Yesterday’s closes in grains were well off of the daily lows, and prices are higher at midday today. This signals support at these lower levels.
The debt ceiling deal was passed in the US House and is now moving onto the Senate, potentially offering some support to commodities.
July corn on Brazil’s Bovespa Exchange was lower again, around the equivalent of $4.45 per bushel. This is likely in anticipation of a record safrinha crop and is close to the lowest level in two years.
Sales of corn by Argentina’s farmers total 12.3 mmt to date, compared with 25.8 mmt at this time last year.
On China’s Dalian Exchange, July soybeans hit a new low – the equivalent of $14.47 per bushel. This takes out the previous close of $14.53 (equivalent).
Soybean meal has been trending lower, but is sharply higher at midday – this is supporting soybean futures.
Crude oil has recently been under pressure and is currently below $70 per barrel. This is likely on concern about global economics, especially with China’s economy said to be slowing. This also has been pressuring soybean oil, but both commodities are higher at midday today.
Chinese crush margins are turning negative, which could lead to a slowdown in future purchases of soybeans.
The western prairies in Canada have recently seen beneficial rains to help their wheat crop, and over the next week or so there will be widespread rain in Saskatchewan and western Alberta.
Spain is experiencing drought, but elsewhere in Europe and the Black Sea, wheat crop conditions are favorable. Some of Russia’s spring wheat areas remain dry, however.
Recent heavy rains in China’s wheat growing regions could reduce quality of that crop. Therefore, they may use more wheat for feed.
This morning, there were flash flood warnings in the Texas panhandle area. The wheat crop in this area was already struggling and this may further complicate the problems there.
Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing by Stewart-Peterson and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Stewart-Peterson Inc. Reproduction of this information without prior written permission is prohibited. Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Reproduction and distribution of this information without prior written permission is prohibited. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing.
Stewart-Peterson Inc., Stewart-Peterson Group Inc., and SP Risk Services LLC are each part of the family of companies within Total Farm Marketing (TFM). Stewart-Peterson Inc. is a publishing company. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services LLC is an insurance agency. A customer may have relationships with any or all three companies.
Corn is trading higher to begin the month with the deferred contracts leading, and for all the volatility last month, July corn actually gained 9 cents.
Rains that were expected in the 7-day forecast were pushed West of most growing areas into Saskatchewan and Montana while the rest of the Corn Belt should receive only scattered showers.
Brazilian corn remains cheap and on the Bovespa exchange, July corn is trading at the equivalent of $4.44 a bushel.
Refinitiv Commodities analysts expect US corn production to be fractionally better than the previous year citing rapid plantings and decent early season conditions.
Soybeans are trading higher as well to begin the month with both soy products higher but crude oil slightly lower.
Yesterday, November soybeans hit a new one year low, and with the losses in soy products, crush premiums fell back to 1.60 a bushel, the lowest incentive for processors in two years.
Soybean meal has fallen sharply caused by feed demand concerns, chiefly California’s Prop 12, but yesterday’s rally in lean hogs breathed some life into meal futures.
Yesterday, shipping data from Reuters showed Brazil exporting 178,800 tonnes of soybeans to buyers in the US in a rare move, but still a bargain for the importers.
Wheat is trading higher with July KC having climbed back above the 8 dollar mark. While good to excellent ratings improves slightly, there are major concerns about the US HRW wheat crop.
The SRW wheat crop is looking good so far and the spring wheat crop is mostly getting planted, but it seems that the US wheat crop will be similar to the low levels of the past two years.
Russian farmers have begun to suspend wheat deliveries to exporters while waiting for higher prices after the export duty will be reduced on June 7 which is causing wheat to pile up in Russia.
Canadian wheat production for 23/24 is expected to be in line with last season despite area expansions due to poor soil moisture conditions in the Southern Prairies. Canadian wheat production is estimated at 33.3 mmt, down 1% from last season.
