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Opening Update: July 19, 2023

Bygmidev

All prices as of 6:30 am Central Time

Corn

SEP ’23 546 17.25
DEC ’23 552.25 17.75
DEC ’24 540 10

Soybeans

AUG ’23 1510 18
NOV ’23 1413.75 18.5
NOV ’24 1293.5 12.25

Chicago Wheat

SEP ’23 693.75 23
DEC ’23 713.25 22.75
JUL ’24 739 21.75

K.C. Wheat

SEP ’23 844.5 17.25
DEC ’23 849.5 17.25
JUL ’24 817.5 17.75

Mpls Wheat

SEP ’23 889 11.5
DEC ’23 898.5 12
SEP ’24 822.5 7.5

S&P 500

SEP ’23 4586.25 -1.5

Crude Oil

SEP ’23 75.77 0.11

Gold

OCT ’23 1995 -4.8

  • Corn is trading higher again today continuing its rally after Russia attacked Ukraine’s port city of Odessa again last night inflicting much more damage than the previous night.

  • The 10-day forecast for the Corn Belt is still showing dry conditions with temperatures turning the hottest of the season beginning this weekend. Minnesota received some light showers overnight.

  • Projections for ethanol production for the week ending July 14 is showing production higher than the previous week at 1.042 million b/d with the stockpile average estimate above a week ago.

  • Barchart has raised their corn yield estimates to a yield of 177.97 bpa which compares the the USDA’s most recent forecast of 177.76 bpa.

  • Soybeans are trading higher again this morning with the Nov contract making a new high for 2023. Soybean meal’s gains are helping this rally, and soybean oil is higher as well.

  • Forecasts are predicting that August will begin with higher than normal temperatures in the Western Corn Belt, so rainfall will be important to shore up the poor current soil moisture levels.

  • The NWS will likely release their 30 and 90-day forecasts this week which the soy complex will watch closely for an idea on moisture and temperature into pod fill season.

  • India’s oilmeals exports fell to 280,001 tons in June from 436,596 tons in May.

  • Wheat is beginning the day higher with Chicago wheat leading the way followed by KC and Minn following news of last nights Russian attack on Ukraine’s port city.

  • After Russia withdrew from the grain deal they attacked Ukraine’s port city of Odessa with minimal damage and no casualties, but reports have come in of a second attack from last night which a spokesperson from Odessa called it a “hellish night”. It is assumed much more damage was done during this attack.

  • This morning, Russia said that ships in the Black Sea would be “in danger”, but they have also said that they would be willing to come back to negotiate in 3 months if the UN makes good on Russian demands.

  • The UN is apparently “floating” ideas on how to get Ukrainian and Russia grain out to the rest of the world as the Black Sea is closed.

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

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

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

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Grain Market Insider: July 18, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Short covering, triggered by a warmer and drier forecast and the escalation of tensions in the Black Sea region drove December prices to close above yesterday’s highs.

  • Like corn, the soybean market surged higher, aided by soybean meal and a much warmer and drier forecast.  Soybean oil on the other hand closed with a 56-point loss and weighed on crush margins, which lost 8 -1/2 cents in the December contracts.

  • The addition of war premium and the closure of the Black Sea export corridor likely sparked some short covering and led the wheat complex mostly higher with the exception of September Minneapolis, which closed lower.

  • To see the current US Drought Monitor and maps showing the current US 8 – 14 day Temperature and Precipitation outlook courtesy of 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 new action is recommended for Old Crop. The market had a nearly 140-cent swing from the May low to the June high and back on weather. Use any remaining bounces in the market to price what Old Crop bushels you may have, if any. We won’t have any “New Alerts” for 2022 Corn (Cash, Calls, or Puts) as we have moved focus onto 2023 and 2024 Crop Year Opportunities.

  • No action is recommended for New Crop 2023 corn. In the month of June, December corn experienced a 137-cent high to low, swing primarily on weather and production concerns. Since then, planted acreage figures have increased by about 2 mil. acres and pushed the current 2023 carryout estimate north of 2.2 billion bushels, which hasn’t been seen since the 2018/19 crop year. When Dec corn was trading over 620, Grain Market Insider recommended making a cash sale and buying Dec 580 puts to cover more downside. The Dec 580 puts, paired with the previously recommended Dec 610 calls, yielded a combination of options commonly known as a Strangle, which benefits from dramatic market moves either up or down. Considering crop conditions continue to be low with over 60% of the crop experiencing drought, changing weather can still affect final production and rally prices, at which point the 610 calls should gain in value and protect any already sold bushels if the market makes new highs.

  • No action is currently recommended for 2024 corn.  So far this year the market has seen an extreme amount of volatility with drought, less than stellar crop conditions, and supply and demand estimates that currently put 2023 ending stocks north of 2.2 billion bushels, which would carry over into the 2024 crop year. While growing conditions can still change in the weeks ahead, we are at the time of year when there are more headwinds to rising prices than tailwinds. Grain Market Insider recently recommended making a sale on your 2024 crop, and we currently see no present opportunity to recommend any additional sales at this time. We’ll be watching for another opportunity to suggest adding to early sales levels between now and the beginning of September. 

  • The corn market added weather and war premium to its value on Tuesday as prices pushed through resistance, triggering strong money flow into the corn market.

  • Technically, the corn market traded through Monday’s reversal high, which likely triggered additional buying and short covering in the market.  The strong close has the corn market looking at the 100-day moving average as the next level of resistance.

  • The USDA released its weekly crop ratings, and the US corn crop was rated 55% good/excellent, up 2% from last week and above market expectations. The corn crop improved, supported by recent rainfall in areas of the Corn Belt.

  • Weather forecasts have turned significantly drier over the next couple weeks, and temperatures are moving to a warmer trend. Despite recent rainfall, 64% of the corn crop is in drought, and needs timely rainfall, and the warmer, drier conditions are timed with the pollination timetable, which could limit potential yield.

  • Russia officially leaving the Ukrainian Grain Export deal and the attack on the Odessa port in the Ukraine added additional buying strength to the corn and wheat markets on the session.

Above: Favorable weather and an estimated 2023 carryout north of 2 bil bushels pushed the market through support that was in place since January 2021 and posted a double bottom at 474. This, and the fact that the market is oversold, is supportive if reversal action occurs. In that event, initial resistance could be found between 502 – 538, with heavy resistance up towards 595 – 625.  Below the market there may not be much support above 390 – 415, the November ’20 lows, if the corn market falls below the recent low of 474.

