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Grain Market Insider: June 6, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Corn finished higher with July futures leading the surge, as traders digested lower-than-expected good to excellent ratings countered by a continued outlook for beneficial rains later next week.

  • Soybeans finished fractionally higher after the USDA reported a daily flash sale of Old Crop soybeans to Spain.

  • Soybean meal closed lower, while soybean oil held onto late day gains despite weakness in crude oil futures.

  • Wheat ended mixed after trading sharply higher in the overnight session on news of a major Ukrainian dam collapse in a Russian controlled portion of Ukraine.

  • To see updated US 8-14 Day Temperature and Precipitation Outlooks from the Climate Prediction Center, as well as the latest 7-Day Rainfall Outlook from NOAA, 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 at this time for Old Crop. July corn has had nearly a 60-cent rally in the last couple of weeks. Expect volatility to remain in the market, a changing weather forecast can push the market significantly in either direction. If you still have Old Crop to sell, consider using this rally to begin pricing some of those bushels. Don’t forget, there is about a 70-cent inverse between the July and September futures contracts, which could be lost when bids get rolled from one contract to the next in the next few weeks.

  • For 2023 New Crop corn, Grain Market Insider recommends liquidating December ‘23 560 calls. Since our previous recommendation to purchase December ‘23 560 and 610 calls, the December ‘23 corn contract has rallied enough that you should be able to liquidate your 560 call position with enough equity to pay for the December 610 call position. With dryness building in the Midwest, and an estimated fund short position in excess of 45k contracts, we continue to target the 590 – 630 range in the December futures to suggest adding cash sales. If you don’t happen to have any New Crop sold, you should consider targeting the 550 – 560 area to begin pricing bushels.

  • Continue to hold current sales levels for the 2024 crop year. We will look for opportunities to make further sales as we move through the 2023 growing season as weather volatility builds. 

Grain Market Insider Corn open positions listed above.

  • After two-sided trade for the early part of the session, corn futures turned higher led by the July contract and supported by poorer-than-expected crop ratings, a drier afternoon weather model, and an escalation in the Russia-Ukraine war.

  • The USDA released weekly crop ratings on Monday afternoon, and the U.S. corn crop was rated 64% Good/Excellent This rating was down 5% from last week and below market expectations, as the crop conditions are reflecting the current dry weather across the Corn Belt. Most noticeable was the impact in the eastern Corn Belt with Michigan down 20%, Illinois down 19%, Ohio down 17%, and Indiana down 10% from last week.

  • Afternoon weather models are still looking to a more active pattern the second week of June, but models trended slightly drier than the overnight models, helping turn corn price higher into the end of the session.

  • The corn market will likely stay volatile and choppy this week, focusing on daily weather forecasts and preparing for the June WASDE report to be released on Friday, June 9. The June WASDE is expected to show a weaker demand tone and overall increasing corn supplies.

Above: The July contract is beginning to show signs of exhaustion, but Friday’s bullish surge higher is a positive sign that there is support near 575. If current prices can hold and close above the 50-day moving average near 610, the market would be poised to test April’s high of 647-1/2. Support below the market rests between 550 and 530, and again near the 2021 September low of 497-1/2.

Soybeans

Soybeans Action Plan Summary

  • May was a rough month for soybeans with a 175-cent range, but the market is consolidating, and found support just above 1270. July soybeans continue to be oversold with a tight Old Crop balance sheet, and with dryness concerns building and a seasonal window that is conducive for upside volatility and opportunity, continue to hold on progressing any Old Crop sales for now.

  • We recommend not adding to current sales levels for the new 2023 crop at this time. A quick planting pace with favorable conditions and South American competition have pressed US prices down nearly 17% from the beginning of the year. The potential remains for a tighter New Crop balance sheet, as the US Drought Monitor map remains concerning. We would consider recommending the next sales in the 1300 to 1350 area.

  • 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. 

  • Yesterday’s Crop Progress report showed soybeans are 91% planted vs 83% last week, and 76% average. Additionally, 62% of the crop was rated good to excellent (the lowest since 2014).

  • Soybeans traded both sides of neutral in today’s session, as weather remains an uncertainty. Many areas of the Midwest have seen scattered rains, but no widespread coverage just yet.

  • Private exporters reported sales of 165,000 mt of soybeans for delivery to Spain during the 22/23 marketing year.

  • Higher soybean oil today lent some support, despite lower palm and crude oil. Crude oil has set back on doubt that OPEC will stick with their lower production targets, and palm oil was lower after news that Malaysia could see an uptick in output of 4.7%.

Above: After a strong close last week, July soybeans will look for follow-through momentum to turn around a down-trend that has been in place since April. Support should be found near the recent lows of 1300 with nearby resistance near the 1420 area.

Wheat

Market Notes: Wheat

  • Yesterday’s Crop Progress report showed winter wheat was 4% harvested, which is in line with the average. In addition, 36% of that crop was rated good to excellent vs 34% last week. Finally, spring wheat was said to be 93% planted (in line with average), and 64% of that crop was rated good to excellent.

  • Wheat was up sharply overnight and early this morning after news that Russia destroyed a key hydroelectric dam in Ukraine. The explosion and destruction occurred at the Nova Kakhovka Dam on the Dnipro River in southern Ukraine. This region produces approximately 6% of Ukrainian wheat.

  • The Australian agriculture department is projecting a decline wheat production of 30% due to the El Nino weather pattern. This provided some support to wheat early in the session.

  • On Friday’s WASDE report, the market will receive updated estimates of US wheat production, but the export estimate of 775 mb may have to be lowered due to the current slower export pace.

Chicago Wheat Action Plan Summary

  • No new action is recommended for the 2022 crop. The market is down more than 300 cents from its October high and has become extremely oversold. The July contract may also post its 8th consecutive down month in a row at prices not seen since early 2021, even though wheat inventories of major exporting countries are anticipated to fall to 16-year lows. With the market being this oversold and a fund net position short nearly 113k contracts, we continue to eye the 640 – 670 range to clean up and market any remaining Old Crop inventory.

  • We recommend not taking any action on the 2023 crop at this time. While the window of opportunity is quickly closing for Old Crop, it is still wide open for better opportunities ahead for New Crop.  We are currently targeting a more aggressive window of 720 – 800 to suggest advancing sales and move more New Crop inventory.

  • For 2024 New Crop SRW wheat, Grain Market Insider recommends adding to current sales levels. Prices have rallied nicely off of lows to start the month of June. Rallies have recently been difficult to come by for wheat and this is historically a good area to add to current sales levels.

