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Grain Market Insider: May 22, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Export inspections of 52 mb helped spark a short cover rally in July corn and recover somewhat from being oversold.

  • Short covering from extremely oversold conditions with carryover strength from soybean oil and a flash sale of 225k MT of meal gave support to the soybean market.

  • Rumors of delayed vessels inbound for Ukraine and support from the neighboring corn market helped all three wheat markets close on the positive side of unchanged.

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

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

Corn

Corn Action Plan Summary

  • No action is recommended at this time for Old Crop. 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 to the other in the next month or so.

  • No action is currently recommended for the 2023 new crop. While the crop is going in the ground fast, the most volatile part of the growing season remains ahead. We’re going to maintain an opportunistic posture for now, targeting 590 – 630 versus December corn to suggest any further cash sales.  

  • 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.

  • Despite lacking overall bullish news, the corn market rallied on short covering. With the corn market being oversold, technical buying pushed prices back higher.

  • Weekly export inspections were within expectations on Monday at 52.1 mb of corn inspected for export last week. China took shipments on 12.4 mb of that total. Even with this week’s totals, the current inspection pace is approximately 100 mb behind the pace needed to reach the USDA export target.

  • Corn market bulls are watching weather forecasts, which show above average temperatures and below average moisture across the corn belt going into early June. While the conditions should allow crop progress to continue, the dry pattern building across the heart of the corn belt may trigger some additional short covering and add potential weather premium in an oversold market.

  • Weekly crop progress numbers will be released on Monday afternoon. The market is anticipating corn planting to be 82% complete as of May 21, up from 65% last week. Close attention will be on the northern Plain’s progress with the first prevent planting date around the corner on May 25 for areas of the northern states.

  • The overall tone for cash basis remains soft, as producers have been moving more supplies, and exporters are concerned about demand for those supplies, which is limiting basis potential.

Above: Stochastic indicators have crossed over to the downside indicating there may be more weakness ahead, though the market is showing signs of being oversold. With July corn searching for support, it may find some between 550 and 530, and again near the 2021 September low of 497-1/2, while nearby resistance sits near 600 and again near the 50-day moving average.

Corn Managed Money Funds net position as of Tues. May 16.  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 recommend not 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 higher and took back the losses from Friday and then some. A move higher in soybean oil brought the soy complex higher despite a decline in palm oil today.

  • Bullish news came from a sale to the Philippines of 225,000 metric tons of soy cake and meal, but export inspections for last week were poor as expected.

  • Soybean inspections totaled 5.7 mb for the week ending Thursday, May 18, and total inspections are now at 1,771 mb for 22/23, down 2% vs the previous year.

  • Planting progress is expected to move along swiftly as weather forecasts improve, and the weekly crop progress report is expected to show planting and emergence well ahead of the 5-year average.

  • Overall, there hasn’t been much positive fundamental news to explain today’s rally, so it was likely technical due to being oversold. Support for the July contract is near the 13-dollar mark.

Above: While July soybeans posted a bearish reversal on 5/08 and have continued to follow through to the downside, the market is showing signs of being oversold, which could be supportive if reversal action occurs. The next area of support may be found near 1288 and 1181, the July 2022 and November 2021 lows respectively. Nearby resistance may be found between 1420 and 1450, and again near 1500.

Soybeans Managed Money Funds net position as of Tues. May 16.  Net position in Green versus price in Red.

Wheat

Market Notes: Wheat

  • The USDA reported wheat export inspections of 15 mb, bringing the total 22/23 inspections to 703 mb, they also estimated 775 mb of US wheat exports.

  • There have been reports that Ukraine claims Russian inspections are delaying vessels bound for the port of Pivdennyi, despite the extension of the Black Sea export corridor deal. 

  • Spread traders were active in the Minneapolis contracts selling the front month contracts and buying the deferred, possibly indicating supply concerns later on.

  • Sov Econ estimated Russian wheat production at 88 mmt, 1.2 mmt higher than their previous estimate.

  • There may be some concerns with Russian spring wheat areas drying out with forecasts of higher temperatures on the way.

Chicago Wheat Action Plan Summary

  • No new action is recommended for the 2022 crop.  As the 2022 crop marketing year begins to wind down, most if not all, your Old Crop bushels should be sold out, and with large rallies difficult to come by at this time of year. Consider selling rallies in the 640 to 670 range to market any remaining inventory.

  • We recommend not taking any action on the 2023 crop at this time.  Managed Money funds currently hold their largest net short position since 2018, with a near record of about 40% of the total open interest in the Chicago contracts. Such a large position could be very supportive should the funds buy back their positions if market dynamics change due to HRW concerns or supply concerns in corn.

  • 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 wheat market is searching for support, and open interest has been increasing on the recent selloff, which implies sellers may be adding to their positions. If buying returns and the market can break through nearby resistance between 655 and 669, it may be in position to test the April high of 718.  Support below the market may be found between 593 -565. 