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

Soybeans

Soybeans Action Plan Summary

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

  • Grain Market Insider sees an active opportunity to sell a portion of your 2023 soybeans. The USDA shocked the market with bearish expectations for the 2023 soybean crop’s supply and demand. Demand was lowered for both 2022 and 2023 crop years, with an added 25 mbu of 2022 inventory carried over to 2023. The net result being a current ending stocks estimate of 300 mbu for the 2023 crop, a full 50% higher than trade expectations. While the key part of the growing season is still ahead, and production concerns remain, that could turn the market higher again, continued favorable forecasts and improving crop conditions may lead the market to further price erosion. With the very dry conditions that many of you continue to experience, and the tremendous uncertainty that brings to what you’ll have for bushels this fall, we understand if there’s hesitancy to sell anything here. If you are worried about committing physical bushels with a cash sale, consider selling futures or buying put options.

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

  • Soybeans ended the day higher but slipped from their early highs which exceeded the 14-dollar mark and reached the highest levels since January of this year. The rally in soybean meal has been a major catalyst for moving soybeans higher, but soybean oil ended lower.

  • Yesterday’s crop progress showed the soy crop improving more than the average trade guess with an increase of 4 points for a good to excellent rating of 55%. While an improvement, it is the second lowest rating since 2012, and only 20% of the crop is setting pods.

  • Soybean meal has been rallying due to Argentina’s shrinking soy crop which is estimated at 21 mmt (4 mmt below the last USDA estimate), and Argentina is the largest exporter of soybean meal.

  • With forecasts looking very dry and warm over the next two weeks, weather premium has been added to the market. Crop conditions improved over the past three weeks, but a two-week period of dry weather could easily send ratings back lower.

Above: The soybean charts rolled from the August to the September contract on 7/17 with the 75-cent discount to the September represented by the 52-cent gap on the chart between 7/14 and 7/17. To fill the gap, the market will need additional bullish news to continue higher and trade through the heavy resistance area of 1490 – 1505. If not, and prices retreat, initial support below the market is near 1400 with further support being in the 1350 – 1390 area.

Above: 2023/24 Soybeans percent planted (red) versus the 5-year average (green).

Wheat

Market Notes: Wheat

  • Wheat posted sharp gains, perhaps on a delayed reaction to the news of the cancellation of the Black Sea grain corridor. Additionally, some more war premium could be factored in after it was reported that Russia launched a new round of attacks on the port city of Odessa in Ukraine.

  • Yesterday’s Crop Progress report showed that spring wheat condition improved 4% to 51% good to excellent. This may have limited the upside today for MPLS futures, relative to the gains in Chicago and KC.

  • US winter wheat harvest at 56% complete, continues to lag behind the average pace of 69% complete for this time of year.

  • UkrAgroConsult increased their estimate of Russian 23/24 wheat exports to 47 mmt (up 2 mmt). The weaker Russian Ruble may be a contributing factor. Additionally, their estimate of the 2023 Russian wheat harvest was increased by 0.4 mmt to 85.2 mmt.

  • Argentina’s wheat planting area estimate has been reduced by Bolsa de Rosario to 5.4 million hectares due to dry conditions. Production was also revised down to 15.6 mmt.  

Chicago Wheat Action Plan Summary

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

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

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

Above: September wheat rallied nearly 200 cents from the May low to its June high when it encountered heavy resistance and posted a bearish reversal. While prices have been relatively range bound recently, heavy resistance remains near 730 – 770, the June high, with nearby resistance around 690 – 700. If prices fall back, support below the market may be found between 650 – 610, and again near 570, the May low. 

KC Wheat Action Plan Summary

  • We continue to look for better prices before making any 2023 sales.  While crop conditions have improved and there are reports of better-than-expected US yields, questions remain about the world wheat supply with the closure of the Black Sea corridor, dryness in Russia, the Canadian Prairies/Northern US Plains, and Europe. With world supplies currently seen at 11-year lows, we continue to target 950 – 1000 in the July futures as a potential level to suggest the next round of New Crop sales.

  • Patience is warranted for the 2024 crop. With continued issues in the Black Sea region and with major exporting countries’ stocks expected to fall to 16-year lows, we are willing to be patient with further sales of New Crop HRW wheat. We are targeting just below the 900 level on the upside while keeping an eye on recent lows for any violation of support.

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

Above: Balancing both production and demand concerns, the September contract continues to trade within the 736 – 919 range established in May. The recent downturn in the market has established heavy resistance above the market between 890 – 920, with initial support coming in between 778 – 763 and key support near the May low of 736.

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

Mpls Wheat Action Plan Summary

  • No new action for 2022 Old Crop MINNEAPOLIS Wheat. The market had a nearly 116-cent swing from the May low to the June high and back on weather. While weather and geopolitical events can still affect Old Crop prices, the marketing year for Old Crop is quickly winding down, and any additional upside opportunities may be more difficult to come by before New Crop harvest. Use any remaining bounces in the market to price what Old Crop bushels you may have, if any. We won’t have any “New Alerts” for the 2022 crop (Cash, Calls, or Puts) as we have moved focus onto 2023 and 2024 Crop Year opportunities.

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

  • Grain Market Insider recommends selling a portion of your 2024 spring wheat crop. So far this year we have seen some of the volatility from the 2023 crop, with its challenges from late planting and now dryness, be carried over to the 2024 crop. We are now at that time of year where there are typically more headwinds to prices than tailwinds, and to begin getting some early sales on the books. Now that the market has rallied to within 15 cents of the June high where there is significant overhead resistance, Insider recommends making a sale on a portion of your 2024 spring wheat production by using either SEPT ’24 Minneapolis Wheat futures contracts or a SEPT ’24 HTA contract, so basis can be set at a later, more advantageous time. While $8 prices are not the $9 or $10+ that we have seen in recent years, and weather and geopolitical disruptions can still shock the market higher, they still represent historically good prices to begin making sales.

Above: In the month of June, the September contract rallied towards the 200-day moving average and into resistance between 889 and 940, the April and December highs respectively. The market has since retreated and slowly climbed back, and it will need additional bullish news to be able to trade through the recent highs. Should the market fall back, initial support may be found between 805 – 845 with further downside support between 770 and 730. 

Above: 2023/24 Spring wheat percent Good to Excellent (red) versus the 5-year average (green) and last year (purple).

