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
JUL ’23
585
4
DEC ’23
530.5
2
DEC ’24
511.25
4.25
Soybeans
JUL ’23
1505
22
NOV ’23
1289.5
23.75
NOV ’24
1212
6
Chicago Wheat
JUL ’23
654.75
1.75
SEP ’23
669
1.5
JUL ’24
710.5
2
K.C. Wheat
JUL ’23
818
23.75
SEP ’23
819
19
JUL ’24
786
12.25
Mpls Wheat
JUL ’23
825
17.5
SEP ’23
837.5
12
SEP ’24
794
0.75
S&P 500
SEP ’23
4483.75
48
Crude Oil
AUG ’23
70.83
0.97
Gold
AUG ’23
1923.2
5.3
It is estimated that 70% of the US corn crop remains in drought. This is up from last week at 64%.
The storm system yesterday brought reports of hail and wind damage in several areas of the Midwest. The National Weather Service is officially calling this a derecho due to the strength of the winds over a widespread area.
The seven-day forecast continues to show rain for a large part of the corn belt, including some of the driest areas that received rain yesterday.
After the recent downtrend, corn futures are now at or near oversold levels on daily stochastics.
According to CONAB, Brazil’s government is ready to buy 500,000 mt of corn in an effort to rebuild food stocks.
It is estimated that 63% of the US soybean crop is in drought. This is up from 57% last week.
Private exporters reported sales of 132,000 mt of soybeans for delivery to China during the 23/24 marketing year.
Soybean oil is more than 2 cents higher this morning, which may be fueled by a higher palm oil market. This in turn may be offering support to soybean futures which currently show double-digit gains for the day.
After today’s Stock and Acreage reports, the next USDA report will be the WASDE on July 12. Due to worsening crop conditions for soybeans (and corn), there is a good chance they will lower yields at that time. The big question is whether or not that will be enough to offset poor export demand, with commitments to date behind the USDA’s goal.
Argentina’s soybean harvest is now complete, and yields are said to be 45% behind the 5-year average, according to the Buenos Aires Grain Exchange.
KC wheat is leading the US wheat complex higher this morning. Paris milling wheat futures are also higher for the second day in a row – France reported another decline in their crop condition to 81% good to excellent.
South Korean flour mills are reported to have purchased 50,000 mt of US wheat overnight.
Chicago wheat futures have downward momentum on both daily stochastics and the RSI. However, December Chicago wheat may be finding support near the 21-day moving average, which today is at 6.90-3/4.
Not only is today a report day, but it is also month and quarter end. This could result in position squaring and increased volatility. The upcoming shortened Independence Day holiday week could have a similar result, especially if the weather forecast has any major changes this weekend.
Russia’s foreign minister, Sergei Lavrov, told reporters that he sees no arguments to extend the Black Sea Grain Initiative. The current deal is set to expire on July 18.
Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing by Stewart-Peterson and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Stewart-Peterson Inc. Reproduction of this information without prior written permission is prohibited. Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Reproduction and distribution of this information without prior written permission is prohibited. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing.
Stewart-Peterson Inc., Stewart-Peterson Group Inc., and SP Risk Services LLC are each part of the family of companies within Total Farm Marketing (TFM). Stewart-Peterson Inc. is a publishing company. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services LLC is an insurance agency. A customer may have relationships with any or all three companies.
Corn is trading slightly higher this morning after yesterday’s Derecho winds across the Midwest that brought rain but strong winds and large hail as well.
There were 64 reports of large hail yesterday and 477 reports of wind damage with three counties in Illinois reporting gusts over 100 mph.
Despite the storm and damage, Illinois was in desperate need of rain which it received a decent amount of.
The planted acreage report will be released today and trade estimates are guessing that corn acres will be at 91.85 million acres, down 150,000 acres from March intentions, some of these acres may be going towards soybeans.
Soybeans are trading higher with July leading and both soybean meal and oil higher as well. Yesterday’s storm and the damage it caused is helping futures out today.
