|

Grain Market Insider: July 13, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • US corn export sales last week for both Old and New Crop were above trade expectations and the largest since March. This friendly news helped corn erase nearly all of yesterday’s losses.

  • A drier long-range forecast and the fact that 57% of the crop remains in drought conditions helped to rally the soybean complex higher today, surpassing yesterday’s losses.

  • Wheat markets followed corn and soybean prices higher. Spring wheat producing areas experiencing drought now total 25%, rainfall looks limited for these areas over the next week.

  • The US Dollar Index continued its move lower, falling to its lowest level since April 2022. A weaker US dollar is supportive to commodities.

  • To see the US 7-day precipitation forecast courtesy of NOAA, Weather 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 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.

  • Buyers returned to the corn market on Thursday, as prices finished with strong double-digit gains. Spillover support from the soybean market, and a short squeeze in the July futures, with expiration on Friday, helped triggered the buying support.

  • Weekly exports sales reported this morning for corn were slightly above market expectations.  The USDA reported Old Crop sales of 18.4 mb and New Crop sales of 19.4 mb. Numbers are still overall disappointing as Old Crop sales need to average 26.5 mb weekly to hit the USDA export sales target of 1.650 billion bushels for the 2022-23 marketing year.

  • The strong price action with December corn pushing back over the $5.00 price level and closing above the 10-day moving average could likely set up additional buying strength on Fridays open. The key to today’s price movement will be follow-through to end the week.

  • Traders are questioning final yield projections, as 64% of the corn crop is still experiencing some form of drought, down 3% from last week. In addition, the fungal disease, Tar Spot, is now being found in six states. The spread of this disease will be watched by the market.

  • The U.S. Dollar Index has broken through the 100-basis point level and traded to its lowest level since April 2022 on the prospects that Fed interest rate hikes may be coming to an end.  The weaker dollar has helped trigger some money flow into the commodity and equity markets.

Above: The USDA added a bearish 4 million acres to its planted acreage estimate on June 30. The September contract is now extremely oversold and consolidating in the 480 – 505 support level that has been in place since January 2021. The oversold condition of the market would be considered supportive to higher prices if reversal action occurs; if not, there may not be much support until 390 – 415. Overhead lies strong resistance between 595 and 625. 

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, along with soybean meal and oil, saw big gains today that surpassed yesterday’s losses after the USDA increased the 22/23 carryout to 255 mb and announced a 23/24 carryout of 300 mb, 50% larger than the 200 mb figure that was expected.

  • Today’s gains were largely fueled by the fact that 57% of the US soybean crop is experiencing drought conditions with a drier long range forecast for the north central Midwest, and a sharply lower US dollar.

  • This morning, the USDA announced that private exporters reported a sale of 315,704 metric tons of soybeans for delivery to Mexico during the 2023/2024 marketing year. 

  • Chinese customs data shows that soybean imports in June totaled 10.27 mmt, representing a 24.5% increase versus last June, and year over year imports have risen 13.6% to 52.575 mmt, mostly on large purchases of cheap Brazilian soybeans. Chinese demand may be slowing in the second half of the year though, as hog herds begin to shrink due to the lack of profitability and less feed is needed, according to a Chinese consultant, Sitonia Consulting.

  • Anec reports that Brazil’s soybean exports are seen reaching 10.45 mmt in July, with soybean meal exports reaching 2.5 mmt for the same period. This compares to just 7 mmt of soybeans and 2.07 mmt of meal exported for the same time last year.

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

  • The USDA reported an increase of 14.5 mb of wheat export sales for 23/24. The USDA is projecting 725 mb of exports in 23/24, and commitments now total 184 mb (down 29% from last year).

  • Despite a negative report yesterday, all three US wheat futures classes rebounded today and closed in positive territory. It may have been a case of “follow the leader” though, as corn and soybean futures led the charge higher.

  • The US Dollar Index continues to decline, breaking below the 100 level today. This is most likely tied to yesterday’s CPI and today’s PPI data, which showed easing inflation. There is thought that the Fed may be close to the end of raising interest rates, and this might be putting some risk premium back into financial and commodity markets.

  • In the face of a negative report yesterday, global wheat ending stocks (minus China) are still at an 11-year low.

  • Matif wheat closed a little higher, gaining about 1.50 – 2.00 euros. Support may be building for wheat (both US and abroad) at these lower levels. Additionally, there is still uncertainty surrounding the impending expiration of the Black Sea Grain Initiative. Putin reportedly asked for an extension if Russia is let back into the SWIFT banking program.

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. Price volatility has risen in the last couple of weeks due to the changing weather forecasts and current events in the Black Sea. While prices have fallen off their recent highs, plenty of time remains to market next year’s crop. War continues in the Black Sea region, major exporting countries’ stocks expected to fall to 16-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties.  For now, after recently 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.

  • We continue to hold on pricing the 2024 crop. With the September ‘24 contract about 60 cents from its May 22 low, continued issues in the Black Sea region and major exporting countries’ stocks expected to fall to 16-year lows, we are entering the time frame where we would consider suggesting making sales recommendations while also keeping an eye on the recent lows for any violation of support. 

Above: The September contract rallied out of its congestion area on the Front Month Continuous chart towards the 200-day moving average and into resistance between 889 and 940, the April and December highs respectively.  With the market off those highs, it will need additional bullish news to be able to trade through them. Should the market continue to fall, support may be found between 770 and 730. 

