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Grain Market Insider: July 6, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Driven by updated crop conditions and weather conditions, the corn market traded both sides of unchanged before settling on the positive side in sympathy with soybeans and wheat.

  • Oversold conditions and the unwinding of short corn and long soybean spreads likely added to the short covering bounce in the corn market, as traders covered positions and took profits following the market’s fall from the June highs.

  • A non-threatening forecast and weak demand took the soybean complex lower with December soybean oil leading the way with a 3.5% loss.

  • After making new highs for the move in yesterday’s trade, soybean oil traded through yesterday’s lows as traders booked profits from the recent rally on overbought conditions.

  • Better than expected yields in Illinois and continued low Russian export prices weighed on Chicago and K.C., wheat while Minneapolis was able to maintain small gains.

  • To see the current US Drought Monitor and the NOAA US 7-day precipitation forecast map, 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.

  • Continue to hold current sales levels for the 2024 crop year. The Dec 24 contract is trading weather much like the rest of the market and posted nearly an eighty-cent range between 5/18 and 6/21 as dry conditions affect the ’23 crop and the potential carryout for the 2024 crop year. For now, continue to be patient as Grain Market Insider would like to see prices in the 570 – 600 level before considering making additional sales recommendations for the 2024 crop.

  • Corn futures saw short covering in an oversold market to finish with double digit gains on Thursday. With both weakness in the soybean and wheat trade overall, corn futures were likely the backside of that trade.The market saw a risk off mentality overall, and that meant covering short corn positions.

  • Chinese corn prices have been on the rise since April due to adverse weather, and rumors of China purchasing Brazilian corn for November delivery has helped support global corn prices, aiding the short covering rally.

  • Weather will stay as a focus. The short-term weather forecast is showing some concerns about the northwestern Corn Belt staying on the dry side, bringing concerns regarding overall crop yield.

  • A potential forecast for cooler temperatures next week should only help those areas that did receive recent rainfall, as corn looks to enter the pollination stage in the central Corn Belt.

  • The USDA will release weekly corn export sales numbers on Friday morning. Expectations are for old crop and new crop sales to range from 0-500,000 MT each respectively, as export demand is still lacking overall.

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 has pierced the 490 – 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. 

  • Soybeans ended the day lower, along with both soybean meal and oil after futures became overbought during the past week, and weather forecasts turn wetter in the South over the next week.

  • Brazil’s export group, ANEC, reported that June soy exports rose to 9.44 mmt, which compares with 7 mmt in June of last year. With Brazil taking so much control of the soy export market, US export remain very sluggish.

  • The 10-day forecast is showing rain for Iowa, northern Illinois, the northern Plains, and Great Lakes regions. The northern areas are the hardest pressed for moisture right now and these rains could provide some needed relief.

  • Soy conditions are currently the worst rated for this time of year since 2012 at only 50% good to excellent, falling 1% from the previous week. The decline in ratings came after a week of beneficial rain, so it is unknown what ratings will look like after this week’s rain amounts which are forecasted to be decent but better in the South.

Above: The USDA’s Stocks and Acreage report gave the market a bullish shot in the arm with a much-reduced acreage estimate. If the market can continue to rally beyond the 1450 area, 1500 – 1550 could be its next target. If not, support could be found between 1340 and 1300 with further support near 1270.

Wheat

Market Notes: Wheat

  • Despite the uncertainty in the Black Sea, US wheat futures closed mostly lower today. Not only are there worries about sabotage of Ukrainian nuclear power plant, but overnight Russian missile strikes hit the city of Lviv. Russia is also said to be taking back parts of eastern Ukraine.

  • Better than expected yields of SRW wheat in Illinois may have put pressure on the Chicago market today. Higher yields of French wheat also offered resistance. Reportedly, that crop yield is 5% above the 10 year average.

  • Cheap Russian wheat exports continue to act as the anchor for US futures. Russian FOB values are said to be as low as $232 per metric ton. Additionally, one estimate of Russia’s wheat crop (Agritel) was increased by 2.5 mmt to 85.7 mmt. For reference the USDA is using a figure of 85 mmt.

  • Tunisia is reported to have purchased 100,000 mt of wheat from Russia. The US was not totally left on the sidelines, however. Taiwan flour millers purchased 56,000 mt of US wheat.

  • A Canadian port strike in British Columbia could eventually slow grain movement there, although it is not a major concern so far.