Soybean oil has gotten support from a rise in world veg oil prices with palm oil up today, and concerns about smaller southeast Asian palm oil production.
Today’s USDA acreage report is expected to show a small increase in soybean acres with likely increases in Minnesota and North Dakota. Stocks are expected to be tighter.
Argentina has completed their soybean harvest with yields coming in 45% less than normal, another bullish factor today.
Wheat is trading higher this morning with KC leading the way up after forecasts turned slightly drier for spring wheat areas.
The USDA acreage report is expecting to show slightly lower spring wheat acreage and about 200,000 acres of declines in all wheat. Wheat stocks are forecast to be 611 mb compared to current ending stocks of 598 mb.
Global wheat production is now estimated higher at 786 mmt from 783 mmt, but stockpile estimates are expected to fall to 264 mmt from 271 mmt as consumption expands.
Ukraine’s wheat crop is being estimated at 17.9 mmt which is down 12% year over year.
Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing by Stewart-Peterson and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Stewart-Peterson Inc. Reproduction of this information without prior written permission is prohibited. Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Reproduction and distribution of this information without prior written permission is prohibited. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing.
Stewart-Peterson Inc., Stewart-Peterson Group Inc., and SP Risk Services LLC are each part of the family of companies within Total Farm Marketing (TFM). Stewart-Peterson Inc. is a publishing company. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services LLC is an insurance agency. A customer may have relationships with any or all three companies.
Continued long liquidation and technical selling, paired with less than stellar export sales, pressured the corn market ahead of tomorrow’s USDA Stocks and Acreage report.
First Notice Day is tomorrow, and with reduced position limits for the July contract, it appears short July position holders were in a race to cover positions with July closing sharply higher and the July/August spread gaining 26 cents.
New Crop soybean contracts closed nearly unchanged, balanced by higher soybean meal and lower soybean oil. With traders squaring meal positions ahead of tomorrow’s report while bean oil saw more technical follow through selling after yesterday’s bearish reversal.
Weak export sales and a higher US Dollar added resistance to the wheat markets with Chicago and K.C. following corn lower, while Minneapolis closed higher.
The US Dollar broke out of its recent range to the upside and traded to a high of 103.44, on hawkish comments from Jerome Powell and a better-than-expected GDP report. The move higher may add a layer of resistance to the grain markets if it continues.
To see the current US Drought Monitor and US 7-day Precipitation forecast, 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.
Further technical selling and long liquidation pushed the corn market moderately lower. December corn failed to find support at the June 8 price gap at $6.33 ½. Confirmation of rainfall in recent forecasts and longer-term weather models holding a wetter and cooler bias pressure the market.
The selling in December corn futures has been aggressive as prices have lost nearly 16% over the past six trading sessions and has been measured as one of the steepest six-session drops in corn prices during the month of June over the past three decades.
Export demand remains a concern as the weekly USDA Export Sales report showed new sales of 140,400 MT of old crop and 123,500 MT of new crop. The total sales were at the lower end of analysts’ expectations.
Weather models remain bearish for prices, as the 8-14 day forecast is looking at trending overall cooler temperature and above average precipitation over the majority of the corn belt. Rainfall looks to be targeted over Iowa, Illinois and into Indiana, areas that shifted drier on the latest drought monitor maps.
Drought monitor maps are reflecting the dry conditions, as the estimate is up to 70% of corn acres in the U.S. are experiencing some form of drought, up 10% from last week.
The market may be poised for some short covering before Friday’s 11:00 am USDA Planted Acreage and Grain Stocks report, as traders could look to square positions. Expectations are for corn acres to be at 91.8 million acres, down slightly from the March planting estimates. Grain stocks for the quarter are expected to be near 4.25 billion bushels, down 2.3% from last year.