Other Charts / Weather

|

Midday Update: July 13, 2023

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn
SEP ’23 485 8.75
DEC ’23 492 8.25
DEC ’24 502.75 6.75
Soybeans
AUG ’23 1463.5 19.25
NOV ’23 1349.25 21.5
NOV ’24 1251 24
Chicago Wheat
SEP ’23 637.75 5
DEC ’23 657.5 5.25
JUL ’24 687.25 5.5
K.C. Wheat
SEP ’23 800 -3
DEC ’23 805 -2
JUL ’24 765.5 -2.25
Mpls Wheat
SEP ’23 860 6.5
DEC ’23 866.5 7
SEP ’24 793 0.25
S&P 500
SEP ’23 4527 19.5
Crude Oil
SEP ’23 76.3 0.76
Gold
OCT ’23 1984.9 4.1

  • The USDA reported an increase of 18.4 mb of corn export sales for 22/23 and an increase of 18.5 mb for 23/24.

  • CPI data yesterday is leading to some thoughts that the Fed may be nearing the end of the interest rate increases. This is also pressuring the US dollar and maybe putting some risk premium back into financial and commodity markets.

  • The western Corn Belt looks to be drier and warmer for the second week of the forecast.

  • The USDA’s increased estimate of Brazilian corn production, at 133 mmt (vs 132 previously), will likely limit upside for US futures. Brazil export values are also cheaper than US, pressuring the export market too.

  • The USDA reported an increase of 3.0 mb of soybean export sales for 22/23 and an increase of 7.7 mb for 23/24.

  • Private exporters reported sales of 315,704 mt of soybeans for delivery to Mexico during the 23/24 marketing year.

  • Yesterday’s USDA estimate of new crop soybean carryout at 300 mb was higher than many anticipated.

  • Chinese soybean imports in June totaled 10.27 mmt; this is 24.5% above last year for the same timeframe.

  • The USDA reported an increase of 14.5 mb of wheat export sales for 23/24.

  • The USDA estimated 4.76 bb of global wheat ending stocks (excluding China). This is the lowest in 11 years.

  • The 8-14 day forecast is predicting below normal rainfall for spring wheat areas in the northern US plains. Canda is also dry, which may affect their canola and spring wheat production.

  • According to the Rosario Board of Trade, Argentina is expected to plant 5.4 million hectares of wheat, a 200,000 hectare decline from the June estimate. Production is estimated at 15.6 mmt.

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

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

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

|

Opening Update: July 13, 2023

ByGrain Market Insider

All prices as of 6:30 am Central Time

Corn
SEP ’23 481.25 5
DEC ’23 488.75 5
DEC ’24 500.5 4.5
Soybeans
AUG ’23 1464.25 20
NOV ’23 1347.25 19.5
NOV ’24 1245 18
Chicago Wheat
SEP ’23 634 1.25
DEC ’23 653.75 1.5
JUL ’24 682.75 1
K.C. Wheat
SEP ’23 805.25 2.25
DEC ’23 808.5 1.5
JUL ’24 762.5 -5.25
Mpls Wheat
SEP ’23 860 6.5
DEC ’23 865.5 6
SEP ’24 793 0.25
S&P 500
SEP ’23 4520.75 13.25
Crude Oil
SEP ’23 75.67 0.13
Gold
OCT ’23 1983.7 2.9

  • December corn traded both sides of unchanged overnight and is now near the top of its 9-1/2 cent range as it recovers somewhat from yesterday’s bearish USDA report.

  • The USDA lowered the potential corn yield to 177.5 bushels/acres (-4.0 bu/acre), just above market expectations, but did not adjust the demand side of the balance sheet to establish a new carry out projection of 2.262 billion bushels for the 23/24 marketing year. This total was in line with analysts’ expectations. If realized 23/24 ending stocks and stocks/use ratios would be the highest in 7 years.

  • The USDA lowered old crop export demand by 75 million bushels, and traders in the market pressured corn prices feeling that a projected new crop export demand of 2.100 billion bushels, up 450 mb from 22/23 projections, will be difficult to reach at current corn price levels.

  • Weekly ethanol production reported by the EIA came in below expectations and slipped to 1,032k barrels/day from the previous week’s 1,060k barrels/day. Ethanol stocks also rose 1.8% to 22.658M barrels.

  • The Funds were active sellers yesterday following the USDA report, selling an estimated 10,500 contracts. They are now estimated to be short 26,000 contracts.

  • The soybean complex is trading higher this morning with traders likely covering some short positions after yesterday’s bearish USDA report, with soybean meal and oil also trading higher.

  • The USDA surprised the market by adding 25 mb to the 22/23 carryout bringing the total to 255 mb (versus 232 mb expected) and only dropping the 23/24 carryout numbers 50 mb from last June to 300 mb, with an estimated yield of 52 bpa. Trade expectations were about 200 mb for 23/24 carry out with a 51.3 bpa yield.

  • South American production for 22/23 was left unchanged in today’s report with Brazil’s crop estimated at 156 mmt versus 156.2 mmt expected, and Argentina’s crop estimated at 25 mmt versus 23.6 mmt expected. 

  • Funds were active sellers of soybeans following the bearish USDA report, selling an estimated 10,000 contracts. They are now estimated to be long 94,000 contracts.

  • Export sales will be announced later this morning for soybeans and are expected to range from 10 – 30 mb.

  • The wheat market is also posting a bit of a recovery from yesterday’s downturn with Chicago and Minneapolis mostly higher, and K.C. mixed.

  • In yesterday’s report, the USDA estimated 23/24 all wheat production at 1.739 bb versus expectations of 1.677 bb, and 1.665 bb last month. 22/23 wheat carryout was estimated at 580 mb versus expectations of 583 mb, and 23/24 carryout came in at 592 mb when the trade was looking for 565 mb.

  • The USDA estimated the winter wheat yield at 46.9 bpa, up 2.0 bu from last month’s projection, and for reference, last year’s average yield was 47.0 bpa. 

  • Like corn and beans, funds were active sellers in Chicago wheat, selling an estimated 9,000 contracts. They are now estimated to be short 59,000 Chicago wheat contracts.