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

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Midday Update: July 6, 2023

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn
SEP ’23 495 9.75
DEC ’23 502 8.5
DEC ’24 501.25 2.25
Soybeans
AUG ’23 1454.75 -14
NOV ’23 1339.5 -15.5
NOV ’24 1244.75 -7
Chicago Wheat
SEP ’23 659.75 -14.5
DEC ’23 678.25 -12
JUL ’24 705.75 -9.25
K.C. Wheat
SEP ’23 843.5 -2.75
DEC ’23 842.5 -2
JUL ’24 792.75 0.75
Mpls Wheat
SEP ’23 859 1.5
DEC ’23 865.25 1.75
SEP ’24 795 -5
S&P 500
SEP ’23 4421.5 -62.25
Crude Oil
SEP ’23 70.82 -1.06
Gold
OCT ’23 1935 -11.2

  • Corn is trading higher at midday as weather forecasts are becoming questionable and the drought monitor is not showing as much relief as had been hoped after recent rains.

  • The northern Corn Belt is expected to receive less rainfall than hoped over the next 7 days, but the southern half of the Corn Belt is forecast to receive beneficial rains.

  • National soil moisture remains an issue with 48% short to very short. Missouri is at 83%, Wisconsin at 71%, and Illinois and Michigan both at 67%.

  • Brazil has reportedly harvested 20% of their second crop corn and based on yield data, analysts raised production estimates again.

  • Soybeans are trading lower today, along with both soybean meal and oil after futures became a bit too overbought, and funds are likely taking a breather.

  • Brazilian FOB offers are now at over a dollar discount to US values and will be there for the next few months making export sales even more difficult for the US.

  • Brazil’s export group, ANEC, reported that June soy exports rose to 9.44 mmt, which compares with 7 mmt in June of last year.

  • The USDA’s forecast for 83.5 million acres of beans has kept prices elevated, and next week’s WASDE could add to the bullishness with a small ending stocks number.

  • Wheat is still mixed with Chicago posting the most losses followed by KC, but Minn wheat is managing to stay slightly higher.

  • Russia attacked the city of Lviv overnight and Ukrainian forces have said that Russia is making slow progress in taking back eastern Ukraine.

  • Russia’s wheat crop estimates were raised by 2.5 mmt and are now at 85.7 mmt on good weather.

  • The French 2023 soft wheat yield is seen at 5% above the 10-year average and was helped by good sowing conditions and frequent rains in early spring.

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 6, 2023

Bygmidev

All prices as of 6:30 am Central Time

Corn

SEP ’23 490 4.75
DEC ’23 497.5 4
DEC ’24 500.75 1.75

Soybeans

AUG ’23 1473.25 4.5
NOV ’23 1358 3
NOV ’24 1252.25 0.5

Chicago Wheat

SEP ’23 666.75 -7.5
DEC ’23 683 -7.25
JUL ’24 708 -7

K.C. Wheat

SEP ’23 853.25 7
DEC ’23 852 7.5
JUL ’24 799.75 7.75

Mpls Wheat

SEP ’23 863.25 5.75
DEC ’23 868.25 4.75
SEP ’24 800 24

S&P 500

SEP ’23 4465 -18.75

Crude Oil

SEP ’23 72.13 0.25

Gold

OCT ’23 1950.4 4.2

  • Corn is beginning the day higher but is still near its lowest prices of the year after the USDA estimated 94.1 million acres planted.

  • Rains are currently falling in southern Kansas and the Oklahoma Panhandle and the rains are expected to move east over the Corn Belt in the next five days.

  • Areas North of the Corn Belt are expected to remain drier, but temperatures will also be lower giving some relief.

  • Brazil has reportedly harvested 20% of their second crop corn and based on yield data, analysts raised production estimates again.

  • Soybeans are trading slightly higher this morning apart from the front month which is lower, while soybean meal trades higher and soybean oil is lower.

  • The rains falling in Kansas are forecast to move into the southern Midwest and are expected to miss most of Missouri, but the 6 to 10 day forecast looks wet for the central Corn Belt.

  • The USDA’s forecast for 83.5 million acres of beans has kept prices elevated, and next week’s WASDE will likely add to the bullishness with a small ending stocks number.

  • Exports have been poor with Brazil keeping a firm grasp on the competition, but US soybeans are getting support from renewed soybean oil demand.

  • Wheat is mixed this morning with Chicago lower bur KC and Minn higher as rain in Kansas is expected to delay harvest for another couple of days.

  • Russia attacked the city of  Lviv overnight and Ukrainian forces have said that Russia is making slow progress in taking back eastern Ukraine.

  • Russia’s wheat crop estimates were raised by 2.5 mmt and are now at 85.7 mmt on goods weather.

  • The French 2023 soft wheat yield is seen at 5% above the 10-year average and was helped by good sowing conditions and frequent rains in early spring. 

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 5, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Driven by updated crop conditions and weather conditions, the corn market traded both sides of unchanged before settling on the positive side in sympathy with soybeans and wheat.

  • After trading on both sides of unchanged like corn, November soybeans settled just 1 ¼ cents higher with strength being drawn from a higher soybean oil market, while lower soybean meal added resistance to prices.