Above: The weather has been a dominant feature of the current market and since May 18, September corn has had a 127-cent swing and back, testing 625 resistance and falling through 540 support. Without more bullish news, prices could slide further, where support may be found around the psychological level of 500, between 490 – 505, with key resistance above the market near 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 ended significantly higher in the July contract as First Notice Day approaches tomorrow, but deferred contracts only ended slightly higher. Soybean meal closed higher while only July and August soybean oil ended higher.
The USDA’s Planted Acreage and Stocks report will be released tomorrow, and analysts are expecting soybean acres to increase slightly, while stocks are estimated to decline.
Significant rains are currently moving through central Illinois, but they are accompanied by strong winds in some areas with reports of up to 70 and 80 mph. More rain is in the forecast for Iowa, Illinois, and Indiana over the next 5 days.
Weekly export sales were disappointing again with an increase of 8.4 mb for 22/23 and an increase of 0.6 mb for 23/24. Sales were down 28% from the prior 4-year average. Last week’s export shipments of 7.0 mb were below the 11.4 mb needed each week to achieve the USDA’s export estimates.
Above: The market continues to keep its eye on the weather. The August contract rallied in June and tested the 1450 resistance area near the 100 and 200-day moving averages before it slid back. If the market receives additional bullish news and can 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 holding in positive territory for much of the day, Chicago wheat posted small losses at the close. The silver lining may be that the market is probing for a bottom at these lower support levels.
The USDA reported an increase of 5.7 mb of wheat export sales for 23/24. The USDA is estimating 725 mb of wheat exports for 23/24 and last week’s shipments of 5.8 mb are behind the 14.1 mb pace needed to meet that goal.
The US Dollar Index is trending higher today and above the 103 level. Along with poor export data, these factors are likely limiting the upside for wheat futures.
Also offering resistance to US wheat is the fact that Canada revised higher their spring wheat seeding to the largest acreage since 2001. Recent rains in the northern US are likely to improve spring wheat conditions as well. Interestingly, Minneapolis wheat was the only US class to post gains today in the face of these negative factors.
The US Ag Attaché in Australia is projecting their wheat crop at 29 mmt, down about 10 mmt from last year. The reduction is a result of anticipated drought conditions caused by the El Nino weather pattern.
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
US 7 day precipitation forecast courtesy of NOAA, Weather Prediction Center.
The USDA reported an increase of 5.5 mb of corn export sales for 22/23 and an increase of 4.9 mb for 23/24.
Weather still appears to be the main driver of the grain complex. Rain is forecasted for some of the drier areas of the central Midwest. However, grain markets are mixed at midday, suggesting that they are finding some support at these lower levels.
Yesterday’s announced purchase of US corn by Mexico is supportive but does once again bring up the question of their impending GMO ban on imports down the road.
A South Korean feed company is tendering for 130,000 mt of feed corn. Given the discount of South American exports vs US, as well as grain still flowing out of the Black Sea, it is unlikely to be sourced from here.
The USDA reported an increase of 8.4 mb of soybean export sales for 22/23 and an increase of 0.6 mb for 23/24.
Soybean meal and oil are slightly higher at midday, which may be keeping soybean futures afloat. The Malaysian palm oil futures market is on holiday so there is no influence on US markets currently.
Reportedly, South American soybean meal offers dropped $18 per ton, compared with the previous day. This is sure to keep pressure on the US export market, which is still not performing well.
Right now, bulls and bears are battling between poor crop ratings, vs rain in the forecast and poor exports. Tomorrow’s reports could help provide some direction – the stocks number will likely be more of a factor and there is some anticipation that June 1 soybean stocks will be tighter than expected.
The USDA reported an increase of 5.7 mb of wheat export sales for 23/24.
US wheat futures appear to be probing for a bottom this morning. Some support may be coming from higher Matif wheat futures, which have a gap above the market that may yet be filled.
Offering resistance to US wheat is the fact that Canda revised their spring wheat seeding higher, to the largest acreage since 2001.