  •  Export sales released later this morning are expected to range from 8 – 16 mb.

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. 

|

Grain Market Insider: July 12, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • A carryout projection of 2.262 billion bushels for the 23/24 crop year pushed traders into sell mode, sending DEC ‘23 corn prices to levels not seen since September 2021.

  • The USDA’s carryout estimates for 22/23 and 23/24 crops far exceeded the upper end of trade expectations and sent the soybean complex lower, creating a bearish reversal following today’s report.

  • The drag of the bearish soybean numbers pulled both soybean meal and oil lower, but had the effect of being friendly to DEC Board Crush, which traded 7-cents higher following the report.

  • Higher 23/24 production estimates and carryout projections from today’s USDA report sent the wheat markets lower, with Chicago leading the way down with losses nearing 28 cents in the September contract.

  • The June Consumer Price Index report was released today and showed a 0.2% increase versus an expected increase of 0.3%, reducing the chances of further rate hikes. The US Dollar Index tumbled on the news, which is supportive to commodities, though today’s USDA report outweighed any positive reaction in the grain markets.

  • To see the current NOAA US 8 – 14 day Temperature and Precipitation outlooks, 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. December corn rallied 139 cents from its May 18 low to its high on June 21 on weather and production concerns. The market is currently off that high on poor export sales figures and a forecast that shows increased chances of rain in the next couple of weeks. 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, yields a combination of options commonly known as a Strangle, which benefits from dramatic market moves either up or down. Considering it is still early in the season, with drought and crop production uncertainty it is too soon to know if the market high is in or not. Either way, the Strangle position is prepared. If conditions improve from here and prices make new lows, unsold bushels will be protected with the 580 puts. If it doesn’t rain again and prices skyrocket to new highs, already sold bushels will be protected by the 610 calls.

  • Grain Market Inside recommends selling New Crop 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 last week’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.

  • The corn market saw strong selling pressure with double digit losses on the session after the USDA WASDE report triggered selling. December corn closed 17-¾ cents lower and established a new low for the move. December corn traded to its lowest point since September 2021.

  • The USDA lowered the potential corn yield to 177.5 bushels/acres (-4.0 bu/acre), just above market expectations, but did not adjust the demand side of the balance sheet to establish a new carry out projection of 2.262 billion bushels for the 2023-24 marketing year. This total was in line with analysts’ expectations.

  • The USDA lowered old crop export demand by 75 million bushels, and traders in the market pressured corn prices feeling that a projected new crop export demand of 2.100 billion bushels, up 450 mb from 2022-23 projections, will be difficult to reach at current corn price levels.

  • The weak price action with corn futures trading near the bottom end of the range on the close will likely trigger additional selling pressure in upcoming sessions.

  • The weather stays negative price as a beneficial rain system moved across key areas of the Corn Belt on Wednesday. Forecasts are still looking at an active weather pattern for the majority of the corn belt through the end of July.

Above: The USDA added a bearish 4 million acres to its planted acreage estimate on June 30. The September contract is now extremely oversold and consolidating in the 480 – 505 support level that has been in place since January 2021. The oversold condition of the market would be considered supportive to higher prices if reversal action occurs; if not, there may not be much support until 390 – 415. Overhead lies strong resistance between 595 and 625. 

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 recommends selling a portion of your 2023 soybeans today. 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. 

  • The USDA surprised the market by adding 25 mb to the 22/23 carryout versus an expected 2 mb (255 mb actual carryout vs 232 mb expected), and only dropping 50 mb from the 23/24 carryout numbers from last June to 300 mb, with an estimated yield of 52 bpa. Trade expectations were about 200 mb for 23/24 carryout with a 51.3 bpa yield.

  • South American production for 22/23 was left unchanged in today’s report with Brazil’s crop estimated at 156 mmt versus 156.2 mmt expected, and Argentina’s crop estimated at 25 mmt versus 23.6 mmt expected.

  • Also in today’s USDA report, global ending stocks for the 22/23 season came in above expectations, as well with an increase of 1.6 mmt to 103 mmt. For 23/24, global stocks were estimated to decrease 2.3 mmt from June to 121 mmt, which is still a record.

  • The USDA reported this morning that private exporters reported sales of 105,000 metric tons of soybean cake and meal for delivery to unknown destinations for the 23/24 marketing year.  There has been no confirmation yet of China’s rumored purchase of 10 – 14 cargoes of US soybeans off the PNW for October delivery for their reserves. 

  • Additionally, as of June 29, China has bought just 1.72 mmt of 23/24 US soybeans versus 7.77 mmt for the same time last year.

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 reversal is a bearish development and could lead to further price erosion without other bullish information.  Initial support below the market is near 1425 with further support being in the 1350 – 1390 area.

Wheat

Market Notes: Wheat

  • The USDA estimated 23/24 all wheat production at 1.739 bb versus expectations of 1.677 bb, and 1.665 on the June report. 22/23 wheat carryout was estimated at 580 mb versus expectations of 583 mb. 23/24 carryout came in at 592 mb when the trade was looking for 565 mb.

  • The USDA estimated the winter wheat yield at 46.9 bpa, up 2.0 bu from last month’s projection, and for reference, last year’s average yield was 47.0 bpa.

  • Aside from today’s WASDE report, weather looks like it will still be a factor for the spring wheat crop. The next 7 days look mostly dry for the northern US Plains and Canadian Prairies.

  • Recent Russian drone attacks on the Ukraine port of Odessa are leading to increased tensions and concern that the Black Sea export corridor will not be renewed next week.

  • The sharply lower US Dollar Index was not enough to outweigh the negative results of today’s report. Down the road, however, if it continues to trend lower, it may benefit the export market.