Above: The market appears to have put in short-term lows to end the month of May near the 575 level. A close above the 660 area would be a supportive sign of a trend change to higher. The next area of possible support, if the late May lows do not hold, would be below the market near the September ’20 low of 533-1/4.  Resistance above the market could be found between 670 and 724.

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. Crop ratings overall are at historically low levels, and production concerns persist.  Additionally, any unforeseen geopolitical changes in the Black Sea region could cause the market to bounce and retrace 25% towards the 2022 high. 

  • 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: Last week Wednesday’s bullish reversal indicates that there is support near 760, and any follow-through buying could be supportive with the market still showing signs of being oversold.  Resistance may be found above the market between 833 and 850, with further support resting below the market near 736-1/4.

Mpls Wheat Action Plan Summary

  • No action is currently recommended for the 2022 crop.  With planting concerns and a seasonal tendency for old crop prices to increase over the next 4-5 weeks, we are continuing to wait for better prices to develop. The calendar is becoming a constraint though, and we’ll be looking to part with any remaining old crop bushels by mid-June or so. 

  • No action is recommended on the 2023 crop at this time. The September ’23 contract had a 120-cent range in the month of May where it found support just above 770. While the planting pace has largely caught up to the 5-year average, dryness in some areas is increasing. With the market still largely oversold and a full growing season ahead of us, we are not looking to make any sales right now.

  • We continue to be patient to market any of the 2024 crop. The market for the 2024 crop continues to be illiquid, and it may be early summer before we post any recommendations, continue to be patient.

Above: The July contract continues to be weak and showing signs of being oversold. Additionally, open interest is falling, indicating liquidation. The market is showing signs of being oversold, which could be supportive if buying returns.  Resistance currently sits between 820 and 855 and then the recent high of 888-1/2. Support below the market may be found between 770 and 760. 

Other Charts / Weather

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Midday Update June 6, 2023

ByGrain Market Insider

All prices as of 10:30 am Central Tim

Corn
JUL ’23 606 8.5
DEC ’23 539 2
DEC ’24 510 -1.75
Soybeans
JUL ’23 1363.25 13.25
NOV ’23 1188.25 8.5
NOV ’24 1148.5 6.25
Chicago Wheat
JUL ’23 629.25 5.25
SEP ’23 642.25 6
JUL ’24 690.25 3.75
K.C. Wheat
JUL ’23 816.25 -6
SEP ’23 810.75 -5.75
JUL ’24 774.5 -8.25
Mpls Wheat
JUL ’23 812 -8.25
SEP ’23 814.75 -7.5
SEP ’24 792.75 12.25
S&P 500
SEP ’23 4331.5 7.5
Crude Oil
AUG ’23 72.35 0.09
Gold
AUG ’23 1975.5 1.2

  • Corn is trading higher today with front month July leading the way up, while December is showing only slight gains. Crop progress was supportive, while wetter forecasts may limit upward movement.

  • 64% of the corn crop was rated good to excellent which is a decline from last month and the lowest rating for this date since 2013. Illinois is a concern with only 50% of the crop rated good to excellent.

  • DTN’s 7-day forecast is calling for moderate rain ranging from Montana to the US Gulf, and beneficial amounts in Kansas and Missouri. A front is also expected to move through the US this weekend.

  • In Brazil, the second crop corn is off to a good start and could be a record crop, but there is a potential frost threat in June which could move through safrinha corn areas.

  • Soybeans began the day lower but have reversed higher, while soybean meal and oil have reversed positions as well, with meal now lower and oil higher despite a slip in crude oil.

  • 62% of the soybean crop is rated good to excellent which is the lowest rating for that date since 2014 due to the dry weather. Iowa was rated at 70% while Illinois was rated at only 51%.

  • Brazil continues to dominate the export market with soybeans, but demand from China may be lagging as their economic growth is potentially slower than expected.

  • August palm oil fell by 1.9% after reports came out that Malaysia may end up with a surge in output of about 4.7%.

  • Wheat was an early leader in the grain complex after news of escalations in Ukraine were reported, but prices have backed up from their highs and are now lower on the day.

  • Ukraine claims that Russia blew up a major dam that could threaten hundreds of thousands of residents, the nuclear power plant, as well as major wheat-growing areas.

  • Yesterday, the USDA said that 82% of the winter wheat is headed and 4% harvested with 36% being rated good to excellent which was up 2% from the previous week.

  • On Friday, NASS will update its estimate of winter wheat production and the USDA will do the same in the WASDE. Traders are expecting the USDA to reduce export estimates for wheat for the 22/23 year.

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

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

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

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Opening Update: June 6, 2023

ByGrain Market Insider

All prices as of 6:30 am Central Time

Corn

JUL ’23 607 9.5
DEC ’23 543.75 6.75
DEC ’24 515 3.25

Soybeans

JUL ’23 1356.25 6.25
NOV ’23 1185 5.25
NOV ’24 1147.25 5

Chicago Wheat

JUL ’23 644.25 20.25
SEP ’23 656 19.75
JUL ’24 702.75 16.25

K.C. Wheat

JUL ’23 844.75 22.5
SEP ’23 838.25 21.75
JUL ’24 799 16.25

Mpls Wheat

JUL ’23 836.25 16
SEP ’23 836.5 14.25
SEP ’24 792.75 12.25

S&P 500

SEP ’23 4320.25 -3.75

Crude Oil

AUG ’23 70.62 -1.64

Gold

AUG ’23 1979.6 5.3

  • Corn is trading higher this morning following yesterday’s crop progress report that showed ratings falling, but support is also coming from a 20-cent rally in wheat today as well.

  • Corn is now estimated at 96% planted, above 92% last week, but good to excellent conditions have fallen due to recent dryness. Ratings have fallen to 64% from 69% a week ago.

  • Yesterday at midday, weather forecasts changed and called for more rain within the next 7 days on the GFS model, but traders are unsure if this will hold.

  • Yesterday’s export inspections showed 46.5 mb inspected for 22/23 putting total inspections down 32% from the previous year.

  • Soybeans are trading higher along with corn following yesterday’s crop progress, but soy products are mixed with soybean meal higher again but soybean oil lower due to lower palm oil prices.

  • Crop progress showed that soybeans were 91% planted compared to 83% last week, emergence is at 74% vs 56% a week ago, and the good to excellent rating is at 62% which was below trade estimates at 65%.