The US Ag Attaché in Australia is estimating their wheat crop at 29 mmt. That is a reduction of about 10 mmt from last year in anticipation of the El Nino drought conditions.
Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing by Stewart-Peterson and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Stewart-Peterson Inc. Reproduction of this information without prior written permission is prohibited. Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Reproduction and distribution of this information without prior written permission is prohibited. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing.
Stewart-Peterson Inc., Stewart-Peterson Group Inc., and SP Risk Services LLC are each part of the family of companies within Total Farm Marketing (TFM). Stewart-Peterson Inc. is a publishing company. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services LLC is an insurance agency. A customer may have relationships with any or all three companies.
Corn is trading relatively unchanged this morning after two days of sharp selloffs. July is slightly higher while deferred contracts are about a cent lower.
Yesterday, a front moved through Iowa, Missouri, and Illinois, but 24-hour precipitation totals showed that most areas received about 1/4 inch.
There is still significant rain in the 5-day forecast with large amounts expected in the parts of Illinois that are the driest.
US ethanol stocks rose by 0.8% to 22.979 mln bbl with analysts having expected 22.755 mln bbl.
Soybeans are trading slightly lower with losses in soybean meal but gains in July and Aug soybean oil. Yesterday’s rain was beneficial, but the important weather is still ahead.
Brazilian soy exports have reached up to 14.2 mmt in June compared to the 14.3 mmt forecast the previous week as the world looks to Brazil for soybeans.
Brazil’s crop is now expected to reach a record breaking 156 mmt of soybeans harvested, far above the initial analyst guesses earlier this year.
Friday morning’s acreage report is expected to show soybean acres up slightly from May intentions with average trade guesses at 87.67 ma, up from the previous estimate.
Wheat is mixed this morning with Chicago and KC slightly lower but Minn around 3 cents higher as the market trades quietly ahead of Friday’s planted acreage report.
Friday’s USDA stocks report is expected to show June 1 wheat stocks down near 335 mb vs 611 mb a year ago.
Despite support from the anticipated end of the Black Sea grain deal next month, Ukraine is now expected to raise a wheat crop as high as 24.4 mmt compared to estimates ranging between 16 to 18 mmt.
Canadian wheat planting was only slightly lower than previously expected at 26.9 million acres with canola at 22.1.
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.
Long liquidation dominated the corn market, led by the July contract, as traders began moving out of their long positions ahead of Friday’s First Notice Day when long July position holders will be notified of delivery.
Like the corn market, soybeans were held hostage by sellers liquidating July positions ahead of Friday’s First Notice Day, as the July/August spread lost 9-1/2 cents.
Sharply lower soybean meal and oil added to the negativity in soybeans, as Stats Canada reported an increase of 500k acres to Canada’s Canola crop.
Sharply lower corn and beans add downward pressure to the wheat complex as Funds likely add to short positions on a more favorable weather forecast for the Midwest.
To see the current US NOAA 6 – 10 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. Any remaining old crop bushels that you may have should be getting priced into this rally. We won’t have any “New Alerts” for 2022 Corn — either 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.
Sellers stayed in control in the corn market as prices finished with strong double-digit losses, dropping another 4% again on Wednesday. Since peaking at $6.29-3/4 on June 16, December corn has lost 93 cents into today’s close.
Technical selling and long liquidation gripped the corn market as prices pushed through support levels. Selling pressure was only fueled by the weather forecast staying on the wetter side for the next couple weeks, which could provide some severely needed moisture in key growing areas.
The USDA announced an export sale of corn to Mexico this morning. Mexico bought 170,706 MT of corn. Of that total, 21,340 MT was old crop, and 149,366 MT was new crop. This was the first published export corn sale since April 14.
The market may turn choppy as traders look to this Friday’s USDA Planted Acreage and Grain Stocks report. Expectations are for corn acres to be at 91.8 million acres, down slightly from the March planting estimates. Grain stocks for the quarter are expected to be near 4.25 billion bushels, down 2.3% from last year.