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. Price volatility has risen in the last couple of weeks due to the changing weather forecasts and current events in the Black Sea. While prices have fallen off their recent highs, plenty of time remains to market next year’s crop. War continues in the Black Sea region, major exporting countries’ stocks expected to fall to 16-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties.  For now, after recently 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.

  • We continue to hold on pricing the 2024 crop. With the September ‘24 contract about 60 cents from its May 22 low, continued issues in the Black Sea region and major exporting countries’ stocks expected to fall to 16-year lows, we are entering the time frame where we would consider suggesting making sales recommendations while also keeping an eye on the recent lows for any violation of support. 

Above: The September contract rallied out of its congestion area on the Front Month Continuous chart towards the 200-day moving average and into resistance between 889 and 940, the April and December highs respectively.  With the market off those highs, it will need additional bullish news to be able to trade through them. Should the market continue to fall, support may be found between 770 and 730. 

Other Charts / Weather

|

Midday Update: July 12, 2023

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn
SEP ’23 491 -3.5
DEC ’23 498 -3.5
DEC ’24 501 -4.25
Soybeans
AUG ’23 1488 16.5
NOV ’23 1375 14.75
NOV ’24 1257 6
Chicago Wheat
SEP ’23 654 -6.5
DEC ’23 672.5 -5.5
JUL ’24 699.75 -2.5
K.C. Wheat
SEP ’23 820.25 3.25
DEC ’23 823 2.5
JUL ’24 782.5 0.75
Mpls Wheat
SEP ’23 866.25 2.25
DEC ’23 871 3
SEP ’24 795 2.25
S&P 500
SEP ’23 4518.75 45.25
Crude Oil
SEP ’23 75.45 0.74
Gold
OCT ’23 1978.3 22.1

  • Parts of the central and southern Corn Belt should receive good rains over the next five days, bringing relief to some of the driest areas.

  • FOB corn prices in Brazil are still cheaper than the US, keeping pressure on exports.

  • About 30% of China’s corn is said to be in dry areas that could affect their production. This could lead to increased Chinese imports down the road, though where they source the beans from is another question.

  • July corn on Brazil’s Bovespa Exchange is around the equivalent of $4.80 per bushel. This is near the lowest level in two years.

  • Private exporters reported sales of 105,000 mt of soybean meal sold to unknown destinations for the 23/24 marketing year.

  • Both soybean meal and oil are higher this morning, offering a boost to soybean futures. Palm oil is higher as well, providing some support too.

  • CPI data this morning showed that inflation increased 0.2% in June, which was below expectations.

  • China is increasing soybean imports from Brazil due to growing concerns about what US supply will look like. As of June 29, China has bought just 1.72 mmt of US soybeans (for 23/24) vs 7.77 mmt for the same time period last year.

  • Spring wheat areas have a mostly dry forecast for the next 7 days, including the northern US Plains and the Canadian prairies.

  • Russian drone attacks on the Odessa port in Ukraine led to some support in the wheat market yesterday. Reportedly, of the 20 drones sent, only 2 made it through Ukraine’s air defense system. In any case, this does not bode well for the extension of the export corridor that expires next week.

  • The US Dollar Index is sharply lower this morning. Wheat does not seem to be responding much, but this could have a bigger impact on exports down the road if the USD continues to decline.

  • Japan is tendering for 123,770 mt of food-quality wheat from the US, Canada, and Australia.

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. 

|

Opening Update: July 12, 2023

Bygmidev

All prices as of 6:30 am Central Time

Corn

SEP ’23 496.5 2
DEC ’23 503.25 1.75
DEC ’24 506 0.75

Soybeans

AUG ’23 1484.75 13.25
NOV ’23 1373 12.75
NOV ’24 1264.5 13.5

Chicago Wheat

SEP ’23 654.25 -6.25
DEC ’23 672.25 -5.75
JUL ’24 697 -5.25

K.C. Wheat

SEP ’23 817.25 0.25
DEC ’23 820.25 -0.25
JUL ’24 782 0.25

Mpls Wheat

SEP ’23 862.75 -1.25
DEC ’23 865.5 -2.5
SEP ’24 792.75 0

S&P 500

SEP ’23 4484.5 11

Crude Oil

SEP ’23 74.89 0.18

Gold

OCT ’23 1958.6 2.4

  • Corn is trading higher and near the top of its 5-cent range this morning in the December contract as traders ready themselves and cover short positions ahead of today’s 11 am USDA WASDE report.

  • Expectations for today’s USDA report are for corn yield to drop to 176.3 bpa, down 5.2 bpa from the June report.  Despite the yield drop, the additional acres and possible demand adjustment will likely keep new crop corn carryover near 2.250 billion bushels on the report.  The average trade guess for the 2022 crop ending stocks is 1.424 bil. bu, versus 1.452 bil. bu in June.

  • The weekly EIA report on ethanol production will be released today at 9:30 CST with some looking for weekly production to be down from last week’s pace of 1,060k barrels/day.

  • Over the next 10 days decent rain is expected through eastern Nebraska, southern Iowa, Missouri, and into Illinois and the eastern Corn Belt.  While the north/central Midwest and northern Plains are expected to see much lighter amounts.

  • Soybeans continue their march higher ahead of today’s 11 a.m. USDA report with soybean meal and oil also higher, with soybean oil likely getting a boost from higher Malayasian palm oil.

  • The average trade guess for 2022 carryover is up 2 mil bu. at 232 mbu. versus the USDA’s June estimate of 230, largely due to reduced export demand.   Due to lower acreage numbers from the June 30th report, the average trade estimate for 2023 carryover is 203 mil. bu with a 51.3 bpa, versus June’s 350 mil. bu estimate.

  • South American basis is improving which is allowing US soybeans to be more competitive in the world market, though they remain above SA offers.