Chicago Wheat Managed Money Funds net position as of Tues, May 16.  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: The July contract posted a bearish reversal lower on 5/17, a negative development, with some profit taking as indicated by a drop in open interest. If the market can reverse and break through the 885 to 917 resistance area it could make a move towards 966. With the market looking for support, some may be found between 736 and 716.

K.C. Wheat Managed Money Funds net position as of Tues. May 16.  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 posted a bearish reversal on 5/17 and stochastic indicators have crossed to the downside, indicating momentum has shifted downward for now.  Initial resistance may be found between 830 and 855, with support between 770 and 760.

Minneapolis Wheat Managed Money Funds net position as of Tues. May 16.  Net position in Green versus price in Red.

Other Charts / Weather

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Midday Update May 22, 2023

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn
JUL ’23 572.5 18
DEC ’23 508.75 9
DEC ’24 498.25 5.5
Soybeans
JUL ’23 1334.25 27
NOV ’23 1194 18.5
NOV ’24 1170.25 14.25
Chicago Wheat
JUL ’23 611.5 6.5
SEP ’23 623.5 6.5
JUL ’24 663.5 2.25
K.C. Wheat
JUL ’23 825.75 1.5
SEP ’23 817.75 2.25
JUL ’24 757.5 6.25
Mpls Wheat
JUL ’23 808.25 4.25
SEP ’23 811.75 4.75
SEP ’24 752.25 -17
S&P 500
JUN ’23 4209.5 4.75
Crude Oil
JUL ’23 71.58 -0.11
Gold
AUG ’23 1992.9 -7.4

  • Corn is continuing to push higher with July leading the way after a poor showing last week that saw the July contract losing 30 cents on the week. Chinese cancellations and poor exports were to blame.

  • While Brazil is expected to have a record corn crop at 130 mmt, Argentina’s crop keeps looking worse, and while the USDA is still estimating production at 37 mmt, most analysts are projecting closer to 30 mmt.

  • With Chinese cancellations of US corn, the USDA will likely need to lower their yearly corn exports in the next WASDE. China’s corn imports from the US in April were under 54,000 mt which compares to 1.51 million mt a year ago.

  • There was an announced corn tender by Taiwan’s MFIG for 65,000 mt of optional corn.

  • Soybeans are moving sharply higher and are on track to recover all of the losses from Friday. Both soybean oil and meal are higher along with crude oil.

  • Palm oil was down 1.52% today, which put some early pressure on soybean oil, but both soy products have recovered as those markets were getting oversold.

  • China logged imports from Brazil that were down 16% from a year ago at just 5.4 mmt which causes some concern about China’s economy and their demand.

  • Brazil’s soybean crop is harvested and now Safras and Mercado raised their production estimates to 155.7 mmt vs the USDA’s 155 mmt.

  • Wheat is mixed today with Chicago and KC higher but Minn struggling. The Kansas HRW wheat tour results are supportive of prices.

  • The Kansas wheat tour is expecting the lowest production in 66 years, and issues at Ukraine’s largest port with Russians disrupting shipments are bullish factors today.

  • Another vessel of Polish wheat reportedly is headed to Florida and would be the third cargo imported from Europe by millers in Florida.

  • Russian wheat production is being estimated higher by Sov Econ to 88 mmt, up 1.2 mmt. Russian FOB values are extremely cheap and are said to be $250 mt into August.

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: May 22, 2023

ByGrain Market Insider

All prices as of 6:30 am Central Time

Corn
JUL ’23 558.5 4
DEC ’23 500.5 0.75
DEC ’24 494.5 1.75
Soybeans
JUL ’23 1316.5 9.25
NOV ’23 1182.25 6.75
NOV ’24 1162.25 6.25
Chicago Wheat
JUL ’23 600 -5
SEP ’23 612.25 -4.75
JUL ’24 655 -6.25
K.C. Wheat
JUL ’23 814.5 -9.75
SEP ’23 807.25 -8.25
JUL ’24 740.25 -11
Mpls Wheat
JUL ’23 798.75 -5.25
SEP ’23 800 -7
SEP ’24 752.25 -17
S&P 500
JUN ’23 4201.75 -3
Crude Oil
JUL ’23 71.76 0.07
Gold
AUG ’23 1997.9 -2.4

  • Corn is trading slightly higher this morning with July leading the way up after a disappointing close on Friday which led the contract to lose 31-3/4 cents on the week.

  • There is a bullish argument concerning the limited number of deliveries for the May contract and the fact that it went off the board 80 cents above current July futures.

  • The US Department of Ag announced on Friday an atypical case of mad cow disease in an older beef cow in South Carolina but the animal did not enter slaughter and no trade impacts are expected.

  • Friday’s CFTC report showed non-commercials buying back 17,658 contracts and reducing their net short position to 91,985 contracts. 

  • Soybeans are trading higher and are possibly gaining support from Argentina’s drought stricken soybean crop. Soybean meal and oil are mixed with losses in the front months and gains in deferred.

