC ’24 futures, so the basis can be set at a later more advantageous date. While $5.00 futures is not the $6.00 or $7.00, we’ve become accustomed to the last few years, it’s still historically a good price to be getting some early sales on the books at.

  • Selling pressure returned to the corn market to end the week, influenced by weakness across the grain markets and weather models forecasting better rain potential through the weekend.  Dec corn finished ¼ cent lower on the week as prices consolidated this week around the $5.00 level.

  • The USDA weekly export sales are still disappointing overall. The USDA announced new sales of 251,700 MT of old crop and 418,000 MT of new crop sales last week. Weekly exports were 707,500 MT, down 17% from last week and 24% from the four-week average.

  • The USDA announced a flash sale of corn to Mexico this morning. Mexico bought 180,000 MT of corn, which 135,000 MT was for new crop and 45,000 MT for old crop.

  • Brazil shipped just over 1 MMT of corn in the month of June, but U.S. prices continue to struggle on talk of Chinese buying of Brazilian corn as the window for Brazil corn exports is about to rally to its peak over the next few months.

  • Long range forecasts limit corn market rallies as 6-10 day and 8-14 day outlook forecasts from the NOAA are staying cooler and wetter than average.

Above: The USDA added a bearish 4 million acres to its planted acreage estimate on June 30. The September contract is now extremely oversold and consolidating in the 480 – 505 support level that has been in place since January 2021. The oversold condition of the market would be considered supportive to higher prices if reversal action occurs; if not, there may not be much support until 390 – 415. Overhead lies strong resistance between 595 and 625. 

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 being recommended for New Crop 2023 soybeans. No action is being recommended for New Crop 2023 soybeans. While changing weather forecasts will continue to dominate price action, a potentially much lower than anticipated 2023 carryout looms over the market due to low crop condition ratings and a reduced planted acreage estimate. Grain Market Insider is still eyeing a rally to the 1400 – 1450 area before considering any additional 2023 cash sales. Yet given the time of year and how fast prices can change direction, we’re willing to change that plan at a moment’s notice. In view of the current crop conditions and carryout situation and that we recently recommended making a cash sale, we suggest holding tight on further cash sales for now. 

  • 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. 

  • An outlook for rain and cool temperatures for much of the northern and central Midwest in the 6 – 10 day forecast led the soybean complex lower, with the hope of reduced crop stress and some much needed moisture.

  • The area of the US soybean crop that is in drought areas dropped 3% to 60%. While this is still a significant area, given the recent rain throughout the Corn Belt, it is expected to drop further.

  • Weekly Export sales came in within expectations, but toward the low end, with net sales of 6.9 mb for 22/23, down 17% from last week’s report and 45% below the 4-week average. On the other hand, 23/24 sales came in above expectations at a friendly 21.8 mb.

  • According to Brazil’s grain exporters association, Anec, Brazil is expected to export 9.4 mil metric tons of soybeans in July, which is down from June’s 13.9 mt total.  For the year, its expected that the country may export a total of 96.3 mil mt, an increase of 17- 18 mmt over last year’s total. 

  • According to OilWorld, an analytical agency based in Germany, world biodiesel production is estimated to grow 8% this year. That is largely due to increases in the US with soybean oil being the primary feedstock, and Indonesia where palm oil is primarily used. The increased use of both feedstocks is supportive to bean oil and soybeans to maintain current world supplies.

  • China’s Shanghai Securities News stated that the country’s sow herd shrank by 1.68% in June. This being the largest decline in months, suggests that farmers are culling more and more of their sows to cut losses, further reducing their feed demand.

Above: The USDA’s Stocks and Acreage estimate came in well below expectations and gave the market a solid push to the upside. The market has now fallen back and is struggling to continue higher without additional bullish input. If the market can rebound, resistance above the market continues to rest between 1500 – 1550, while support below the market could be found between 1340 and 1300 with further support near 1270.

Wheat

Market Notes: Wheat

  • Despite a sharp drop in the US dollar today, all three classes of US wheat futures posted losses, and despite the lowest US wheat stocks in 16 years, which should also offer support, the wheat market looks weak.

  • The USDA reported an increase of 14.9 mb of wheat export sales for 23/24 and a decrease of 0.1 mb for 24/25.

  • Better than expected yields of French wheat are weighing on both US and Paris futures. So far, the French crop is reported to be about 10% harvested.