  • According to Refinitiv, China has increased soybean imports from Brazil in response to concerns of tight US supplies.  China’s total Feb. – June soybean imports from Brazil were 40.74 million tons versus 31.6 mil. tons and 38.6 mil. tons for 2022 and 2021 respectively.

  • It has been rumored that China bought 10 – 14 cargoes of US soybeans off the PNW for October delivery for their reserves.  Though at this time there remains no confirmation from the USDA and New Crop commitments continue to be historically low.

  • The wheat complex is trading mixed this morning with Chicago lower, Minneapolis mixed, and K.C. near unchanged.

  • Average trade estimates for today’s USDA report have the 2023 US wheat crop at 1,683 mil. bu. versus June’s 1,665 mil. bu.  While 2023 total Winter Wheat is estimated at 1,154 mb versus 1,136 mb.  The first HRS estimate is near 477 mb versus 446 mb last year.  The average trade guess for 2023 wheat ending stocks is up 9 mb to 571 mb versus the USDA’s June estimate of 562 mb. 

  • In its first outlook of the year, the French agricultural ministry estimated the country’s soft-wheat harvest at a 2-year high of 35 mmt, 1.3 mmt higher than last year.  Yield was also reported to be the highest since 2019.

  • As the Black Sea Grain Initiative is set to expire next week, Russia has been targeting the Ukrainian port city of Odessa with drone attacks.  Though the attacks have largely been neutralized with relatively minor damage reported.  Additionally, the expiration of the BSGI will likely make it difficult for Ukraine to reach its export targets. 

  • According to Ukraine’s agricultural ministry, the country’s grain exports for the 23/24 season as July 12, rose to 894k tons versus 598k tons last season.  With wheat exports double and corn up 22% versus year ago levels.

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. 

|

Grain Market Insider: July 11, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • The corn market continues to hover and consolidate around the $5.00 December level as traders prepare for tomorrow’s July USDA report.

  • Lower than expected crop conditions and anticipation of a 200 mbu haircut to 2023 soybean production in tomorrow’s USDA report kept traders on the buy side of the soybean market today.

  • Soybean meal added support to soybeans as it followed through on yesterday’s strength to settle higher on the day, while soybean oil likely saw some profit taking from being overbought and settled lower in sympathy with lower palm oil.

  • A slow winter wheat harvest and deteriorating spring wheat conditions added to the bullishness in the wheat market as all three wheat classes closed higher on the day.

  • The grain markets may have gotten an extra boost of support as the US Dollar traded lower for the third day in a row, breaking through support and settling near 2-month lows.

  • To see the current NOAA US 6 – 10 day Temperature and Precipitation outlooks, 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. December corn rallied 139 cents from its May 18 low to its high on June 21 on weather and production concerns. The market is currently off that high on poor export sales figures and a forecast that shows increased chances of rain in the next couple of weeks. 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, yields a combination of options commonly known as a Strangle, which benefits from dramatic market moves either up or down. Considering it is still early in the season, with drought and crop production uncertainty it is too soon to know if the market high is in or not. Either way, the Strangle position is prepared. If conditions improve from here and prices make new lows, unsold bushels will be protected with the 580 puts. If it doesn’t rain again and prices skyrocket to new highs, already sold bushels will be protected by the 610 calls.

  • Grain Market Inside recommends selling New Crop 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 last week’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 prices consolidated again around the $5.00 price level as futures were firmer on Tuesday. December corn traded around the $5.00 area for the seventh consecutive session as traders square positions before Wednesday’s USDA report.

  • The USDA will release the July Supply/Demand report on Wednesday at 11:00 CST. Expectations are for corn yield to drop to 176.6 bushels/acre, down 4.9 bushels/acres from the June report. Despite the yield drop, the additional acres and possible demand adjustment will likely keep new crop corn carryover near 2.250 billion bushels on the report.

  • Improved weather across the Corn Belt was reflected in the weekly USDA crop rating released on Monday afternoon. The USDA crop ratings on Monday afternoon gained 4% to 55% good/excellent, slightly above analyst expectations. Nebraska saw the largest improvement, gaining 12% week over week. Illinois gained 6% in the good/excellent category but is still well behind the 5-year average at 39% good/excellent.

  • The weather forecast will limit any near-term rally and rainfall chances and above-normal temperature should help additional crop recovery in some areas and stabilize the crop into pollination.

Above: The USDA added a bearish 4 million acres to its planted acreage estimate on June 30. The September contract is now extremely oversold and consolidating in the 480 – 505 support level that has been in place since January 2021. The oversold condition of the market would be considered supportive to higher prices if reversal action occurs; if not, there may not be much support until 390 – 415. Overhead lies strong resistance between 595 and 625. 

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. 

  • No action is being recommended for New Crop 2023 soybeans. No action is being recommended for New Crop 2023 soybeans. While changing weather forecasts will continue to dominate price action, a potentially much lower than anticipated 2023 carryout looms over the market due to low crop condition ratings and a reduced planted acreage estimate. Grain Market Insider is still eyeing a rally to the 1400 – 1450 area before considering any additional 2023 cash sales. Yet given the time of year and how fast prices can change direction, we’re willing to change that plan at a moment’s notice. In view of the current crop conditions and carryout situation and that we recently recommended making a cash sale, we suggest holding tight on further cash sales for now. 

  • 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. 

  • The USDA rated the US soybean crop as of Sunday, July 9, at 51% good to excellent, a 1% increase from last week, but also 1% below trade expectations and 11% below year-ago levels. Although soybean crop conditions improved, they remain at their lowest levels since 2012.

  • The average trade guess for 2022 ending stocks on tomorrow’s USDA WASDE report is 232 mbu, up 2 mbu versus the June estimate of 230 mbu, largely due to reduced demand. For 2023, due to much reduced acres, the average estimate for ending stocks is 203 mbu with a 51.3 bpa, versus a 350 mbu estimate last month.