  • Argentina’s soybean harvest has stalled slightly and is 72% complete. The USDA has not changed their estimate of 27 mmt but that production is likely much lower between 20 and 24 mmt.

  • China’s soybean imports from Brazil fell by 16% in April compared with the same month a year ago after delays to their harvest.

  • Friday’s CFTC report showed funds as net sellers of 24,517 contracts reducing their net long position to 23,942 contracts.

  • Wheat is lower this morning as a more favorable weather pattern brings relief to areas in Kansas, Oklahoma, and Texas which are dealing with drought.

  • The HRW wheat crop tour in Kansas has wrapped up and indicated that production will be the lowest in 66 years. Yields are expected to be better than earlier estimates, but large levels of abandonment will cut into production.

  • Ukraine’s port of Pivdennyi said Russia is sabotaging its operation by not allowing inspections of inbound vessels in violation of the brokered agreement.

  • Friday’s CFTC report showed non-commercials as buyers of 4,137 contracts of wheat, reducing their net short position to 112,769 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: May 19, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Corn futures recovered early in the day as short covering entered the market following Thursday’s bullish reversal, but succumbed to selling pressure from outside markets and neighboring wheat and soybeans.

  • Despite Thursday’s bullish reversal, continued fund long liquidation and short selling on favorable weather and weak export demand pushed soybeans lower. 

  • Soybean meal and oil finished in the red along with soybeans, with soybean oil supported somewhat from higher Malaysian palm oil, while meal encountered weakness from cheaper South American offers.

  • Technical selling and profit taking dominated the K.C. contracts and led the wheat complex lower, as rain moves through the southern Plains, even though the Kansas City wheat council tour estimated the Kansas crop at only 178 mb.

  • A rise in economic concerns may have added to the pall over the grain markets as US debt ceiling negotiations stalled with both sides at an apparent impasse for now.

  • To see the updated US 7-day precipitation forecast and June Precipitation Outlook 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.  As the 2022 crop marketing year begins to wind down, most if not all, your Old Crop bushels should be sold out.  With recent export sales cancellations, large rallies for Old Crop corn may be difficult to come by, and with a substantial inverse between old and new crop contracts, consider selling rallies in the 575-600 range to market any remaining inventory.

  • No action is currently recommended for the 2023 new crop. While the crop is going in the ground fast, the most volatile part of the growing season remains ahead. We’re going to maintain an opportunistic posture for now, targeting 590 – 630 versus December corn to suggest any further cash sales.  

  • 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.

  • Early short covering faded during the session as selling pressure from wheat and soybean markets spilled into the corn market during the session. In addition, markets turned softer overall as the US debt ceiling talks stalled between politicians in Washington DC.

  • The weak afternoon price action keeps the market on the defensive going into next week, as the sellers appear to still be in control of the market.

  • Overall, US weather looks to stay favorable as corn planting is hitting the home stretch. The market will be keeping a close eye on the northern Plains and the slow progress in that region with prevent plant dates starting as early as May 25.

  • Demand remains a focus on Old Crop corn prices. Export sales are soft, and the market is concerned that additional China cancellations could occur, with still 2.1 MMT of corn sales on the books that still need to be delivered to China.

  • Corn basis levels are reflecting softer tones as producers have slowed field work, allowing for better movement of stored supplies onto the cash market.

Above: Stochastic indicators have crossed over to the downside indicating there may be more weakness ahead, though the market is showing signs of being oversold. With July corn searching for support, it may find some between 550 and 530, and again near the 2021 September low of 497-1/2, while nearby resistance sits near 600 and again near the 50-day moving average.

Soybeans

Soybeans Action Plan Summary

  • We recommend holding current sales levels for Old Crop.  We are beginning to push into the May-June seasonal window of opportunity, where prices could bounce as processors begin to push to keep tight on-hand supplies flowing, and seasonal weather concerns can get priced into the market.

  • We recommend not 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. 

  • The soy complex started the day higher this morning but ended lower. July beans led the way down and were pulled lower primarily by soybean meal.

  • Early morning support came from a jump in Malaysian palm oil by 2.6% on renewed Chinese demand, but for the week it lost 4.6%. Crude oil began the day higher but slipped as well.

  • Bearish outside influences drove the entire grain complex lower following comments by Fed Chairman Powell, and agreements about raising the debt ceiling that were halted a few hours ago after disagreements occurred between Republican negotiators and the White House.

  • Last week’s export sales of 623,000 bushels of Old Crop beans weighed on markets again today. To arrive at the USDA’s expectations, an additional 80 mb of soybeans need to be sold by August. Shipments were a marketing year low at 6.9 mb.

Above: While July soybeans posted a bearish reversal on 5/08 and have continued to follow through to the downside, the market is showing signs of being oversold, which could be supportive if reversal action occurs. The next area of support may be found near 1288 and 1181, the July 2022 and November 2021 lows respectively. Nearby resistance may be found between 1420 and 1450, and again near 1500.