  • Soybean oil likely found support from much higher crude and heating oil prices that were 3.2% and 5.1% higher respectively, implying higher demand for bean oil may be ahead.

  • Continued concerns regarding explosives being placed at the Zaporizhzhia nuclear power plant in Ukraine likely supported all three wheat classes to close sharply higher on the day.

  • To see the current US NOAA 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.

  • Continue to hold current sales levels for the 2024 crop year. The Dec 24 contract is trading weather much like the rest of the market and posted nearly an eighty-cent range between 5/18 and 6/21 as dry conditions affect the ’23 crop and the potential carryout for the 2024 crop year. For now, continue to be patient as Grain Market Insider would like to see prices in the 570 – 600 level before considering making additional sales recommendations for the 2024 crop.

  • After trading both sides of unchanged and making a new low for the move. December corn found support below the market on very oversold conditions and a sharply higher wheat market to close unchanged.

  • The USDA released their updated crop ratings for corn Monday afternoon, raising the Good/Excellent rating 1%, to 51%. While the overall rating came in as expected, Illinois’ G/E rating improved 10% to 36%.

  • Although the current crop conditions have improved, they continue to be the lowest since 2012, with some feeling that current conditions imply a yield closer to 171.5 bpa. This would suggest a crop size of 14.75 billion bushels based on the updated USDA acreage numbers and imply a 300 mil. bu increase to carryout based on current USDA usage. 

  • Corn used in ethanol production for the month of May was weak and only came in at 437.5 mil. bu, bringing this year’s total used to 3.835 bil bu, which is down 4% from the USDA’s current estimate of down 4%. At this point in the marketing year, it seems unlikely that usage will reach USDA estimates without any adjustments lower.

  • Cooler temperatures are expected to move through the Midwest in the next 24 – 36 hours.  While normal to slightly below normal temperatures are expected this weekend, with above average rain in the southwest Corn Belt and 1 – 1.5 inches of rain expected in IL and IN.

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 has broken through the 490 – 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.

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. 

  • Soybeans ended mixed today with the July contract fading lower as its in the delivery process. While November closed slightly higher as trade seems to be focusing less on the recent acreage report and more on upcoming weather which should be wet over the next 7 days.

  • Crop progress was released late on Monday and showed soybean conditions declining surprisingly, despite the very beneficial rains that fell over the Corn Belt last week. Soybeans are now at 50% good to excellent and 29% poor to very poor. 24% of the crop is blooming and 4% is setting pods, both below average.

  • News today was relatively quiet, and the market is trying to find direction. After Friday’s Stocks and Acreage reports and Monday’s Crop Progress report, there is a lot of data for traders to digest. The next USDA supply and demand report on July 12 may help the market to find direction.

  • Palm oil reserves in Malaysia may rise to a four-month high. June inventory grew 11% from the previous month to 1.86 million tons. Down the road, El Nino could have an impact on palm oil production, however.

Above: The USDA’s Stocks and Acreage report gave the market a bullish shot in the arm with a much-reduced acreage estimate. If the market can continue to rally beyond the 1450 area, 1500 – 1550 could be its next target. If not, support could be found between 1340 and 1300 with further support near 1270.

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

Wheat

Market Notes: Wheat

  • Wheat posted strong gains today, seemingly on concern about the situation in the Black Sea. Explosives have reportedly been planted at the Zaporizhzhia nuclear power plant in Ukraine. Both Russia and Ukraine are blaming each other, and naturally this is causing an increase in tensions and concern for the welfare of the region.  

  • Aside from the nuclear plant, there is also question as to whether the Black Sea export corridor will be renewed on July 18th. There continues to be talk out of Russia that they will not renew the agreement, but traders have heard that story before.

  • Monday’s crop progress report showed spring wheat condition down 2% from last week, now at 48% good to excellent. This also was supportive to the wheat market today. As for winter wheat, condition was left unchanged at 40% G/E, but harvest pace is still well behind at only 37% complete versus 46% on average.

  • Argentina is planting wheat, with the Argentina Secretariat of Agriculture saying that 23/24 will have 6.1 million hectares planted. For the 23/24 marketing year, Argentina wheat production may increase to 18 – 19 mmt versus 12.6 mmt in 22/23.

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.

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.

  • There continues to be an opportunity to sell 2023 New Crop MINNEAPOLIS Wheat. Weather dominates the market right now, and friendlier forecasts have pushed prices below the 822 support level. Closing below that 822 support signals that the recent uptrend off the May lows may have ended, which poses the risk that the change in trend could erode the price further in the weeks ahead. The first risk being, price drops to the May low of 771, which is where first support comes in. If that level doesn’t hold, then the next risk could be in the 680-710 window. Although making a sale in a down market may be uncomfortable, it’s important at times to have a Plan B with the objective of trying to avoid having to sell bushels at even lower prices in the future if a downtrend takes hold.