Above: Weather continues to dominate price discovery with every change in the weather forecast. Corn rallied into the 625 resistance area and reversed lower to test 580 – 540 support level. Should this support area fail, further support may be found below the market between 505 and 490. With resistance above 625 coming in near the March highs between 650 – 670.
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 — either 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 closed sharply lower again, along with both soybean meal and oil, as weather forecasts continue to predict needed rains over the next 5 days in the Corn Belt. Illinois and Indiana are slated to receive the most rain followed by Iowa.
Next week’s Crop Progress report will be interesting in that we will see how much help the crop received from this week’s rain. Monday’s report showed good to excellent ratings at just 51% and Illinois’ ratings at just 25%.
Brazil’s soybean crop has been estimated higher yet again, now at 156 mmt. They increased their soy exports as well to a record large 97.3 mmt, up 1.3 mmt from their last estimate.
On Friday, the Planted Acreage report will be released, and the Dow Jones survey expects the USDA to say that 97.7 million acres of soybeans were planted in 2023 and 808 mb of soybeans were on hand as of June 1.
Above: The market’s eye is squarely on the weather at this time. The August contract rallied through the 50-day moving average and hit resistance near 1450 and the 100-day moving average. If the market can rally beyond this point, the resistance area between 1500 and 1550 could be its next target. If the market drops back, support could be found between 1340 and 1300 with further support near 1270.
Wheat
Market Notes: Wheat
Neither the higher US Dollar today, nor lower Matif wheat futures offered any support to the US wheat complex. Funds are likely adding short positions due to the shift in weather towards a wetter forecast. Additionally, lower row crop futures do not help the wheat price situation.
Major weather models are all putting more rain in the forecast for the driest parts of the Midwest. This may slow winter wheat harvest, which is already behind the normal pace. But it may also bring some moisture to northern spring wheat areas, improving crop conditions there. Spring wheat is currently rated 50% good to excellent.
Within the past week, two cargoes of wheat have left Ukraine along with 5 cargoes of corn, destined for Europe and China. While there have been reports of Russia blocking shipments in the Black Sea, some grain still appears to be flowing. This is also despite the recent developments in Russia and the Wagner group’s attempted coup.
The Ukraine Grain Traders Union is estimating Ukraine’s wheat crop at 24.4 mmt, which is higher than other estimates ranging from 16-18 mmt. If the Black Sea corridor is renewed on July 18th (still an uncertainty at this point), increased exports out of that region could further pressure US markets.
On Friday, traders will receive the quarterly Stocks and Acreage reports from the USDA. All wheat acreage is expected to be down slightly at 49.647 million acres, compared to 49.855 on the March report. The pre-report average stocks estimate is at 611 mb, vs 946 in March, and vs 698 at this time last year.
December Chicago wheat broke through support at the 100-day moving average today but did hold support at 5.85, the 21-day moving average. Technically, momentum is down on daily stochastics and the RSI.
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 near 670 with further support coming in 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: The September contract continues to trade within the 736 – 919 range established in May, balancing both production and demand concerns. The recent downturn in the market has established heavy resistance above the market between 890 – 920, with initial support coming in between 778 – 763, with key support near the May low of 736.
Mpls Wheat Action Plan Summary
No new action for 2022 Old Crop MINNEAPOLIS Wheat. Prices haven’t moved much over the last couple of weeks, and it’s disappointing to see the lack of upside opportunities that the market has offered following the large snowfall and the late start to planting this spring. Yet, 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, especially given record European wheat shipments and falling Russian prices. Also, we typically recommend finishing up sales on any remaining Old Crop bushels by mid-June, as bids will soon shift from the July to September contract, and there is currently no carry offered.
Grain Market Insider recommendsselling 2023 New Crop MINNEAPOLIS Wheat today. 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.
Private exporters reported sales of 170,706 mt of corn for delivery to Mexico, with 21,340 mt for delivery during the 22/23 marketing year and 149,366 during 23/24.