Wheat

Market Notes: Wheat

  • The Kansas wheat crop tour estimated an average yield of 30 bpa, compared to a 5-year average of 45 bpa. Additionally, they are projecting the Kansas crop at 178 mb, the worst since 1963.

  • Despite the crop tour findings, K.C. wheat lost about 30 cents today in the front month contracts. This may indicate that the poor conditions have already been priced in the market.

  • The strengthening El Nino pattern could be cause for concern with drought for Australia’s wheat crop. Russia’s spring wheat areas are also warm and dry.

  • Russian wheat exports continue to be cheap, with their FOB values hitting a 22-month low of $250 per metric ton.

Chicago Wheat Action Plan Summary

  • No new action is recommended for the 2022 crop.  As the 2022 crop marketing year begins to wind down, most if not all, your Old Crop bushels should be sold out, and with large rallies difficult to come by at this time of year. Consider selling rallies in the 640 to 670 range to market any remaining inventory.

  • We recommend not taking any action on the 2023 crop at this time.  Managed Money funds currently hold their largest net short position since 2018, with a near record of about 40% of the total open interest in the Chicago contracts. Such a large position could be very supportive should the funds buy back their positions if market dynamics change due to HRW concerns or supply concerns in corn.

  • 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: July wheat has pierced the low end of the recent trading range but remains in the broader range from earlier this month. If buying returns and the market can break through nearby resistance around 669 and the 50-day moving average, it may be in position to test the April high of 718. Key support may be found near 592.   

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: The July contract posted a bearish reversal lower on 5/17, a negative development, with some profit taking as indicated by a drop in open interest. If the market can reverse and break through the 885 to 917 resistance area it could make a move towards 966. With the market looking for support, some may be found between 736 and 716.

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 posted a bearish reversal on 5/17 and stochastic indicators have crossed to the downside, indicating momentum has shifted downward for now.  Initial resistance may be found between 830 and 855, with support between 770 and 760.

Other Charts / Weather

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Midday Update May 19, 2023

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn
JUL ’23 566.5 11.25
DEC ’23 507.75 7
DEC ’24 498.5 5.5
Soybeans
JUL ’23 1335.25 2
NOV ’23 1193.75 6.75
NOV ’24 1169 7
Chicago Wheat
JUL ’23 611.75 0
SEP ’23 624.5 0
JUL ’24 664.75 -0.5
K.C. Wheat
JUL ’23 842.75 -14.25
SEP ’23 832.5 -13
JUL ’24 757 -6
Mpls Wheat
JUL ’23 818.25 -10.25
SEP ’23 820.75 -10
SEP ’24 769.25 -3.75
S&P 500
JUN ’23 4213 1
Crude Oil
JUL ’23 71.77 -0.17
Gold
AUG ’23 1996.6 18.3

  • Despite a lower soybean crop estimate, Argentina kept their corn crop production unchanged at 36 mmt.

  • The International Grain Council estimated the 23/24 corn crop at a near-record 1.2 billion metric tons.

  • China has 84 mb of US corn remaining on the books, meaning that more cancellations are possible.

  • The climate prediction center is forecasting drought improvement in the western US plains over the next 3 months. 

  • July corn on Brazil’s Bovespa exchange is making new lows and trading around the equivalent of $4.49 per bushel.

  • Argentina lowered their soybean crop estimate to 21 mmt from 22.5 previously. The USDA is still using a number of 27 mmt.

  • Stochastics for both July and November soybeans indicate oversold conditions.

  • Soybean crush premium (based on July futures) is down 12 cents this week to $1.89 per bushel. This is the lowest number since last summer.

  • Crude oil is higher at midday, offering some support to the soybean oil market. Higher palm oil is also supportive.

  • Parts of the southwestern Plains, including parts of Texas and Oklahoma, will see some more beneficial rains.

  • The HRW crop tour came up with a yield of 30 bpa (vs a 5-year average of 45 bpa), and the lowest crop production estimate since 1963, at 178 mb.

  • Despite the Black Sea corridor extension, there are said to be 62 vessels waiting for inspection, which is a slow process.

  • Ukraine’s president is going to Japan to visit with the G7, to ask for support against Russia.

  • Russian wheat export FOB values hit a 22-month low, at $250 per metric ton.

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: May 19, 2023

ByGrain Market Insider

All prices as of 6:30 am Central Time

Corn
JUL ’23 557.25 2
DEC ’23 505.5 4.75
DEC ’24 497 4
Soybeans
JUL ’23 1338.25 5
NOV ’23 1196.75 9.75
NOV ’24 1165 3
Chicago Wheat
JUL ’23 617.25 5.5
SEP ’23 629.75 5.25
JUL ’24 671 5.75
K.C. Wheat
JUL ’23 859.5 2.5
SEP ’23 846.75 1.25
JUL ’24 762.25 -0.75
Mpls Wheat
JUL ’23 831.75 3.25
SEP ’23 834.5 3.75
SEP ’24 769.25 -3.75
S&P 500
JUN ’23 4220.75 8.75
Crude Oil
JUL ’23 72.79 0.85
Gold
AUG ’23 1984.5 6.2

  • Corn is trading higher this morning as December corn finds support at the 5-dollar level. The July contract is on track to end the week with a loss while the loss in December would only be slight at these levels.

