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Grain Market Insider: June 28, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Long liquidation dominated the corn market, led by the July contract, as traders began moving out of their long positions ahead of Friday’s First Notice Day when long July position holders will be notified of delivery.

  • Like the corn market, soybeans were held hostage by sellers liquidating July positions ahead of Friday’s First Notice Day, as the July/August spread lost 9-1/2 cents.

  • Sharply lower soybean meal and oil added to the negativity in soybeans, as Stats Canada reported an increase of 500k acres to Canada’s Canola crop.

  • Sharply lower corn and beans add downward pressure to the wheat complex as Funds likely add to short positions on a more favorable weather forecast for the Midwest.

  • To see the current US NOAA 6 – 10 and 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.   Any remaining old crop bushels that you may have should be getting priced into this rally. We won’t have any “New Alerts” for 2022 Corn — either 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.

  • Continue to hold current sales levels for the 2024 crop year.  The Dec 24 contract is trading weather much like the rest of the market and posted nearly an eighty-cent range between 5/18 and 6/21 as dry conditions affect the ’23 crop and the potential carryout for the 2024 crop year. For now, continue to be patient as Grain Market Insider would like to see prices in the 570 – 600 level before considering making additional sales recommendations for the 2024 crop.

  • Sellers stayed in control in the corn market as prices finished with strong double-digit losses, dropping another 4% again on Wednesday. Since peaking at $6.29-3/4 on June 16, December corn has lost 93 cents into today’s close.

  • Technical selling and long liquidation gripped the corn market as prices pushed through support levels. Selling pressure was only fueled by the weather forecast staying on the wetter side for the next couple weeks, which could provide some severely needed moisture in key growing areas.

  • The USDA announced an export sale of corn to Mexico this morning. Mexico bought 170,706 MT of corn. Of that total, 21,340 MT was old crop, and 149,366 MT was new crop. This was the first published export corn sale since April 14.

  • The market may turn choppy as traders look to this Friday’s USDA Planted Acreage and Grain Stocks report. Expectations are for corn acres to be at 91.8 million acres, down slightly from the March planting estimates. Grain stocks for the quarter are expected to be near 4.25 billion bushels, down 2.3% from last year.

Above: Weather continues to dominate price discovery with every change in the weather forecast. Corn rallied into the 625 resistance area and reversed lower to test 580 – 540 support level. Should this support area fail, further support may be found below the market between 505 and 490. With resistance above 625 coming in near the March highs between 650 – 670.

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 — either 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.  Changes in weather forecasts and crop conditions will continue to dominate the market. With having just recommended making a cash sale, and with one of the most volatile USDA report days of the year coming this Friday, we would need to see the market rally to 1400 – 1450 area before we would consider recommending any additional sales for the 2023 crop. Otherwise, in light of current crop conditions, we will suggest holding tight on further cash sales for now.

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

  • Soybeans closed sharply lower again, along with both soybean meal and oil, as weather forecasts continue to predict needed rains over the next 5 days in the Corn Belt. Illinois and Indiana are slated to receive the most rain followed by Iowa.

  • Next week’s Crop Progress report will be interesting in that we will see how much help the crop received from this week’s rain. Monday’s report showed good to excellent ratings at just 51% and Illinois’ ratings at just 25%.

  • Brazil’s soybean crop has been estimated higher yet again, now at 156 mmt. They increased their soy exports as well to a record large 97.3 mmt, up 1.3 mmt from their last estimate.

  • On Friday, the Planted Acreage report will be released, and the Dow Jones survey expects the USDA to say that 97.7 million acres of soybeans were planted in 2023 and 808 mb of soybeans were on hand as of June 1.

Above: The market’s eye is squarely on the weather at this time. The August contract rallied through the 50-day moving average and hit resistance near 1450 and the 100-day moving average. If the market can rally beyond this point, the resistance area between 1500 and 1550 could be its next target. If the market drops back, support could be found between 1340 and 1300 with further support near 1270.