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.
Following a sharp drop in the overnight session on a more favorable June weather forecast and demand concerns, corn had a strong recovery of 15-1/2 cents as month end positioning entered the market.
The soybean complex saw quite the reversal led by the July contract following concerns of slowing Chinese demand and higher world veg oil production, which weighed heavily on the soybean complex overnight.
The wheat complex ended the day mixed as Minneapolis contracts lagged on strong planting progress numbers, while K.C. and Chicago contracts uncovered short covering on continued Kansas crop concerns and oversold conditions.
Concerns over possible higher interest rates, lower consumer demand and slower world economies weighed on the commodity sector, likely adding pressure to grain futures early in the session.
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. 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. Planting is nearly complete and the volatile weather months still ahead. December corn has dropped nearly 120 cents from its January high, and with that drop, much of the weather risk premium has eroded away. With drought still looming in the WCB and the funds carrying a 92k contract short position, we continue to target the 590 – 630 range in the December futures to suggest adding cash sales. If you happen to not 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.
Weak Chinese economic data, demand concerns, and a weather forecast showing the potential for a more active pattern weighed heavily on corn prices to start the session, but end of month profit taking and position squaring lifted corn to a steady to lower close.
Tuesday evening weather models continue to show the potential for increased precipitation and cooler temperatures for the second week of June in areas of the Corn Belt, limiting the new crop futures ability to rally.
The USDA released the first corn crop ratings on Tuesday afternoon. The USDA stated that 69% of this year’s crop rated good/excellent as of Sunday night. Expectations were for the crop to be 71% good/excellent and in line with the 5-year average. Last year’s first initial crop rating was 73% good/excellent. Corn planting reached 92% complete, up from 81% last week and in line with expectations.
The firmer close off the session lows may indicate a market looking for more information. While demand news stayed quiet, weather forecasts can have a tendency to change. Money flow may have been more neutral, looking for more confirmation of a true weather pattern change. The movement of wheat futures turning higher into the close likely supported the corn market in the afternoon.
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
July soybeans found support last week just above the 1300 level. While the month of May has been a rough one for the soy complex, the market remains in a seasonal window conducive for upside volatility and opportunity. Given the oversold nature of the market, combined with a still tight Old Crop domestic balance, continue to hold on progressing any Old Crop sales for now.
We recommendnot adding to current sales levels for the new 2023 crop at this time. As we continue through planting season, favorable weather 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 1350 to 1400 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 began the day sharply lower driven by another significant drop in soybean oil, but prices managed to somewhat recover through the day with July soybeans ending higher, deferred months lower, and soybean oil relatively unchanged.
Disappointing economic numbers out of China added bearish pressure to the market with their PMI data showing a slowing in the economic activity over the past month.
China is still a buyer of Brazilian soybeans despite the poor economic data and purchased 5 more July soybean cargoes in addition to the 10 to 12 last week. Some analysts estimate total Chinese soybean imports closer to 102-104 mmt compared to the USDA’s estimate of 98 mmt.
Brazil has reportedly made some rare soybean sales to the US equal to a combined 120,000 metric tonnes. Brazil has now passed the US in both soy and corn exports.
Yesterday’s USDA weekly Crop Progress report showed a jump in soybean planting to 83% completion vs 65% on average, and 56% of the crop is emerged vs 40% on average.
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 rated the US winter wheat crop condition at 34% good to excellent versus 31% last week and the spring wheat crop at 85% planted only slightly behind the 86% average.
Despite recent rains, the winter wheat crop in Kansas is still struggling with a 69% poor to very poor rating. The rain is probably too late to help the wheat crop, but could benefit corn and soybeans.
End of month profit taking and position squaring possibly added to the strength in the wheat market along with anticipation that a US debt ceiling deal may be reached.
Russia is still said to be lowering their wheat export prices, now at $230-$240 per ton. Alongside the rising US dollar, both factors may pressure the US export market and limit upside for wheat futures.