  • On Friday, the USDA will release this month’s WASDE and expectations are for old crop ending stocks to rise slightly and for Argentinian production to be lowered.

  • India’s palm oil imports hit a 27-month low as buyers seek cheaper soft oils, and palm oil stocks in Malaysia are expecting an output surge that could pressure prices further.

  • Wheat is leading the grain complex higher this morning following news that a Ukrainian dam was blown up, fighting there has escalated, and Russia says it does not see a way forward to renew the Black Sea Grain deal.

  • Australian wheat production is now expected to decrease by a third due to extreme drought and the second driest May on record.

  • Wheat sowing is beginning in Argentina, the major origin country of wheat imported by Brazil. 6.3% of the crop has reportedly been sown so far.

  • Crop progress for wheat showed winter wheat 4% harvested  vs 5% a year ago with a good to excellent rating of 36% vs 24% last week. Spring wheat is 93% planted and 76% is emerged.

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: June 5, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Corn futures closed lower after trading sharply higher in the Sunday night open. Weather models trended slightly wetter in their mid-day run for areas of desperate need in the eastern Corn Belt.

  • Soybeans and soybean oil closed lower despite crude oil moving higher on news of a Saudi Arabian production cut. Soybean meal managed to hold onto gains and close back above the $400/ton level.

  • All three wheats closed higher bucking the lower trend in the row crops. Spring wheat was the biggest winner adding double-digits as forecast models continue to point towards dryness into mid to late June for key producing regions.  

  • To see updated US 6-10 Day Temperature and Precipitation Outlooks from the Climate Prediction Center, scroll down to the Other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  •  No action is recommended at this time for Old Crop. July corn has had nearly a 60-cent rally in the last couple of weeks. Expect volatility to remain in the market, a changing weather forecast can push the market significantly in either direction. If you still have Old Crop to sell, consider using this rally to begin pricing some of those bushels. Don’t forget, there is about a 70-cent inverse between the July and September futures contracts, which could be lost when bids get rolled from one contract to the next in the next few weeks.

  • For 2023 New Crop corn, Grain Market Insider recommends liquidating December ‘23 560 calls. Since our previous recommendation to purchase December ‘23 560 and 610 calls, the December ‘23 corn contract has rallied enough that you should be able to liquidate your 560 call position with enough equity to pay for the December 610 call position. With dryness building in the Midwest, and an estimated fund short position in excess of 45k contracts, we continue to target the 590 – 630 range in the December futures to suggest adding cash sales. If you don’t happen to have any New Crop sold, you should consider targeting the 550 – 560 area to begin pricing bushels.

  • Continue to hold current sales levels for the 2024 crop year. We will look for opportunities to make further sales as we move through the 2023 growing season as weather volatility builds. 

Grain Market Insider Corn open positions listed above.

  • Corn futures reversed off overnight highs as weather models are still forecasting rainfall chances to increase around June 12, with a potential pattern shift coming in the back half of the month. The weak price action could lead to additional selling pressure on the Monday night open.

  • Demand keeps the market cautious as weekly corn export inspections were at 46.5 mb for the week ending June 1. This number was within expectations, but overall export inspections are running 32% behind last year versus a predicted drop in exports of 28% for the marketing year by the USDA. Total inspections are still behind the pace needed to reach USDA targets.

  • The USDA will release weekly crop ratings on Monday afternoon, and the market is expecting a 2% drop to 67% good/excellent, reflecting the current dry weather across the Corn Belt. Corn planting should be nearly complete, analyst estimate US corn at 97% planted as of Sunday.

  • The corn market will likely stay volatile and choppy this week, focusing on daily weather forecasts and preparing for the June WASDE report to be released on Friday, June 9. The June WASDE is expected to show a weaker demand tone and overall increasing corn supplies.

Above: The July contract is beginning to show signs of exhaustion, but Friday’s bullish surge higher is a positive sign that there is support near 575. If current prices can hold and close above the 50-day moving average near 610, the market would be poised to test April’s high of 647-1/2. Support below the market rests between 550 and 530, and again near the 2021 September low of 497-1/2.

Soybeans

Soybeans Action Plan Summary

  • May was a rough month for soybeans with a 175-cent range, but the market is consolidating, and found support just above 1270. July soybeans continue to be oversold with a tight Old Crop balance sheet, and with dryness concerns building and a seasonal window that is conducive for upside volatility and opportunity, continue to hold on progressing any Old Crop sales for now.

  • We recommend not adding to current sales levels for the new 2023 crop at this time. A quick planting pace with favorable conditions and South American competition have pressed US prices down nearly 17% from the beginning of the year. The potential remains for a tighter New Crop balance sheet, as the US Drought Monitor map remains concerning. We would consider recommending the next sales in the 1300 to 1350 area.

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

  • Soybeans ended the day lower after trading either side of unchanged, while soybean meal ended higher but soybean oil was lower despite higher crude oil prices. Weather forecasts changed around midday causing prices to turn negative.

  • Weather has been the focus for the price movement in corn and soybeans, and up until around noon, forecasts were calling for dryness until mid-June. Forecasts have changed slightly now calling for more rain within the next 7 days in the heart of the Corn Belt where it is sorely needed.

  • Soybean inspections totaled just 7.9 mb for the week ending Thursday, June 1, bringing total inspections to 1.788 bb and down 3% from the previous year. The USDA is estimating soybean exports at 2.015 bb for 22/23 which is down 7% from the previous year, but those numbers could change on Friday’s WASDE report.

  • Crop progress will be released this afternoon and planting progress is being estimated at 92% complete from 83% last week, and we will get our first glimpse of the soybean ratings for which analysts are estimating at 65% good to excellent.

Above: After a strong close last week, July soybeans will look for follow-through momentum to turn around a down-trend that has been in place since April. Support should be found near the recent lows of 1300 with nearby resistance near the 1420 area.

Wheat

Market Notes: Wheat

  • Weekly wheat inspections of 8.6 mb bring the total 22/23 inspections to 728 mb. The USDA is estimating exports at 775 mb, and with only a few weeks left in the marketing year, they may need to revise that estimate on Friday’s USDA report.

  • As of May 30th, funds have increased their net short position of Chicago wheat to 127,034 contracts (equivalent to about 635 mb).

  • News outlets are reporting that Russia stated they will not extend the Black Sea grain corridor again in July. However, time will tell. They have made similar statements in the past before the deal was renewed. Russia does appear to still be delaying vessel inspections though.