Wheat

Market Notes: Wheat

  • Neither the higher US Dollar today, nor lower Matif wheat futures offered any support to the US wheat complex. Funds are likely adding short positions due to the shift in weather towards a wetter forecast. Additionally, lower row crop futures do not help the wheat price situation.

  • Major weather models are all putting more rain in the forecast for the driest parts of the Midwest. This may slow winter wheat harvest, which is already behind the normal pace. But it may also bring some moisture to northern spring wheat areas, improving crop conditions there. Spring wheat is currently rated 50% good to excellent.

  • Within the past week, two cargoes of wheat have left Ukraine along with 5 cargoes of corn, destined for Europe and China. While there have been reports of Russia blocking shipments in the Black Sea, some grain still appears to be flowing. This is also despite the recent developments in Russia and the Wagner group’s attempted coup.

  • The Ukraine Grain Traders Union is estimating Ukraine’s wheat crop at 24.4 mmt, which is higher than other estimates ranging from 16-18 mmt. If the Black Sea corridor is renewed on July 18th (still an uncertainty at this point), increased exports out of that region could further pressure US markets.

  • On Friday, traders will receive the quarterly Stocks and Acreage reports from the USDA. All wheat acreage is expected to be down slightly at 49.647 million acres, compared to 49.855 on the March report. The pre-report average stocks estimate is at 611 mb, vs 946 in March, and vs 698 at this time last year.

  • December Chicago wheat broke through support at the 100-day moving average today but did hold support at 5.85, the 21-day moving average. Technically, momentum is down on daily stochastics and the RSI.

Chicago Wheat Action Plan Summary

  • No new action is recommended for the 2022 crop. Grain Market Insider is done with the 2022 crop, and there will be no New Alerts posted for the 2022 crop going forward.

  • 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.  

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 near 670 with further support coming in between 650 – 610. While resistance above the market rests between 770 – 810.

KC Wheat Action Plan Summary

  • No new action is recommended for the 2022 crop. Though most, if not all, of your Old Crop 2022 wheat may be sold, consider storing any remaining Old Crop, if possible, in anticipation of a short new crop this year, and marketing it along with the new crop.

  • We continue to look for better prices before making any 2023 sales. 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.

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

Mpls Wheat Action Plan Summary

  • No new action for 2022 Old Crop MINNEAPOLIS Wheat. Prices haven’t moved much over the last couple of weeks, and it’s disappointing to see the lack of upside opportunities that the market has offered following the large snowfall and the late start to planting this spring. Yet, 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, especially given record European wheat shipments and falling Russian prices. Also, we typically recommend finishing up sales on any remaining Old Crop bushels by mid-June, as bids will soon shift from the July to September contract, and there is currently no carry offered.

  • Grain Market Insider recommends selling 2023 New Crop MINNEAPOLIS Wheat today.  Weather dominates the market right now and friendlier forecasts have pushed prices below the 822 support level. Closing below that 822 support signals that the recent uptrend off the May lows may have ended, which poses the risk that the change in trend could erode the price further in the weeks ahead. The first risk being price drops to the May low of 771, which is where first support comes in. If that level doesn’t hold, then the next risk could be in the 680 – 710 window. Although making a sale in a down market may be uncomfortable, it’s important at times to have a Plan B with the objective of trying to avoid having to sell bushels at even lower prices in the future if a downtrend takes hold.

  • 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 trading lower, it will need additional bullish news to turn it back around. Should the market continue to fall, support may be found between 770 and 730. 

Other Charts / Weather

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Midday Update June 28, 2023

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn
JUL ’23 611.25 -11.75
DEC ’23 546 -15
DEC ’24 517.5 -5
Soybeans
JUL ’23 1448.25 -46.75
NOV ’23 1267 -27.25
NOV ’24 1210.25 -22
Chicago Wheat
JUL ’23 665.25 -19.75
SEP ’23 678.5 -20.5
JUL ’24 718.25 -18.5
K.C. Wheat
JUL ’23 813.75 -24
SEP ’23 815 -24.5
JUL ’24 789.25 -16.25
Mpls Wheat
JUL ’23 813.25 -20
SEP ’23 825.25 -20
SEP ’24 810 -15.5
S&P 500
SEP ’23 4416.5 -2.25
Crude Oil
AUG ’23 69.41 1.71
Gold
AUG ’23 1920.2 -3.6

  • Private exporters reported sales of 170,706 mt of corn for delivery to Mexico, with 21,340 mt for delivery during the 22/23 marketing year and 149,366 during 23/24.