Other Charts / Weather

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Midday Update: July 18, 2023

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn
SEP ’23 515.25 16
DEC ’23 521 15
DEC ’24 520.25 9.5
Soybeans
AUG ’23 1496 12
NOV ’23 1395.25 17.25
NOV ’24 1280.25 9
Chicago Wheat
SEP ’23 669 15.25
DEC ’23 688.75 15
JUL ’24 714 14.25
K.C. Wheat
SEP ’23 831.25 16
DEC ’23 835.5 15.5
JUL ’24 796.5 11.75
Mpls Wheat
SEP ’23 879.25 1
DEC ’23 887.75 2
SEP ’24 805.5 5.5
S&P 500
SEP ’23 4570.25 16.5
Crude Oil
SEP ’23 75.4 1.32
Gold
OCT ’23 2006.5 31

  • Corn is trading higher today and is on track for the third higher close in the last four trading days. This comes after the withdrawal of Russia from the grain deal and despite an improvement in crop conditions.

  • Yesterday’s Crop Progress report showed corn good to excellent ratings improving by 2 points to 57%. National corn pollination is now 47% complete with northern states entering their pollination phase.

  • The 8-to-14-day forecast remains dry and warm which could easily pose a threat to yield. Some rains are forecast to fall in the North while very scattered showers are expected in the Corn Belt over the next 7 days.

  • Yesterday’s corn export inspections were slow again with inspections totaling 14.3 mb for the week ending Thursday, July 13. Total inspections for 22/23 are now at 1.334 bb and down 33% from the previous year.

  • Soybeans are continuing their move higher and have taken out their more recent high from July 3 as soybean meal continues to rally on low Argentinian supply. Soybean oil is trading slightly higher.

  • Yesterday’s crop progress showed the soy crop improving more than the average trade guess with an increase of 4 points for a good to excellent rating of 55%. While an improvement, it is the second lowest rating since 2012, and only 20% of the crop are setting pods.

  • NOPA June soybean crush fell to a 9-month low of 165.023 million bushels, down from the 177.915 mb processed in May.

  • Chinese purchases of soybeans picked up last week, but they mainly sourced from Brazil and only bought small amounts from the US. There have been rumors that China has been buying more September and October beans from Brazil in the past week.

  • Wheat is trading higher at midday with KC posting the most gains and Chicago not far behind after Russia attacked Ukraine’s port of Odessa overnight in retaliation to the attack on the Crimean bridge.

  • Yesterday’s Crop Progress report showed an increase in spring wheat’s good to excellent ratings by 4 points to 51%, but with the upcoming dry and warm forecast, crop conditions could easily drop back down.

  • Russia’s withdrawal from the grain deal, in addition to their attack on Odessa, has sent wheat prices moving higher globally with Russian wheat reportedly up 50 cents per bushel in the past two weeks.

  • Winter wheat harvest in the US is now 56% complete but continues to lag the average pace of 69%. Harvest in Kansas meanwhile saw a 12% jump from last week and is now 71% complete.

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

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

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

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Opening Update: July 18, 2023

Bygmidev

All prices as of 6:30 am Central Time

Corn

SEP ’23 508.75 9.5
DEC ’23 515.5 9.5
DEC ’24 515 4.25

Soybeans

AUG ’23 1495.5 11.5
NOV ’23 1389.75 11.75
NOV ’24 1281.75 10.5

Chicago Wheat

SEP ’23 663 9.25
DEC ’23 683.75 10
JUL ’24 708.5 8.75

K.C. Wheat

SEP ’23 822.75 7.5
DEC ’23 827.5 7.5
JUL ’24 784.75 -7.5

Mpls Wheat

SEP ’23 878.75 0.5
DEC ’23 886 0.25
SEP ’24 805.5 5.5

S&P 500

SEP ’23 4552 -1.75

Crude Oil

SEP ’23 74.4 0.32

Gold

OCT ’23 1990.4 14.9

  • Corn is trading higher this morning after reports came in that Russia attacked Ukraine’s port city of Odessa, seemingly solidifying their withdrawal from the grain deal and retaliating for the Crimea bridge attack.

  • Crop conditions showed the good to excellent rating for corn improving by 2% to 57%, on par with trade guesses. This is still the third worst rating for this date since 1988, however.

  • The three worse ratings in mid July were in 1988, 2012, and 2005, but those crops did not trend higher in mid July, and this year’s corn crop has improved by 7% in just three weeks.

  • The 8 to 14 day forecast is still showing below normal precipitation and above normal temperatures primarily in the eastern Corn Belt which may be adding some weather premium today.

  • Soybeans are trading higher this morning and are being led by soybean meal which is on a strong rally, while soybean oil is slightly higher.

  • Crop progress showed the soy crop’s good to excellent rating improving by 4% last week to 55% which was above the average trade guess and a result of rainfall in the past few weeks.

  • Soybean meal has been rallying due to Argentina’s shrinking soy crop which is estimated at 21 mmt (4 mmt below the last USDA estimate), and Argentina is the largest exporter of soybean meal.

  • NOPA June soybean crush fell to a 9-month low of 165.023 million bushels, down from the 177.915 mb processed in May.

  • Wheat is trading higher alongside corn and soybeans this morning with Chicago leading the way, followed by KC. Russia’s attack on the port city of Odessa is likely helping futures.

  • Crop conditions showed spring wheat good to excellent ratings improving by 4% from last week to 51%, 10 points below last year’s rating at this time.

  • The winter wheat harvest is now 56% complete compared to 46% last week, but behind last year’s 71% at this time.

  • After Russia blamed Ukraine for the attack on the Crimean bridge over the weekend, Russia withdrew from the grain deal and promised retaliation which came in the way of the attack on Ukraine’s port city of Odessa, but only 1 person was injured and nearly all of the missiles and drones were shot down.

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

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

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

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Grain Market Insider: July 17, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Corn traded lower for most of the day after it gapped higher on the evening’s open following the expiration of the Black Sea Grain Initiative, in a “buy the rumor, sell the fact” type of fashion, as traders likely felt the corridor’s closure was already priced into the market.

  • The soybean market was caught between weak export inspections and NOPA crush demand, and a concerning weather forecast that shows hot and dry conditions in much of the WCB, and the northern and central Plains, two weeks out.

  • Weak demand likely outweighed the anticipated closure of the Black Sea export corridor as all three wheat markets sold off after the morning’s reopening led by the K.C. contracts.

  • The US Dollar continues to trade at its lowest levels in 15 months, which is generally supportive to the commodity sector as a lower USD makes US exports lower on the world market. The financial markets are currently predicting a 96% likelihood of a 0.25% rate increase at next week’s Fed meeting.

  • To see the current US Drought Monitor and maps showing the current US 8 – 14 day Temperature and Precipitation outlook courtesy of 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 new action is recommended for Old Crop. The market had a nearly 140-cent swing from the May low to the June high and back on weather. Use any remaining bounces in the market to price what Old Crop bushels you may have, if any. We won’t have any “New Alerts” for 2022 Corn (Cash, Calls, or Puts) as we have moved focus onto 2023 and 2024 Crop Year Opportunities.