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. While we are looking for stronger markets to present themselves in this currently weak environment, there are factors that could be supportive, should they occur. Such as any escalation of the Ukraine war or disruption of grain movement in the Black Sea, or a significant devaluation of the US Dollar back to 2021 levels, as that market is showing characteristics of a potential drop.
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. Wet conditions have delayed some planting and raised some prevent planting concerns which could continue to influence the market and generate better selling opportunities in the coming months. We are in no hurry to sell right now with everything going on.
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.
The USDA said 92% of the corn crop is planted vs 84% on average. The crop was also rated 69% good to excellent.
In the face of the national 69% GTE rating, areas of the central and eastern Corn Belt will need more rain.
The December corn daily futures chart is possibly forming the right shoulder of an inverted head and shoulders pattern. If it solidifies, it could point to a price recovery.
July corn on Brazil’s Bovespa Exchange is trading around the equivalent of $4.54 per bushel.
The USDA said 83% of the soybean crop is planted vs 65% average.
July soybeans on China’s Dalian Exchange hit the lowest level in two years due to concerns about demand. That contract is now around the equivalent of $14.53 per bushel.
July soybean meal hit the lowest level since August of 2022.
Palm oil is lower due to talk of better production, India possibly increasing their import duty, and potentially lower China demand.
The USDA rated the winter wheat crop at 34% good to excellent vs 31% last week.
The USDA said the spring wheat crop is 85% planted vs 86% average.
Kansas winter wheat is still struggling, even with recent rains. Their crop is rated 69% poor to very poor.
The US Dollar Index continues to trend higher, which may limit upside potential for wheat as it makes it more expensive for importing countries.
Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing by Stewart-Peterson and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Stewart-Peterson Inc. Reproduction of this information without prior written permission is prohibited. Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Reproduction and distribution of this information without prior written permission is prohibited. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing.
Stewart-Peterson Inc., Stewart-Peterson Group Inc., and SP Risk Services LLC are each part of the family of companies within Total Farm Marketing (TFM). Stewart-Peterson Inc. is a publishing company. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services LLC is an insurance agency. A customer may have relationships with any or all three companies.
Corn futures are lower again this morning following yesterday’s selloff as wetter weather is forecast for the end of June.
Planting progress showed that 92% of the corn crop is planted compared to 81% last week with 72% emerged and a rating of 69% good to excellent compared to 73% a year ago.
The best chances of rain in the seven day forecast are in the western Plains with some falling in the central and Eastern Corn Belt, with better rains expected the second week of June.
Concerns that the US debt deal could fall through Congress is weighing on markets with most commodities falling.
Soybeans are also trading lower after their sharp selloff yesterday with soybean oil leading the way lower yesterday and today.
Planting progress showed that 83% of the soybean crop has been planted compared to 66% last week, with emergence at 56% compared to 36% a year ago. Soybeans have not received a rating yet.
Soybean inspections yesterday were 8.8 mb for 22/23 putting total inspections down 2% from the previous year. The USDA is estimating soybean exports at 2.015 bb, down 7% from the previous year.
China’s economic growth may be lagging, and July soybeans on the Dalian exchange closed down by 1.6% putting prices at their lowest levels in the past two years.
Wheat is trading lower along with the rest of the grain complex this morning due to more favorable weather in the extended forecast and yesterday’s crop progress report.
The winter wheat good to excellent ratings jumped to 34% vs 31% last week thanks to the recent rains. Spring wheat is 85% planted vs 64% last week, and emergence is at 57% vs 32% last week.
Wheat inspections totaled 14.0 mb for the week ending Thursday May 25, putting total inspections at 719 mb and down 2% from the previous year.
Russian farmers have begun to suspend wheat deliveries to exporters while waiting for higher prices after the export duty will be reduced on June 7. This is causing wheat to pile up in Russia.