  • The weather forecast for some of the drier areas of the Midwest has relief over the next 10-14 days, and this is continuing to weigh on the grain complex.

  • July corn futures are holding together better than new crop, suggesting that domestic supply is still tight for old crop.

  • On Friday, traders will receive the quarterly stocks and acreage reports. The average pre-report estimate for Friday’s data has corn acreage at 91.809 million vs 91.996 in March. The stocks number is expected to come in at 4,261 mb compared to 7,401 in March.

  • For the month of June, soybean oil has rallied from about 45 cents to 60 cents per pound. But this morning both meal and oil are down, which could account for the sharp decline in soybean futures.

  • The market seems more focused on the rain forecast and drop in export demand, compared to the reduction in crop ratings for soybeans (and corn too).

  • ABIOVE, which is Brazil’s oilseed group, increased their estimate of Brazilian soy exports by 1.3 mmt to a record 97.3 mmt.

  • On Friday, the trade is looking for soybean acres at 87.660 million, vs 87.505 in March. The stocks number for soybeans is anticipated to be 808 mb vs 1,685 in March.

  • Over the past week, 2 cargoes of wheat (and 5 cargoes of corn) left Ukrainian ports headed for Europe and China.

  • Winter wheat harvest continues but remains well behind the average pace. With more rain on the way, it may delay harvest even further. However, the moisture should improve spring wheat conditions in the northern US.

  • The Ukraine Grain Traders Union is reportedly estimating their wheat crop at 24.4 mmt (vs lower estimates ranging from 16-18 mmt)

  • On Friday, traders are looking for all wheat acreage at 49.647 million acres, vs 49.855 in March. The stocks number for wheat is expected to come in at 611 mb, vs 946 in March.

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

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

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

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Opening Update: June 28, 2023

ByGrain Market Insider

All prices as of 6:30 am Central Time

Corn
JUL ’23 625.75 2.75
DEC ’23 551.5 -9.5
DEC ’24 517.25 -5.25
Soybeans
JUL ’23 1485.5 -9.5
NOV ’23 1276.5 -17.75
NOV ’24 1219 -13.25
Chicago Wheat
JUL ’23 678 -7
SEP ’23 692 -7
JUL ’24 728 -8.75
K.C. Wheat
JUL ’23 827.25 -10.5
SEP ’23 830.25 -9.25
JUL ’24 810 4.5
Mpls Wheat
JUL ’23 825.5 -7.75
SEP ’23 837.5 -7.75
SEP ’24 810 -15.5
S&P 500
SEP ’23 4415.25 -3.5
Crude Oil
AUG ’23 67.7 0
Gold
AUG ’23 1916.6 -7.2

  • Corn is trading lower again this morning after yesterday’s selloff which was due to an apparent shift in the weather pattern to wetter.

  • First notice day for July corn is on Friday, and so far it has not lost nearly as much value as the deferred months with on hand supplies tight.

  • Current radar is showing some rain in northern Minnesota, eastern Iowa, and northwest Illinois. Wider coverage is being forecast over the next 5 days.

  • Ukraine’s 2023 grain crop is now being seen at 42.5 mmt, down from 53 mmt in 2022 with 21.1 mmt being corn. 

  • Soybeans, soybean meal and oil are all lower this morning with weather as the main bearish factor. The 5-day forecast is showing good coverage for the entire Corn Belt.

  • Brazilian soy exports have reached up to 14.2 mmt in June compared to the 14.3 mmt forecast the previous week as the world looks to Brazil for soybeans.