The weather forecast for some of the drier areas of the Midwest has relief over the next 10-14 days, and this is continuing to weigh on the grain complex.
July corn futures are holding together better than new crop, suggesting that domestic supply is still tight for old crop.
On Friday, traders will receive the quarterly stocks and acreage reports. The average pre-report estimate for Friday’s data has corn acreage at 91.809 million vs 91.996 in March. The stocks number is expected to come in at 4,261 mb compared to 7,401 in March.
For the month of June, soybean oil has rallied from about 45 cents to 60 cents per pound. But this morning both meal and oil are down, which could account for the sharp decline in soybean futures.
The market seems more focused on the rain forecast and drop in export demand, compared to the reduction in crop ratings for soybeans (and corn too).
ABIOVE, which is Brazil’s oilseed group, increased their estimate of Brazilian soy exports by 1.3 mmt to a record 97.3 mmt.
On Friday, the trade is looking for soybean acres at 87.660 million, vs 87.505 in March. The stocks number for soybeans is anticipated to be 808 mb vs 1,685 in March.
Over the past week, 2 cargoes of wheat (and 5 cargoes of corn) left Ukrainian ports headed for Europe and China.
Winter wheat harvest continues but remains well behind the average pace. With more rain on the way, it may delay harvest even further. However, the moisture should improve spring wheat conditions in the northern US.
The Ukraine Grain Traders Union is reportedly estimating their wheat crop at 24.4 mmt (vs lower estimates ranging from 16-18 mmt)
On Friday, traders are looking for all wheat acreage at 49.647 million acres, vs 49.855 in March. The stocks number for wheat is expected to come in at 611 mb, vs 946 in March.
Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing by Stewart-Peterson and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Stewart-Peterson Inc. Reproduction of this information without prior written permission is prohibited. Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Reproduction and distribution of this information without prior written permission is prohibited. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing.
Stewart-Peterson Inc., Stewart-Peterson Group Inc., and SP Risk Services LLC are each part of the family of companies within Total Farm Marketing (TFM). Stewart-Peterson Inc. is a publishing company. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services LLC is an insurance agency. A customer may have relationships with any or all three companies.
Corn is trading lower again this morning after yesterday’s selloff which was due to an apparent shift in the weather pattern to wetter.
First notice day for July corn is on Friday, and so far it has not lost nearly as much value as the deferred months with on hand supplies tight.
Current radar is showing some rain in northern Minnesota, eastern Iowa, and northwest Illinois. Wider coverage is being forecast over the next 5 days.
Ukraine’s 2023 grain crop is now being seen at 42.5 mmt, down from 53 mmt in 2022 with 21.1 mmt being corn.
Soybeans, soybean meal and oil are all lower this morning with weather as the main bearish factor. The 5-day forecast is showing good coverage for the entire Corn Belt.
Brazilian soy exports have reached up to 14.2 mmt in June compared to the 14.3 mmt forecast the previous week as the world looks to Brazil for soybeans.
Brazil’s crop is now expected to reach a record breaking 156 mmt of soybeans harvested, far above the initial analyst guesses earlier this year.
Friday morning’s acreage report is expected to show soybean acres up slightly from May intentions with average trade guesses at 87.67 ma, up from the previous estimate.
Wheat is lower again this morning pulled down by lower corn and an improved weather forecast.
While it appears less likely that the Black Sea grain deal will be extended next month, two Ukrainian ports have continued to load ships including two wheat vessels in the last week.
In the US, HRW wheat conditions have been improving, and the spring wheat crop has gotten beneficial rains in North Dakota.
The EU’s soft wheat exports have risen by 11% year over year at 30.8 mmt, compared with 27.7 mmt the previous period with Morocco as a leading destination.
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.
Lower than expected crop ratings led the corn market to gap open 5 cents higher at the start of the evening session, only to uncover the sellers in the market as weather forecasts showed more rain chances across the Midwest.
