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Grain Market Insider: August 11, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Updated supply and demand numbers in today’s USDA WASDE report came in above market expectations for both old and new crop corn carryout. The initial reaction resulted in a 14-cent low to high range, with corn losing its gains to settle just over 4 cents off the day’s low.

  • Old crop soybean ending stocks in today’s report came in just above expectations, while new crop ending stocks were 22 mb below the average trade guess. Despite the news, soybeans lost ground and traded lower into the close, with the focus likely moving back to weather.

  • Despite a 100 mil lb increase in soybean oil usage for biofuels, and an increase in soybean meal exports, both soybean oil and meal followed soybeans lower on the day.

  • All three wheat classes finished the day lower, led by the KC contracts as 23/24 US wheat ending stocks came in above expectations, and 23 mb higher in today’s USDA update than last month’s.

  • To see the updated US Carryout and Stocks to Use charts for corn, soybeans, and wheat, 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 action is recommended for the 2023 corn crop. This year’s growing season has been marked by dry conditions and changing weather forecasts, which have swung prices nearly 150 cents from high to low. Though dry conditions remain with a great amount of variability in crop conditions from region to region, weather forecasts remain favorable for now, and it may not be until after harvest before we know the full effect this growing season had on yields. Just as Insider recently recommended selling half of the previously recommended DEC 580 puts to lock in gains in case the market turns higher, Insider will continue to monitor market conditions and may consider recommending selling the remaining DEC 580 puts if conditions warrant it. While many unknowns could still shock the market higher, seasonality and current trends suggest we may not see a shift to higher prices until after harvest.

  • No action is currently recommended for 2024 corn.  In 2012, the best pricing opportunities for Dec 2013 corn were during the 2012 summer runup.  Despite the significant yield losses to the 2012 crop, and the fear of running out of corn, the Dec 2013 contract peaked in the summer of 2012, and by Jan 2 of 2013, the price was already down about 12% from the high. We continue to watch the calendar for 2024 corn as this 2023 summer volatility could provide some additional opportunities to get some good early sales on the books in the event of a 2013 type repeat. Insider recently recommended making a sale on your 2024 crop, and we’ll be watching for another opportunity to suggest adding to prior early sales levels between now and the beginning of September.  

  • No Action is currently recommended for 2025 corn. 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. 

  • Corn futures ended the week under selling pressure as the USDA Crop Production report still forecasts overall heavy corn supplies for the 2023-24 marketing year. December corn closed the day losing 9 cents and was 10 cents lower on the week. Most importantly, Friday’s price action was weak, with December closing 20-1/4 cents off the session high.

  • The USDA lowered projected yield to 175.1 bushels/acre on the August Crop Production report this morning, but the drop in production was offset by demand adjustments. The USDA removed 75 mb from old and new crop export demand, and 25 mb from new crop feed usage to maintain a carryout at 2.202 billion bushels for the next marketing year, about 40 mb above expectations.

  • Concern for market participants is that yield projections could work higher in future reports as August weather has become more crop friendly, and that has been reflected in improved crop ratings in key corn producing states. Illinois corn crop ratings have improved for 6 consecutive weeks, likely adding to yield potential.

  • Export news is still lacking overall, but Mexico has been a key buyer of US corn. Last week, Mexico bought 421,000 MT of new crop corn, and on a morning flash sale announcement added an additional 143,000 MT this week.

  • Weather forecasts remain non-threatening overall, but a warmer drier trend at the end of next week may have some impacts on corn stress in the southern Corn Belt. 

Above: Since the market’s retreat from the 550 – 560 resistance area, the market has been consolidating just above the September contract’s July low of 474 and is showing signs of being oversold. Being oversold is considered supportive if reversal action occurs. If the market receives more bullish input and turns back higher, heavy resistance lies near 555 – 565. If not, and the market retreats past 474 support, the next area of major support may be found near 415.

Soybeans

Soybeans Action Plan Summary

  • No action is recommended for 2023 soybeans. This season the market has experienced a lot of volatility, not only from USDA reports but also from the changing weather forecasts, crop conditions, and export sales. We ended the month of July experiencing hot conditions with little rainfall and weak export sales. Since then, conditions have become more favorable, and export sales have picked up. While much of the crop remains in drought conditions, which can maintain upside potential, timely rains may come and push prices lower. Much like in 2012, when July was dry, and the pattern changed in August, when decent rain fell in parts of the western Corn Belt and IL, sending Nov ’12 soybeans down 20%. For now, Insider may not consider suggesting any additional sales until after harvest. Although, we will continue to monitor the market for any upside opportunities in the coming weeks.

  • No action is recommended for 2024 crop.  Grain Market Insider continues to monitor any developments for the 2024 crop, though it may not be until after harvest or toward year’s end before we will consider recommending any 2024 crop sales.

  • No Action is currently recommended for 2025 Soybeans. 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.

  • Soybeans traded both sides of unchanged today, beginning the day lower but gaining directly after the USDA report. In about the last hour of trading, prices slipped and soybeans, soybean meal, and oil all closed lower.

  • The WASDE report was fairly neutral with most estimates coming in as expected. The USDA lowered their expected soybean yield to 50.9 bpa, slightly below the average trade guess, and 23/24 ending stocks were pegged at 245 mb, a little less than expected.

  • Soybean production is forecast at 4.21 billion bushels, down 2% from the previous year. The yield estimate of 50.9 bpa would be up 1.4 bushels from 2022, and the area harvested for soybeans in the US is forecast at 82.7 million acres, unchanged from the previous forecast but down 4% from 2022.

  • Soybean sales to China have improved slightly and another sale of 9.9 mb was reported earlier this week, but new crop soybean sales are far less than a year ago at only 338 mb compared to 577 mb a year ago. Last week’s soymeal exports were decent, and soybean oil demand has been good.

  • For the week, November soybeans lost 25-3/4 cents, December soybean meal lost 9.0, and soybean oil lost 1.30 for December.

Above: The market posted a bullish reversal on 8/08 after trending lower since 7/27 and trading through 1350 support. Additionally, the fact that the market is showing signs of being oversold is supportive to prices. If prices continue to the upside, resistance can be found near 1400 and again around 1450. If not, initial support below the market may be found near 1328 with further support between 1318 – 1300. 

Wheat

Market Notes: Wheat

  • The USDA pegged 22/23 US wheat carryout at 580 mb, in line with the trade expectation of 579 mb and unchanged from July. As for 23/24, the USDA came up with 615 mb, above the trade expectation of 594 mb, versus a 592 mb carryout in the July report. The USDA estimated all US wheat production at 1.734 bb, down from 1.739 bb in July. The trade was looking for 1.740 bb.

  • Despite thoughts that India’s wheat production might be cut on today’s report, it was kept unchanged from July at 113.5 mmt. Russian production was also unchanged at 85.0 mmt.

  • Russian wheat export FOB prices have risen to $255 per ton, but this is still cheaper than most other origins, keeping pressure on the US export front.

  • According to the US Climate Prediction Center, the El Nino weather pattern is expected to persist though the US winter and into 2024. If accurate, this could lead to drier conditions in India and Australia, ultimately limiting their wheat production.

  • All three US wheat futures classes could be considered oversold on stochastics. This does not necessarily mean that a bottom is in, but it could mean that one is close.

  • As of August 8th, about 52% of the US spring wheat crop is said to be in an area of drought.

Chicago Wheat Action Plan Summary

  • No new action is recommended for 2023 crop.  Since the end of May, the wheat market has been largely rangebound, influenced by weak demand, changing headlines from the Black Sea region, and the corn market with its own demand and weather concerns. With harvest mostly in the rearview mirror, US production has been better than expected and demand remains weak. Still, many supply questions remain unanswered from the Black Sea region, which could push prices in either direction.  While Insider will continue to monitor the downside for any breach of major support, we would need to see prices pushed toward the 700 level before considering any additional sales.