  • Brazil’s crop is now expected to reach a record breaking 156 mmt of soybeans harvested, far above the initial analyst guesses earlier this year.

  • Friday morning’s acreage report is expected to show soybean acres up slightly from May intentions with average trade guesses at 87.67 ma, up from the previous estimate.

  • Wheat is lower again this morning pulled down by lower corn and an improved weather forecast.

  • While it appears less likely that the Black Sea grain deal will be extended next month, two Ukrainian ports have continued to load ships including two wheat vessels in the last week.

  • In the US, HRW wheat conditions have been improving, and the spring wheat crop has gotten beneficial rains in North Dakota.

  • The EU’s soft wheat exports have risen by 11% year over year at 30.8 mmt, compared with 27.7 mmt the previous period with Morocco as a leading destination. 

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

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

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

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Grain Market Insider: June 27, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Lower than expected crop ratings led the corn market to gap open 5 cents higher at the start of the evening session, only to uncover the sellers in the market as weather forecasts showed more rain chances across the Midwest.

  • Soybeans opened steady to better at the opening of the overnight session, and like corn, sellers emerged to liquidate long positions on improved weather forecasts.

  • Soybean meal and oil settled in opposite directions, while December meal added to the woes in soybeans and succumbed to more long liquidation to close down 3.38%, December bean oil found support midday to rally nearly 2.00 cents and close up 1.67%.

  • Led by the Chicago contracts, all three wheat classes fell victim to the sellers’ wrath as spillover pressure from corn and soybeans weighed heavily on the wheat market.

  • To see the current US NOAA 6 – 10 and 8 – 14 day Precipitation and Temperature 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.   Any remaining old crop bushels that you may have should be getting priced into this rally. We won’t have any “New Alerts” for 2022 Corn — either 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 as traders book profits and liquidate long positions on poor export sales figures and a forecast that shows increased chances of rain in the next two weeks. The US Drought Monitor still shows drought conditions across much of the Midwest and it is estimated that 64% of the corn crop is experiencing some level of drought and is in desperate need of rain. If you missed getting any sales made or adding Dec 23 580 puts before this sharp break, for now, we are looking at a level north of 610 as a catchup opportunity. 

  • Continue to hold current sales levels for the 2024 crop year.  The Dec 24 contract is trading weather much like the rest of the market and posted nearly an eighty-cent range between 5/18 and 6/21 as dry conditions affect the ’23 crop and the potential carryout for the 2024 crop year. For now, continue to be patient as Grain Market Insider would like to see prices in the 570 – 600 level before considering making additional sales recommendations for the 2024 crop.  

  • Strong selling pressure gripped the corn market on Tuesday as New Crop prices closed down over 4% lower as improved weather forecasts outweighed the USDA crop ratings from Monday afternoon.

  • The USDA released weekly corn crop ratings on Monday afternoon. The corn conditions dropped an additional 5% to 50% good/excellent. The state of Illinois is still the focus of the market as rainfall missed many areas of the state over the weekend and ratings were at 26% good/excellent last week, down 10% from the prior week. These are the worst ratings since 2012.

  • Sellers took control of the market as weather forecasts for the next two weeks look to bring plenty of chances for rainfall to most of the Midwest. If realized, this could help stabilize the crop as pollination is right around the corner.

  • AgRural estimates that Brazil’s safrinha corn, or second crop corn, is 9.3% harvested. They estimate the safrinha crop at 97.9 MMT and the total corn crop estimate at 127.4 MMT. The influence of fresh supplies to the market is a wet blanket on rallies.

  • The market may likely remain choppy as traders look to this Friday’s USDA Planted Acreage and Grain Stocks report. Expectations are for corn acres to be at 91.8 million acres, down slightly from the March planting estimates. Grain stocks for the quarter are expected to be near 4.25 billion bushels, down 2.3% from last year.

Above: Weather continues to dominate price discovery with every change in the weather forecast. Corn rallied into the 625 resistance area and reversed lower to test 580 – 540 support level. Further support may be found below the market between 505 and 490, with resistance above 625 coming in near the March highs between 650 – 670.