  • 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 trading lower, it will need additional bullish news to turn it back around. Should the market continue to fall, support may be found between 770 and 730. 

Other Charts / Weather

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Midday Update: July 5, 2023

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn
SEP ’23 481.75 -6.25
DEC ’23 488.5 -5
DEC ’24 494.25 -3.75
Soybeans
AUG ’23 1461.5 -6.25
NOV ’23 1344.25 -9.5
NOV ’24 1247.75 9.75
Chicago Wheat
SEP ’23 661 19.25
DEC ’23 678.25 17.5
JUL ’24 705.5 14.5
K.C. Wheat
SEP ’23 833.5 37
DEC ’23 832.5 33.75
JUL ’24 785 23.25
Mpls Wheat
SEP ’23 843.25 34
DEC ’23 850.5 32.25
SEP ’24 776 -2
S&P 500
SEP ’23 4488 -4.25
Crude Oil
SEP ’23 71.91 2
Gold
OCT ’23 1950.7 2.1

  • Corn is trading lower this morning following rains over the Independence Day holiday and continued pressure from Friday’s NASS seeding report.

  • The USDA said that the planting estimate for corn was 94.1 million acres which would increase ending stocks and has caused selling in corn futures.

  • On Friday, crop progress was released showing the corn crop rated 51% good to excellent, up just one point from a week ago. Illinois, Iowa, and Indiana showed improvement from a week ago.

  • Illinois crop ratings improved by 10 points to 36% good to excellent, but Missouri came in at just 23% and 37% of the crop poor to very poor. Missouri is expected to receive beneficial rains this week, which should help next week’s ratings.

  • Soybeans are trading higher after Monday’s Crop Progress report, which showed conditions worsening, but Friday’s acreage report is still giving buying momentum with acres projected to be tight.

  • August soybean oil closed at a new high for the year on Monday as demand picks up. Yesterday, both canola and rapeseed traded higher.

  • Despite the recent beneficial rains in the driest areas of the Corn Belt, crop progress showed soybeans falling by 1% in the good to excellent rating and is now at 50%, the lowest rating for this time of year since 2012.

  • In China, soybeans on the Dalian exchange showed September futures rising nearly 3% to $17.12 per bushel, which is a four-month high.

  • Wheat is trading up this morning with KC leading the charge higher after crop progress results came in showing conditions worsening.

  • On Monday, the USDA said that 37% of winter wheat was harvested, which is down from a five-year average of 46% for this time of year. Winter wheat good to excellent ratings were steady at 40%.

  • Spring wheat good to excellent ratings slipped 2% to 48% good to excellent, and in North Dakota, ratings slipped from 49% to 40%.

  • There is increased tension between Russia and Ukraine right now concerning the nuclear power plant with both countries accusing each other of plotting imminent attacks on the plant. This comes as it appears the Black Sea grain deal may not be renewed.

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 5, 2023

Bygmidev

Markets are closed until 8:30 am Central Time

  • On Monday, corn traded higher throughout the day before ultimately settling lower on continued pressure from the bearish USDA report.

  • The USDA said that the planting estimate for corn was 94.1 million acres which would increase ending stocks and has caused selling in corn futures.

  • On Friday, crop progress was released showing the corn crop rated 51% good to excellent, up just one point from a week ago. Illinois, Iowa, and Indiana showed improvement from a week ago.

  • Rains fell in the western Plains yesterday, and Kansas and Missouri are expecting heavy rain amounts over the next five days, and good rain in the Corn Belt as a whole.

  • On the flip side of corn, soybeans ended higher on Friday with continued support from the USDA report with planting estimates at just 83.5 million acres.

  • August soybean oil closed at a new high for the year on Monday as demand picks up. Yesterday, both canola and rapeseed traded higher.

  • Despite the recent beneficial rains in the driest areas of the Corn Belt, crop progress showed soybeans falling by 1% in the good to excellent rating and is now at 50%, the lowest rating for this time of year since 2012.

  • With soybean futures in the US surging, China has taken notice, and September beans on the Dalian exchange closed 2.9% higher yesterday to a four month high.

  • Wheat ended Monday lower after being pulled down by falling corn prices and poor export demand.

  • Yesterday, September milling wheat closed up 0.8% and early today those prices were up another 1.6%, so it is possible that US futures open higher.

  • On Monday, the USDA said that 37% of winter wheat was harvested which is down from a five year average of 46% for this time of year. Winter wheat good to excellent ratings were steady at 40%.

  • Spring wheat good to excellent ratings slipped 2% to 48% good to excellent, and in North Dakota, ratings slipped from 49% to 40%.