  • No action is currently recommended for 2024 Chicago wheat. Since the middle of June, price volatility has risen with updated USDA reports, changing weather forecasts, and current events in the Black Sea.  While prices continue to be volatile, plenty of time remains to market the 2024 crop. The war continues in the Black Sea region, major exporting countries’ stocks are at 11-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties. For now, after recommending making a sale for the 2024 crop, and while keeping an eye on the market to see if any major support is broken, Grain Market Insider would need to see prices north of 800 before considering recommending any additional sales.

  •  No Action is currently recommended for 2025 Chicago Wheat. 2025 markets are very illiquid right now, and it may be some time before conditions are conducive to consider making any recommendations. Be patient as we monitor the markets for signs of improvement.

Above: Since testing the June high on 7/25, the market has retreated and support near 620 has held. September wheat is oversold and appears to be consolidating at the lower end of the 622 – 777 range. If the market breaks out to the downside, psychological support could be found near 600 with key support near 573, while heavy resistance remains above the market around 777 – 808.

KC Wheat Action Plan Summary

  • We continue to look for better prices before making any 2023 sales. As harvest winds down and more becomes known about this year’s crop with some reports of better-than-expected yields, questions remain about the world wheat supply. The war continues in the Black Sea region, Ukraine’s export capabilities remain uncertain, and dryness continues in key production areas of the world. With world supplies currently seen at 11-year lows, we continue to target 950 – 1000 in the July futures as a potential level to suggest the next round of New Crop sales. At the same time, we continue to watch the bottom end of the range that prices have traded in since late 2022. A close below the bottom end would reduce the probability of getting to 950 – 1000 and would increase the risk of prices falling into the 600 – 650 range.    

  • No action is currently recommended for the 2024 crop.  Demand and supply concerns out of the Black Sea continue to dominate the market right now, and Insider suggested making a sale as prices closed below 817 to protect from further downside erosion due to a potential change in trend with cheap supplies continuing to flow from Russia and Ukraine hampering US export demand. While prices continue to be volatile, plenty of time remains to market the 2024 crop. The war continues in the Black Sea region, major exporting countries’ stocks are at 11-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties. For now, after recommending making a sale for the 2024 crop, Grain Market Insider would need to see prices north of 850 before considering recommending any additional sales, while also keeping an eye on the market to see if any major support is broken.

  • No Action is currently recommended for 2025 KC Wheat. 2025 markets are very illiquid right now, and it may be some time before conditions are conducive to consider making any recommendations. Be patient as we monitor the markets for signs of improvement.

Above: September KC wheat has retreated following the key reversal on 7/25 and is poised to test the 735 – 745 support area, which coincides with this year’s lows.  Additionally, the market is showing signs of being oversold, and is considered supportive if prices reverse higher.  If prices do reverse to the upside, overhead resistance lies near 830.

Mpls Wheat Action Plan Summary

  • No action is currently recommended for the 2023 New Crop. Weather has been a dominant feature to price volatility this growing season with continued dryness concerns in not only the US, but also Canada and Australia. As we enter harvest season, there isn’t a strong likelihood of higher prices until after harvest, although both weather and geopolitical events can change suddenly to move prices higher. Insider will consider making sales suggestions if prices improve, while also continuing to watch the downside for any further violations of support.

  • No action is recommended for the 2024 crop. This year has been marked with volatility from adverse weather to geopolitical disruptions and has given us historically good prices to begin making early sales. While prices continue to be volatile, plenty of time remains to market the 2024 crop. The war continues in the Black Sea region, major exporting countries’ stocks are at 11-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties. For now, after recommending making a sale for the 2024 crop, Grain Market Insider will continue to consider making sales recommendations if prices improve, while also keeping an eye on the downside should prices break support.

  • No Action is currently recommended for the 2025 Minneapolis wheat crop. 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: Following the bearish reversal on 7/25, the market has retreated and is oversold, which could be supportive if prices reverse higher. For now, support below the market may be found near the psychological support level of 800, while resistance remains above the market near 950.

Other Charts / Weather

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Midday Update: August 11, 2023

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn
SEP ’23 485 1.75
DEC ’23 497.5 1.25
DEC ’24 514 -0.5
Soybeans
NOV ’23 1311.25 -7
JAN ’24 1320.5 -7.75
NOV ’24 1258.5 -9.25
Chicago Wheat
SEP ’23 632.75 -5
DEC ’23 659.25 -4.5
JUL ’24 703.25 -5.75
K.C. Wheat
SEP ’23 757.25 -9.75
DEC ’23 769 -10.25
JUL ’24 765.5 -7.5
Mpls Wheat
SEP ’23 816.25 -0.75
DEC ’23 831 -2.25
SEP ’24 822 -5
S&P 500
SEP ’23 4475 -10.75
Crude Oil
OCT ’23 82.88 0.59
Gold
OCT ’23 1930.6 0.6

  • Private exporters reported sales of 143,637 mt of corn for delivery to Mexico during the 23/24 marketing year.

  • President Biden made comments that the Chinese economy is a “ticking time bomb”, further increasing tension between the two nations.

  • More rain over the next five days is forecasted for the north and central Corn Belt, but the longer range forecast is drier.

  • December corn is consolidating on the charts, forming a potential pennant pattern that would point to more downside price movement. 

  • As of August 8th, 49% of the US corn crop is said to be experiencing drought conditions.

  • The 8-14 day US weather map looks warm and dry. Ridging across the Midwest in yesterday’s forecast has been reduced. Some soybean areas could probably use the dry weather, while others still could use some rain.

  • Low water levels in the Panama Canal are slowing trade in that area. So far Brazil is still able to satisfy China’s demand for corn and soybeans, however.

  • Soybean meal on China’s Dalian Exchange continues to make new highs. China continues to buy large amounts of soybeans, with crush demand positive.

  • As of August 8th, 43% of the US soybean crop is said to be experiencing drought conditions.

  • Wheat export sales yesterday were better than expected, but are still behind last year’s pace. US soft wheat is becoming more competitive with Europe and the Black Sea.

  • All three US wheat futures classes are considered oversold by some technical indicators, including stochastics.

  • Paris milling wheat futures are lower this morning and have had a lower close for 11 out of the last 14 sessions.

  • As of August 8th, 52% of the US spring wheat crop is said to be experiencing drought conditions.

  • Russian wheat FOB export values are said to be around $255 per mt (as of today).  

  • According to the Buenos Aires Grain Exchange, Argentina has 14.8 million acres of wheat planted. Dryness there is still a concern though.

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: August 11, 2023

ByGrain Market Insider

All prices as of 6:30 am Central Time

Corn
SEP ’23 483 -0.25
DEC ’23 496.25 0
DEC ’24 514 -0.5
Soybeans
NOV ’23 1323.75 5.5
JAN ’24 1333.5 5.25
NOV ’24 1270.25 2.5
Chicago Wheat
SEP ’23 635.5 -2.25
DEC ’23 661 -2.75
JUL ’24 704.25 -4.75
K.C. Wheat
SEP ’23 769.25 2.25
DEC ’23 780.25 1
JUL ’24 770.5 -2.5
Mpls Wheat
SEP ’23 818 1
DEC ’23 833.75 0.5
SEP ’24 822 -5
S&P 500
SEP ’23 4484.75 -1
Crude Oil
OCT ’23 82.72 0.43
Gold
OCT ’23 1930.8 0.8

  • Corn is trading slightly lower this morning but is mostly quiet ahead of the USDA report today.

  •  The USDA has surveyed over 15,000 producers for today’s report, and estimates are that production will be over 15.0 bb and that new crop ending stocks will be over 2.0 bb.