  • July corn struggled more than new crop this week due to poor demand news which included a cancelled Chinese sale and a bad export sales report.

  • In Brazil, the upcoming corn crop does not seem to have traders concerned as futures on the Bovespa exchange continue to make new lows.

  • Ukrainian corn plantings so far in 2023 are lagging behind the previous year at just 3.3 million hectares vs 4.2 m the previous year. 

  • Soybeans, soybean meal and oil are all trading higher this morning with support from higher crude and a lower US dollar.

  • Slowing domestic demand is pressuring the July contract as soybean crush premiums decline to the lowest levels seen since last summer.

  • Argentina’s Buenos Aires Grain Exchange cut their soybean forecast again by 6.7% to 21 mmt. Their previous estimate was 22.5 mmt, and the USDA’s estimate remains unchanged at 27 mmt.

  • Barge shipments down the Mississippi River declined in the week ending May 13 with soybean shipments down 61% week over week.

  • Wheat is trading slightly higher this morning, most likely partially due to end of week profit taking but also in response to the HRW wheat tour results.

  • The tour estimated Kansas wheat production at 178 mb with a yield estimate of 30 bpa. The tour estimated a very high level of abandonment expecting only 5.9 million acres vs the USDA’s 6.6 ma.

  • Russia is planning to discuss wheat and meat exports at a Chinese business forum where they will attempt to expand exports to China.

  • Three new inbound vessels were approved for the Ukraine export corridor following the renewal of the deal. Two of those ships are preparing for inspection in Istanbul and the other was stranded in Ukraine since March 2022 and is finally departing.

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: May 18, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Corn export sales for the week ending May 11th came in at a net negative 13.3 million bushels for the 22/23 marketing year, which weighed on the corn market.

  • Soybeans and soybean meal continued their recent liquidation trend while soybean oil managed to rally despite lower crude oil prices.

  • Net cancellations in weekly export sales for the 22/23 marketing year pressured the market, K.C. wheat contracts were hit hardest by sellers as all three wheats worked lower.

  • The US Dollar continued its winning streak adding outside pressure once again to commodities.

  • To see the updated U.S. Drought Monitor and June Temperature Outlook 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

Updated as of 05/10/2023

  • No action is recommended at this time for Old Crop. At this point in the crop marketing year most, if not all, of your Old Crop 2022 corn should be sold out. With the substantial inverse between old and new crop contract months, large rallies for Old Crop corn may be difficult to come by as we move forward. Consider using 40 to 50-cent rallies to sell any remaining inventory.

  • No action is currently recommended for the 2023 new crop. While the crop is going in the ground fast, the most volatile part of the growing season remains ahead. We’re going to maintain an opportunistic posture for now, targeting 590 – 630 versus December corn to suggest any further cash sales.  

  • 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.

  • The corn market finished mixed on Thursday as weak export demand and competition from cheaper South American corn limited gains on the front end of the market.

  • The USDA released weekly export data this morning and corn sales continue to disappoint.  For the week of May 11, the 22/23 crop year saw net cancellations of 13.3 mb, a market year low, and new crop sales were light at 2.9 mb. These totals are well below sales needed to reach USDA targets.

  • The large second crop Brazil corn is making good progress with limited concerns as harvest is getting closer. The expected record crops have Brazil offering corn for export at a discount to US prices.

  • Overall, US weather looks to stay favorable as corn planting is hitting the home stretch. The market will be keeping a close eye on the northern Plains and the slow progress in that region with prevent plant dates starting as early as May 25.

  • A strong US Dollar and aggressive selling in the wheat market limited the upside potential in the corn market as US wheat prices are still expensive compared to the global wheat market.

Above: Stochastic indicators have crossed over to the downside indicating there may be more weakness ahead, though the market is showing signs of being oversold. With July corn searching for support, it may find some between 550 and 530, and again near the 2021 September low of 497-1/2, while nearby resistance sits near 600 and again near the 50-day moving average.

Soybeans

Soybeans Action Plan Summary

Updated as of 05/09/2023

  • We recommend holding current sales levels for Old Crop.  We are beginning to push into the May-June seasonal window of opportunity, where prices could bounce as processors begin to push to keep tight on-hand supplies flowing, and seasonal weather concerns can get priced into the market.

  • We recommend not adding to current sales levels for the new 2023 crop at this time.  As we work through planting season, our research indicates there is a 66% likelihood of better prices moving into early June. Additionally, weather conditions will begin to dominate the market as we begin to move into the growing season, and we may consider recommending sales in the 1400 to 1450 area if any significant concerns arise.