  • Weather is improving in China’s wheat-growing regions, where recent heavy rains may have caused some crop damage. From a bigger-picture perspective, there is some concern that global wheat supply could be lower than anticipated, especially if there is adverse weather.

Chicago Wheat Action Plan Summary

  • No new action is recommended for the 2022 crop. The market is down more than 300 cents from its October high and has become extremely oversold. The July contract may also post its 8th consecutive down month in a row at prices not seen since early 2021, even though wheat inventories of major exporting countries are anticipated to fall to 16-year lows. With the market being this oversold and a fund net position short nearly 113k contracts, we continue to eye the 640 – 670 range to clean up and market any remaining Old Crop inventory.

  • We recommend not taking any action on the 2023 crop at this time. While the window of opportunity is quickly closing for Old Crop, it is still wide open for better opportunities ahead for New Crop.  We are currently targeting a more aggressive window of 720 – 800 to suggest advancing sales and move more New Crop inventory.

  • No action is currently recommended for the 2024 crop. Although the market is down nearly 17% from the beginning of the year, the July ’24 contract is finding support near 2021 lows. With major exporting countries’ stocks expected to fall to 16-year lows, and the great amount of economic and geopolitical uncertainty in the world, it wouldn’t take much to trigger a 23% retracement of the 2022 highs, toward the 700-750 level, which we are targeting to suggest adding coverage on next year’s crop.

Above: The market is currently oversold and testing support between 593 and 565, with the next area of possible support below the market near the September ’20 low of 533-1/4. Resistance above the market could be found between 670 and 724.

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. Crop ratings overall are at historically low levels, and production concerns persist.  Additionally, any unforeseen geopolitical changes in the Black Sea region could cause the market to bounce and retrace 25% towards the 2022 high. 

  • Patience is warranted for the 2024 crop. The 2024 market has limited liquidity, and it may be until mid-summer before recommendations are posted. 

Above: Last week Wednesday’s bullish reversal indicates that there is support near 760, and any follow-through buying could be supportive with the market still showing signs of being oversold.  Resistance may be found above the market between 833 and 850, with further support resting below the market near 736-1/4.

Mpls Wheat Action Plan Summary

  • No action is currently recommended for the 2022 crop.  With planting concerns and a seasonal tendency for old crop prices to increase over the next 4-5 weeks, we are continuing to wait for better prices to develop. The calendar is becoming a constraint though, and we’ll be looking to part with any remaining old crop bushels by mid-June or so. 

  • No action is recommended on the 2023 crop at this time. The September ’23 contract had a 120-cent range in the month of May where it found support just above 770. While the planting pace has largely caught up to the 5-year average, dryness in some areas is increasing. With the market still largely oversold and a full growing season ahead of us, we are not looking to make any sales right now.

  • We continue to be patient to market any of the 2024 crop. The market for the 2024 crop continues to be illiquid, and it may be early summer before we post any recommendations, continue to be patient.

Above: The July contract continues to be weak and showing signs of being oversold. Additionally, open interest is falling, indicating liquidation. The market is showing signs of being oversold, which could be supportive if buying returns.  Resistance currently sits between 820 and 855 and then the recent high of 888-1/2. Support below the market may be found between 770 and 760. 

Other Charts / Weather

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Midday Update June 5, 2023

ByGrain Market Insider

All prices as of 10:30 am Central Tim

Corn
JUL ’23 599.25 -9.75
DEC ’23 537.5 -3.75
DEC ’24 511.5 -4.5
Soybeans
JUL ’23 1348.5 -4
NOV ’23 1180 -3.75
NOV ’24 1145.25 -3
Chicago Wheat
JUL ’23 621.5 2.5
SEP ’23 633.5 1.25
JUL ’24 684.25 1.75
K.C. Wheat
JUL ’23 819.5 7.25
SEP ’23 814 6.75
JUL ’24 780 1.25
Mpls Wheat
JUL ’23 817.5 9.75
SEP ’23 818.75 13
SEP ’24 791 10.5
S&P 500
SEP ’23 4338.25 7.25
Crude Oil
AUG ’23 72.67 0.83
Gold
AUG ’23 1974.3 4.7

  • Corn is mixed at midday with front month July lower by two cents but the December contract 4 cents higher. Traders will be fixated on weather and dryness should drive prices higher.

  • The 6–10 day forecast is mostly dry in the Corn Belt with scattered showers, but European and GFS models show rain in the second half of June.

  • The USDA will release crop progress this afternoon which will likely show a decline in the corn crop ratings. Last week’s rating showed 69% good to excellent, but it may drop by a few points due to lack of rain.

  • Brazilian corn remains significantly cheaper with their FOB corn prices in June below the US July futures. On the Bovespa exchange, July corn is trading at the equivalent of $4.58 a bushel.

  • Soybeans are trading slightly lower, while soy products are mixed. Soybean meal is about 1% higher, while soybean oil is 1% lower despite gains in crude oil.

  • The lack of rains recently has helped support soybeans as it has with corn, but more substantial rains will likely fall in the second half of this month, and soybeans are able to deal with the temporary dryness a bit better than corn.

  • Brazil is said to have harvested 5.7 billion bushels of soybeans, which would be the most on record for a single country. Additionally, they are said to have exported 15.1 mmt in May, which is 40% above last year.

  • According to the USDA, about 28% of US soybean production areas are in drought as of May 30.

  • All three wheat contracts are trading higher this morning despite the fact that both corn and soybeans turned around and are now trading lower on the day.

  • There is concern that the world wheat supply will be much tighter than anticipated, and traders will get an idea of that when the WASDE report is released this Friday.

  • The Crop Progress report today will give an indication if the recent rains in HRW wheat areas were enough to improve crop ratings. Last week’s ratings pegged US winter wheat’s good to excellent rating at 34%.

  • The wet weather has subsided for now in China’s wheat growing regions. However, the recent heavy rains could cause quality reductions, or even crop loss.