  • No action is recommended for New Crop 2023 corn. In the month of June, December corn experienced a 137-cent high to low, swing primarily on weather and production concerns. Since then, planted acreage figures have increased by about 2 mil. acres and pushed the current 2023 carryout estimate north of 2.2 billion bushels, which hasn’t been seen since the 2018/19 crop year. When Dec corn was trading over 620, Grain Market Insider recommended making a cash sale and buying Dec 580 puts to cover more downside. The Dec 580 puts, paired with the previously recommended Dec 610 calls, yielded a combination of options commonly known as a Strangle, which benefits from dramatic market moves either up or down. Considering crop conditions continue to be low with over 60% of the crop experiencing drought, changing weather can still affect final production and rally prices, at which point the 610 calls should gain in value and protect any already sold bushels if the market makes new highs.

  • No action is currently recommended for 2024 corn.  So far this year the market has seen an extreme amount of volatility with drought, less than stellar crop conditions, and supply and demand estimates that currently put 2023 ending stocks north of 2.2 billion bushels, which would carry over into the 2024 crop year. While growing conditions can still change in the weeks ahead, we are at the time of year when there are more headwinds to rising prices than tailwinds. Grain Market Insider recently recommended making a sale on your 2024 crop, and we currently see no present opportunity to recommend any additional sales at this time. We’ll be watching for another opportunity to suggest adding to early sales levels between now and the beginning of September. 

  • Export inspections for the week ending July 13 came in at the lower end of expectations at 14.3 mb. Though the number was an increase from the prior week, they are still light, and year-to-date totals are 33% behind last year, though in line with the updated USDA forecast.

  • Russia terminated the Black Sea Grain Initiative that allowed Ukraine to ship ag goods out through the Black Sea. Russia claims the deal was terminated because their terms in the agreement were not fulfilled.

  • Part of the sell off in the corn market may be, “buy the rumor, sell the fact,” in that the termination of the deal may have already been priced into the market. The USDA, in its latest report, may have already accounted for the closure by forecasting Ukraine’s 23/24 corn exports at only 19.5 mmt, down 30% from 22/23.

  • Since the recent break in prices, China has been an active buyer of South American and Ukrainian corn which is supportive of US prices, in that overall prices may have fallen enough to stimulate demand. Relative to the world market, US prices have become much more competitive since Brazil’s export prices have risen about $1.25 on slow farmer selling. It’s also been reported that China bought 6 or 7 cargoes for July – Sept delivery.

  • The USDA will release its updated estimate for US crop conditions this afternoon with some calling for a 1 – 2% increase in the Good/Excellent ratings from last week’s 55% rating.

Above: Favorable weather and an estimated 2023 carryout north of 2 bil bushels pushed the market through support that was in place since January 2021 and posted a double bottom at 474. This, and the fact that the market is oversold, is supportive if reversal action occurs. In that event, initial resistance could be found between 502 – 538, with heavy resistance up towards 595 – 625.  Below the market there may not be much support above 390 – 415, the November ’20 lows, if the corn market falls below the recent low of 474.

Above: Money Corn Managed Money Funds net position as of Tuesday, July 11. Net position in Green versus price in Red. Managers net sold 44,843 contracts between July 3 – 11, bringing their total position to a net short 63,052 contracts.

Soybeans

Soybeans Action Plan Summary

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

  • Grain Market Insider sees an active opportunity to sell a portion of your 2023 soybeans. The USDA shocked the market with bearish expectations for the 2023 soybean crop’s supply and demand. Demand was lowered for both 2022 and 2023 crop years, with an added 25 mbu of 2022 inventory carried over to 2023. The net result being a current ending stocks estimate of 300 mbu for the 2023 crop, a full 50% higher than trade expectations. While the key part of the growing season is still ahead, and production concerns remain, that could turn the market higher again, continued favorable forecasts and improving crop conditions may lead the market to further price erosion. With the very dry conditions that many of you continue to experience, and the tremendous uncertainty that brings to what you’ll have for bushels this fall, we understand if there’s hesitancy to sell anything here. If you are worried about committing physical bushels with a cash sale, consider selling futures or buying put options.

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

  • Soybeans ended the day higher, but backed off their early morning highs that were led by Russia’s exit of the Ukrainian grain deal. The news initially caused soybean oil to rally because Ukraine exports a large amount of sunflower oil, but by the end of the day, excitement wore off and soybean oil closed lower, while soybean meal maintained a higher close.

  • Soybean export inspections were soft today which did not help support futures. Inspections totaled 5.7 mb for the week ending Thursday, July 13. Total inspections for 22/23 are now at 1.833 bb, down 5% from the previous year.

  • NOPA crush numbers for the month of June were released this morning and only 165 mb of soybeans were crushed with 1.690 bil pounds in soybean oil stocks. The number of soybeans crushed was well below expectations of 170 – 173 mb as were oil stocks, which were expected to be closer to 1.8 bil. pounds.

  • The 8 to 14-day forecast is showing drier and warmer conditions, but the rain over the past two weeks should be enough to improve the good to excellent ratings for this week’s Crop Progress report. The extended forecasts for August may give some insight into conditions for pod fill season.

  • China’s economy has been a bearish factor as trade has been concerned over the lack of growth. Today those fears were confirmed after second quarter GDP readings showed a slowing economy, which grew at a lower-than-expected rate of 6.3%. China has been purchasing Brazilian beans, but purchases from the US have been very slow.

Above: The soybean charts have rolled from the August to the September contract where heavy resistance lies between 1390 – 1430 in September. To continue higher, the market continues to need an influx of bullish news to offset the negative influence of the bearish reversal that was posted on July 12. 1490 – 1505 remains the next heavy resistance area should the market break through 1390 – 1430. If not, and prices retreat, initial support below the market is near 1425 with further support being in the 1350 – 1390 area.

Above: Soybeans Managed Money Funds net position as of Tuesday, July 11. Net position in Green versus price in Red. Money Managers net sold 6,394 contracts between July 3 – 11, bringing their total position to a net long 82,748 contracts.

Wheat

Market Notes: Wheat

  • Overnight, wheat traded higher based on news that Russia decided to end the Black Sea Grain Initiative. However, by the end of today’s session, all three US wheat futures classes posted losses. This could perhaps be due to the results of the deal already being “baked in” to prices, with many traders anticipating the corridor being closed.

  • The USDA pegged weekly wheat inspections at 9.3 mb, bringing total 23/24 inspections to 65 mb, down 16% from last year. With the USDA estimating wheat exports at 725 mb, the current pace of exports is below what is needed to meet that number.