  • DTN’s yield tour was on day 4 yesterday and they estimated corn yields in Kansas at 150.7 bpa and 150.1 bpa in Missouri.

  • Brazil’s corn production was raised again for 22/23 from 127.8 mmt to 130 mmt, but analysts in a Bloomberg survey were estimating 135.5 mmt.

  • Soybeans are slightly higher this morning along with soybean meal and oil ahead of the WASDE report which is anyone’s guess to whether it will be friendly or not.

  • Estimates are expecting a smaller crop of 4.238 bb which would be based on a lower yield of 51.2 bpa with new crop ending stocks expected to be lowered from 300 mb to 261 mb.

  • Yesterday’s yield tour by DTN saw soybean yields in Kansas at 39.0 bpa and 48.4 bpa in Missouri, but both crops have chances to improve from further rains.

  • Thursday’s weekly export sales report showed that old crop soybeans only need 46 mb more shipped by the end of August to meet the USDA’s goal of 1.980 bb, but sales have slowed down in a big way.

  • Wheat is mixed this morning with Chicago and KC slightly lower but Minn slightly higher as markets trade quietly ahead of the WASDE report.

  • In today’s report, the USDA will most likely adjust wheat export estimates as Russia stays in control of wheat exports and other countries have trouble exporting.

  • This morning the US halted an import of Polish wheat at Houston after authorities cited issues with contamination, but the move could spark tensions with the EU.

  • Ukraine has harvested nearly 23 mmt of grain so far which includes 17.7 mmt of wheat and 4.9 mmt of barley, but shipping will be a problem.

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: August 10, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Consolidation ahead of tomorrow’s USDA report kept price action quiet in the corn market. Traders expect a two-bushel cut to national yield and carryout staying above 2.1 billion bushels.

  • Soybeans ended mixed with the two front months lower and deferred contracts trading higher. Traders expect national soybean yield to fall 0.8 bpa from the July estimate of 52 bpa in tomorrow’s USDA report.  

  • Front month soybean oil traded sideways and near the 200-day moving average for a ninth consecutive session, while soybean meal traded higher finding support near the 50-day moving average on its continuous chart.

  • Despite today’s reported marketing year high, export sales last week for 23/24 wheat prices were quietly mixed across the board as traders squared positions ahead of tomorrow’s USDA report.

  • To see the updated US Corn Areas in Drought as of August 8th, and the current US 1–3-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

  • For the 2023 corn crop, Grain Market Insider sees an active opportunity to sell half of the previously recommended DEC ‘23 580 puts. At the end of June, Insider recommended buying DEC ’23 580 puts for approximately 30 cents in premium, plus fees and commission. At the time, the US Drought Monitor was showing dryness across the Midwest and weather forecasts were calling for hot and dry conditions. Since then, forecasts have turned more favorable and DEC ’23 corn has dropped over 100 cents, with the recommended 580 puts gaining nearly 200% in value. The growing season isn’t over yet, and the Drought Monitor still shows dry conditions. Following the recent market drop and pick up in export sales, any further yield loss could rally prices. Insider recommends selling half of the previously recommended DEC ’23 580 puts to lock in gains in case prices rally back and holding the remainder, which will continue to protect any unsold bushels if prices erode further going into harvest.  

  • No action is currently recommended for 2024 corn.  In 2012, the best pricing opportunities for Dec 2013 corn were during the 2012 summer runup.  Despite the significant yield losses to the 2012 crop, and the fear of running out of corn, the Dec 2013 contract peaked in the summer of 2012, and by Jan 2 of 2013, the price was already down about 12% from the high. We continue to watch the calendar for 2024 corn as this 2023 summer volatility could provide some additional opportunities to get some good early sales on the books in the event of a 2013 type repeat. Insider recently recommended making a sale on your 2024 crop, and we’ll be watching for another opportunity to suggest adding to prior early sales levels between now and the beginning of September.  

  • No Action is currently recommended for 2025 corn. 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. 

  • An overall quiet session in the corn market as market participants squared positions and prices consolidated prior to Friday’s USDA Crop Production and Supply/Demand reports. December futures had an 8-cent trading range, finishing with small gains on the session.

  • Friday’s USDA report will be anticipating potential yield changes with this summer’s overall dry weather. Expectations are for yield to be lowered to 175.5 bushels/acre, which reduce carryout to 2.162 billion bushels. The USDA could make some demand adjustments, as demand has been lacking.

  • Weekly export sales were improved for new crop corn sales at 29.9 mb, and old crop at 5.9 mb. Mexico was the largest buyer of US corn last week. Though sales improved, new crop sales are still trending below last year’s pace at this time frame on soft demand tone.

  • Brazil’s CONAB raised their forecast for Brazil corn production to 129.96 MMT vs 127.77 MMT. This is an increase of 86.2 million bushels. Corn exports were targeted at 50 MMT.

  • The weather forecast remains non-threatening going into the second half of August with temperature forecasted to stay near normal with rainfall to be normal to above-normal for much of the Corn Belt.

Above: Since mid-July, the market retraced about 62% of the prior down move, hit resistance around the 50-day moving average, and turned lower. The market is approaching oversold status on the stochastic indicator with key support near the September contract’s 474 low. If the market receives more bullish input and turns back higher, heavy resistance lies near 555 – 565.

Soybeans

Soybeans Action Plan Summary

  • No action is recommended for 2023 soybeans. This season the market has experienced a lot of volatility, not only from USDA reports but also from the changing weather forecasts, crop conditions, and export sales. We ended the month of July experiencing hot conditions with little rainfall and weak export sales. Since then, conditions have become more favorable, and export sales have picked up. While much of the crop remains in drought conditions, which can maintain upside potential, timely rains may come and push prices lower. Much like in 2012, when July was dry, and the pattern changed in August, when decent rain fell in parts of the western Corn Belt and IL, sending Nov ’12 soybeans down 20%. For now, Insider may not consider suggesting any additional sales until after harvest. Although, we will continue to monitor the market for any upside opportunities in the coming weeks.

  • No action is recommended for 2024 crop.  Grain Market Insider continues to monitor any developments for the 2024 crop, though it may not be until after harvest or toward year’s end before we will consider recommending any 2024 crop sales.

  • No Action is currently recommended for 2025 Soybeans. 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.

  • Soybeans began the day higher but declined and ended mixed with the two front months lower but the deferred contracts higher. Soybean oil was also bear spread but soybean meal was higher. Trade has been relatively quiet ahead of tomorrow’s WASDE report.

  • Expectations for tomorrow’s USDA report are for the national soybean yield to fall to 51.2 bpa from 52.0 bpa in the last report, and new crop ending stocks to fall to 261 mb from 300 mb in the last report. The USDA’s yield estimates may end up incorrect, especially after the recent and forecasted rains.

  • Malaysian palm oil futures were down 1.17% today, and palm oil is now cheaper than both soybean and sunflower oil by $100 to $150 per metric ton which has incentivized India to import 60% more palm oil in July than in the previous month.

  • The US has become more competitive with Brazil for soybean exports in the fall, and the recent string of Chinese purchases from the US has been encouraging. Yesterday, another sale was announced for the 23/24 marketing year of 9.2 mb.

Above: The market posted a bullish reversal on 8/08 after trending lower since 7/27 and trading through 1350 support. Additionally, the fact that the market is showing signs of being oversold is supportive to prices. If prices continue to the upside, resistance can be found near 1400 and again around 1450. If not, initial support below the market may be found near 1328 with further support between 1318 – 1300. 

Wheat

Market Notes: Wheat

  • The USDA reported an increase of 20.9 mb of wheat export sales for 23/24, a marketing year high, but a decrease of 0.2 mb for 24/25.