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: June 5, 2023

ByGrain Market Insider

All prices as of 6:30 am Central Time

Corn

JUL ’23 610 1
DEC ’23 544.5 3.25
DEC ’24 515 -1

Soybeans

JUL ’23 1352 -0.5
NOV ’23 1185.75 2
NOV ’24 1148.5 0.25

Chicago Wheat

JUL ’23 621 2
SEP ’23 633.75 1.5
JUL ’24 681.5 -1

K.C. Wheat

JUL ’23 818.25 6
SEP ’23 814.75 7.5
JUL ’24 788 9.25

Mpls Wheat

JUL ’23 814.5 6.75
SEP ’23 813.25 7.5
SEP ’24 780.5 13.25

S&P 500

SEP ’23 4334.25 3.25

Crude Oil

AUG ’23 73.26 1.42

Gold

AUG ’23 1956.7 -12.9

  • Corn is trading slightly higher as hot and dry conditions are forecast over the next week with some scattered showers, but according to the GFS model, Sunday and Monday should bring good rains.

  • Today’s crop progress report will likely show a decline in corn ratings due to the weather and lower soil moisture levels.

  • Mexico has said that they would defend their position on genetically modified corn, but that the use of their local corn for human consumption won’t affect the trade with the US.

  • Friday’s CFTC report showed funds as buyers of corn by 46,962 contracts which reduced their net short position to 51,065 contracts.

  • Soybeans are beginning the week higher but soy products are mixed with soybean meal slightly higher and soybean oil lower despite higher crude.

  • Just as corn is trading the weather very closely, so are soybeans. The recent hot and dry weather has been supportive, but soybeans can wait longer to receive good rains than corn can and barring a drought, US soybean production is expected to be large.

  • Friday’s WASDE report will likely show small changes but the largest one may be a revision lower to Argentina’s production. The USDA last estimated it at 7 to 8 mmt higher than other analysts and exchanges.

  • Friday’s CFTC data showed funds as net sellers of soybeans by 3,618 contracts leaving them net long only 529 contracts at this point.

  • Wheat is higher this morning due to the weather as well as attention on Friday’s WASDE report which will likely show lower US production.

  • One ship departed a port in Ukraine over the weekend carrying 33,000 mt of wheat, and 5 other ships left the Black Sea carrying 210,471 mt of agricultural products.

  • Friday’s CFTC report showed funds as net sellers of wheat by 8,210 contracts increasing their net short position to a very large 126,998 contracts.

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

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

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

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Grain Market Insider: June 2, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Corn rallied sharply to end the week as weather models continued their dry bias for much of the Corn Belt through the next week to ten days.

  • Soybeans continued their move higher with help from soybean oil, as well as outside markets.

  • Soybean oil futures posted a second straight session of strong gains moving over 3% higher, while soybean meal slumped slightly despite once again strong weekly net export sales.

  • All three wheat classes continued higher following the strength of the corn market and commodities as a whole.

  • Total nonfarm US payrolls increased by 339,000 jobs in May, this was well above the expectations of the market and spurred buying in both commodities and the stock market.

  • To see updated US 8-14 Day Temperature and Precipitation Outlooks from the Climate Prediction Center, scroll down to the Other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  • No action is recommended at this time for Old Crop.

  • No action is recommended at this time for Old Crop. July corn has had nearly a 60-cent rally in the last couple of weeks. The selloff from the recent high of 606-3/4 shows there is still a lot of volatility in the market, and that a changing weather forecast can push the market significantly in either direction. If you still have Old Crop to sell, consider using this rally to begin pricing some of those bushels. Don’t forget, there is about a 75-cent inverse between the July and September futures contracts, which could be lost when bids get rolled from one contract to the next in the next few weeks.  

  • For 2023 New Crop corn, Grain Market Insider recommends liquidating December ‘23 560 calls. Since our previous recommendation to purchase December ‘23 560 and 610 calls, the December ‘23 corn contract has rallied enough that you should be able to liquidate your 560 call position with enough equity to offset much of the original premium outlay for both options and leave you with a long December 610 call position for a nearly net neutral premium cost. The open long December 610 call position will afford you the potential to gain more equity in the event the December corn futures contract continues to rally, thus providing you with a level of “re-ownership” on previous sales and giving you more confidence to make further sales at higher prices. The recent rally off the May low of 490-3/4 shows how volatile December corn can be on the turn of a weather forecast with little risk premium built into prices and a full growing season ahead of us. With dryness building in the Midwest, and an estimated fund short position in excess of 95k contracts, we continue to target the 590 – 630 range in the December futures to suggest adding cash sales. If you don’t happen to have any New Crop sold, you should consider targeting the 550 – 560 area to begin pricing bushels.

  • Continue to hold current sales levels for the 2024 crop year. We will look for opportunities to make further sales as we move through the 2023 growing season as weather volatility builds. 

Grain Market Insider Corn open positions listed above.

  • Corn futures turned higher off early session lows as money flowed into the market, supported by “risk on” trade across the broader markets, and weather models turning drier for the eastern Corn Belt next week.

  • The CBOE Volatility Index (VIX), which measures fear in the markets, pushed to its lowest level in over 23 months, allowing strong money flow into both equity and commodity markets.

  • Demand concerns are still a major factor in the corn market. Weekly exports sales for corn were disappointing with old crop sales at only 7.4 mb and new crops sales 12.3 mb last week. Both were on the lower end of expectations as the U.S. struggles against foreign export competition.

  • July corn futures had a strong close over the 50-day moving average for the first time since April 19th, and the strong price action could lead to additional buying support on Sunday night’s open.

  • Next week, the corn market will likely stay volatile focusing on daily weather forecasts and preparing for the June WASDE report to be released on Friday, June 9.

Above: The July contract is beginning to show signs of exhaustion, but Wednesday’s bullish reversal is a positive sign that there is support near 575. If current prices can hold and close above the 50-day moving average near 610, the market would be poised to test April’s high of 647-1/2. Support below the market rests between 550 and 530, and again near the 2021 September low of 497-1/2. 

Soybeans

Soybeans Action Plan Summary

  • May was a rough month for soybeans with a 175 cent range, but the market is consolidating, and found support just above 1270. July soybeans continue to be oversold with a tight Old Crop balance sheet, and with dryness concerns building and a seasonal window that is conducive for upside volatility and opportunity, continue to hold on progressing any Old Crop sales for now.

  • We recommend not adding to current sales levels for the new 2023 crop at this time. A quick planting pace with favorable conditions and South American competition have pressed US prices down nearly 17% from the beginning of the year. The potential remains for a tighter New Crop balance sheet, as the US Drought Monitor map remains concerning. We would consider recommending the next sales in the 1300 to 1350 area.

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

  • Soybeans ended the day higher thanks to strong gains from soybean oil, while soybean meal closed lower. July soybeans gained 14-¾ cents on the week, while Nov beans lost 6 cents. The stock market posted significant gains, which helped support commodities.