  • A meeting between leaders of Ukraine and Turkey to discuss an extension of the Black Sea grain deal took place Friday. They reportedly also discussed a prisoner swap and efforts to end the war. This comes despite Russia insisting they will not extend the agreement that ends on July 17th.

  • From a technical perspective, Chicago wheat futures are at or near oversold levels on daily stochastics. This could mean that a technical correction to the upside is due.

Chicago Wheat Action Plan Summary

  • No new action is recommended for 2023 New Crop. In the month of June, the September Chicago wheat contract posted a 163-cent range and has largely been a follower of the corn market which has been mostly driven by weather. While demand remains weak, production concerns in parts of the country remain, as does uncertainty surrounding the Black Sea region and the potential for major exporting countries’ inventory to hit 16-year lows. 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. Price volatility has risen in the last couple of weeks due to the changing weather forecasts and current events in the Black Sea. While prices have fallen off their recent highs, plenty of time remains to market next year’s crop. War continues in the Black Sea region, major exporting countries’ stocks expected to fall to 16-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties.  For now, after recently 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: September wheat rallied nearly 200 cents from the May low to its June high when it encountered heavy resistance and posted a bearish reversal. This technical formation on the price chart is considered bearish and momentum may be adding to the bearish tone. Support below the market may be found between 650 – 610, while resistance above the market rests between 770 – 810.

KC Wheat Action Plan Summary

  • We continue to look for better prices before making any 2023 sales. While Crop ratings have improved and the Black Sea export corridor remains open, questions remain about the size of the HRW crop, whether Russia will continue to agree to keep the Black Sea corridor open, and what production looks like in Europe and Australia. 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 expected to fall to 16-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 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: Balancing both production and demand concerns, the September contract continues to trade within the 736 – 919 range established in May. The recent downturn in the market has established heavy resistance above the market between 890 – 920, with initial support coming in between 778 – 763 and key support near 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.

  • We continue to hold on pricing the 2024 crop. With the September ‘24 contract about 60 cents from its May 22 low, continued issues in the Black Sea region and major exporting countries’ stocks expected to fall to 16-year lows, we are entering the time frame where we would consider suggesting making sales recommendations while also keeping an eye on the recent lows for any violation of support. 

Above: The September contract rallied out of its congestion area on the Front Month Continuous chart towards the 200-day moving average and into resistance between 889 and 940, the April and December highs respectively.  With the market off those highs, it will need additional bullish news to be able to trade through them. Should the market continue to fall, support may be found between 770 and 730. 

Other Charts / Weather

/imge

|

Midday Update: July 7, 2023

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn
SEP ’23 492.25 -6.75
DEC ’23 498.75 -7.75
DEC ’24 500.25 -4.75
Soybeans
AUG ’23 1434 -14.25
NOV ’23 1323 -16.5
NOV ’24 1231 -12.75
Chicago Wheat
SEP ’23 658.75 0.75
DEC ’23 675.5 -1
JUL ’24 700.75 -4
K.C. Wheat
SEP ’23 833.75 -10
DEC ’23 836 -8.75
JUL ’24 791.25 -6.75
Mpls Wheat
SEP ’23 857.25 -0.75
DEC ’23 865.5 0.75
SEP ’24 805.5 5.5
S&P 500
SEP ’23 4447.25 0.25
Crude Oil
SEP ’23 72.75 0.96
Gold
OCT ’23 1953.9 19.3

  • The USDA reported an increase of 9.9 mb of corn export sales for 22/23 and an increase of 16.5 mb for 23/24.

  • Private exporters reported sales of 180,000 tons of US corn sold to Mexico.

  • The 6-10 day forecast has some decent rain for parts of the west-central Corn Belt. The 8-14 day map has that weather shifting more to the East, into the Tennessee / Ohio river valley.

  • Ethanol data yesterday showed higher production, lower stocks, and improved margins (due to lower corn prices).

  • Next week’s WASDE report on July 12th is likely to show a reduction in the corn yield estimate. The question is how much of an impact this will have given the higher acreage estimate last week.

  • The USDA reported an increase of 6.9 mb of soybean export sales for 22/23 and an increase of 21.8 mb of 23/24.

  • Soybean meal is lower this morning – a lower close would mark the fourth day in a row. This is putting pressure on soybean futures. Palm oil futures are trending lower as well, not helping the situation.  