Soybeans opened steady to better at the opening of the overnight session, and like corn, sellers emerged to liquidate long positions on improved weather forecasts.
Soybean meal and oil settled in opposite directions, while December meal added to the woes in soybeans and succumbed to more long liquidation to close down 3.38%, December bean oil found support midday to rally nearly 2.00 cents and close up 1.67%.
Led by the Chicago contracts, all three wheat classes fell victim to the sellers’ wrath as spillover pressure from corn and soybeans weighed heavily on the wheat market.
To see the current US NOAA 6 – 10 and 8 – 14 day Precipitation and Temperature 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. Any remaining old crop bushels that you may have should be getting priced into this rally. We won’t have any “New Alerts” for 2022 Corn — either 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 as traders book profits and liquidate long positions on poor export sales figures and a forecast that shows increased chances of rain in the next two weeks. The US Drought Monitor still shows drought conditions across much of the Midwest and it is estimated that 64% of the corn crop is experiencing some level of drought and is in desperate need of rain. If you missed getting any sales made or adding Dec 23 580 puts before this sharp break, for now, we are looking at a level north of 610 as a catchup opportunity.
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.
Strong selling pressure gripped the corn market on Tuesday as New Crop prices closed down over 4% lower as improved weather forecasts outweighed the USDA crop ratings from Monday afternoon.
The USDA released weekly corn crop ratings on Monday afternoon. The corn conditions dropped an additional 5% to 50% good/excellent. The state of Illinois is still the focus of the market as rainfall missed many areas of the state over the weekend and ratings were at 26% good/excellent last week, down 10% from the prior week. These are the worst ratings since 2012.
Sellers took control of the market as weather forecasts for the next two weeks look to bring plenty of chances for rainfall to most of the Midwest. If realized, this could help stabilize the crop as pollination is right around the corner.
AgRural estimates that Brazil’s safrinha corn, or second crop corn, is 9.3% harvested. They estimate the safrinha crop at 97.9 MMT and the total corn crop estimate at 127.4 MMT. The influence of fresh supplies to the market is a wet blanket on rallies.
The market may likely remain choppy as traders look to this Friday’s USDA Planted Acreage and Grain Stocks report. Expectations are for corn acres to be at 91.8 million acres, down slightly from the March planting estimates. Grain stocks for the quarter are expected to be near 4.25 billion bushels, down 2.3% from last year.
Above: Weather continues to dominate price discovery with every change in the weather forecast. Corn rallied into the 625 resistance area and reversed lower to test 580 – 540 support level. Further support may be found below the market between 505 and 490, with resistance above 625 coming in near the March highs between 650 – 670.
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 — either 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 closed lower today along with soybean meal, while soybean oil closed higher. A wetter forecast for the Corn Belt over the next week has put pressure on corn and beans while rising world veg oil prices have given soybean oil support.
At the moment, traders are clearly fixated on weather forecasts, because yesterday’s Crop Progress report showed the worst good to excellent ratings since 1988 at just 51%, down 3% from the previous week, but the selloff today was due to increased chances for widespread rain.
The next report to watch will be Friday’s Quarterly Stocks and Acreage report, where analysts are expecting soybean acres to increase slightly to 87.67 million acres from 87.45 million acres in the previous report.
Yesterday’s soybean inspections were poor as Brazil keeps control of the export market with their cheaper soybean offerings. Due to slow US sales, exports may be lowered in the next WASDE report.
Above: The market’s eye is squarely on the weather at this time. The August contract rallied through the 50-day moving average and hit resistance near 1450 and the 100-day moving average. If the market can rally beyond this point, the resistance area between 1500 and 1550 could be its next target. If the market drops back, support 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
All three US wheat futures classes posted double-digit losses. No support was received from Paris milling wheat futures, which gapped lower and also saw a sharp decline. Spillover pressure from lower corn and soybeans did not help.