  • The debt ceiling bill being passed by both the House and Senate calmed many traders’ fears and resulted in a 600-point gain in the Dow and spurred buying in the commodity market. The debt ceiling deal will be good until January 1, 2025.

  • The Midwest has been dealing with dryness and has only received very sparse scattered showers. The dryness has helped support prices, but good rains are forecast for the second half of June. If those promised rains don’t fall, futures could continue higher.

  • Export sales for the week ending May 25 showed an increase of 4.5 mb for soybeans in 22/23, which was up 7% from the previous week. Sales for 23/24 were 11.1 mb and export shipments of 8.5 mb and were below the 13.3 mb needed each week to achieve the USDA’s estimates.

Above: The market continues to show signs of being oversold and Wednesday’s bullish reversal indicates there is support near 1270 and follow through buying could lead to a market bounce. The next area of support could be found between 1237 – 1214 with nearby resistance near 1350 and 1420. 

Wheat

Market Notes: Wheat

  • The USDA reported net cancellations of 7.7 mb of wheat export sales for 22/23, but an increase of 17.1 mb for 23/24.

  • Wheat traded both sides of neutral today, but ended with a positive close. Spillover from higher corn and soybeans was likely a contributing factor.

  • A combination of weather and higher outside markets also lent support to the grain markets today. As of writing, the Dow is up over 700 points and crude oil is up about $1.50 per barrel, coming after the debt ceiling deal was passed by congress and strong jobs data this morning.

  • Paris milling wheat was also higher today, as it is being reported that Russia is again refusing to register Ukrainian grain vessels. Tensions between the two warring nations are high, despite the recent extension of the export deal.

  • Managed funds are said to be short 605 mb of SRW wheat – that is more than the USDA’s estimate of 2023 production (406 mb). This could lead to a short covering rally if there is a catalyst to light the fuse.

  • The rains have subsided in China’s wheat growing regions. However, the damage may already be done. Crop damage is likely, and at a minimum, there will be quality downgrades.

Chicago Wheat Action Plan Summary

  • No new action is recommended for the 2022 crop. The market is down more than 300 cents from its October high and has become extremely oversold. The July contract may also post its 8th consecutive down month in a row at prices not seen since early 2021, even though wheat inventories of major exporting countries are anticipated to fall to 16 year lows. With the market being this oversold and a fund net position short nearly 113k contracts, we continue to eye the 640 – 670 range to clean up and market any remaining Old Crop inventory.

  • We recommend not taking any action on the 2023 crop at this time. While the window of opportunity is quickly closing for Old Crop, it is still wide open for better opportunities ahead for New Crop.  We are currently targeting a more aggressive window of 720 – 800 to suggest advancing sales and move more New Crop inventory.

  • No action is currently recommended for the 2024 crop. Although the market is down nearly 17% from the beginning of the year, the July ’24 contract is finding support near 2021 lows. With major exporting countries’ stocks expected to fall to 16 year lows, and the great amount of economic and geopolitical uncertainty in the world, it wouldn’t take much to trigger a 23% retracement of the 2022 highs, toward the 700-750 level, which we are targeting to suggest adding coverage on next year’s crop.

Above: The market is currently oversold and testing support between 593 and 565, with the next area of possible support below the market near the September ’20 low of 533-1/4. Resistance above the market could be found between 670 and 724.

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. Crop ratings overall are at historically low levels, and production concerns persist.  Additionally, any unforeseen geopolitical changes in the Black Sea region could cause the market to bounce and retrace 25% towards the 2022 high. 

  • Patience is warranted for the 2024 crop. The 2024 market has limited liquidity, and it may be until mid-summer before recommendations are posted. 

Above: Wednesday’s bullish reversal indicates that there is support near 760, and any follow through buying could be supportive with the market showing signs of being oversold. Resistance may be found above the market between 833 and 850, with further support resting below the market near 736-1/4. 

Mpls Wheat Action Plan Summary

  • No action is currently recommended for the 2022 crop.  With planting concerns and a seasonal tendency for old crop prices to increase over the next 4-5 weeks, we are continuing to wait for better prices to develop. The calendar is becoming a constraint though, and we’ll be looking to part with any remaining old crop bushels by mid-June or so. 

  • No action is recommended on the 2023 crop at this time. The September ’23 contract had a 120-cent range in the month of May where it found support just above 770. While the planting pace has largely caught up to the 5 year average, dryness in some areas is increasing. With the market still largely oversold and a full growing season ahead of us, we are not looking to make any sales right now.

  • We continue to be patient to market any of the 2024 crop. The market for the 2024 crop continues to be illiquid, and it may be early summer before we post any recommendations, continue to be patient.

Above: The July contract continues to be weak and showing signs of being oversold. Additionally, open interest is falling, indicating liquidation. The market is showing signs of being oversold, which could be supportive if buying returns.  Resistance currently sits between 820 and 855 and then the recent high of 888-1/2. Support below the market may be found between 770 and 760. 

Other Charts / Weather

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Midday Update June 2, 2023

ByGrain Market Insider

All prices as of 10:30 am Central Tim

Corn

JUL ’23 587.25 -5.25
DEC ’23 527.5 -2.5
DEC ’24 509 -1.5

Soybeans

JUL ’23 1345.75 16.25
NOV ’23 1178.25 9.25
NOV ’24 1145.75 10.75

Chicago Wheat

JUL ’23 607 -3.75
SEP ’23 620.5 -3.75
JUL ’24 672.25 -0.5

K.C. Wheat

JUL ’23 794.25 -8.25
SEP ’23 790.5 -7
JUL ’24 763 -8

Mpls Wheat

JUL ’23 794.75 5.75
SEP ’23 793.25 2.5
SEP ’24 767.25 6

S&P 500

SEP ’23 4327 57.25

Crude Oil

AUG ’23 71.77 1.57

Gold

AUG ’23 1979.7 -15.8

  • The USDA reported an increase of 7.4 mb of corn export sales for 22/23 and an increase of 12.3 mb for 23/24.

  • According to the USDA, about 34% of US corn production areas are in drought as of May 30th.

  • Today’s weather forecast is mostly dry for the next 10 days in the Midwest, but the western Plains look like they will have better chances for rain. In fact, there are flash flood warnings around the Texas panhandle.

  • July corn is seeing more price pressure vs new crop. This is likely due to the start of Brazil’s safrinha crop harvest and the fact that their prices are lower than the US.