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 — either 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.  Changes in weather forecasts and crop conditions will continue to dominate the market. With having just recommended making a cash sale, and with one of the most volatile USDA report days of the year coming this Friday, we would need to see the market rally to 1400 – 1450 area before we would consider recommending any additional sales for the 2023 crop. Otherwise, in light of current crop conditions, we will suggest holding tight on further cash sales for now.

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

  • Soybeans closed lower today along with soybean meal, while soybean oil closed higher. A wetter forecast for the Corn Belt over the next week has put pressure on corn and beans while rising world veg oil prices have given soybean oil support.

  • At the moment, traders are clearly fixated on weather forecasts, because yesterday’s Crop Progress report showed the worst good to excellent ratings since 1988 at just 51%, down 3% from the previous week, but the selloff today was due to increased chances for widespread rain.

  • The next report to watch will be Friday’s Quarterly Stocks and Acreage report, where analysts are expecting soybean acres to increase slightly to 87.67 million acres from 87.45 million acres in the previous report.

  • Yesterday’s soybean inspections were poor as Brazil keeps control of the export market with their cheaper soybean offerings. Due to slow US sales, exports may be lowered in the next WASDE report.

Above: The market’s eye is squarely on the weather at this time. The August contract rallied through the 50-day moving average and hit resistance near 1450 and the 100-day moving average. If the market can rally beyond this point, the resistance area between 1500 and 1550 could be its next target. If the market drops back, support 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

  • All three US wheat futures classes posted double-digit losses. No support was received from Paris milling wheat futures, which gapped lower and also saw a sharp decline. Spillover pressure from lower corn and soybeans did not help.

  • The increased chances of rain for some parts of the central Midwest likely has funds jumping back into the market. While the actual weather impact to the wheat crop at this point should be minimal, pressure from lower row crop prices is expected to weigh on wheat as well.

  • US winter wheat harvest is well behind the average pace of 33% complete for this time of year, with only 24% of the crop collected. And while at this point the impact is minimal, the USDA did say winter wheat conditions improved 2% from last week to 40% good to excellent. Spring wheat conditions did decrease by 1% from last week to 50% GTE.

  • Russia continues to rule the wheat export front, with FOB offers said to range between $230 and $240 per ton. This is well below US or European offers and is keeping pressure on futures prices.

  • The 100-day moving average for Chicago wheat is around 713. This may act as an area of support, especially if traders catch wind of some friendly news. If there is a bright spot, it is the fact that Russia is said to already be blocking grain shipments in the Black Sea and may not renew the corridor deal on July 18th.

Chicago Wheat Action Plan Summary

  • No new action is recommended for the 2022 crop. Grain Market Insider is done with the 2022 crop, and there will be no New Alerts posted for the 2022 crop going forward.

  • 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.  

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 near 670 with further support coming in between 650 – 610. While resistance above the market rests between 770 – 810.

KC Wheat Action Plan Summary

  • No new action is recommended for the 2022 crop. Though most, if not all, of your Old Crop 2022 wheat may be sold, consider storing any remaining Old Crop, if possible, in anticipation of a short new crop this year, and marketing it along with the new crop.

  • We continue to look for better prices before making any 2023 sales. 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.

Above: The market has been able to trade out of the recent congestion area to near the 200-day moving average and into the 870 – 920 resistance area. If the market can push through, 970 – 1000 is the next major point of resistance. If it falls back, initial support could be near 825 with further support between 778 and 764. 

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. Prices haven’t moved much over the last couple of weeks, and it’s disappointing to see the lack of upside opportunities that the market has offered following the large snowfall and the late start to planting this spring. Yet, 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, especially given record European wheat shipments and falling Russian prices. Also, we typically recommend finishing up sales on any remaining Old Crop bushels by mid-June, as bids will soon shift from the July to September contract, and there is currently no carry offered.