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 3, 2023

ByGrain Market Insider
The CME and Total Farm Marketing offices will be closed
Tuesday, July 4, in observance of Independence Day

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Marked by low volume as many traders stayed away for an extended July 4th holiday, the corn market failed to hold onto support from the neighboring soybean market as carryover weakness from Friday’s report and weekend rains weighed on prices.

  • Following Friday’s surprise USDA 4 million acre drop in soybeans planted acres, follow through buying in soybeans added to last week’s gains, though the November contract settled in the bottom end of its range.

  • Continued buying from Friday’s limit up close in soybean oil helped to give an additional support to soybeans and Board Crush margins as December bean oil closed 2.1% higher. Soybean meal traded higher in the overnight but sold off throughout the day to close lower, ending in a bearish reversal.

  • News that the EU is considering letting Russia back into the global banking system, along with weak demand and low Russian prices, pressured all three wheat classes to close lower on the day following two-sided trade.

  • To see the current US NOAA July 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.

  • Continue to hold current sales levels for the 2024 crop year. The Dec 24 contract is trading weather much like the rest of the market and posted nearly an eighty-cent range between 5/18 and 6/21 as dry conditions affect the ’23 crop and the potential carryout for the 2024 crop year. For now, continue to be patient as Grain Market Insider would like to see prices in the 570 – 600 level before considering making additional sales recommendations for the 2024 crop.

  • The corn market was digesting Friday’s bearish USDA corn acre numbers, weather forecast, and technical weakness as prices drifted lower into the close of the session. Price action remains weak as Dec corn failed to push back through the key $5.00 price level on the day.

  • December corn futures posted a new low for the move, pushing past the low established on 5/18. Finishing with a lower range close, the weak price action will likely keep sellers active on Wednesday as long as support price news is lacking in the market.

  • Large areas of the corn belt saw greater than one inch of rainfall over the past few days, which will likely help some areas in need. Many areas of the corn belt are still overall deficient on rainfall totals, and timely rains will be necessary. Forecasts going into next week are still showing a cooler and wetter overall bias.

  • The USDA will release weekly crop progress report late on Monday afternoon, and analysts are expecting corn conditions to improve slightly to 51% good/excellent, up 1% from last week. Illinois will still be a watched state as decent rainfall coverage occurred over the weekend, and ratings should stabilize.

  • The USDA released weekly export inspections on Monday morning and U.S. exporters shipped 643,000 MT of corn last week. This total was higher than last week’s totals, but year-over-year exports are still lagging by 31%.

Above: The USDA’s Stocks and Acreage report added bearish news to the market with its higher acres estimate. Since the last week of June, prices have been racing towards the 490 – 505 support level which has been in place since January 2021. If the market breaks through the 490 area, 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 Tuesday, June 27. Net position in Green versus price in Red. Money Managers net sold 5,454 contracts between June 20 – June 27, bringing their total position to a net long 52,845 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. Changes in weather forecasts and crop conditions will continue to dominate the market. With having just recommended making a cash sale, and with one of the most volatile USDA report days of the year coming this Friday, we would need to see the market rally to 1400 – 1450 area before we would consider recommending any additional sales for the 2023 crop. Otherwise, in light of current crop conditions, we will suggest holding tight on further cash sales for now.

  • Continue to hold off on pricing the 2024 crop. We look to make sales further into the 2023 growing season when selling opportunities tend to improve seasonally. 

  • Soybeans ended the day higher after Friday’s huge rally, but November beans backed significantly off their highs overnight where they reached the highest levels since late February. Soybean meal closed lower while soybean oil closed higher.

  • On Friday, the USDA estimated soybeans at 83.5 million acres, far below the average trade guess of 87.7 million acres and the previous USDA estimate of 87.5 ma. US quarterly soy stocks came in at 796 million bushels, below the trade guess of 812 mb but overshadowed by the huge drop in acres.

  • Crop progress will be released later today, and it is expected that good to excellent ratings will increase after the recent rains in some of the driest areas of the Corn Belt. Soybeans are expected to improve by 1% to 52% good to excellent, but that number may come in higher.

  • Friday’s CFTC report showed funds as buyers of soybeans by 22,530 contracts, increasing their net long position to 99,480 contracts.

Above: The USDA’s Stocks and Acreage report gave the market a bullish shot in the arm with a much-reduced acreage estimate. If the market can continue to rally beyond the 1450 area, 1500 – 1550 could be its next target. If not, support could be found between 1340 and 1300 with further support near 1270.

Soybeans Managed Money Funds net position as of Tuesday, June 27. Net position in Green versus price in Red. Money Managers net bought 22,530 contracts between June 20 – June 27, bringing their total position to a net long 99,480 contracts.

Wheat

Market Notes: Wheat

  • The European Union is considering letting the Russian Agricultural Bank back into the global SWIFT program. This reduction of sanctions is an effort to get Russia to extend the Black Sea corridor once again – last week Russia said they do not have reason to extend it beyond expiration on July 17. Meanwhile, Russia continues to lead the world for cheap wheat exports, which remains an anchor for US export demand.