  • The USDA reported an increase of 4.5 mb of soybean export sales for 22/23 and an increase of 11.1 mb for 23/24.

  • According to the USDA, about 28% of US soybean production areas are in drought as of May 30th.

  • The NASS Crush report showed 187 mb of US soybeans were crushed in April. In addition, soybean oil stocks at the end of April were up 3% from (vs last year) and meal stocks were up 28% for the same time frame.

  • Brazil is said to have harvested 5.7 billion bushels of soybeans, which would be the most on record for a single country. Additionally, they are said to have exported 15.1 mmt in May, which is 40% above last year.

  • The USDA reported net cancellations of 7.7 mb of wheat export sales for 22/23 and an increase of 17.1 mb for 23/24.

  • According to Ukrainian officials, Russia is reportedly refusing to register Ukrainian grain vessels. This is not the first time this news has surfaced, but it signifies that there is still much tension between the two nations, even after the Black Sea deal was last extended.

  • The wet weather has subsided for now in China’s wheat growing regions. However, the recent heavy rains could cause quality reductions, or even crop loss.

  • As of the latest Commitments of Traders report, funds are said to be short 605 mb of SRW wheat. For reference, the USDA is estimating US production of that crop at 406 mb in 2023.

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: June 2, 2023

ByGrain Market Insider

All prices as of 6:30 am Central Time

Corn

JUL ’23 585.5 -7
DEC ’23 527.75 -2.25
DEC ’24 510 -0.5

Soybeans

JUL ’23 1327.75 -1.75
NOV ’23 1169.5 0.5
NOV ’24 1139 4

Chicago Wheat

SEP ’23 626 1.75
JUL ’24 673 0.25

K.C. Wheat

SEP ’23 797 -0.5
JUL ’24 770.75 -0.25

Mpls Wheat

JUL ’23 788.25 -0.75
SEP ’23 792.5 1.75
SEP ’24 767.25 6

S&P 500

SEP ’23 4292.25 22.5

  • Corn is trading lower this morning with July down 9 cents and Dec down only 3. Dryness in the short term has been a concern, but today’s forecast calls for more scattered showers.

  • Yesterday evening, the Senate voted to suspend the debt ceiling through January 1, 2025, avoiding risk of default and giving traders some confidence back.

  • While rain is forecast in the second half of June, dry weather in the interim has been a concern and was likely behind yesterday’s gains.

  • Export sales will be released at 7:30 and will likely show disappointing numbers again as Brazilian corn remains cheaper than the US.

  • The soy complex is beginning the day mixed with soybeans and soybean meal lower, but soybean oil higher as it gains support from higher crude and higher palm oil.

  • Yesterday’s rally can be attributed to oversold technicals and a dry 10 day forecast in which the Midwest will receive only scattered showers with the bulk of rain falling in the western Plains.

  • Soybean export sales are also expected to be low again today as Brazil dominates the market having already exported 15.1 mmt. They have harvested 5.70 billion bushels at this point, the most by any country.

  • Yesterday, USDA’s NASS said that 187 mb of US soybeans were crushed in April, up 3% from a year ago, and that soybean oil stocks at the end of April totaled 2.08 billion pounds, the highest in over a year.

  • Wheat is mixed with Chicago relatively unchanged, KC down slightly, and Minn up slightly. All three products are on track for lower closes on the week.

  • The war in Ukraine doesn’t seem to matter to traders anymore despite the fact that vessels leaving the Black Sea are sparse and that Russia is intentionally trying to slow inspections and traffic down.

  • Today’s export sales report will likely show shipments of wheat below the necessary 39 mb needed to meet the USDA’s estimates and could result in a revision lower on the WASDE for exports.

  • Argentina’s wheat planting has been delayed due to poor soil moisture with only 6.3% planted, and China’s wheat crop in the Henan province is receiving too much rain which could result in a loss of 10 to 20 mmt.

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: June 1, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Corn ended the day mixed as July futures gave up early morning gains to close slightly lower, while New Crop contracts rallied on continued hot and dry weather worries.

  • The soybean complex piggybacked on yesterday’s strong reversals, July soybeans and soybean oil led the gains with moves higher of 2.29% and 3.59% respectively.

  • Wheat finished higher across the entire complex on follow-through buying from yesterday’s reversal in the two winter wheats. A weaker US dollar also likely helped spur some buying.

  • A sharp daily break in the US dollar lent a helping hand to commodities. An almost certain resolution to US debt ceiling concerns, as well as Federal Reserve comments hinting at potential a pause to rate hikes, are likely pressuring the US dollar.

  • To see updated US Drought Monitor and US 6-10 day Temperature and Precipitation Outlooks from the Climate Prediction Center, scroll down to the Other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  • No action is recommended at this time for Old Crop.

  • No action is recommended at this time for Old Crop. July corn has had nearly a 60-cent rally in the last couple of weeks. The selloff from the recent high of 606-3/4 shows there is still a lot of volatility in the market, and that a changing weather forecast can push the market significantly in either direction. If you still have Old Crop to sell, consider using this rally to begin pricing some of those bushels. Don’t forget, there is about a 75-cent inverse between the July and September futures contracts, which could be lost when bids get rolled from one contract to the next in the next few weeks.  

  • No action is currently recommended for the 2023 new crop. The recent rally off the May low of 490-3/4 shows how volatile December corn can be on the turn of a weather forecast with little risk premium built into prices and a full growing season ahead of us. With dryness building in the Midwest, and an estimated fund short position in excess of 95k contracts, we continue to target the 590 – 630 range in the December futures to suggest adding cash sales. If you don’t happen to have any New Crop sold, you should consider targeting the 550 – 560 area to begin pricing bushels.

  • Continue to hold current sales levels for the 2024 crop year. We will look for opportunities to make further sales as we move through the 2023 growing season as weather volatility builds. 

Grain Market Insider Corn open positions listed above.

  • A break in the U.S Dollar Index, likely a resolution to the debt ceiling concerns, and strong outside markets supported corn futures for most of the session. July corn saw prices erode as demand concerns stay in the forefront of the market, and the competition for cheaper newly harvested Brazil corn is starting to come to the export market.

  • New crop corn futures added some premium as precipitation chances for the heart of the Corn Belt were pushed further back into next week, but weather models are still looking for a significant pattern change into mid-June.