The increased chances of rain for some parts of the central Midwest likely has funds jumping back into the market. While the actual weather impact to the wheat crop at this point should be minimal, pressure from lower row crop prices is expected to weigh on wheat as well.
US winter wheat harvest is well behind the average pace of 33% complete for this time of year, with only 24% of the crop collected. And while at this point the impact is minimal, the USDA did say winter wheat conditions improved 2% from last week to 40% good to excellent. Spring wheat conditions did decrease by 1% from last week to 50% GTE.
Russia continues to rule the wheat export front, with FOB offers said to range between $230 and $240 per ton. This is well below US or European offers and is keeping pressure on futures prices.
The 100-day moving average for Chicago wheat is around 713. This may act as an area of support, especially if traders catch wind of some friendly news. If there is a bright spot, it is the fact that Russia is said to already be blocking grain shipments in the Black Sea and may not renew the corridor deal on July 18th.
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 near 670 with further support coming in 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: The market has been able to trade out of the recent congestion area to near the 200-day moving average and into the 870 – 920 resistance area. If the market can push through, 970 – 1000 is the next major point of resistance. If it falls back, initial support could be near 825 with further support between 778 and 764.
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. Prices haven’t moved much over the last couple of weeks, and it’s disappointing to see the lack of upside opportunities that the market has offered following the large snowfall and the late start to planting this spring. Yet, 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, especially given record European wheat shipments and falling Russian prices. Also, we typically recommend finishing up sales on any remaining Old Crop bushels by mid-June, as bids will soon shift from the July to September contract, and there is currently no carry offered.
K.C. Wheat Managed Money Funds net position as of Tuesday, June 20. Net position in Green versus price in Red. Money Managers net bought 2,328 contracts between June 13 – 20, bringing their total position to a net long 5,944 contracts.
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 760.
The corn crop was rated 50% good to excellent vs 55% last week (and 67% last year). This is the worst rating for this time of year since 1988.
Corn (and the whole grain complex) is trading lower this morning due to increased chances for rain in the Midwest, especially in some of the areas that missed the last round of precipitation. Currently there are two potential rain events, with the second probably bringing wider coverage and heavier amounts.
Global weather conditions are mostly favorable. It is still dry in Argentina, but as of right now Australia is normal (despite the El Nino weather pattern which could bring them drought).
As of writing, July corn is nearly 75 cents above September. First notice day for July futures is this Friday, meaning any one long futures is at risk of being delivered against. With the quarterly Stocks and Acreage reports also on Friday, markets could remain volatile into the end of the week.
The soybean crop was rated 51% good to excellent vs 54% last week (and 65% last year).
On daily stochastics and the RSI, November soybeans are at or near overbought levels. Momentum is also starting to trend downwards.
Yesterday’s soybean export inspections were poor at only 5.2 mb. This may also be limiting upside in futures, and not just in soybeans. Brazil is undercutting US exports for both corn and beans, while Russia is doing the same in wheat.
July soybean futures are roughly $1 above August, reflecting tight supply of old crop. As with corn, first notice day is on Friday is sure to affect this spread, as traders who are long will need to exit the July contract.
Soybean meal and oil are also lower this morning, offering no support to soybean futures.
The winter wheat crop is 24% harvested, compared to 33% average. Crop conditions did also rise 2% from last week to 40% good to excellent.
The spring wheat crop is rated 50% good to excellent vs 51% last week (and 59% last year).
Yesterday’s concern about availability of Black Sea wheat seems to have since been quashed. The Wagner coup against Russia appears to have disintegrated, and prices faded in tandem.
Paris milling wheat futures gapped lower, also offering no support to US futures today.
Russian wheat FOB export offers a range from roughly $230 – $240 per ton, well below that of US or other world offerings. This is keeping pressure on the US market. However, there is still the possibility that Russia will not extend the Black Sea export deal on July 18th, with reports by the Ukraine Sea Ports Authority that Russia is impeding grain shipments.
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.