  • Matif wheat closed lower, despite consultancy Strategie Grains lowering their EU soft wheat production estimate to 124.7 mmt (vs 126.2 mmt previously) due to heat and dryness this growing season.

  • India’s domestic wheat prices are on the rise, so they will reportedly release 5 mmt of wheat from their reserves to help combat these higher prices. It is also possible that in tomorrow’s report, the USDA will lower wheat production in India (and China) due to the weather problems they have experienced.

  • Pre-report estimates suggest US 23/24 all wheat production at 1.740 bb, up just slightly from 1.739 in July. US wheat ending stocks are anticipated to come in at 579 mb (vs 580 last month) for 22/23 and 594 mb (vs 592 last month) for 23/24.

  • Ukraine’s Navy has designated temporary corridors for trade ships to pass through, despite the risks of a Russian attack. The question is, will there be vessels (and crews) willing to take on that risk? In any case, these routes will allow for movement in and out of Ukrainian ports.

Chicago Wheat Action Plan Summary

  • No new action is recommended for 2023 crop.  Since the end of May, the wheat market has been largely rangebound, influenced by weak demand, changing headlines from the Black Sea region, and the corn market with its own demand and weather concerns. With harvest mostly in the rearview mirror, US production has been better than expected and demand remains weak. Still, many supply questions remain unanswered from the Black Sea region, which could push prices in either direction.  While Insider will continue to monitor the downside for any breach of major support, we would need to see prices pushed toward the 700 level before considering any additional sales.

  • No action is currently recommended for 2024 Chicago wheat. Since the middle of June, price volatility has risen with updated USDA reports, changing weather forecasts, and current events in the Black Sea.  While prices continue to be volatile, plenty of time remains to market the 2024 crop. The war continues in the Black Sea region, major exporting countries’ stocks are at 11-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties. For now, after recommending making a sale for the 2024 crop, and while keeping an eye on the market to see if any major support is broken, Grain Market Insider would need to see prices north of 800 before considering recommending any additional sales.

  •  No Action is currently recommended for 2025 Chicago Wheat. 2025 markets are very illiquid right now, and it may be some time before conditions are conducive to consider making any recommendations. Be patient as we monitor the markets for signs of improvement.

Above: Since testing the June high on 7/25, the market has retreated and support near 620 has held. September wheat is oversold and appears to be consolidating at the lower end of the 622 – 777 range. If the market breaks out to the downside, psychological support could be found near 600 with key support near 573, while heavy resistance remains above the market around 777 – 808.

KC Wheat Action Plan Summary

  • We continue to look for better prices before making any 2023 sales. As harvest winds down and more becomes known about this year’s crop with some reports of better-than-expected yields, questions remain about the world wheat supply. The war continues in the Black Sea region, Ukraine’s export capabilities remain uncertain, and dryness continues in key production areas of the world. With world supplies currently seen at 11-year lows, we continue to target 950 – 1000 in the July futures as a potential level to suggest the next round of New Crop sales. At the same time, we continue to watch the bottom end of the range that prices have traded in since late 2022. A close below the bottom end would reduce the probability of getting to 950 – 1000 and would increase the risk of prices falling into the 600 – 650 range.    

  • No action is currently recommended for the 2024 crop.  Demand and supply concerns out of the Black Sea continue to dominate the market right now, and Insider suggested making a sale as prices closed below 817 to protect from further downside erosion due to a potential change in trend with cheap supplies continuing to flow from Russia and Ukraine hampering US export demand. While prices continue to be volatile, plenty of time remains to market the 2024 crop. The war continues in the Black Sea region, major exporting countries’ stocks are at 11-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties. For now, after recommending making a sale for the 2024 crop, Grain Market Insider would need to see prices north of 850 before considering recommending any additional sales, while also keeping an eye on the market to see if any major support is broken.

  • No Action is currently recommended for 2025 KC Wheat. 2025 markets are very illiquid right now, and it may be some time before conditions are conducive to consider making any recommendations. Be patient as we monitor the markets for signs of improvement.

Above: September KC wheat has retreated following the key reversal on 7/25 and is poised to test the 735 – 745 support area, which coincides with this year’s lows.  Additionally, the market is showing signs of being oversold, and is considered supportive if prices reverse higher.  If prices do reverse to the upside, overhead resistance lies near 830.

Mpls Wheat Action Plan Summary

  • No action is currently recommended for the 2023 New Crop. Weather has been a dominant feature to price volatility this growing season with continued dryness concerns in not only the US, but also Canada and Australia. As we enter harvest season, there isn’t a strong likelihood of higher prices until after harvest, although both weather and geopolitical events can change suddenly to move prices higher. Insider will consider making sales suggestions if prices improve, while also continuing to watch the downside for any further violations of support.

  • No action is recommended for the 2024 crop. This year has been marked with volatility from adverse weather to geopolitical disruptions and has given us historically good prices to begin making early sales. While prices continue to be volatile, plenty of time remains to market the 2024 crop. The war continues in the Black Sea region, major exporting countries’ stocks are at 11-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties. For now, after recommending making a sale for the 2024 crop, Grain Market Insider will continue to consider making sales recommendations if prices improve, while also keeping an eye on the downside should prices break support.

  • No Action is currently recommended for the 2025 Minneapolis wheat crop. 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: Following the bearish reversal on 7/25, the market has retreated and is oversold, which could be supportive if prices reverse higher. For now, support below the market may be found near the psychological support level of 800, while resistance remains above the market near 950.

Other Charts / Weather

US 1 – 3 day precipitation forecast courtesy of NOAA, Weather Prediction Center.

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Midday Update: August 10, 2023

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn
SEP ’23 484.25 3.25
DEC ’23 497 2.75
DEC ’24 516 2
Soybeans
NOV ’23 1320.25 11.75
JAN ’24 1330.25 11.75
NOV ’24 1266 7.75
Chicago Wheat
SEP ’23 639.75 4.75
DEC ’23 664.75 3
JUL ’24 709.75 0.25
K.C. Wheat
SEP ’23 768 6.5
DEC ’23 781.25 5.25
JUL ’24 771.75 4.25
Mpls Wheat
SEP ’23 819.75 0
DEC ’23 835.75 0.25
SEP ’24 827 -3
S&P 500
SEP ’23 4507.75 22
Crude Oil
OCT ’23 82.79 -0.9
Gold
OCT ’23 1929.5 -2

  • The USDA reported an increase of 5.9 mb of corn export sales for 22/23 and an increase of 29.9 mb for 23/24.

  • Pre-report estimates suggest a corn yield of 175.4 bpa (vs 177.5 last month). Carryout for 23/24 is expected at 2,179 mb (vs 2,262 mb in July).

  • Chinese economic and trade data suggests that their economy is slowing. However, they did end restrictions on travel, which could help their economy to pick back up.

  • After recent weather problems in northern China, they may need to buy more corn for their reserves. However, it will likely come from Brazil, which remains cheaper than US. September corn on their Bovespa Exchange is trading around the equivalent of $4.75 per bushel.

  • More rain is expected for the central and eastern Corn Belt over the next five days or so.

  • The USDA reported an increase of 14.9 mb of soybean export sales for 22/23, and an increase of 40.3 mb for 23/24.

  • Pre-report estimates suggest a soybean yield of 51.2 bpa (vs 52 last month). Carryout for 23/24 is expected at 261 mb (vs 300 mb in July).

  • Compared with Brazil, US new crop soybeans are competitive for the Oct-Dec timeframe, which could lead to more purchases by China.

  • India has purchased 60% more palm oil in July (compared to June) due to the fact that it is about $100-$150 per ton cheaper than soybean or sunflower oil.

  • The USDA reported an increase of 20.9 mb of wheat export sales for 23/24, and a decrease of 0.2 mb for 24/25.