  • Most recent drought monitor maps reflected the current dry conditions across the Corn Belt as areas of abnormally dry and Level 1 drought conditions developed across the key corn producing states of Iowa, Illinois, and Indiana.

  • Private analysts continue to raise their Brazil 2nd crop corn production estimates higher, as StoneX raised their estimates to 102.9 MMT from their estimate of 100.8 MMT in April.

  • The USDA will release weekly export sales on Friday morning, expectations are for old crop corn sales to range from –100,000 MT to 400,000 MT as U.S. corn continues to struggle against export competition.

Above: The July contract is beginning to show signs of exhaustion, but Wednesday’s bullish reversal is a positive sign that there is support near 575. If current prices can hold and close above the 50-day moving average near 610, the market would be poised to test April’s high of 647-1/2. Support below the market rests between 550 and 530, and again near the 2021 September low of 497-1/2. 

Soybeans

Soybeans Action Plan Summary

  • May was a rough month for soybeans with a 175 cent range, but the market is consolidating, and found support just above 1270. July soybeans continue to be oversold with a tight Old Crop balance sheet, and with dryness concerns building and a seasonal window that is conducive for upside volatility and opportunity, continue to hold on progressing any Old Crop sales for now.

  • We recommend not adding to current sales levels for the new 2023 crop at this time. A quick planting pace with favorable conditions and South American competition have pressed US prices down nearly 17% from the beginning of the year. The potential remains for a tighter New Crop balance sheet, as the US Drought Monitor map remains concerning. We would consider recommending the next sales in the 1300 to 1350 area.

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

  • Soybeans ended the day significantly higher and were led by gains in soybean oil and crude oil. Malaysian palm oil and other world veg oils have moved higher supporting soybeans. Soybean meal closed higher as well.

  • The forecast for most of the Corn Belt is dry until the middle of this month with some scattered showers in the interim, but many producers need rain and higher futures are reflecting that. The market will likely trade weather in the absence of other news.

  • The debt ceiling issue seems to be resolved with the agreement passing through the House and now on to the Senate where it will most likely be successful. Traders and markets have reacted positively to the resolution with the stock market working higher today too.

  • One other concern for soybeans is China’s economy and the sluggish economic data that was released yesterday. Soybeans on the Dalian exchange have fallen to their lowest levels in two years at the equivalent of $14.47 a bushel. Sagging prices of Chinese stocks, copper, and crude oil have also pointed to a slowing economy.

Above: The market continues to show signs of being oversold and Wednesday’s bullish reversal indicates there is support near 1270 and follow through buying could lead to a market bounce. The next area of support could be found between 1237 – 1214 with nearby resistance near 1350 and 1420. 

Wheat

Market Notes: Wheat

  • The US dollar is sharply lower today, which may have given wheat some room to run higher.

  • All three classes of US wheat futures are still at, or near, oversold levels on daily stochastics. After yesterday’s reversal and today’s follow through, a near term bottom may be in place.

  • With the exception of dry Russian spring wheat areas, and drought in Spain, most of Europe and the Black Sea have seen favorable wheat crop conditions.

  • China has recently received heavy rains in their wheat growing regions. This could cause quality issues, which may result in more of their wheat being used for feed.

  • Today’s Drought Monitor map shows an increase in dry conditions throughout the eastern and central parts of the Midwest. The SRW crop should still be in good shape with plenty of soil moisture, but if the pattern persists it could be cause for concern.

  • According to the UN, only 6 grain vessels have left Ukraine since the last deal extension. Russia is believed to still be restricting or delaying movement of ships.

Chicago Wheat Action Plan Summary

  • No new action is recommended for the 2022 crop. The market is down more than 300 cents from its October high and has become extremely oversold. The July contract may also post its 8th consecutive down month in a row at prices not seen since early 2021, even though wheat inventories of major exporting countries are anticipated to fall to 16 year lows. With the market being this oversold and a fund net position short nearly 113k contracts, we continue to eye the 640 – 670 range to clean up and market any remaining Old Crop inventory.

  • We recommend not taking any action on the 2023 crop at this time. While the window of opportunity is quickly closing for Old Crop, it is still wide open for better opportunities ahead for New Crop.  We are currently targeting a more aggressive window of 720 – 800 to suggest advancing sales and move more New Crop inventory.

  • No action is currently recommended for the 2024 crop. Although the market is down nearly 17% from the beginning of the year, the July ’24 contract is finding support near 2021 lows. With major exporting countries’ stocks expected to fall to 16 year lows, and the great amount of economic and geopolitical uncertainty in the world, it wouldn’t take much to trigger a 23% retracement of the 2022 highs, toward the 700-750 level, which we are targeting to suggest adding coverage on next year’s crop.

Above: The market is currently oversold and testing support between 593 and 565, with the next area of possible support below the market near the September ’20 low of 533-1/4. Resistance above the market could be found between 670 and 724.

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. Crop ratings overall are at historically low levels, and production concerns persist.  Additionally, any unforeseen geopolitical changes in the Black Sea region could cause the market to bounce and retrace 25% towards the 2022 high. 

  • Patience is warranted for the 2024 crop. The 2024 market has limited liquidity, and it may be until mid-summer before recommendations are posted. 

Above: Wednesday’s bullish reversal indicates that there is support near 760, and any follow through buying could be supportive with the market showing signs of being oversold. Resistance may be found above the market between 833 and 850, with further support resting below the market near 736-1/4. 

Mpls Wheat Action Plan Summary

  • No action is currently recommended for the 2022 crop.  With planting concerns and a seasonal tendency for old crop prices to increase over the next 4-5 weeks, we are continuing to wait for better prices to develop. The calendar is becoming a constraint though, and we’ll be looking to part with any remaining old crop bushels by mid-June or so. 

  • No action is recommended on the 2023 crop at this time. The September ’23 contract had a 120-cent range in the month of May where it found support just above 770. While the planting pace has largely caught up to the 5 year average, dryness in some areas is increasing. With the market still largely oversold and a full growing season ahead of us, we are not looking to make any sales right now.

  • We continue to be patient to market any of the 2024 crop. The market for the 2024 crop continues to be illiquid, and it may be early summer before we post any recommendations, continue to be patient.

Above: The July contract continues to be weak and showing signs of being oversold. Additionally, open interest is falling, indicating liquidation. The market is showing signs of being oversold, which could be supportive if buying returns.  Resistance currently sits between 820 and 855 and then the recent high of 888-1/2. Support below the market may be found between 770 and 760. 

Other Charts / Weather