  • News outlets are reporting that Ukraine is conducting drills for a radiation exposure emergency. According to Ukraine officials, Russia has planted explosives at the Zaporizhzhia nuclear plant. This is the same plant that has had several other scares over the past months after being disconnected from the power grid.

  • Weekly wheat export inspections of 12.4 mb for the week ending 6/29 were 64% higher than the week prior 23% higher last year and bring total 23/24 inspections to 40.2 mb.

  • As of June 27, funds reduced their net short position in Chicago wheat from about 90,000 contracts to about 55,000 contracts.

  • Weather over the next seven days is expected to bring more rain to the western corn belt, which may continue to slow harvest in Kansas and Nebraska.

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.

Chicago Wheat Managed Money Funds net position as of Tuesday, June 27. Net position in Green versus price in Red. Money Managers net bought 31,966 contracts between June 20 – June 27, bringing their total position to a net short 52,168 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 Tuesday, June 27. Net position in Green versus price in Red. Money Managers net bought 6,475 contracts between June 20 – 27, bringing their total position to a net long 12,419 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.

  • There continues to be an opportunity to sell 2023 New Crop MINNEAPOLIS Wheat. Weather dominates the market right now, and friendlier forecasts have pushed prices below the 822 support level. Closing below that 822 support signals that the recent uptrend off the May lows may have ended, which poses the risk that the change in trend could erode the price further in the weeks ahead. The first risk being, price drops to the May low of 771, which is where first support comes in. If that level doesn’t hold, then the next risk could be in the 680-710 window. Although making a sale in a down market may be uncomfortable, it’s important at times to have a Plan B with the objective of trying to avoid having to sell bushels at even lower prices in the future if a downtrend takes hold.

  • 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 trading lower, it will need additional bullish news to turn it back around. Should the market continue to fall, support may be found between 770 and 730. 

Minneapolis Wheat Managed Money Funds net position as of Tuesday, June 27. Net position in Green versus price in Red. Money Managers net bought 6,263 contracts between June 20 – June 27, bringing their total position to a net long 3,001 contracts.

Other Charts / Weather

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Midday Update: July 3, 2023

ByGrain Market Insider

The CME and Total Farm Marketing offices will be closed
Tuesday, July 4, in observance of Independence Day

All prices as of 10:30 am Central Time

Corn
SEP ’23 491.25 2.75
DEC ’23 496.75 2
DEC ’24 499.5 2.75
Soybeans
AUG ’23 1483 41
NOV ’23 1367.5 24.25
NOV ’24 1244.25 37.5
Chicago Wheat
SEP ’23 651.5 0.5
DEC ’23 670.25 1
JUL ’24 700 2.25
K.C. Wheat
SEP ’23 818.25 18.25
DEC ’23 818.75 18.5
JUL ’24 779.75 11.5
Mpls Wheat
SEP ’23 828.75 11.75
DEC ’23 837.5 11
SEP ’24 778 -16
S&P 500
SEP ’23 4487 -1.25
Crude Oil
SEP ’23 70.8 0.02
Gold
OCT ’23 1954.2 5.7

  • Corn began higher in the overnight but has faded and is now relatively unchanged. Friday’s USDA report was bearish for corn after planted acres were forecast to be higher.

  • Very beneficial rains fell over some of the driest areas of the Corn Belt this weekend, but there was also some hail and rain damage in some fields.

  • Last week’s acreage number came in 2.1 million acres higher than in March which pressured futures, but the June 1 stocks number was lower than expected and down 155 mb from pre report estimates.

  • This afternoon’s Crop Progress report will let traders know whether or not the recent rains were enough to help the crop turn around. Good to excellent ratings will likely increase.

  • Soybeans are still riding the high from Friday’s very bullish USDA report but have faded slightly from overnight highs which hit the highest prices since February 24.

  • Friday’s NASS stocks and seeding report showed that soybean stocks were 16 mb below estimates and 172 mb below a year ago, but the huge bullish news was soybean acres falling 4 million below March intentions.

  • Soy products in China followed the lead of US markets and moved higher with soybean oil on the Dalian exchange rising 6%.

  • World veg oils have been moving significantly higher with Malaysian palm oil futures up 5.2% which is the highest level since March. US soybean oil futures are at their highest levels since December of last year.

  • Wheat has bounced around today, opening lower but now trading significantly higher in the KC wheat contract, while Chicago is a bit higher and Minn. wheat lower.

  • Friday’s USDA report showed wheat stocks to be lower than expected at 580 mb, 31 mb lower than expectations and what would be the lowest in 16 years.