  • On tomorrow’s report, the USDA may lower wheat production for India and China due to the weather problems they have experienced.

  • Despite FOB export values about $20-$30 per ton higher over the past couple weeks, Russian wheat is still the world’s cheapest. This continues to pressure the US export market.

  • Strategie Grains, a consultancy group, lowered their estimate of EU soft wheat production to 124.7 mmt (vs 126.2 previously), citing heat and dry weather as the cause.

  • Wheat prices are on the rise in India, and they are said to be releasing 5 mmt from their reserves (for domestic use) in order to combat these higher prices. This also supports the talks that they are looking to import Russian wheat.  

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

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

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

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Opening Update: August 10, 2023

Bygmidev

All prices as of 6:30 am Central Time

Corn

SEP ’23 483.5 2.5
DEC ’23 496.75 2.5
DEC ’24 516 2

Soybeans

NOV ’23 1318.75 10.25
JAN ’24 1329 10.5
NOV ’24 1265.25 7

Chicago Wheat

SEP ’23 640 5
DEC ’23 665.75 4
JUL ’24 711 1.5

K.C. Wheat

SEP ’23 770.75 9.25
DEC ’23 785.5 9.5
JUL ’24 774.25 6.75

Mpls Wheat

SEP ’23 826.75 7
DEC ’23 842.5 7
SEP ’24 827 -3

S&P 500

SEP ’23 4508.75 23

Crude Oil

OCT ’23 83.36 -0.33

Gold

OCT ’23 1935.8 4.3

  • Corn is trading slightly higher this morning as it settles into a trading range ahead of tomorrow’s WASDE report.

  • Rains are currently falling in Kentucky and Tennessee but are forecast to move into Iowa and Minnesota and the northeast over the next 5 days.

  • The Dow Jones average trade guess for yields that the USDA will release tomorrow are at 175.4 bpa with the USDA’s most recent guess at 177 bpa.

  • In China, corn on the Dalian exchange is near its highest prices in 4 months following concerns about recent flooding in northeastern China.

  • Soybeans are slightly higher as well but have mostly traded in a range the past week, and soy products are mixed with soybean meal higher and soybean oil lower.

  • Very beneficial rains have fallen over the past 7 days for western and southern soybean states with the 5-day forecast showing rain in the northern and eastern states, a great scenario for soybeans setting pods.

  • Tomorrow’s WASDE report estimates are expecting a reduction in new crop ending stocks due to expectations for a small reduction in the yield estimate of 52.0 bpa.

  • Yesterday, another soybean sale was reported to China of 9.2 mb for the 23/24 marketing year.

  • Wheat is trading slightly higher along with corn and soybeans ahead of the WASDE report but mainly has been stuck in a trading range over the past 4 days.

  • The Dow Jones pre-report survey doesn’t show much change expected in the USDA’s estimate of world wheat production, but changes could occur in China and India.

  • Japan’s Ministry of Agriculture is seeking to buy a total of 93,972 mmt of food quality wheat from the US and Canada in a tender that will close on August 10.

  • In France, harvesting of soft-wheat fields has been postponed due to very heavy rainfall, and the quality is expected to decline.

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: August 9, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Spillover weakness from wheat, favorable weather forecasts, and consolidation ahead of Friday’s USDA report pressed the corn market lower.

  • Choppy trade dominated the soybean market today as traders sought to cover open positions and take profits as prices begin to consolidate ahead of Friday’s August update from the USDA.

  • Soybean meal and oil closed in opposite directions with meal retreating on long liquidation, while oil rallied on stronger palm and crude oil prices.

  • Reports of Putin signing an order requiring payment for Russian ag products in rubles likely pressured the wheat markets to close in negative territory today, giving up much of this week’s gains.

  • To see the current US 7-day precipitation forecast and 8 – 14-day Temperature and Precipitation Outlooks courtesy of the Climate Prediction Center, scroll down to the other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  • For the 2023 corn crop, Grain Market Insider sees an active opportunity to sell half of the previously recommended DEC ‘23 580 puts. At the end of June, Insider recommended buying DEC ’23 580 puts for approximately 30 cents in premium, plus fees and commission. At the time, the US Drought Monitor was showing dryness across the Midwest and weather forecasts were calling for hot and dry conditions. Since then, forecasts have turned more favorable and DEC ’23 corn has dropped over 100 cents, with the recommended 580 puts gaining nearly 200% in value. The growing season isn’t over yet, and the Drought Monitor still shows dry conditions. Following the recent market drop and pick up in export sales, any further yield loss could rally prices. Insider recommends selling half of the previously recommended DEC ’23 580 puts to lock in gains in case prices rally back and holding the remainder, which will continue to protect any unsold bushels if prices erode further going into harvest.  

  • No action is currently recommended for 2024 corn.  In 2012, the best pricing opportunities for Dec 2013 corn were during the 2012 summer runup.  Despite the significant yield losses to the 2012 crop, and the fear of running out of corn, the Dec 2013 contract peaked in the summer of 2012, and by Jan 2 of 2013, the price was already down about 12% from the high. We continue to watch the calendar for 2024 corn as this 2023 summer volatility could provide some additional opportunities to get some good early sales on the books in the event of a 2013 type repeat. Insider recently recommended making a sale on your 2024 crop, and we’ll be watching for another opportunity to suggest adding to prior early sales levels between now and the beginning of September.  

  • No Action is currently recommended for 2025 corn. 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. 

  • Corn futures saw choppy trade before fading during the session as selling in the wheat market, non-threatening weather forecasts, and positioning before Friday’s USDA Crop Production report limited the market.

  • Forecasts are staying cooler with a wetter bias for the majority of the Corn Belt into next week, which should help ear fill of the developing crop.

  • The USDA will release weekly export sales totals for last week on Thursday morning. Demand is still a concern as expectations for new sales of old crop corn in the report range from 75,000-600,000 mt, and 200,000-600,000 mt for new crop. Last week’s corn export sales were within expectations, but overall, still disappointing.

  • The corn market will likely stay choppy as the market prepares for the USDA Crop Production report on Friday. Analysts expect corn yield to drop to 175.6 bushel/acre, limiting some production. Overall carryout should remain heavy around 2.15-2.2 billion bushels.

  • Weekly ethanol production was down 4.1% week-over-week. Total production was 1.021 million barrels/day. The amount of corn used for the week is estimated at 102.82 million bushels, staying on pace to reach the USDA target for the marketing year.

Above: Since mid-July, the market retraced about 62% of the prior down move, hit resistance around the 50-day moving average, and turned lower. The market is approaching oversold status on the stochastic indicator with key support near the September contract’s 474 low. If the market receives more bullish input and turns back higher, heavy resistance lies near 555 – 565.

Soybeans

Soybeans Action Plan Summary

  • No action is recommended for 2023 soybeans.  The USDA injected a lot of volatility into this market beginning with a much lower-than-expected planted acreage estimate, followed by a much larger-than-expected 300mb carryout estimate in its July WASDE. While demand has been weak, we have a bona fide weather market during a crucial period for soybeans and there is little wiggle room for lost yield in this year’s crop. While a drier forecast can still maintain upside potential, plenty of time remains for rain to come and push prices lower, much like in 2012 when July was dry. Then the pattern changed in August, and decent rain fell in parts of the western Corn Belt and IL, sending Nov ’12 soybeans down 20%. For now, Insider may not consider suggesting any additional sales until after harvest. Although, we will continue to monitor the market for any upside opportunities in the coming weeks. 

  • No action is recommended for 2024 crop.  Grain Market Insider continues to monitor any developments for the 2024 crop, though it may not be until after harvest or toward year’s end before we will consider recommending any 2024 crop sales.

  • No Action is currently recommended for 2025 Soybeans. 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.