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.
Decent export inspections were not enough to support the corn market as it fell on a more favorable weather forecast.
Poor export inspections added fuel to the selloff in soybeans, which was triggered by a less threatening weather outlook.
Soybean meal and oil also felt the pressure in the complex. Soybean oil led the way down losing 2.62 cents/lb, a 5.37% loss in the July, and crude oil added pressure with a 4.3% loss.
With K.C. contracts leading the way, all three wheat classes succumbed to the seller’s wrath with help coming from neighboring corn and soybeans and lower global demand concerns.
To see updated US 8-10 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 touched the lower end of the target range of 575 – 600 with a high of 575-1/2, which put it 30 cents off last week’s low. If you still have Old Crop bushels to sell, consider using this rally to begin pricing some of those remaining bushels and adding incremental sales up to 600. Another thing to consider is that there is about a 65-cent inversion from the July contract to the September contract, which may be lost when bids roll from one contract to the other in the next month or so.
No action is currently recommended for the 2023 new crop. Planting is nearly complete and the volatile weather months still ahead. December corn has dropped nearly 120 cents from its January high, and with that drop, much of the weather risk premium has eroded away. With drought still looming in the WCB and the funds carrying a 92k contract short position, we continue to target the 590 – 630 range in the December futures to suggest adding cash sales. If you happen to not 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.
Extended weather forecasts are signaling a potential pattern change as the current ridge over the Corn Belt will be replaced by a more active weather pattern. This triggered profit taking and technical selling after last week’s rally, as corn futures traded lower to start the week.
Corn demand remains a concern as weekly export inspections were marked at 52 mb, at the top of expectations, but still down 32% from last year and behind the pace needed to reach the USDA export target.
The Brazilian corn harvest is starting to begin, and AgRural raised their projection for the Brazil second crop corn to 127.4 MMT up from 125.1 MMT for their April projection.
For the first time since 2013, Chicago wheat prices are trading below corn futures prices on the front month as July Chicago Wheat (SRW) closed at $5.91 versus July corn at $5.94. Cheaper wheat may lead to additional demand concerns with the substitution of wheat into feed rations versus corn.
The USDA is scheduled to release the first corn crop ratings on Tuesday afternoon. Expectations are for the crop to be 71% Good/Excellent, in line with the 5-year average. Last year’s first initial crop rating was 73% Good/Excellent. Corn planting is expected to be 92% complete, up from 81% last week.
Above: The July contract traded through the May 8th high of 600 and continues to show positive momentum. If current prices can hold and close above the 50-day moving average near 613, 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.
Above: Money Managers net sold 6042 contracts between May 17-23, bringing their total position to a net short 98,027 contracts. Corn Managed Money Funds net position as of Tuesday, May 23. Net position in Green versus price in Red.
Soybeans
Soybeans Action Plan Summary
July soybeans found support last week just above the 1300 level. While the month of May has been a rough one for the soy complex, the market remains in a seasonal window conducive for upside volatility and opportunity. Given the oversold nature of the market, combined with a still tight Old Crop domestic balance, continue to hold on progressing any Old Crop sales for now.
We recommendnot adding to current sales levels for the new 2023 crop at this time. As we continue through planting season, favorable weather 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 1350 to 1400 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 closed sharply lower, led down by a decline in soybean oil by over 5% and declines in soybean meal and crude oil as well. A change in the weather forecast for June put pressure on the markets today.
Last week, the 10-day forecast was calling for warm and dry weather as planting wraps up, but over the weekend forecasts were updated to show cooler weather with more precipitation beginning in the middle of June. For now, it appears as though the market will be trading weather.
Export inspections for soybeans came in at 9 mb which was in line with expectations, but still below the 17mb needed each week to reach the USDA’s estimate.
Soybeans in both Brazil and China declined today, partially because of Brazil’s crop size and partially due to slowing demand in China. On the Dalian exchange, soybeans lost 1.8% and are trading at the equivalent of $14.80 per bushel.