  • The trade estimates Brazil’s soybean production to come in at 156.2 mmt in Wednesday’s USDA report, up slightly from the June estimate of 156 mmt. For Argentina’s production, the average trade guess is 23.6 mmt, 1.4 mmt lower than in June.

  • South American basis is improving which is allowing US soybeans to be more competitive in the world market, though they remain above SA offers.

  • It has been rumored that China bought 10-14 cargoes of US soybeans off the PNW for October delivery for their reserves.

  • Over the next 10 days, Minnesota, the Dakotas, Wisconsin, and northern Iowa are all expected to be mostly dry, with decent rain expected through eastern Nebraska, southern Iowa and Missouri, and into Illinois and the eastern Corn Belt.

Above: The USDA’s Stocks and Acreage estimate came in well below expectations and gave the market a solid push to the upside. The market has now fallen back and is struggling to continue higher without additional bullish input. If the market can rebound, resistance above the market continues to rest between 1500 – 1550, while support below the market could be found between 1340 and 1300 with further support near 1270.

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

Wheat

Market Notes: Wheat

  • Yesterday afternoon’s USDA Crop Progress report kept winter wheat condition unchanged at 40% good to excellent, with harvest still well behind at 46% complete versus the average of 59%.

  • Spring wheat conditions declined 1% to 47% good to excellent. The northern Plains could use some more rain to help this crop, but little is in this week’s forecast. Canda’s crop is also in a similar situation where more moisture is needed.

  • According to CONAB, as of July 1st, Brazil’s wheat crop is 79.6% planted, with Argentina’s reported to be 81.4% planted.

  • Japan is tendering for 60,000 mt of feed wheat. While it is possible this may stir up some US export business, Russia continues to offer cheap wheat FOB exports at $235-$240 per ton. However, interior Russian wheat prices are said to have recently rallied.

  • Paris milling wheat futures posted gains for the first time in three sessions, which offered some support to the US market today. Additionally, the US Dollar continues to fade off of recent highs, allowing more upside potential for wheat futures.

  • Daily stochastic indicators show that Chicago wheat is technically oversold and is close to a crossover signal. Barring any surprises in tomorrow’s USDA report, this would indicate that it could be due for more of a correction to the upside.

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. Price volatility has risen in the last couple of weeks due to the changing weather forecasts and current events in the Black Sea. While prices have fallen off their recent highs, plenty of time remains to market next year’s crop. War continues in the Black Sea region, major exporting countries’ stocks expected to fall to 16-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties.  For now, after recently 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.

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.

  • We continue to hold on pricing the 2024 crop. With the September ‘24 contract about 60 cents from its May 22 low, continued issues in the Black Sea region and major exporting countries’ stocks expected to fall to 16-year lows, we are entering the time frame where we would consider suggesting making sales recommendations while also keeping an eye on the recent lows for any violation of support. 

Above: The September contract rallied out of its congestion area on the Front Month Continuous chart towards the 200-day moving average and into resistance between 889 and 940, the April and December highs respectively.  With the market off those highs, it will need additional bullish news to be able to trade through them. Should the market continue to fall, support may be found between 770 and 730. 

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

Other Charts / Weather

|

Midday Update: July 11, 2023

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn
SEP ’23 492.25 0
DEC ’23 499.75 0.25
DEC ’24 502.75 -0.5
Soybeans
AUG ’23 1460.75 5.25
NOV ’23 1351.25 5.75
NOV ’24 1243.5 2.5
Chicago Wheat
SEP ’23 656.75 10.5
DEC ’23 674.5 11
JUL ’24 701 10.5
K.C. Wheat
SEP ’23 818.75 7.5
DEC ’23 821.75 7.5
JUL ’24 782 9
Mpls Wheat
SEP ’23 859.25 9
DEC ’23 867.75 11
SEP ’24 792.75 -5.75
S&P 500
SEP ’23 4454.25 10
Crude Oil
SEP ’23 74.39 1.44
Gold
OCT ’23 1956.5 6.4

  • The USDA rated the corn crop at 55% good to excellent (up 4% from last week). Despite the increase, this is still the worst rating for this time of year since 2012.

  • The average pre-report estimate for US corn production is 15.149 bb, with a yield of 175.8 bpa.

  • Tomorrow’s report may reflect a boost in Brazil corn production, with traders looking for a crop of 132.8 mmt.

  • December corn is building technical support around the $4.90-$5.00 level, but the improving crop conditions could limit upside potential.

  • On tomorrow’s report, 2023 corn carryout is expected to come in around 2.2 bb.

  • The USDA rated the soybean crop at 51% good to excellent (up 1% from last week). Like corn, this is the poorest rating for this time period since 2012.

  • The average pre-report estimate for US soybean production is 4.250 bb, with a yield of 51.4 bpa.

  • Yesterday’s close in soybean oil was the highest so far this year, likely due to influence from palm oil as well as anticipated demand for biofuels.

  • Over the next 10 days, Minnesota, the Dakotas, Wisconsin, and northern Iowa are all expected to be mostly dry.

  • Tomorrow’s report is expected to show a drop in 2023 soybean carryout to around 200 mb.

  • The USDA said only 46% of the winter wheat crop has been harvested (vs 59% average). Winter wheat condition was unchanged at 40% good to excellent.

  • The USDA rated the spring wheat crop at 47% good to excellent (down 1% from last week)

  • Spring wheat areas in the northern US remain in need of moisture, but not much is expected this week. 

  • Reportedly, interior Russian wheat prices have rallied, but they are still offering wheat for export at $235-$240 per metric ton FOB.

  • According to CONAB, 79.6% of Brazil’s wheat crop has been planted as of July 1st.