  • Soybeans ended the day slightly higher but slowly declined from the early morning highs. Soybean meal also began the day higher but ended lower, while soybean oil traded higher along with higher crude oil and palm oil.

  • Day two of the DTN Yield Tour showed estimates of 60.2 bpa for Illinois, 58.8 for Indiana, and 58.7 for Ohio. If the yield estimate for Illinois holds, it would be a new record high. On Friday, the USDA will give their estimates for national yields.

  • The export group, ANEC, has pegged Brazil’s August soybean exports at 8.8 mmt versus 5 mmt in August the previous year, proving that Brazil continues to dominate the export market. Despite that, China has made a solid number of purchases from the US over the past two weeks in an attempt to shore up their supplies.

  • There is some concern about Chinese economic data after producer price data fell by 4.4%, a sign of deflation, but they have remained active buyers of agricultural products.

Above: The market posted a bullish reversal on 8/08 after trending lower since 7/27 and trading through 1350 support. Additionally, the fact that the market is showing signs of being oversold is supportive to prices. If prices continue to the upside, resistance can be found near 1400 and again around 1450. If not, initial support below the market may be found near 1328 with further support between 1318 – 1300. 

Wheat

Market Notes: Wheat

  • Reports that Putin signed a decree requiring payment for Russian ag exports to be made in rubles pressured the wheat complex lower today, along with consolidation ahead of Friday’s USDA report where the trade is anticipating a 23/24 carryout near 598 mb.

  • Ukraine has said that if Russia continues to target Ukrainian ports and export routes, they would begin picking targets that would “prevent their waters from being blocked”. Although, it wasn’t specified when they might begin engaging with Russian targets.

  • Ukraine’s 23/24 grain exports have totaled 2.76 mmt so far in the June/July season, of which 1.08 mmt has been wheat. Exports have been affected since Russia stepped up their attacks on export routes, with some reports indicating they are down 40%.

  • According to the European Commission, EU SRW exports for the season starting July 1 have reached 2.92 mmt through August 6, which is down 16% from year ago levels that were 3.48 mmt.

Chicago Wheat Action Plan Summary

  • No new action is recommended for 2023 New Crop. The wheat market has seen a great amount of volatility in recent weeks and has primarily been a follower of corn, which has been driven by weather. Although demand remains weak, the closure of the Black Sea corridor, and the continued supply uncertainty, which that brings to the market, still leaves many supply questions unanswered. While Grain Market Insider will continue to monitor the downside for any violation of major support following the recent sales recommendation, it may be after harvest or near the end of summer before we consider recommending any additional sales for the 2023 crop.

  • No action is currently recommended for 2024 Chicago wheat. Since the middle of June, price volatility has risen with updated USDA reports, changing weather forecasts, and current events in the Black Sea.  While prices continue to be volatile, plenty of time remains to market the 2024 crop. The war continues in the Black Sea region, major exporting countries’ stocks are at 11-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties. For now, after recommending making a sale for the 2024 crop, and while keeping an eye on the market to see if any major support is broken, Grain Market Insider would need to see prices north of 800 before considering recommending any additional sales.

  •  No Action is currently recommended for 2025 Chicago Wheat. 2025 markets are very illiquid right now, and it may be some time before conditions are conducive to consider making any recommendations. Be patient as we monitor the markets for signs of improvement.

Above: Since testing the June high on 7/25, the market has retreated and support near 620 has held. September wheat is oversold and appears to be consolidating at the lower end of the 622 – 777 range. If the market breaks out to the downside, psychological support could be found near 600 with key support near 573, while heavy resistance remains above the market around 777 – 808.

KC Wheat Action Plan Summary

  • We continue to look for better prices before making any 2023 sales. As harvest winds down and more becomes known about this year’s crop with some reports of better-than-expected yields, questions remain about the world wheat supply. The war continues in the Black Sea region, Ukraine’s export capabilities remain uncertain, and dryness continues in key production areas of the world. With world supplies currently seen at 11-year lows, we continue to target 950 – 1000 in the July futures as a potential level to suggest the next round of New Crop sales.

  • No action is currently recommended for the 2024 crop.  Demand and supply concerns out of the Black Sea continue to dominate the market right now, and Insider suggested making a sale as prices closed below 817 to protect from further downside erosion due to a potential change in trend with cheap supplies continuing to flow from Russia and Ukraine hampering US export demand. While prices continue to be volatile, plenty of time remains to market the 2024 crop. The war continues in the Black Sea region, major exporting countries’ stocks are at 11-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties. For now, after recommending making a sale for the 2024 crop, Grain Market Insider would need to see prices north of 850 before considering recommending any additional sales, while also keeping an eye on the market to see if any major support is broken.

  • No Action is currently recommended for 2025 KC Wheat. 2025 markets are very illiquid right now, and it may be some time before conditions are conducive to consider making any recommendations. Be patient as we monitor the markets for signs of improvement.

Above: September KC wheat has retreated following the key reversal on 7/25 and is poised to test the 735 – 745 support area, which coincides with this year’s lows.  Additionally, the market is showing signs of being oversold, and is considered supportive if prices reverse higher.  If prices do reverse to the upside, overhead resistance lies near 830.

Mpls Wheat Action Plan Summary

  • No action is currently recommended for the 2023 New Crop. Weather has been a dominant feature to price volatility this growing season with continued dryness concerns in not only the US, but also Canada and Australia. As we enter harvest season, there isn’t a strong likelihood of higher prices until after harvest, although both weather and geopolitical events can change suddenly to move prices higher. Insider will consider making sales suggestions if prices improve, while also continuing to watch the downside for any further violations of support.

  • No action is recommended for the 2024 crop. This year has been marked with volatility from adverse weather to geopolitical disruptions and has given us historically good prices to begin making early sales. While prices continue to be volatile, plenty of time remains to market the 2024 crop. The war continues in the Black Sea region, major exporting countries’ stocks are at 11-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties. For now, after recommending making a sale for the 2024 crop, Grain Market Insider will continue to consider making sales recommendations if prices improve, while also keeping an eye on the downside should prices break support.

  • No Action is currently recommended for the 2025 Minneapolis wheat crop. 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: Following the bearish reversal on 7/25, the market has retreated and is oversold, which could be supportive if prices reverse higher. For now, support below the market may be found near the psychological support level of 800, while resistance remains above the market near 950.

Other Charts / Weather

US 7-day precipitation forecast courtesy of NOAA, Weather Prediction Center.

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Midday Update: August 9, 2023

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn
SEP ’23 484.25 -1.5
DEC ’23 497 -1.75
DEC ’24 515.25 -0.25
Soybeans
NOV ’23 1311.25 5.25
JAN ’24 1320.75 5
NOV ’24 1257.75 0.25
Chicago Wheat
SEP ’23 641.75 -14.5
DEC ’23 668 -13.5
JUL ’24 712.5 -11.25
K.C. Wheat
SEP ’23 760.25 -10.25
DEC ’23 775.25 -6.25
JUL ’24 766.75 -9
Mpls Wheat
SEP ’23 824 -6.75
DEC ’23 839 -6.5
SEP ’24 832 2
S&P 500
SEP ’23 4490.25 -28.25
Crude Oil
OCT ’23 82.94 0.58
Gold
OCT ’23 1931.7 -8.8

  • Corn began the day on a higher note but has since slipped, and is trading a few cents lower as a trading range begins to form.

  • Recent rains in the Corn Belt, along with forecasts for additional rain to come, have pressured prices, but support for December corn seems firm around $4.90.

  • DTN’s Digital Yield Tour has pegged yields at 197 bpa for Illinois and 194 bpa for Ohio, large improvements from previous trade guesses thanks to the rains.

  • Friday’s WASDE report will be the focus this week with the average trade guess for yield around 177 bpa, but some private crop scouts estimating between 173 and 174 bpa.