Soybean planting progress will likely show a large jump from last week’s 66% completion, and typically soybeans can handle early dry conditions better than corn can. So, the recent dryness is of less concern since it may not affect yields.
Above: The market traded through the July ‘22 low of 1304 in search of support, and the stochastic indicators continue to be oversold, which could be supportive if reversal action occurs. The next area of support could be found between 1237 – 1214, with nearby resistance near 1350 and 1420.
Above: Money Managers net sold 19,795 contracts between May 17-23, bringing their total position to a net short 4142 contracts. Soybeans Managed Money Funds net position as of Tuesday, May 23. Net position in Green versus price in Red.
Wheat
Market Notes: Wheat
Wheat’s lower trade today is likely the result of a risk off session caused by improving chances for rain throughout the Midwest, spillover pressure from corn and beans, as well as concern about lower global demand for wheat due to financial and economic issues.
Wheat inspections were decent at 14.0 mb, bringing the total 22/23 inspections to 719 mb.
Despite Russian attacks over the weekend in the port of Odessa, one of the ports supposedly protected in the Black Sea grain deal, and reports of Ukrainian drones hitting Moscow, US wheat futures posted sharp losses in today’s session.
Australia is starting to get some rain, although the El Nino weather pattern is growing, which generally means less rain for that region of the world. This may have contributed to today’s weakness as some drought concerns were reduced.
Higher temperatures last week in North Dakota are likely to be reflected in an increase in spring wheat planting on this afternoon’s Crop Progress report.
Friday’s Commitments of Traders report showed, as of May 23rd, funds holding 121,053 short contracts of Chicago wheat, which is equivalent to 605 million bushels.
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. While we are looking for stronger markets to present themselves in this currently weak environment, there are factors that could be supportive, should they occur. Such as any escalation of the Ukraine war or disruption of grain movement in the Black Sea, or a significant devaluation of the US Dollar back to 2021 levels, as that market is showing characteristics of a potential drop.
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.
Above: Money Managers net sold 6019 contracts between May 17-23, bringing their total position to a net short 118,788 contracts. Chicago Wheat Managed Money Funds net position as of Tuesday, May 23. Net position in Green versus price in Red.
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: With support failing near 807, and the July contract showing a head and shoulders formation, there is a potential downside objective near 740 with support near the May 2nd low of 736-1/4. The market is also showing signs of being oversold, which can be supportive if a reversal occurs. Resistance may be found above the market between 833 and 850.
Above: Money Managers net bought 28 contracts between May 17-23, bringing their total position to a net long 16,621 contracts. K.C. Wheat Managed Money Funds net position as of Tuesday, May 23. Net position in Green versus price in Red.
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. Wet conditions have delayed some planting and raised some prevent planting concerns which could continue to influence the market and generate better selling opportunities in the coming months. We are in no hurry to sell right now with everything going on.
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 market is testing support near the 5/22 low of 793 and is showing signs of being oversold, which could be supportive if buying returns. Resistance currently sits between 830 and 855 and then the recent high of 888-1/2. If the current support area fails, support below the market may be found between 770 and 760.
Above: Money Managers net sold 1564 contracts between May 17-23, bringing their total position to a net short 6402 contracts. Minneapolis Wheat Managed Money Funds net position as of Tuesday, May 23. Net position in Green versus price in Red.
Yesterday the American weather model put more rains into the Midwest (especially the 8-14 day timeframe). This may be weighing on grain futures this morning.
Reportedly, an agreement has been reached to raise the US debt ceiling, but now that deal must be passed by congress.
July corn on Brazil’s Bovespa Exchange is around the equivalent of $4.94 per bushel.
According to AgRural, their projection of Brazil’s total corn production has been raised to 127.4 mmt (vs 125.1 mmt previously).
Based on July futures, board crush is the lowest since June of 2022.