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. 

|

Opening Update: July 11, 2023

Bygmidev

All prices as of 6:30 am Central Time

Corn

SEP ’23 498.25 6
DEC ’23 505.25 5.75
DEC ’24 507 3.75

Soybeans

AUG ’23 1480.25 24.75
NOV ’23 1366.25 20.75
NOV ’24 1251.5 10.5

Chicago Wheat

SEP ’23 657.75 11.5
DEC ’23 675 11.5
JUL ’24 702 11.5

K.C. Wheat

SEP ’23 825.25 14
DEC ’23 828.5 14.25
JUL ’24 775 2

Mpls Wheat

SEP ’23 866.5 16.25
DEC ’23 873 16.25
SEP ’24 792.75 -5.75

S&P 500

SEP ’23 4454.5 10.25

Crude Oil

SEP ’23 73.42 0.47

Gold

OCT ’23 1959.3 9.2

  • There’s not much turn around on this turn around Tuesday as corn follows through this morning with higher prices and traders square positions ahead tomorrow’s USDA WASDE report with an anticipated 2023 carryout in excess of 2.1 bil bu.

  • Crop conditions as of Sunday, July 9 for the US corn crop were 55% good to excellent, 2% above expectations and a 4% increase from last week.

  • Basis for nearby bids on corn shipped to the US Gulf firmed yesterday on limited supplies and rising barge freight.  While bids for the deferred months softened on rising futures prices.

  • While Brazil’s safriha corn crop appears to be quite bountiful, harvest is behind.  One of Brazil’s crop watchers AgRural, estimates the harvest to be 27% complete compared to 41% last year, which may be helping strengthen the domestic basis. 

  • The soybean complex is mixed this morning with soybeans and soybean meal higher in anticipation a near 200 mb 2023 carryout in tomorrow’s USDA report.  While soybean oil is lower, following lower palm oil prices.

  • The USDA rated the US soybean crop as of Sunday, July 9 at 51% good to excellent, a 1% increase from last week, but also 1% below trade expectations and 11% below year ago levels.

  • Spot basis bids at river terminals, processors and elevators were mostly weaker yesterday as strong farmer sales fed the short-term demand on rising Board prices.

  • China has adopted new regulations to require imported soybeans to be quarantined in specific warehouses prior to entering the domestic market.  While these new regulations will likely slow the importation process into China, it remains unclear what affects they will have on the overall market.

  • All three wheat classes are firmer to start the day with Minneapolis contracts leading the way higher as crop conditions came in below expectations.

  • As of Sunday July 9, the US Winter Wheat crop was estimated to be 46% harvested, 5% behind trade expectations of 51%, which also compares to 62% last year and 59% complete on average.  The USDA also rated the Spring Wheat crop at 47% good to excellent, which was 2% below expectations.

  • The President of Turkey is expected to meet with Vladimir Putin to discuss the Black Sea Grain Initiative with hopes of extending the arrangement past July 18, but the Kremlin has yet to confirm whether a meeting is scheduled.

  • According to IKAR, Russian wheat export prices are trading at $231/mt, keeping Russia the dominant player in world wheat exports. 

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. 

|

Grain Market Insider: July 10, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Consolidation ahead of Wednesday’s USDA WASDE report continues as traders square positions in the corn market, with prices not veering far from $5.00 in the December contract.

  • Sharply higher soybean oil prices and anticipation of lower production and ending stocks numbers in Wednesday’s upcoming USDA report drove the soybean market higher.

  • Higher Malaysian palm oil prices which were up 2.32% in the overnight added to the bullish sentiment in soybean oil, which closed up 248 points (4.75%). December soybean meal with $2.60 in gains and the strong bean oil market drove Board Crush in the December contracts to a 5-1/4 cent gain, adding support to soybeans.

  • Despite better than expected wheat export inspections, overall exports lag last year’s and weighed on prices with Paris Milling Wheat futures adding pressure to the Winter Wheats, while Minneapolis was able to close on the positive side, possibly in anticipation of lower crop conditions in this afternoon’s report.

  • The US dollar slid lower for the third day in a row and is trading near the June lows.  If the dollar breaks further, it could add support to commodities.

  • To see the current US 7 day precipitation forecast and NOAA US 8 – 14 day Temperature and Precipitation outlooks, 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. December corn rallied 139 cents from its May 18 low to its high on June 21 on weather and production concerns. The market is currently off that high on poor export sales figures and a forecast that shows increased chances of rain in the next couple of weeks. 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, yields a combination of options commonly known as a Strangle, which benefits from dramatic market moves either up or down. Considering it is still early in the season, with drought and crop production uncertainty it is too soon to know if the market high is in or not. Either way, the Strangle position is prepared. If conditions improve from here and prices make new lows, unsold bushels will be protected with the 580 puts. If it doesn’t rain again and prices skyrocket to new highs, already sold bushels will be protected by the 610 calls.

  • Grain Market Inside recommends selling New Crop 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 last week’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 prices continue to consolidate around the $5.00 price levels as futures were firmer to start the week. December corn traded around the $5.00 area for the sixth consecutive session as traders begin to square positions before Wednesday’s USDA report.

  • The USDA will release the July Supply/Demand report on Wednesday at 11:00 CST.  Expectations are for corn yield to drop to 176.3 bushels/acre, down 5.2 bushels/acres from the June report. Despite the yield drop, the additional acres and possible demand adjustment will likely keep new crop corn carryover near 2.250 billion bushels on the report.

  • Demand remains a concern as weekly export inspections were 341,000 mt last week, below trade expectations. This total is down 50% from last week and year-over-year, export inspections lagged last year by 32%.

  • Weather forecast will limit any near-term rally and rainfall chances and above normal temperatures should help additional crop recovery in some area and stabilize the crop into pollination.