  • The US Dollar remains below the 100 mark but may be finding some support after the recent sharp decline. In the long run, a lower US Dollar should help the export market, but if it begins to trend higher again, that will add to pressure on commodities, especially wheat.

  • There is some concern, globally, about spring wheat supply. But here in the US, export demand is low due to other world origins being cheaper and may keep pressure on MPLS futures.

  • According to the National Bureau of Statistics, China’s summer wheat harvest of 146.13 mmt, was 0.9% below last year’s. This is being attributed to the rain damage they received during the growing season.

Chicago Wheat Action Plan Summary

  • No new action is recommended for 2023 New Crop. In the month of June, the September Chicago wheat contract posted a 163-cent range and has largely been a follower of the corn market which has been mostly driven by weather. While demand remains weak, production concerns in parts of the country remain, as does uncertainty surrounding the Black Sea region and the potential for major exporting countries’ inventory to hit 16-year lows. While Grain Market Insider will continue to monitor the downside for any violation of major support, following the recent sales recommendation it may be after harvest or near the end of summer before we consider recommending any additional sales for the 2023 crop.

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

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

Above: September wheat rallied nearly 200 cents from the May low to its June high when it encountered heavy resistance and posted a bearish reversal. This technical formation on the price chart is considered bearish and momentum may be adding to the bearish tone. Support below the market may be found between 650 – 610, while resistance above the market rests between 770 – 810.

Above: Chicago Wheat Managed Money Funds net position as of Tuesday, July 11. Net position in Green versus price in Red. Money Managers net bought 1,878 contracts between July 3 – 11, bringing their total position to a net short 52,128 contracts.

KC Wheat Action Plan Summary

  • We continue to look for better prices before making any 2023 sales.  While crop conditions have improved and there are reports of better-than-expected US yields, questions remain about the world wheat supply with the closure of the Black Sea corridor, dryness in Russia, the Canadian Prairies/Northern US Plains, and Europe. With world supplies currently seen at 11-year lows, we continue to target 950 – 1000 in the July futures as a potential level to suggest the next round of New Crop sales.

  • Patience is warranted for the 2024 crop. With continued issues in the Black Sea region and with major exporting countries’ stocks expected to fall to 16-year lows, we are willing to be patient with further sales of New Crop HRW wheat. We are targeting just below the 900 level on the upside while keeping an eye on recent lows for any violation of support.

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

Above: Balancing both production and demand concerns, the September contract continues to trade within the 736 – 919 range established in May. The recent downturn in the market has established heavy resistance above the market between 890 – 920, with initial support coming in between 778 – 763 and key support near the May low of 736.

Above: K.C. Wheat Managed Money Funds net position as of Tuesday, July 11. Net position in Green versus price in Red. Money Managers net bought 824 contracts between July 3 – 11, bringing their total position to a net long 14,584 contracts.

Mpls Wheat Action Plan Summary

  • No new action for 2022 Old Crop MINNEAPOLIS Wheat. The market had a nearly 116-cent swing from the May low to the June high and back on weather. While weather and geopolitical events can still affect Old Crop prices, the marketing year for Old Crop is quickly winding down, and any additional upside opportunities may be more difficult to come by before New Crop harvest. Use any remaining bounces in the market to price what Old Crop bushels you may have, if any. We won’t have any “New Alerts” for the 2022 crop (Cash, Calls, or Puts) as we have moved focus onto 2023 and 2024 Crop Year opportunities.

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

  • No action is recommended for the 2024 crop. With weather dominating the market right now, 2024 prices can be heavily influenced by 2023 carryover estimates and prices. As dryness increases in the spring wheat areas and with major exporting countries’ stocks at 11-year lows, Grain Market Insider would like to see September futures prices in the 800 – 825 range before we would consider suggesting making any sales recommendations, while keeping an eye on the recent lows for any violation of support.

Above: In the month of June, the September contract rallied towards the 200-day moving average and into resistance between 889 and 940, the April and December highs respectively. The market has since retreated and slowly climbed back, and it will need additional bullish news to be able to trade through the recent highs. Should the market fall back, initial support may be found between 805 – 845 with further downside support between 770 and 730. 

Above: Minneapolis Wheat Managed Money Funds net position as of Tuesday, July 11. Net position in Green versus price in Red. Money Managers net bought 2,311 contracts between July 3 – 11, bringing their total position to a net long 4233 contracts.

Other Charts / Weather

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Midday Update: July 17, 2023

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn
SEP ’23 500 -6.5
DEC ’23 507.25 -6.5
DEC ’24 511.75 -5.25
Soybeans
AUG ’23 1483.5 3.25
NOV ’23 1375.75 5
NOV ’24 1269.25 -0.75
Chicago Wheat
SEP ’23 655.5 -6
DEC ’23 675.25 -5.5
JUL ’24 701.75 -6
K.C. Wheat
SEP ’23 815 -14
DEC ’23 819.5 -14
JUL ’24 780 -12.25
Mpls Wheat
SEP ’23 876.5 -7.75
DEC ’23 882.25 -7.25
SEP ’24 810.5 10.5
S&P 500
SEP ’23 4547.5 10.75
Crude Oil
SEP ’23 74.79 -0.53
Gold
OCT ’23 1974.6 -8.8

  • Corn has turned lower around midday, after news that Russia was withdrawing from the Ukrainian grain deal sent corn, soybeans, and wheat higher. Traders have grown tired of this back and forth, however, and prices are already slipping.

  • Russia exited the grain deal after an attack on the bridge connecting Russia to Crimea overnight, and now Ukraine will need to send exports through Europe and the Danube River.

  • Weather forecasts over the next 8 to 14 days have turned drier and warmer, which may add some bullishness to the market. 64% of the corn crop is still experiencing some form of drought.

  • Last week, China was an active buyer of Brazilian and Ukrainian corn which gave the impression that demand was picking up, but export sales for US corn have still been very sluggish due to higher prices.

  • As in corn, soybeans were higher to start the day but have slipped at midday and are now near lows of the day. Russia’s decision to exit the grain deal will have an impact on Ukraine’s exports of sunflower meal and oil which could impact soybean meal and oil in the US.

  • Palm oil exports jumped a whopping 19.3% in June and futures are higher as a result, which adds more bullish sentiment to soybean oil, especially after the grain deal announcement.

  • The NOPA crush report will be released later today, and traders are looking for a crush of 172 mb and soybean oil stocks to fall 1.780 billion pounds.

  • Chinese purchases of soybeans picked up last week, but they mainly sourced from Brazil and only bought small amounts from the US. There have been rumors that China has been buying more September and October beans from Brazil in the past week.