  • 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 traded either side of unchanged today but ultimately closed lower, led down by soybean meal. Soybean oil traded higher despite a drop in crude oil.

  • Export sales were poor last week with the USDA reporting an increase of just 0.6 mb of soybeans for 22/23, far below the average trade guess. Export sales for 23/24 were 24.4 mb, while export shipments were 6.9 mb and below the 12.6 mb needed each week to meet the USDA’s expectations.

  • With Brazil’s harvest complete and estimated at 5.7 billion bushels, premiums there are rallying on an FOB basis, from close to 200 under Chicago futures to 57 under yesterday.

  • Planting pace has accelerated everywhere but North Dakota and Minnesota. And, while showers are forecast across the central and southern Plains, the forecasts into June look mostly dry.

Above: While July soybeans posted a bearish reversal on 5/08 and have continued to follow through to the downside, the market is showing signs of being oversold, which could be supportive if reversal action occurs. The next area of support may be found near 1288 and 1181, the July 2022 and November 2021 lows respectively. Nearby resistance may be found between 1420 and 1450, and again near 1500.

Wheat

Market Notes: Wheat

  • Net cancellations of 1.5 mb of 22/23 wheat export sales did not offer any support to the market today. However, an increase of 12.4 mb for 23/24, while not stellar, does look better.

  • Day 2 of the HRW crop tour found a yield of 27.5 bpa. Last year at this time it was 37 bpa.

  • Kansas City contracts finished almost 30 cents lower, despite the friendly Kansas wheat tour yield projection coming in 13 million bushels below current USDA projections. Good rains have recently fallen in Kansas, many feel these rains were too little too late to help the maturing wheat crop.

  • The US Dollar Index again made a new near term high today, offering weakness to wheat futures.

Chicago Wheat Action Plan Summary

Updated as of 05/09/2023

  • No new action is recommended for the 2022 crop.  At this point in the crop marketing year most, if not all, of your Old Crop 2022 wheat should be sold out. With large rallies difficult to come by at this time of year, consider using 40 to 50-cent rallies to sell any remaining inventory.

  • We recommend not taking any action on the 2023 crop at this time.  Managed Money funds currently hold their largest net short position since 2018, with a near record of about 40% of the total open interest in the Chicago contracts. Such a large position could be very supportive should the funds buy back their positions if market dynamics change due to HRW concerns or supply concerns in corn.

  • 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: July wheat has pierced the low end of the recent trading range but remains in the broader range from earlier this month. If buying returns and the market can break through nearby resistance around 669 and the 50-day moving average, it may be in position to test the April high of 718. Key support may be found near 592.   

KC Wheat Action Plan Summary

Updated as of 05/09/2023

  • 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: The July contract posted a new recent high and reversed lower, a negative development, and open interest has fallen off somewhat, indicating some profit taking. If the market can break through the 912, it may make a run towards 966. Initial support may be found near 833, with key support near 740.

Mpls Wheat Action Plan Summary

Updated as of 05/10/2023

  • 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. Due to the lack of liquidity for the 2024 crop, there may not be any recommendations until late spring or early summer. This is the time for patience, not action.

Above: The market posted a bearish reversal and open interest has fallen off somewhat, indicating some profit taking, and the potential for weakness ahead. Initial resistance above the market sits between 888 and 895, while initial support may be found near 831 and then between 770 and 760.

Other Charts / Weather

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Midday Update May 18, 2023

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn
JUL ’23 553 -8.5
DEC ’23 495.75 -3.25
DEC ’24 489.25 -2.75
Soybeans
JUL ’23 1334 -3
NOV ’23 1186 -1.5
NOV ’24 1162.25 -2.75
Chicago Wheat
JUL ’23 610.75 -14.75
SEP ’23 623.5 -14.25
JUL ’24 661.5 -15
K.C. Wheat
JUL ’23 857.25 -28.25
SEP ’23 845.75 -27.5
JUL ’24 770.5 -15.25
Mpls Wheat
JUL ’23 828.5 -31.25
SEP ’23 830.5 -29.25
SEP ’24 773 -16.5
S&P 500
JUN ’23 4193.75 22.25
Crude Oil
JUL ’23 72.21 -0.68
Gold
AUG ’23 1973.1 -30.6

  • The USDA reported net cancellations of 13.3 mb of 22/23 corn export sales, but an increase of 2.9 mb for 23/24.

  • Funds continue to add to net short positions, vs a long position at this time last year.

  • The US Midwest weather is mostly favorable and long-range forecasts do not indicate heat levels this summer that would cause the market to rally sharply.

  • China’s recent corn cancellations now total 43.5 mb.

  • The USDA reported an increase of 0.6 mb of 22/23 soybean export sales and an increase of 24.4 mb for 23/24.