Prop 12 in California will start July 1. These new rules affect the treatment / living conditions of hogs but could also affect demand for soybean meal.
China’s economy is continuing to slow down, increasing concerns that they may not be able to import the same quantity of commodities as in years past.
July soybeans on China’s Dalian exchange were down 1.8% Tuesday, around the equivalent of $14.80 per bushel.
The wheat market may be concerned about lower demand for US wheat due to global financial issues. Limited cash availability in parts of north Africa and the middle east could mean reduced demand there.
It remains dry in northern Europe and parts of the Russian spring wheat areas.
In opposition to the El Nino pattern, Australia is starting to get some rains. This may alleviate some concern about drought for their upcoming wheat crop, though it is still early to make that determination.
Floods this weekend in the Texas Panhandle area certainly did not help the crop there. Their forecast this week also calls for moderate to heavy rain, causing more concern.
Despite Russia’s attack over the weekend on the Odesa port in Ukraine (which is protected by the agreement), wheat is sharply lower at midday today.
Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing by Stewart-Peterson and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Stewart-Peterson Inc. Reproduction of this information without prior written permission is prohibited. Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Reproduction and distribution of this information without prior written permission is prohibited. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing.
Stewart-Peterson Inc., Stewart-Peterson Group Inc., and SP Risk Services LLC are each part of the family of companies within Total Farm Marketing (TFM). Stewart-Peterson Inc. is a publishing company. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services LLC is an insurance agency. A customer may have relationships with any or all three companies.
Corn is trading quietly with front month July slightly higher but deferred months a bit lower.
Weather forecasts have begun to show models turning cool and wet for the second half of June, but it should remain dry before then.
Brazil’s corn production has been estimated higher to 137 mmt by Safras & Mercado, and their previous estimate was 130 mmt.
July corn on the Bovespa exchange in Brazil ended at the equivalent of $4.95 while July corn on the Dalian exchange was lower at the equivalent of $9.38 a bushel, down 7% on the year.
Soybeans and both soy products are lower this morning as well as crude oil, possibly due to the favorable forecast in the second half of June.
For the moment, trade appears to be expecting a record crop from the US and has already priced in Brazil’s record crop, but weather could still be a factor in the US.
Soybean meal is taking a hit this morning and is still under pressure from California’s Proposition 12 requirements.
Friday’s CFTC data showed funds as sellers of soybeans by 19,795 contracts reducing their net long position to just 4,147 contracts.
Wheat is trading lower along with the rest of the grain complex as recent rains in HRW wheat areas have fallen, and export demand remains poor.
Russia reportedly attacked central Ukraine with Iranian drones on Sunday which was the 1,500th anniversary of Ukraine’s capital. Attacks were also directed at the port of Odesa.
Crop exports out of the Black Sea corridor are the slowest they have been since the agreement was originally struck with only 3 vessels being completed for inspections per day.
Friday’s CFTC report showed funds adding to their net short position. They sold 6,019 contracts increasing their short position to 118,788 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.
The CME and Total Farm Marketing offices will be closed Monday, May 29, 2023, in observance of Memorial Day
All prices as of 1:45 pm Central Time
Grain Market Highlights
Fund short covering and the building of weather premium on a warm and dry outlook ahead of a long weekend pushed the corn market higher with December leading the way.
The addition of weather premium on the warm and dry outlooks had November leading the Old Crop contracts higher, with further support coming from both soybean meal and oil.
Led by strength in the corn market and a short fund position in the Chicago, all three wheat classes ended the day on the positive side of unchanged, with K.C. being the laggard, likely on ideas of increased crop ratings with the recent moisture in the southern Plains.
With debt ceiling talks in Washington D.C. appearing to progress, there has been a sense of optimism that has permeated the markets and likely added a broad level of support to the commodities.