  • About 60% of the US soybean crop is still said to be experiencing drought, despite the drought monitor showing some slight improvements.

  • September soybeans on China’s Dalian exchange are trading around the equivalent of $17.04 per bushel.

  • The USDA reported an increase of 14.9 mb of wheat export sales for 23/24 and a decrease of 0.1 mb of 24/25.

  • More rain for the southern Plains will slow HRW wheat harvest, which is already well behind the average pace. However, slow export demand means that the market will likely not respond much to this.

  • Despite weakness in the wheat market, ending stocks are at the lowest level in 16 years, which should provide some support.

  • French wheat harvest is said to be 10% complete with better than expected yields so far.  

  • The presidents of both Ukraine and Turkey will be meeting to discuss an extension of the Black Sea grain deal. This is despite Russia’s recent statements that they will not extend the corridor again.

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. 

|

Opening Update: July 7, 2023

Bygmidev

All prices as of 6:30 am Central Time

Corn

SEP ’23 495.25 -3.75
DEC ’23 501.5 -5
DEC ’24 501.5 -3.5

Soybeans

AUG ’23 1444.25 -4
NOV ’23 1333.75 -5.75
NOV ’24 1240 -3.75

Chicago Wheat

SEP ’23 645.75 -12.25
DEC ’23 663 -13.5
JUL ’24 692 -12.75

K.C. Wheat

SEP ’23 822.75 -21
DEC ’23 826.75 -18
JUL ’24 798 6

Mpls Wheat

SEP ’23 843.5 -14.5
DEC ’23 851.75 -13
SEP ’24 805.5 5.5

S&P 500

SEP ’23 4444 -3

Crude Oil

SEP ’23 72.05 0.26

Gold

OCT ’23 1941 6.4

  • Corn is starting the day lower following yesterday’s short covering rally as it struggles to gain positive footing with mostly favorable weather forecasts and the surprise jump in acres.

  •  The front moving through the Midwest has produced some moisture, but amounts have largely been disappointing.  Temperatures are expected to stay mild with the potential for more showers next week. 

  • The latest release of the US Drought Monitor indicated that 67% of the corn crop remains in drought conditions, down 3% from the week prior.  With more rain in the forecast for the Corn Belt, it could be expected to fall further.

  • Brazil’s corn basis levels have seen some significant improvement with harvest only 20% complete, and active soybean sales taking precedence to make room for the safrinha corn crop.  This improvement has likely added some support to US corn prices, and though they remain 25 – 35 cents/ bu. above Brazil, the gap has narrowed.

  • Yesterday the managed funds were active buyers in the corn market, purchasing upwards of 8,000 contracts.  They are currently estimated to be long 26,000 contracts.

  • Soybeans are trading lower this morning as traders continue to take a breather and reduce long positions.  Like soybeans, soybean meal is also lower this morning, while bean oil is higher.

  • The front moving through the Midwest has produced some moisture, but amounts have largely been disappointing.  Temperatures are expected to stay mild with the potential for more showers next week.  Weather conditions in the Northern Plains are mostly favorable and may see some isolated showers over the next five days with cooler temperatures to help ease crop stress.

  • The area of the US soybean crop that is in drought areas dropped 3% to 60%. While is still a significant area, given the recent rain in throughout the Cornbelt, it is expected to drop further.

  • The managed funds were active sellers in yesterday’s session, reducing their long position by an estimated 6,500 contracts.  They are now estimated to be long 86,500 contracts. 

  • The wheat market is mostly lower this morning in all three classes, with deferred contracts in K.C. and Minneapolis trading higher.

  •  Weather conditions in the Northern Plains are mostly favorable and may see some isolated showers over the next five days with cooler temperatures to help ease crop stress.

  • The Central and Southern Plains will continue to see showers and thunderstorms over the next week with mild temperatures.  Though the conditions are largely favorable, the rain may slow the wheat harvest.

  • Managed Funds were net sellers yesterday in the wheat market, adding an estimated 6,000 contracts to their short position, which is now estimated to be short 61,000 contracts.

  • Ukraine’s Ag Ministry reported current 23/24 grain exports at 497k tons, which compares to 318k tons for 2022.  Of the total, 177k is reported to be wheat and 273k tons of corn, most of which was exported via the Black Sea.

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

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

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