  • Soybeans also began the day higher in the overnight and have slipped but are still trading higher with both soy products higher as well.

  • Day two of the DTN yield tour showed estimates of 60.2 bpa for Illinois, 58.8 for Indiana, and 58.7 for Ohio. If the yield estimate for Illinois holds, it would be a new record high.

  • The export group, ANEC, has pegged Brazil’s August soybean exports at 8.8 mmt versus 5 mmt in August the previous year.

  • Soybean oil is being supported by census numbers which are showing biodiesel exports at 29% higher than a year ago.

  • Wheat is trading lower near midday as the US harvest progresses and Russia continues to dominate global export sales.

  • Russian FOB values have risen by over $20/mt in the past few weeks, but they are still the cheapest offer and had another large sale yesterday of 235,000 mt.

  • Ukraine’s 23/24 grain exports have totaled 2.76 mmt for far into the June/July season, but exports have been affected since Russia stepped up their attacks on export routes.

  • The Canadian Prairie is dry along with Argentina and Australia, which may hurt global wheat production. In India, prices rose to a 6-month high with production estimates falling.

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: August 9, 2023

Bygmidev

All prices as of 6:30 am Central Time

Corn

SEP ’23 486 0.25
DEC ’23 499.25 0.5
DEC ’24 516.5 1

Soybeans

NOV ’23 1314.5 8.5
JAN ’24 1322.75 7
NOV ’24 1262.25 4.75

Chicago Wheat

SEP ’23 646.25 -10
DEC ’23 671.25 -10.25
JUL ’24 712.75 -11

K.C. Wheat

SEP ’23 764.75 -5.75
DEC ’23 775.25 -6.25
JUL ’24 765.25 -10.5

Mpls Wheat

SEP ’23 826 -4.75
DEC ’23 840.25 -5.25
SEP ’24 830 0

S&P 500

SEP ’23 4524.5 6

Crude Oil

OCT ’23 83.04 0.68

Gold

OCT ’23 1938 -2.5

  • Corn is trading slightly higher this morning as prices found support yesterday at the 4.90 area in December futures and some short covering kicked in.

  • Corn has not wanted to drop much further in price despite the frequent rains lately and improving yield estimates which is a good sign.

  • This morning’s radar is showing rain in Kansas and western Iowa and fronts that are expected to move into Missouri, Ohio, and Tennessee later in the day.

  • DTN’s Digital Yield Tour continued yesterday and pegged corn yields for Illinois at 197 bpa, a massive jump from the previous guess of 140 bpa in June thanks to the rain. Indiana is expected at 191 bpa. 

  • Soybeans have also rebounded after touching support at the 100-day moving average. Nov has moved over 25 cents higher after meeting support yesterday morning. Both soybean meal and oil are trading higher as well.

  • Day two of the DTN yield tour showed estimates of 60.2 bpa for Illinois, 58.8 for Indiana, and 58.7 for Ohio. If the yield estimate for Illinois holds, it would be a new record high, a further testament to the significance of August rains.

  • The average trade guess for Friday’s USDA report is a soybean yield of 51.2 bpa which is very close to DTN’s guess of 51.0.

  • November soybean prices in China are holding the highest levels of the year with the last trade at the equivalent of $17.85 a bushel. This has helped export demand from the US.

  • Wheat is trading lower this morning but like corn and soybeans, has found some support above the lows in early May. Winter wheat harvest is making rallies difficult.

  • Friday’s USDA report will give updates of US wheat production, but big changes aren’t expected. The WASDE report will update production estimates.

  • Ukraine has said that if Russia continues to target Ukrainian ports and export routes that they would begin picking targets that would “prevent their waters from being blocked”.

  • Ukraine’s 23/24 grain exports have totaled 2.76 mmt for far in the June/July season, but exports have been affected since Russia stepped up their attacks on export routes.

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Grain Market Insider: August 8, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • A lack of fresh headline news from the Black Sea or word of new export sales kept the corn market in consolidation mode as traders began to even up positions ahead of Friday’s USDA report, which left the market to close in the upper part of the trading range.

  • Despite the favorable weather forecasts and improving crop conditions, November soybeans reversed to close higher after trading nearly 20 cents lower on the day and testing the 100-day moving average.

  • The wheat market was able to shake off earlier losses with Minneapolis leading the way higher, as crop conditions for spring wheat dropped 1% from last week, while two-sided trade led to a mixed close in the Chicago and KC contracts with Chicago contracts mostly higher and KC mostly lower, with relatively minor losses.

  • There were reports of downgrades for ten US banks that weighed on the equity markets, which could have also carried over to the commodity sector with less appetite for risk. Additionally, import/export data out of China was lower than expected, possibly adding some resistance to commodities.

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

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

Corn

Corn Action Plan Summary

  • For the 2023 corn crop, Grain Market Insider sees an active opportunity to sell half of the previously recommended DEC ‘23 580 puts. At the end of June, Insider recommended buying DEC ’23 580 puts for approximately 30 cents in premium, plus fees and commission. At the time, the US Drought Monitor was showing dryness across the Midwest and weather forecasts were calling for hot and dry conditions. Since then, forecasts have turned more favorable and DEC ’23 corn has dropped over 100 cents, with the recommended 580 puts gaining nearly 200% in value. The growing season isn’t over yet, and the Drought Monitor still shows dry conditions. Following the recent market drop and pick up in export sales, any further yield loss could rally prices. Insider recommends selling half of the previously recommended DEC ’23 580 puts to lock in gains in case prices rally back and holding the remainder, which will continue to protect any unsold bushels if prices erode further going into harvest.  

  • No action is recommended for New Crop 2023 corn. The future price potential for Dec 23 corn continues to be at the mercy of each new weather forecast. Dryness and dry weather forecasts pushed Dec corn from the May low to the June high with a gain of 137 cents, which was promptly erased and then some by mid-July, leaving the market 149 cents off that June high, with a surprise jump in acres and more favorable forecasts. During the runup in early June, we warned that any change in the forecast to wetter weather could erase all the gains as corn didn’t have much of a bullish fundamental story without a supply side shock fueled by lower yields. Overall, our thought process has not changed from a month ago and with the tremendous uncertainty, and subsequent volatility still in front of us, we continue to recommend holding the Strangle options position, comprised of the previously bought Dec 610 calls and Dec 580 puts. A turn back to wetter weather and we wouldn’t be surprised to see sub-500 corn again, and if dry weather persists, we wouldn’t be surprised to see corn prices north of 700. Under either of these scenarios the Strangle will benefit and doesn’t require trying to outguess the weather.  

  • No Action is currently recommended for 2025 corn. 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. 

  • The corn market traded on both sides of unchanged today to settle in the upper end of the day’s range, with no new flash export sales reported or news from the Black Sea to move the market significantly in either direction. With the USDA’s August Supply and Demand report slated for Friday, the market continues to consolidate as traders begin to square positions ahead of its release.

  • The USDA raised crop condition ratings 2% from last week to 57% good to excellent. While improvements were seen in Illinois and the Dakotas, states like Kansas, Minnesota, and Michigan remain below 50% g/e.

  • DTN kicked off their digital yield tour on Monday and estimated the national corn yield at 177 bpa, close to the USDA’s July yield estimate of 177.5. The tour is set to conclude on Friday with details from a different region each day.

  • China’s imports and exports for the month of July fell by 12.4% and 14.5% respectively versus last year, which was faster than expected. The slowdown may indicate a slowing economy and could lead to fewer ag imports.

Above: Since mid-July, the market retraced about 62% of the prior down move, hit resistance around the 50-day moving average, and turned lower. The market is approaching oversold status on the stochastic indicator with key support near the September contract’s 474 low. If the market receives more bullish input and turns back higher, heavy resistance lies near 555 – 565.