To see updated US 7 day precipitation forecast and US 8-10 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 touched the lower end of the target range of 575 – 600 with a high of 575-1/2, which put it 30 cents off last week’s low. If you still have Old Crop bushels to sell, consider using this rally to begin pricing some of those remaining bushels and adding incremental sales up to 600. Another thing to consider is that there is about a 65-cent inversion from the July contract to the September contract, which may be lost when bids roll from one contract to the other in the next month or so.
No action is currently recommended for the 2023 new crop. Planting is nearly complete and the volatile weather months still ahead. December corn has dropped nearly 120 cents from its January high, and with that drop, much of the weather risk premium has eroded away. With drought still looming in the WCB and the funds carrying a 92k contract short position, we continue to target the 590 – 630 range in the December futures to suggest adding cash sales. If you happen to not 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.
Fund short covering pushed corn prices strongly higher to end the week as weather forecasts for the heart of the Corn Belt are a concern into the first week of June.
Weather models are showing above normal temperatures and limited rainfall over the core of the Corn Belt into early June as a high-pressure ridge has developed over this region. Evaporation rates will stay high next week, which has the potential to damage the early-stage corn crop.
Weather forecasts after Memorial Day will be key for potential precipitation to develop around the June 5-7 window. The grain markets could have a high amount of volatility based off those forecasts given the recent rally and the positioning of the Managed money funds in the corn market.
The cash corn market stays supportive as end-users are pursuing supplies given a potential weather issue. The National Corn Index closed Friday at $6.25 with July Futures at $6.04, a discount to the index, reflecting the cash market strength.
Demand will likely be a limiting factor as weekly exports remain poor, and the recent price rally will only add more premium to U.S. corn price versus the cheaper Brazil supplies coming online.
Above: The July contract traded through the recent high of 600 and continues to show positive momentum. If current prices can hold and close above the 50-day moving average near 613, 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
July soybeans found support last week just above the 1300 level. While the month of May has been a rough one for the soy complex, the market remains in a seasonal window conducive for upside volatility and opportunity. Given the oversold nature of the market, combined with a still tight Old Crop domestic balance, continue to hold on progressing any Old Crop sales for now.
We recommendnot adding to current sales levels for the new 2023 crop at this time. As we continue through planting season, favorable weather 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 1350 to 1400 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 week on a strong note along with higher soybean meal and oil. July beans posted a 30-cent gain on the week, while November gained 14 cents. Higher crude oil and palm oil prices were supportive as well.
The entire grain complex got a boost today from talk of dry weather that may continue into the beginning of July, but the European weather models are calling for moderate showers in some of the Corn Belt. We will get a clearer weather picture within the next two weeks.
While soybean meal found some much-needed technical support, soybean oil got a boost from palm oil, which had its third consecutively higher close.There is concern for drought in Malaysia and Indonesia this coming year, which may impact their production.
Argentina will be exporting approximately 5.4 mmt less soybean meal in the coming year due to their drought ravaged crop, and there is still hope that the US will pick up some of that export business.
Above: Soybean prices have fallen to near 1300 and have found some support near 1304. The market continues to show signs of being oversold and appears to be consolidating. Stochastic indicators have crossed to the upside, which is considered positive, and could be supportive if reversal action occurs. Should the 1304 support level fail, the next area of support may be found near the July 2022 and November 2021 lows of 1288 and 1181 respectively.
Wheat
Market Notes: Wheat
The poor US HRW crop, as well as dryness in Russian spring wheat areas, are supportive factors. However, the wheat market was likely pulled higher today, mostly by spillover from corn and soybeans; the US Midwest weather forecast looks warm and dry for the next two weeks or so and the market may be putting in some weather premium ahead of the 3 day weekend.
Nearby contracts were weaker relative to the deferred in K.C. wheat futures today. This may be indicative of the recent rains in the panhandle areas versus supply concerns down the road, given the overall poor conditions in the southern Plains.