  • Wheat, which should have been the most helped by the withdrawal of Russia from the Ukrainian grain deal, is now trading lower. It appears that traders are tired of the back and forth and quickly went back to selling after the news broke.

  • Chicago wheat gapped higher on the open after the Russia news but just closed that gap and is sitting right at its 40 and 50-day moving average.

  • The US Dollar is trading at its lowest levels in over a year which should make the US more competitive regarding exports. Paris milling wheat futures were higher this morning for the third straight day, which is also supportive.

  • Weather for spring wheat is not looking great, and analysts have said that without substantial rains in the Canadian Prairies, Canadian production could slide another few million tons lower. North Dakota and Minnesota are also in need of rain.

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

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

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

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Opening Update: July 17, 2023

Bygmidev

All prices as of 6:30 am Central Time

Corn

SEP ’23 513.75 7.25
DEC ’23 520.25 6.5
DEC ’24 520.75 3.75

Soybeans

AUG ’23 1494.5 14.25
NOV ’23 1385.5 14.75
NOV ’24 1280 10

Chicago Wheat

SEP ’23 680.75 19.25
DEC ’23 699.25 18.5
JUL ’24 723 15.25

K.C. Wheat

SEP ’23 843.5 14.5
DEC ’23 847 13.5
JUL ’24 802 9.75

Mpls Wheat

SEP ’23 893.25 9
DEC ’23 898.5 9
SEP ’24 806 6

S&P 500

SEP ’23 4533.25 -3.5

Crude Oil

SEP ’23 74.37 -0.95

Gold

OCT ’23 1980 -3.4

  • Corn is trading higher and gapped slightly higher overnight after Russia announced that it was withdrawing from their participation in the Ukrainian grain deal.

  • The crucial grain deal was ended abruptly because the Kremlin has claimed that it is not being used for the benefit of countries that it was intended for, but the move also comes as tensions heighten.

  • Weather has been another bullish factor this morning as a large portion of the Corn Belt is forecast to be dry over the next 7 days with warmer than normal temperatures.

  • Friday’s CFTC report showed funds increasing their net short position by a whopping 45,000 contracts which now puts them short over 63,000 contracts.

  • November soybeans are continuing to move higher but still have found resistance at the 14 dollar mark. Crude oil is trading lower below 75 dollars a barrel, but both soybean oil and meal are higher.

  • Soybeans dipped lower after the USDA report that showed higher ending stocks estimates than expected, and focus has shifted back to weather and world veg oils.

  • The closing of the Ukrainian grain deal does not impact soybeans directly, but it does impact the value of soybean oil as that region exports a lot of sunflower oil and meal.

  • Friday’s CFTC data showed funds as net sellers of soybeans by 6,394 contracts reducing their net long position to 82,748 contracts.

  • Wheat is trading higher this morning after the end of the Ukrainian grain deal which obviously impacts wheat the most, but also comes during the US’s winter wheat harvest.

  • As winter wheat harvest presses on, the new supplies could make it difficult for futures to rally, and funds have already been content as sellers.

  • Spring wheat may be facing more weather related challenges as rain is needed in the southern Canadian prairies and in North Dakota with a drier and warmer 8 to 14 day forecast.

  • Friday’s CFTC data showed funds as net buyers of wheat by just 1,878 contracts, slightly reducing their net short positions to 52,128 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: July 14, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • After posting a double bottom on Thursday, December corn broke out of its recent range and surged higher to close the week with a bullish reversal on the weekly chart.

  • The soybean market closed mixed, with Old Crop lower and New Crop higher.  Early strength allowed the market to post a new high for the move before giving way to choppy trade ahead of the weekend, as traders book profits.

  • Bearish reversals in crude and heating oil likely added to the negativity in soybean oil, which bled over to soybeans and December Board Crush, which suffered a 4-1/4 cent loss, while December meal squeezed out a $1.10 gain.

  • Reports of India banning rice exports, continued dryness in the northern Plains, and the possible expiration of the Black Sea grain deal added support to the wheat complex today, with all three classes finishing strong to close out the week.

  • To see maps showing the percentage of crops in drought, courtesy the USDA and US Drought Monitor, scroll down to the other Charts/Weather Section.

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

Corn

Corn Action Plan Summary

  •  No new action is recommended for Old Crop. The market had a nearly 140-cent swing from the May low to the June high and back on weather. Use any remaining bounces in the market to price what Old Crop bushels you may have, if any. We won’t have any “New Alerts” for 2022 Corn (Cash, Calls, or Puts) as we have moved focus onto 2023 and 2024 Crop Year Opportunities.

  • No action is recommended for New Crop 2023 corn. In the month of June, December corn experienced a 137-cent high to low, swing primarily on weather and production concerns. Since then, planted acreage figures have increased by about 2 mil. acres and pushed the current 2023 carryout estimate north of 2.2 billion bushels, which hasn’t been seen since the 2018/19 crop year. When Dec corn was trading over 620, Grain Market Insider recommended making a cash sale and buying Dec 580 puts to cover more downside. The Dec 580 puts, paired with the previously recommended Dec 610 calls, yielded a combination of options commonly known as a Strangle, which benefits from dramatic market moves either up or down. Considering crop conditions continue to be low with over 60% of the crop experiencing drought, changing weather can still affect final production and rally prices, at which point the 610 calls should gain in value and protect any already sold bushels if the market makes new highs.

  • Grain Market Inside sees continued opportunity to sell a portion of your 2024 Corn. While the market has seen some extreme volatility in recent weeks, we are entering a time of year when prices tend to have more headwinds than tailwinds to the upside. Also, with the USDA’s surprise acreage jump, continued rain in the forecast and slow demand, the size of the 2023 crop still has the potential to yield a carryout north of 2 billion bushels. A large 2023 carryout in the US, combined with the large corn crop in Brazil, could pose greater headwinds for 2024 prices. With it being the time of year to start getting early sales for next year on the books, and no recent bullish catalyst from the Stocks or Acreage reports, we are suggesting making a sale for the 2024 corn crop using either a DEC ’24 HTA contract or DEC ’24 futures, so the basis can be set at a later more advantageous date. While $5.00 futures is not the $6.00 or $7.00, we’ve become accustomed to the last few years, it’s still historically a good price to be getting some early sales on the books at.

  • Corn showed some muscle to finish near session highs, following through from yesterday. This may in part stem from skepticism of the USDA’s latest numbers.  

  • The 8-14 day weather forecast may also have lent some support to futures today, with an outlook for warmer and drier conditions across much of the Midwest. With 64% of the US corn crop said to still be experiencing drought conditions, fundamental support may be building at these lower price levels.