  • Improved weather across the Corn Belt has analysts looking for improvement in the corn crop.  USDA crop ratings on Monday afternoon are expected to rise 2% to 53% good/excellent.  Rainfall reduced the areas of corn acres in drought from 70% to 67% week over week.

Above: The USDA added a bearish 4 million acres to its planted acreage estimate on June 30. The September contract is now extremely oversold and consolidating in the 480 – 505 support level that has been in place since January 2021. The oversold condition of the market would be considered supportive to higher prices if reversal action occurs; if not, there may not be much support until 390 – 415. Overhead lies strong resistance between 595 and 625. 

Corn Managed Money Funds net position as of Monday, July 3. Net position in Green versus price in Red. Money Managers net sold 52,845 contracts between June 27 – July 3, bringing their total position to a net short 18,209 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. 

  • No action is being recommended for New Crop 2023 soybeans. No action is being recommended for New Crop 2023 soybeans. While changing weather forecasts will continue to dominate price action, a potentially much lower than anticipated 2023 carryout looms over the market due to low crop condition ratings and a reduced planted acreage estimate. Grain Market Insider is still eyeing a rally to the 1400 – 1450 area before considering any additional 2023 cash sales. Yet given the time of year and how fast prices can change direction, we’re willing to change that plan at a moment’s notice. In view of the current crop conditions and carryout situation and that we recently recommended making a cash sale, we suggest holding tight on further cash sales for now. 

  • 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 finished the day solidly on the positive side with additional support coming from both soybean meal and oil.

  • Export inspections for the week ending July 6 came in at 8.754 mbu, about 900 mbu lower than last week, bringing the total for the year to 1.825 bil. bu, and 5% behind last year at this time. Although the number was within expectations, it remains well below the 22 mbu needed per week to meet the USDA’s goal.

  • Friday’s COT report still show the funds long the soybean complex, although they did reduce their soybean holdings by an estimated 10,000 contracts to 89,000.  For soybean meal and oil, the funds are reportedly long 53,000 meal and 43,000 oil.

  • China has adopted new regulations to require imported soybeans to be quarantined in specific warehouses prior to entering the domestic market.

  • The average trade guess for 2022 ending stocks is up 5 mil bu. at 235 mbu. versus the USDA’s June estimate of 230, largely due to reduced export demand. As for 2023, due to 4 million fewer planted acres, the average trade estimate is 206 mil. bu with a 51.4 bpa compared to 49.5 last year.

  • The trade estimates Brazil’s soybean production to come in at 156.2 mmt in Wednesday’s USDA report, up slightly from the June estimate of 156 mmt.  For Argentina’s production, the average trade guess is 23.6 mmt, 1.4 mmt lower than in June.

Above: The USDA’s Stocks and Acreage estimate came in well below expectations and gave the market a solid push to the upside. The market has now fallen back and is struggling to continue higher without additional bullish input. If the market can rebound, resistance above the market continues to rest between 1500 – 1550, while support below the market could be found between 1340 and 1300 with further support near 1270.

COT – Soybeans Managed Money Funds net position as of Monday, July 3. Net position in Green versus price in Red.  Money Managers net sold 10,338 contracts between June 27 – July 3, bringing their total position to a net long 89,142 contracts.

Wheat

Market Notes: Wheat

  • After starting higher this morning, wheat could not hold onto those gains and traded lower for the rest of the session. Some pressure may be coming from the European markets, where Paris milling wheat futures closed lower for the third session in a row.

  • Wheat export inspections of 15.4 mb bring the 23/24 total inspections to 56 mb; this is down 21% from this time a year ago.

  • Funds are said to remain net short Chicago wheat by about 56,000 contracts. If Wednesday’s WASDE report is friendly this could trigger some short covering.

  • Next week the Black Sea Grain Initiative will expire – so far there has not been any new agreement reached. Turkey is reportedly trying to broker a deal to extend the corridor again, however Russia seems adamant that they have no reason to extend the deal.

  • According to their Agriculture Ministry, Russia’s wheat export tax is set to increase to 2,990 Rubles per ton next week, up from 2,610 Rubles.

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. Price volatility has risen in the last couple of weeks due to the changing weather forecasts and current events in the Black Sea. While prices have fallen off their recent highs, plenty of time remains to market next year’s crop. War continues in the Black Sea region, major exporting countries’ stocks expected to fall to 16-year lows, and no one knows what the weather will bring, leaving the market vulnerable to many uncertainties.  For now, after recently 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.

COT – Chicago Wheat Managed Money Funds net position as of Monday, July 3. Net position in Green versus price in Red. Money Managers net sold 1,838 contracts between June 27 – July 3, bringing their total position to a net short 54,006 contracts.

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.

K.C. Wheat Managed Money Funds net position as of Monday, July 3. Net position in Green versus price in Red. Money Managers net bought 1,341 contracts between June 27 – July 3, bringing their total position to a net long 13,760 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.

  • We continue to hold on pricing the 2024 crop. With the September ‘24 contract about 60 cents from its May 22 low, continued issues in the Black Sea region and major exporting countries’ stocks expected to fall to 16-year lows, we are entering the time frame where we would consider suggesting making sales recommendations while also keeping an eye on the recent lows for any violation of support. 

Above: The September contract rallied out of its congestion area on the Front Month Continuous chart towards the 200-day moving average and into resistance between 889 and 940, the April and December highs respectively.  With the market off those highs, it will need additional bullish news to be able to trade through them. Should the market continue to fall, support may be found between 770 and 730. 

Minneapolis Wheat Managed Money Funds net position as of Monday, July 3. Net position in Green versus price in Red. Money Managers net sold 1,009 contracts between June 27 – July 3, bringing their total position to a net long 1992 contracts. 

Other Charts / Weather

/imge