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

Soybeans

Soybeans Action Plan Summary

  • No new action is being recommended for Old Crop. Any remaining old crop bushels should be getting priced into this rally. We won’t have any “New Alerts” for 2022 Soybeans (Cash, Calls, or Puts) as we have moved focus onto 2023 and 2024 Crop Year Opportunities. 

  • No action is recommended for 2023 soybeans. The USDA injected a lot of volatility into this market beginning with a much lower-than-expected planted acreage estimate, followed by a much larger-than-expected 300mb carryout estimate in its July WASDE. While demand has been weak, we have a bona fide weather market during a crucial period for soybeans and there is little wiggle room for lost yield in this year’s crop. While a drier forecast can still maintain upside potential, plenty of time remains for rain to come and push prices lower, much like in 2012, when July was dry. Then the pattern changed in August, and decent rain fell in parts of the western Corn Belt and IL, sending Nov ’12 soybeans down 20%. For now, Insider may not consider suggesting any additional sales until after harvest. Although, we will continue to monitor the market for any upside opportunities in the coming weeks.

  • No Action is currently recommended for 2025 Soybeans. 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.

  • Soybeans began the day lower but finished higher after trading below the 100-day moving average. Front month soybean meal ended the day lower with deferred months higher, while soybean oil was weak following a decline in palm oil.

  • Lower prices earlier in the day were partially caused by weak economic data out of China that saw their July exports declining by the largest amount since February 2020. China has been an active buyer of US soybeans over the last week and another sale of 4.9 mb was announced yesterday for the 23/24 marketing year.

  • Yesterday’s Crop Progress report showed soybean ratings improving after the recent rains. The good to excellent rating rose by 2 points, above the average trade guess, to 54%. Illinois showed the highest improvement with an increase of 12 points to 58% after the significant rainfall totals.

  • 66% of the soybean crop is setting pods which is ahead of the 5-year average, but yield numbers are still up in the air. The USDA’s most recent estimate was 52 bpa and they will release a revised estimate in the report on Friday, while DTN’s Digital Yield Tour has pegged yields at 51 bpa.

Above: The market posted a bullish reversal on 8/08 after trading through 1350 support and trending lower since 7/27. Additionally, the fact that the market is showing signs of being oversold is supportive to prices. If prices continue to the upside, resistance can be found near 1400 and again around 1450. If not, support below the market may be found between 1318 and the psychological 1300 level. 

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

Wheat

Market Notes: Wheat

  • After a two-sided trade today, wheat managed a mostly positive close. Early weakness, which affected most commodities, likely came from Chinese trade data which showed that their economic activity may be slowing. Their imports and exports in July were lower than expected.

  • The USDA rated the US spring wheat crop 41% good to excellent. This is a 1% drop from last week, and it is possible the USDA will lower production in Friday’s report due to recent declines in condition.

  • Though it has been mentioned before, it is worth reiterating that India’s wheat crop could be below 100 mmt. With their domestic usage usually around 108 mmt, this would reinforce the talk that they are looking to import 9 mmt of Russian wheat. Despite recent price increases, Russian wheat is still the world’s cheapest.

  • SovEcon increased their estimate of Russian wheat exports for 23/24 to 48.1 mmt, an all-time high, versus 47.2 mmt previously. There is some question about the logistics though, as this assumes Russia will have no problems exporting the wheat due to the war. In addition, IKAR increased the Russian 2023 wheat crop estimate to 88 mmt (vs 86.5 mmt previously).

Chicago Wheat Action Plan Summary

  • No new action is recommended for 2023 New Crop. The wheat market has seen a great amount of volatility in recent weeks and has primarily been a follower of corn, which has been driven by weather.  Although demand remains weak, the closure of the Black Sea corridor, and the continued supply uncertainty, which that brings to the market, still leaves many supply questions unanswered. While Grain Market Insider will continue to monitor the downside for any violation of major support following the recent sales recommendation, it may be after harvest or near the end of summer before we consider recommending any additional sales for the 2023 crop.

  • No action is currently recommended for 2024 Chicago wheat. Since the middle of June, price volatility has risen with updated USDA reports, changing weather forecasts, and current events in the Black Sea.  While prices continue to be volatile, plenty of time remains to market the 2024 crop. The war continues in the Black Sea region, major exporting countries’ stocks are at 11-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties. For now, after recommending making a sale for the 2024 crop, and while keeping an eye on the market to see if any major support is broken, Grain Market Insider would need to see prices north of 800 before considering recommending any additional sales.

  •  No Action is currently recommended for 2025 Chicago Wheat. 2025 markets are very illiquid right now, and it may be some time before conditions are conducive to consider making any recommendations. Be patient as we monitor the markets for signs of improvement.

Above: Since testing the June high on 7/25, the market has retreated and support near 620 has held. September wheat is oversold and appears to be consolidating at the lower end of the 622 – 777 range. If the market breaks out to the downside, psychological support could be found near 600 with key support near 573, while heavy resistance remains above the market around 777 – 808.

KC Wheat Action Plan Summary

  • We continue to look for better prices before making any 2023 sales. As harvest winds down and more becomes known about this year’s crop with some reports of better-than-expected yields, questions remain about the world wheat supply. The war continues in the Black Sea region, Ukraine’s export capabilities remain uncertain, and dryness continues in key production areas of the world. With world supplies currently seen at 11-year lows, we continue to target 950 – 1000 in the July futures as a potential level to suggest the next round of New Crop sales.

  • No action is currently recommended for the 2024 crop.  Demand and supply concerns out of the Black Sea continue to dominate the market right now, and Insider suggested making a sale as prices closed below 817 to protect from further downside erosion due to a potential change in trend with cheap supplies continuing to flow from Russia and Ukraine hampering US export demand. While prices continue to be volatile, plenty of time remains to market the 2024 crop. The war continues in the Black Sea region, major exporting countries’ stocks are at 11-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties. For now, after recommending making a sale for the 2024 crop, Grain Market Insider would need to see prices north of 850 before considering recommending any additional sales, while also keeping an eye on the market to see if any major support is broken.

  • No Action is currently recommended for 2025 KC Wheat. 2025 markets are very illiquid right now, and it may be some time before conditions are conducive to consider making any recommendations. Be patient as we monitor the markets for signs of improvement.

Above: September K.C. wheat has retreated following the key reversal on 7/25 and is poised to test the 735 – 745 support area, which coincides with this year’s lows.  Additionally, the market is showing signs of being oversold, and is considered supportive if prices reverse higher.  If prices do reverse to the upside, overhead resistance lies near 830.

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

Mpls Wheat Action Plan Summary

  • No action is currently recommended for the 2023 New Crop. Weather has been a dominant feature to price volatility this growing season with continued dryness concerns in not only the US, but also Canada and Australia. As we enter harvest season, there isn’t a strong likelihood of higher prices until after harvest, although both weather and geopolitical events can change suddenly to move prices higher. Insider will consider making sales suggestions if prices improve, while also continuing to watch the downside for any further violations of support.

  • No action is currently recommended for the 2023 New Crop. Weather dominates the market right now, and though much of the growing season remains, Grain Market Insider suggested making a sale as prices closed below 822 to protect from further downside erosion due to a potential trend change.  Seasonally, there isn’t a strong likelihood of higher prices until after harvest, although both weather and geopolitical events can change suddenly to shock the market higher. Insider will consider making sales suggestions if prices improve through this growing season, while also continuing to watch the downside for any further violations of support.

  • No Action is currently recommended for the 2025 Minneapolis wheat crop. 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: Following the bearish reversal on 7/25, the market has retreated and is oversold, which could be supportive if prices reverse higher. For now, support below the market may be found near the psychological support level of 800, while resistance remains above the market near 950.

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

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