  • On a bearish note, CONAB increased their estimate of Brazilian corn production to 127.8 mmt from 125.7 mmt previously, which for now, is likely to keep pressure on the export front.

  • Although the US dollar was slightly higher today, it is still well below where it was a week ago. This decline has likely taken some downward pressure off the grain markets and allowed for some breathing room.

Above: Favorable weather and an estimated 2023 carryout north of 2 bil. bushels pushed the market through support that was in place since January 2021 and posted a double bottom at 474. This, and the fact that the market is oversold, is supportive if reversal action occurs. In that event, initial resistance could be found between 502 – 538, with heavy resistance up towards 595 – 625. Below the market there may not be much support above 390 – 415, the November ’20 lows.

Soybeans

Soybeans Action Plan Summary

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

  • Grain Market Insider sees an active opportunity to sell a portion of your 2023 soybeans. The USDA shocked the market with bearish expectations for the 2023 soybean crop’s supply and demand. Demand was lowered for both 2022 and 2023 crop years, with an added 25 mbu of 2022 inventory carried over to 2023. The net result being a current ending stocks estimate of 300 mbu for the 2023 crop, a full 50% higher than trade expectations. While the key part of the growing season is still ahead, and production concerns remain, that could turn the market higher again, continued favorable forecasts and improving crop conditions may lead the market to further price erosion. With the very dry conditions that many of you continue to experience, and the tremendous uncertainty that brings to what you’ll have for bushels this fall, we understand if there’s hesitancy to sell anything here. If you are worried about committing physical bushels with a cash sale, consider selling futures or buying put options.

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

  • Led by negativity in the energy markets, weakness in soybean oil weighed on soybeans and likely led to some profit taking and choppy trade after posting a new high for the move.  Both Old and New Crop contracts closed the week in relative unison, with August beans showing a 52-1/2 cent gain, while November posted a 53 cent gain, despite the USDA’s bearish report on Wednesday.

  • Following Wednesday’s surprising USDA report, some are questioning the USDA’s 52 bpa yield estimate with 57% of the US soybean crop experiencing some level of drought, though this is down 3% from last week.

  • China has reportedly been an active buyer of Brazilian soybeans, purchasing 20 – 25 cargoes for May – July 2024 delivery, in addition to US soybeans purchased off the PNW for October delivery.

  • Expectations for Monday’s NOPA soybean crush report are for 170.568 mb of soybeans crushed in June, down 4.1% from May, but expected due to seasonal downtime for maintenance and repairs, and if realized, it would be a record for the month.

  • Updated Consumer Price Index (CPI) and Producer Price Index (PPI) information released this week showed inflation levels are slowing, reducing the possibility of further rate hikes by the Fed, and likely adding early support to prices.

Above: The soybean market is struggling with heavy resistance in the 1490-1505 area and posted a bearish reversal following the July 12 USDA report. The market reversed sharply higher on July 13, but prices need to show continued strength to negate the bearish action from report day. Initial support below the market is near 1425 with further support being in the 1350 – 1390 area.

Wheat

Market Notes: Wheat

  • News reports that India will ban rice exports may have contributed to the strong close in the wheat market. India generally exports a large percentage of the world’s rice, so if they are short on supply, they may turn to wheat as another food staple. Some believe this could mean they will need to import wheat down the road, offering support.

  • Early next week, the Black Sea export corridor deal will expire. As of writing, no agreement on an extension has been reached. Russia has allegedly stated that they will offer an extension, but only in exchange for reduced sanctions on their banking system (namely, being let back into the SWIFT program). Either way, this could mean more volatility for wheat next week.

  • According to the Buenos Aires Grain Exchange, their 23/24 wheat planting estimate for Argentina is unchanged from their last projection at 6.0 mmt.

  • Canada is still too dry, and it is impacting their spring wheat crop. Much like areas of the northern US Plains that are experiencing the same problem.

Chicago Wheat Action Plan Summary

  • No new action is recommended for 2023 New Crop. In the month of June, the September Chicago wheat contract posted a 163-cent range and has largely been a follower of the corn market which has been mostly driven by weather. While demand remains weak, production concerns in parts of the country remain, as does uncertainty surrounding the Black Sea region and the potential for major exporting countries’ inventory to hit 16-year lows. While Grain Market Insider will continue to monitor the downside for any violation of major support, following the recent sales recommendation it may be after harvest or near the end of summer before we consider recommending any additional sales for the 2023 crop.

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

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

Above: September wheat rallied nearly 200 cents from the May low to its June high when it encountered heavy resistance and posted a bearish reversal. This technical formation on the price chart is considered bearish and momentum may be adding to the bearish tone. Support below the market may be found between 650 – 610, while resistance above the market rests between 770 – 810.

KC Wheat Action Plan Summary

  • We continue to look for better prices before making any 2023 sales. While Crop ratings have improved and the Black Sea export corridor remains open, questions remain about the size of the HRW crop, whether Russia will continue to agree to keep the Black Sea corridor open, and what production looks like in Europe and Australia. We continue to target 950 – 1000 in the July futures as a potential level to suggest the next round of New Crop sales.

  • Patience is warranted for the 2024 crop. With continued issues in the Black Sea region and with major exporting countries’ stocks expected to fall to 16-year lows, we are willing to be patient with further sales of New Crop HRW wheat. We are targeting just below the 900 level on the upside while keeping an eye on recent lows for any violation of support.

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

Above: Balancing both production and demand concerns, the September contract continues to trade within the 736 – 919 range established in May. The recent downturn in the market has established heavy resistance above the market between 890 – 920, with initial support coming in between 778 – 763 and key support near the May low of 736.

Mpls Wheat Action Plan Summary

  • No new action for 2022 Old Crop MINNEAPOLIS Wheat. The market had a nearly 116-cent swing from the May low to the June high and back on weather. While weather and geopolitical events can still affect Old Crop prices, the marketing year for Old Crop is quickly winding down, and any additional upside opportunities may be more difficult to come by before New Crop harvest. Use any remaining bounces in the market to price what Old Crop bushels you may have, if any. We won’t have any “New Alerts” for the 2022 crop (Cash, Calls, or Puts) as we have moved focus onto 2023 and 2024 Crop Year opportunities.

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

  • No action is recommended for the 2024 crop. With weather dominating the market right now, 2024 prices can be heavily influenced by 2023 carryover estimates and prices. As dryness increases in the spring wheat areas and with major exporting countries’ stocks at 11-year lows, Grain Market Insider would like to see September futures prices in the 800 – 825 range before we would consider suggesting making any sales recommendations, while keeping an eye on the recent lows for any violation of support.