There are reports that Russa may not extend the Black Sea export deal on July 17th unless demands are met regarding their grain and fertilizer exports.This may have been reflected in higher Matif wheat futures today, even though French wheat is rated 93% good to excellent.
Taiwan flour millers are reported to have purchased 56,000 mt of US milling wheat overnight.
The US Dollar Index continues to trend higher, and though wheat posted gains today, the rising Dollar Index may limit upside potential going forward.
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. While we are looking for stronger markets to present themselves in this currently weak environment, there are factors that could be supportive, should they occur. Such as any escalation of the Ukraine war or disruption of grain movement in the Black Sea, or a significant devaluation of the US Dollar back to 2021 levels, as that market is showing characteristics of a potential drop.
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: Following the recent break, the July contract posted a bullish reversal on 5/22, indicating short-term support near 807. The break below Tuesday’s (5/23) low puts the 807 support level in jeopardy, with the next major support level between 736 and 716 if it does not hold. If 807 can hold, follow-through buying may put the market in position to rally and test resistance between 885 and 917.
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. Wet conditions have delayed some planting and raised some prevent planting concerns which could continue to influence the market and generate better selling opportunities in the coming months. We are in no hurry to sell right now with everything going on.
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 posted a bullish reversal on 5/22, indicating the market has found short-term support near 793. Technical follow-through buying could put the market in position to test resistance between 830 and 855 and then the recent high of 888-1/2. If not, support below 793 may be found between 770 and 760.
The CME and Total Farm Marketing offices will be closed Monday, May 29, 2023, in observance of Memorial Day
All prices as of 10:30 am Central Time
Corn
JUL ’23
601.75
11
DEC ’23
532
16
DEC ’24
512.5
10.5
Soybeans
JUL ’23
1341
17
NOV ’23
1190.75
18.5
NOV ’24
1163
14
Chicago Wheat
JUL ’23
613.75
9.5
SEP ’23
627.5
10.25
JUL ’24
669.75
8.5
K.C. Wheat
JUL ’23
822.5
4.5
SEP ’23
817
5.25
JUL ’24
761.5
8.25
Mpls Wheat
JUL ’23
815.25
9.75
SEP ’23
818.75
10.75
SEP ’24
782.75
8.5
S&P 500
JUN ’23
4199.25
39.5
Crude Oil
JUL ’23
72.5
0.67
Gold
AUG ’23
1959.8
-2.5
Corn is trading higher today and is on track for a positive close on the week in both the July and Dec contracts.
Prices have rallied 50 cents from their lows seven days ago as concerning dry weather forecasts are projected over the Corn Belt for the next 10 days.
There is concern over the Chinese economy, with growth expectations being revised lower there according to Bloomberg, and demand for corn may lessen as they opt to feed wheat instead.
Helping the markets are talks about a resolution to the debt ceiling that may be reached by Monday.
Soybeans, soybean oil, and meal are all trading higher today due to the dry forecast. Lower soybean meal has been a big bearish influence.
Palm oil is up for the third consecutive day as the potential El Nino pattern could lead to drought conditions in Malaysia and Indonesia this year.
Argentina’s soy crop is reportedly 78% harvested and local exchanges are estimating production at just 21 mmt, 6 mmt lower than the most recent USDA estimate.
Argentina typically exports 14% of their soy crop, but crush is expected to be down 5.4 mmt in the coming year due to the extreme drought conditions.
All three wheat products are trading higher today with the poor HRW wheat crop, as well as weather concerns in Russia.
Russia’s spring wheat areas are forecast to be hot and dry, and ship traffic in the Black Sea is restricted with Russia intentionally slowing things down.
There has been confirmation that US mills have imported wheat supplies from both Poland and Germany into the southwest and Texas Gulf.
Paris milling wheat is higher, and French wheat is rated 93% good to excellent despite reports of heat and dryness there. Russia continues to dominate the export market with their cheap offers.
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.