  • The EU is weighing concessions to a Russian bank over the Black Sea grain deal in hopes that Russia will agree to extend the deal.

  • Friday’s CFTC report showed funds buying back a big chunk of their short position. They bought back 31,966 contracts, reducing their net short position to 52,168 contracts.

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

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

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

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Opening Update: July 3, 2023

ByGrain Market Insider

All prices as of 6:30 am Central Time

Corn
SEP ’23 491.25 2.75
DEC ’23 496.5 1.75
DEC ’24 504.25 7.5
Soybeans
AUG ’23 1495 53
NOV ’23 1378.75 35.5
NOV ’24 1242.25 35.5
Chicago Wheat
SEP ’23 647.75 -3.25
DEC ’23 665.75 -3.5
JUL ’24 696 -1.75
K.C. Wheat
SEP ’23 803.5 3.5
DEC ’23 805.75 5.5
JUL ’24 767.25 -1
Mpls Wheat
SEP ’23 822.75 5.75
DEC ’23 822.5 -4
SEP ’24 778 -16
S&P 500
SEP ’23 4488.5 0.25
Crude Oil
SEP ’23 71.27 0.49
Gold
OCT ’23 1939.5 -9

  • Corn is trading higher this morning despite last week’s bearish USDA report but is likely following soybeans today with their large gains.

  • Friday’s corn planting estimate was 94.1 million acres by the USDA, the most since 2013. This makes it more likely for 23/24 ending stocks to rise.

  • The Corn Belt received significant rains in most areas with some of those areas in the most need, so today’s crop progress report will show if good to excellent ratings start moving back up.

  • Funds were net sellers as of June 28 reducing their net long position by 5,454 contracts reducing it to 52,845 contracts.

  • Soybeans are continuing their ascent this morning on the heels of Friday’s very bullish USDA report. Both soybean meal and soybean oil are significantly higher.

  • The USDA’s acreage report on Friday said that only 83.5 million acres of soybeans are expected to be planted in 2023, but 8.2 million acres of those aren’t planted yet and may not get planted.

  • The National Atmospheric and Oceanic Administration issued a new Seasonal Drought Outlook on Friday which showed drought persisting but improving in the central Midwest while worsening in Wisconsin and Michigan.

  • Friday’s CFTC report showed funds as buyers of soybeans by 22,530 contracts, increasing their net long position to 99,480 contracts.

  • Wheat is trading lower this morning despite gains in both corn and soybeans, and KC wheat is leading the way lower as weather improves and exports remain stagnant.

  • Friday’s report which showed more corn acres being planted would give the US a surplus of corn to feed that would cut into wheat use for feed and is a bearish factor.

  • Over the weekend, ABC News reported that Ukraine’s nuclear power plant was doing drills to prepare for possible emergency radiation exposure after the government said that Russia planted explosives at the power plant.

  • Friday’s CFTC report showed funds buying back a big chunk of their short position. They bought back 31,966 contracts, reducing their net short position to 52,168 contracts.

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Grain Market Insider: June 30, 2023

ByGrain Market Insider
The CME and Total Farm Marketing offices will be closed
Tuesday, July 4, in observance of Independence Day

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • While corn stocks reported by the USDA as of June 1 were 150 mb below expectations, it was the incredibly bearish surprise increase of 2.3 mil. acres that shocked the market and sent it reeling sharply lower.

  • The USDA’s soybean stocks and planted acreage numbers came in well below expectations at 796 mb and 83.5 mil. acres respectively and launched soybeans higher, wiping out losses back to June 22.

  • Soybean meal and oil joined in the fun trading higher and added support to soybeans as Dec meal closed with a gain of $16.80 (4.4%), and Dec bean oil closed limit up with a gain of 4.00 cents (7.3%).

  • The wheat complex ended the day mixed, as pressure spilled over from lower corn, and planted acres for wheat were mostly as expected, with June 1 stocks 31 mb below expectations.

  • A lower US Dollar was unable to lend any support to the corn or wheat markets as it traded lower, eclipsing yesterday’s gains.

  • To see the updated USDA Planted Acreage maps, 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.

  • Continue to hold current sales levels for the 2024 crop year.  The Dec 24 contract is trading weather much like the rest of the market and posted nearly an eighty-cent range between 5/18 and 6/21 as dry conditions affect the ’23 crop and the potential carryout for the 2024 crop year. For now, continue to be patient as Grain Market Insider would like to see prices in the 570 – 600 level before considering making additional sales recommendations for the 2024 crop.

  • A surprise jump in corn planted acres brought strong selling pressure in the corn market to end the week. December corn closed down 6.4% and posted its lowest daily close since October 2021. For the week, December corn futures dropped 93-1/4 cents.

  • The USDA Planted Acres report raised planted corn acres to 94.1 million acres, the highest total in 10 years, and up 2.3% from the March intentions report and 6.2% over last year.  Market analysts were expecting a total of 91.9 million acres.