Above: In the month of June, the September contract rallied towards the 200-day moving average and into resistance between 889 and 940, the April and December highs respectively. The market has since retreated and slowly climbed back, and it will need additional bullish news to be able to trade through the recent highs. Should the market fall back, initial support may be found between 805 – 845 with further downside support between 770 and 730. 

Other Charts / Weather

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Midday Update: July 14, 2023

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn
SEP ’23 498.75 5.25
DEC ’23 505.75 5.25
DEC ’24 512 3.25
Soybeans
AUG ’23 1477.75 -7
NOV ’23 1367.25 -2.5
NOV ’24 1264 3.75
Chicago Wheat
SEP ’23 651.5 11.75
DEC ’23 670.25 10.75
JUL ’24 696.75 6.75
K.C. Wheat
SEP ’23 814 8
DEC ’23 818.75 8
JUL ’24 777.5 7
Mpls Wheat
SEP ’23 874.25 12.5
DEC ’23 879.5 12.25
SEP ’24 786.5 -6.5
S&P 500
SEP ’23 4550.75 7.25
Crude Oil
SEP ’23 75.48 -1.28
Gold
OCT ’23 1981.7 -1.2

  • There is talk that many traders are in disbelief of the USDA report numbers. This may explain, at least in part, why grains are trying to rebound after a negative report.

  • The 8-14 day forecast shows warmer and drier than normal conditions across parts of the Midwest, which may also be offering some support to the grain market.  

  • Recent weakness in the US dollar is supportive to com commodity prices. The CPI data showed an easing of inflation, and demand for food and fuel may increase.

  • About 64% of the US corn crop is still said to be experiencing drought conditions.

  • CONAB raised their estimate of Brazilian corn production to 127.8 mmt (vs 125.7 previously).

  • After a higher overnight trade, soybean futures are lower at midday. This could be the result of profit taking after yesterday’s recovery.

  • China has been an active buyer of Brazilian soybeans for May-July 2024. They have also purchased some from the US Pacific Northwest.

  • CONAB reduced their estimate of Brazil’s soybean production to 154.6 mmt (vs 155.7 previously).

  • The expectation for June NOPA soybean crush comes in at 170.568 mb. That would be down 4.1% from May, but that is expected due to seasonal downtime for maintenance and repairs. The actual NOPA data will be released on Monday.

  • About 57% of the US soybean crop is said to be experiencing drought conditions.

  • India is reportedly banning rice exports because of shortages. They normally export about 18 mmt of the world’s 55 mmt. This has led to some thought that they will need to import wheat, as it is the next food staple in line.

  • The forecast looks mostly dry for the Dakotas and Minnesota over the next couple weeks, which may affect spring wheat crop ratings. Spring wheat areas of Canada are also too dry.

  • The Black Sea Grain Initiative expires on Monday. If an agreement for an extension is not reached, world supplies could tighten. Russia has come out and said they are willing to extend the deal if they are let back into the SWIFT banking program.

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

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

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

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Opening Update: July 14, 2023

ByGrain Market Insider

All prices as of 6:30 am Central Time

Corn
SEP ’23 504.25 10.75
DEC ’23 510.75 10.25
DEC ’24 516.25 7.5
Soybeans
AUG ’23 1492.25 7.5
NOV ’23 1378.75 9
NOV ’24 1268.75 8.5
Chicago Wheat
SEP ’23 652.75 13
DEC ’23 672.25 12.75
JUL ’24 702.5 12.5
K.C. Wheat
SEP ’23 817.5 11.5
DEC ’23 822.5 11.75
JUL ’24 770.5 2.75
Mpls Wheat
SEP ’23 877 15.25
DEC ’23 882.5 15.25
SEP ’24 786.5 -6.5
S&P 500
SEP ’23 4547.25 3.75
Crude Oil
SEP ’23 76.58 -0.18
Gold
OCT ’23 1980.6 -2.3

  • The corn market is trading higher this morning and near the top end of its range, with support likely coming from a lower US Dollar and slow farmer selling.

  • US export sales commitments for the 22/23 corn crop at 1.555 bb are down 35% from last year’s levels, and current 23/24 sales commitments at 159 mb are down from year-ago levels of 269 mb, the lowest since 2019. 

  • According to the Rosario Grain Exchange, Argentina’s corn production is seen at 32 mmt, which is down 40% from previous expectations. Additionally, harvest has been slow and is estimated at only 40% complete due to high moisture.

  • The latest US Drought Monitor shows 64% of the corn crop is in a drought area, though down 3% from last week with the recent rainfall, leading some to question the USDA’s current yield forecast of 177.5 bpa.

  • Some areas of the Midwest will see enough rain through the middle of next week to boost soil moisture, but some will miss out, creating a mixed bag of conditions for developing corn and soybeans, while long-range forecasts show the possibility of drier conditions in the North/Central Midwest.

  • Thoughts of a better US economy following yesterday’s friendly inflation data and a lower US dollar are offering support to the soybean complex which is trading near its highs so far this morning.

  • Updated Producer Price Index, or PPI, information released yesterday showed inflation levels are slowing, reducing the possibility of further rate hikes by the Fed.

  • Following Wednesday’s surprising USDA report, some are questioning the USDA’s 52 bpa yield estimate with 57% of the US soybean crop experiencing some level of drought, though this is down 3% from last week.

  • Some areas of the Midwest will see enough rain through the middle of next week to boost soil moisture, but some will miss out, creating a mixed bag of conditions for developing corn and soybeans, while long-range forecasts show the possibility of drier conditions in the North/Central Midwest.

  • Total export sales commitments for 22/23 are down 11% from last year versus the USDA’s revised estimate of a 8% reduction. Total sales commitments for 23/24 are only 153 mbu which are historically low compared to 509 mbu sold last year at this time.

  • The wheat markets are trading higher this morning on talk of India banning rice exports, and possibly wheat exports as well. 

  • Considering India is the world’s largest rice exporter this may add demand to wheat as the next closest substitute.

  • Currently, 52% of the winter wheat crop is experiencing drought, down 2% from last week, while spring wheat areas in drought climbed 6% to 25% as the dryness continues in the northern Plains.

  • The Northern Plains are expected to have a couple of chances for rain in the next week, but amounts are expected to be below normal with below normal temperatures. The Central/Southern Plains are expected to receive periodic rainfall with a decent frequency of activity for this time of year with mild temperatures, although the rainfall may further disrupt wheat harvest.  

  • Minneapolis wheat could lead the wheat complex higher with the growing dryness in the region and falling crop conditions.

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

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

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