  • Despite earlier weakness, soybeans are around neutral and as of this writing have had a wide daily trading range. July soybeans so far today are in about a 25-cent range.

  • NOPA stocks were higher than expected, which may put some pressure on soybean oil.

  • Palm oil is lower for the 4th day in a row and that could also weigh on soybean oil. 

  • The USDA reported net cancellations of 1.5 mb of 22/23 wheat export sales, but an increase of 12.4 mb for 23/24.

  • The day 2 yield estimate on the HRW wheat crop tour came in at 27.5 bpa (vs 37 last year).

  • Rains in Kansas are offering some resistance to the wheat market, even though it may be too little too late for that crop. The moisture could be beneficial to spring planted crops though.

  • The Black Sea Grain Initiative has officially been extended for another 60 days.

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: May 18, 2023

ByGrain Market Insider

All prices as of 6:30 am Central Time

Corn

JUL ’23 555 -6.5
DEC ’23 495.75 -3.25
DEC ’24 488.25 -3.75

Soybeans

JUL ’23 1333.5 -3.5
NOV ’23 1184.5 -3
NOV ’24 1160.25 -4.75

Chicago Wheat

JUL ’23 613 -12.5
SEP ’23 625.5 -12.25
JUL ’24 665 -11.5

K.C. Wheat

JUL ’23 862.5 -23
SEP ’23 850.75 -22.5
JUL ’24 770.5 -15.25

Mpls Wheat

JUL ’23 838.25 -21.5
SEP ’23 838 -21.75
SEP ’24 773 -16.5

S&P 500

JUN ’23 4182.25 10.75

Crude Oil

JUL ’23 72.89 0

Gold

AUG ’23 1997 -6.7

  • Corn is trading lower for the third consecutive day with December below the 5-dollar mark.

  • Yesterday’s news that Russia would agree to extend the Black Sea grain deal at the last moment triggered fund selling and added pressure to corn and wheat.

  • Yesterday the USDA reported the fourth sales cancellation by China of 10.7 mb of corn, but China still has about 89 mb of outstanding sales in the US.

  • Estimates for todays export sales report in corn are between -300k and 650k tons with an average guess of 185k.

  • Soybeans and soybean meal are lower this morning while soybean oil is slightly higher as palm oil futures begin to level off.

  • China’s soybean imports reached a record high of 8.8 million tons this April as their economy recovers and demand increases.

  • Brazil’s soybean harvest achieved its record high mark which the USDA estimates at 155 mmt which is the most soybeans ever grown by any country ever as their production continues to expand.

  • Soybean export sales are expected to be in a range between 50k and 600k tons with an average guess of 298k.

  • Wheat is trading lower again this morning after yesterday’s surprise renewal of the Black Sea grain deal spurred heavy selling. This agreement will last for two months.

  • Yesterday’s crop tour showed wheat yields in Kansas falling below the USDA’s estimates at an average of just 27.5 bpa vs 37 bpa a year ago.

  • With the severe drought ravaging US wheat, the US has had to resort to rare wheat imports with two cargoes of Polish grain arriving in Florida this year.

  • The HRW wheat crop tour will move to Manhattan, KS today where conditions are more favorable, and the tour will offer its final estimates.

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: May 17, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Cancellations reported by the USDA totaling 272k mt in export sales to China weighed heavily on the July corn futures contract, with carryover weakness also spreading to the deferred contracts.

  • Continued technical selling on weakening demand and favorable weather drove prices lower in the soybean complex as funds liquidated more long positions.

  • Russia has agreed to extend the Black Sea Grain Initiative for another 60 days, adding further selling pressure to both corn and wheat markets.

  • Poor conditions and low estimated yields from the K.C. wheat crop tour lent support to K.C. contracts.  While Chicago and Minneapolis contracts took the brunt of the selling, pressured by weak demand and better crop outlooks.

  • Hawkish Fed commentary gave legs to the US Dollar which continued its climb higher, adding some weakness to commodities.

  • To see the updated U.S. 6-10 day Temperature and Precipitation outlooks from the National Weather Service, 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

Updated as of 05/10/2023

  • No action is recommended at this time for Old Crop. At this point in the crop marketing year most, if not all, of your Old Crop 2022 corn should be sold out. With the substantial inverse between old and new crop contract months, large rallies for Old Crop corn may be difficult to come by as we move forward. Consider using 40 to 50-cent rallies to sell any remaining inventory.

  • No action is currently recommended for the 2023 new crop. While the crop is going in the ground fast, the most volatile part of the growing season remains ahead. We’re going to maintain an opportunistic posture for now, targeting 590 – 630 versus December corn to suggest any further cash sales.  

  • 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.

  • The corn market saw additional technical selling as prices pushed through levels of support, triggering long liquidation and momentum selling, boosted by strong selling pressure across the grain complex. July futures traded to their lowest close since December 2021, and December corn closed under the key psychological $5.00 level.