  • USDA released quarterly Grain Stocks report, and total grain stocks were 4.106 billion bushels, down 150 million bushels from expectations and 5.6% from last year’s total. The supportive number was outweighed by the strong jump in planted acres during the session.

  • Weather forecasts remain more friendly for crop development as long-range forecasts hold a wetter and cooler bias across the corn belt into the middle of July.

  • The weak prices action and technical close will likely keep the corn market pressured going into the holiday trade next week. The December close below $5.00 is disappointing to market bulls and could trigger additional liquidation to start the week.

Above: The USDA’s Stocks and Acreage report added bearish news to the market with its higher acres estimate. Since the last week of June, prices have been racing towards the 490 – 505 support level which has been in place since January 2021. If the market breaks through the 490 area, 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. Changes in weather forecasts and crop conditions will continue to dominate the market. With having just recommended making a cash sale, and with one of the most volatile USDA report days of the year coming this Friday, we would need to see the market rally to 1400 – 1450 area before we would consider recommending any additional sales for the 2023 crop. Otherwise, in light of current crop conditions, we will suggest holding tight on further cash sales for now.

  • Continue to hold off on pricing the 2024 crop. We look to make sales further into the 2023 growing season when selling opportunities tend to improve seasonally. 

  • Soybeans absolutely skyrocketed today following the USDA Acreage and Stocks report which saw fewer soybean acres planted in favor of corn. Soybean meal ended over 4% higher, and soybean oil closed over 7% higher in the December contracts.

  • The USDA has estimated soybeans at 83.5 million acres, far below the average trade guess of 87.7 million acres and the previous USDA estimate of 87.5 ma. US quarterly soy stocks came in at 796 million bushels, below the trade guess of 812 mb but overshadowed by the huge drop in acres.

  • Private exporters reported to the USDA export sales of 132,000 metric tons of soybeans for delivery to China during the 23/24 marketing year. This was the first flash sale to China that the US has seen in months.

  • While today’s report gave soybeans a significant rally, weekend weather is forecast to be wet in the driest areas of the Corn Belt, and the longer-term forecast is wet as well. It is possible that trade will go back to trading weather markets next week.

Above: The USDA’s Stocks and Acreage report gave the market a bullish shot in the arm with a much-reduced acreage estimate. If the market can continue to rally beyond the 1450 area, 1500 – 1550 could be its next target. If not, support could be found between 1340 and 1300 with further support near 1270.

Wheat

Market Notes: Wheat

  • Today the USDA estimated 2023 all wheat acreage basically in line with expectation at 49.6 mb vs 49.65 mb expected. This was, however, up 9% from 2022. Included in this change was spring wheat acreage, which increased from the expected 10.51 mb to 11.1 mb.

  • Today the USDA estimated June 1 wheat stocks at 580 million bushels. This was less than the 611 mb expectation and 698 mb last year. While this is somewhat friendly, wheat likely followed corn lower.

  • Yesterday the International Grains Council increased their projection of world wheat production by 6 mmt to 783 mmt for 23/24, which offered no support to the US wheat market today.

  • Technical momentum for wheat is downward on both stochastics and the RSI. Support for Dec Chicago wheat at the 21-day moving average, around 6.91, was violated today.

  • According to Russia’s foreign minister, Sergei Lavrov, he sees no arguments to extend the Black Sea export deal beyond the expiration of July 18.

  • Paris milling wheat could not hold onto earlier gains and posted losses for a fourth day out of the past five sessions.

Chicago Wheat Action Plan Summary

  • No new action is recommended for the 2022 crop. Grain Market Insider is done with the 2022 crop, and there will be no New Alerts posted for the 2022 crop going forward.

  • 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.  

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

  • No new action is recommended for the 2022 crop. Though most, if not all, of your Old Crop 2022 wheat may be sold, consider storing any remaining Old Crop, if possible, in anticipation of a short new crop this year, and marketing it along with the new crop.

  • 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.

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.

  • There continues to be an opportunity to sell 2023 New Crop MINNEAPOLIS Wheat. Weather dominates the market right now, and friendlier forecasts have pushed prices below the 822 support level. Closing below that 822 support signals that the recent uptrend off the May lows may have ended, which poses the risk that the change in trend could erode the price further in the weeks ahead. The first risk being, price drops to the May low of 771, which is where first support comes in. If that level doesn’t hold, then the next risk could be in the 680-710 window. Although making a sale in a down market may be uncomfortable, it’s important at times to have a Plan B with the objective of trying to avoid having to sell bushels at even lower prices in the future if a downtrend takes hold.

  • 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 trading lower, it will need additional bullish news to turn it back around. Should the market continue to fall, support may be found between 770 and 730. 

Other Charts / Weather