  • A cancellation of 272,000 MT (10.7 mb) old crop corn by China only added to the selling pressure and fueled additional demand concerns. The corn market is anticipating further old crop demand adjustments, adding to a growing carry out picture.

  • Brazilian second crop corn is still developing without any major overall issues. The forecasted record corn production allows for cheaper export offerings which will make it difficult for the US exporters to compete on the global market.

  • The overall weather forecast stays supportive for the majority of the Corn Belt with above average temperatures and with rainfall average to below, which should keep the planting window over the next couple weeks very favorable.

  • The USDA will release weekly export sales totals for last week on Thursday morning, and expectations are for -500,000 MT to 300,000 MT of old crop sales. If even at the top end of expectations, the US corn export program is struggling to reach USDA export projections for the marketing year.

Above: Stochastic indicators have crossed over to the downside indicating there may be more weakness ahead, though the market is showing signs of being oversold. With July corn searching for support, it may find some between 550 and 530, and again near the 2021 September low of 497-1/2, while nearby resistance sits near 600 and again near the 50-day moving average.

Soybeans

Soybeans Action Plan Summary

Updated as of 05/09/2023

  • We recommend holding current sales levels for Old Crop.  We are beginning to push into the May-June seasonal window of opportunity, where prices could bounce as processors begin to push to keep tight on-hand supplies flowing, and seasonal weather concerns can get priced into the market.

  • We recommend not adding to current sales levels for the new 2023 crop at this time.  As we work through planting season, our research indicates there is a 66% likelihood of better prices moving into early June. Additionally, weather conditions will begin to dominate the market as we begin to move into the growing season, and we may consider recommending sales in the 1400 to 1450 area if any significant concerns arise.

  • 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 traded sharply lower again today with front month July leading the way lower as both soybean oil and meal fell. The move lower in soybean oil came despite a jump in crude oil. Palm oil was down for the third straight day on rising production and weaker demand.

  • November soybeans are at the lowest level since December of 2021, but closed a chart gap left in July of last year which could be a technical level of support.

  • The selloff comes as the USDA forecasts a record crop for the US and Brazil, while larger outside influences having to do with the economy and recession, pressure commodities.

  • With Brazil’s soybean harvest complete and the bulk of soybeans that could not be stored sold, producers are holding on to their soybeans as an inflation hedge which is driving up premiums in Brazil. This could have a positive effect on US prices.

Above: While July soybeans posted a bearish reversal on 5/08 and have continued to follow-through to the downside, the market is showing signs of being oversold, which could be supportive if reversal action occurs. The next area of support may be found near 1288 and 1181, the July 2022 and November 2021 lows respectively. Nearby resistance may be found between 1420 and 1450, and again near 1500.

Wheat

Market Notes: Wheat

  • Wheat plunged to double-digit losses in all three US classes after Turkey announced that a deal had been reached to extend the Black Sea grain corridor for another 60 days.

  • The day 1 yield estimate of 29.8 bpa on the HRW wheat crop tour is the worst finding since the tour began in 2003. Normally the yield is closer to 45 bpa. This could explain why KC futures were not down as hard as Chicago and Minneapolis.

  • Paris milling wheat futures were also sharply lower due to the extension of the Black Sea agreement. The front month September contract lost 9.00 euros per metric ton.

  • Not offering any support to US wheat futures is the US Dollar as it trends higher, breaking the 103 level today.

Chicago Wheat Action Plan Summary

Updated as of 05/09/2023

  • No new action is recommended for the 2022 crop.  At this point in the crop marketing year most, if not all, of your Old Crop 2022 wheat should be sold out. With large rallies difficult to come by at this time of year, consider using 40 to 50-cent rallies to sell any remaining inventory.

  • We recommend not taking any action on the 2023 crop at this time.  Managed Money funds currently hold their largest net short position since 2018, with a near record of about 40% of the total open interest in the Chicago contracts. Such a large position could be very supportive should the funds buy back their positions if market dynamics change due to HRW concerns or supply concerns in corn.

  • 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: July wheat has pierced the low end of the recent trading range but remains in the broader range from earlier this month. If buying returns and the market can break through nearby resistance around 669 and the 50-day moving average, it may be in position to test the April high of 718. Key support may be found near 592.   

KC Wheat Action Plan Summary

Updated as of 05/09/2023

  • 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: The July contract posted a new recent high and reversed lower, a negative development, and open interest has fallen off somewhat, indicating some profit taking. If the market can break through the 912, it may make a run towards 966. Initial support may be found near 833, with key support near 740.

Mpls Wheat Action Plan Summary

Updated as of 05/10/2023

  • 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. Due to the lack of liquidity for the 2024 crop, there may not be any recommendations until late spring or early summer. This is the time for patience, not action.

Above: The market posted a bearish reversal and open interest has fallen off somewhat, indicating some profit taking, and the potential for weakness ahead. Initial resistance above the market sits between 888 and 895, while initial support may be found near 831 and then between 770 and 760.

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