  • K.C. Wheat Managed Money Funds net position as of Tuesday, June 20. Net position in Green versus price in Red. Money Managers net bought 2,328 contracts between June 13 – 20, bringing their total position to a net long 5,944 contracts.

  • 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 trading lower, it will need additional bullish news to turn it back around. Should the market continue to fall, support may be found between 770 and 760. 

Other Charts / Weather

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Midday Update June 27, 2023

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn
JUL ’23 630.75 -6.5
DEC ’23 561.25 -27
DEC ’24 521.75 -16.5
Soybeans
JUL ’23 1498.25 -22.75
NOV ’23 1288.5 -34.5
NOV ’24 1228.25 -22
Chicago Wheat
JUL ’23 685.75 -38.5
SEP ’23 699.5 -38.75
JUL ’24 736 -36.5
K.C. Wheat
JUL ’23 833.25 -33.25
SEP ’23 836.25 -32
JUL ’24 803 -26.75
Mpls Wheat
JUL ’23 833.25 -29
SEP ’23 843.75 -28.75
SEP ’24 808.25 -17.25
S&P 500
SEP ’23 4390 19.75
Crude Oil
AUG ’23 68.82 -0.55
Gold
AUG ’23 1923.6 -10.2

  • The corn crop was rated 50% good to excellent vs 55% last week (and 67% last year). This is the worst rating for this time of year since 1988.

  • Corn (and the whole grain complex) is trading lower this morning due to increased chances for rain in the Midwest, especially in some of the areas that missed the last round of precipitation. Currently there are two potential rain events, with the second probably bringing wider coverage and heavier amounts.

  • Global weather conditions are mostly favorable. It is still dry in Argentina, but as of right now Australia is normal (despite the El Nino weather pattern which could bring them drought).

  • As of writing, July corn is nearly 75 cents above September. First notice day for July futures is this Friday, meaning any one long futures is at risk of being delivered against. With the quarterly Stocks and Acreage reports also on Friday, markets could remain volatile into the end of the week.

  • The soybean crop was rated 51% good to excellent vs 54% last week (and 65% last year).

  • On daily stochastics and the RSI, November soybeans are at or near overbought levels. Momentum is also starting to trend downwards.

  • Yesterday’s soybean export inspections were poor at only 5.2 mb. This may also be limiting upside in futures, and not just in soybeans. Brazil is undercutting US exports for both corn and beans, while Russia is doing the same in wheat.

  • July soybean futures are roughly $1 above August, reflecting tight supply of old crop. As with corn, first notice day is on Friday is sure to affect this spread, as traders who are long will need to exit the July contract.

  • Soybean meal and oil are also lower this morning, offering no support to soybean futures.

  • The winter wheat crop is 24% harvested, compared to 33% average. Crop conditions did also rise 2% from last week to 40% good to excellent.

  • The spring wheat crop is rated 50% good to excellent vs 51% last week (and 59% last year).

  • Yesterday’s concern about availability of Black Sea wheat seems to have since been quashed. The Wagner coup against Russia appears to have disintegrated, and prices faded in tandem.

  • Paris milling wheat futures gapped lower, also offering no support to US futures today.

  • Russian wheat FOB export offers a range from roughly $230 – $240 per ton, well below that of US or other world offerings. This is keeping pressure on the US market. However, there is still the possibility that Russia will not extend the Black Sea export deal on July 18th, with reports by the Ukraine Sea Ports Authority that Russia is impeding grain shipments.

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

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

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

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Opening Update: June 27, 2023

Bygmidev

All prices as of 6:30 am Central Time

Corn

JUL ’23 628.5 -8.75
DEC ’23 569.75 -18.5
DEC ’24 529 -9.25

Soybeans

JUL ’23 1502.25 -18.75
NOV ’23 1288.25 -34.75
NOV ’24 1224.75 -25.5

Chicago Wheat

JUL ’23 702 -22.25
SEP ’23 716 -22.25
JUL ’24 752.5 -20

K.C. Wheat

JUL ’23 851.25 -15.25
SEP ’23 851.75 -16.5
JUL ’24 821.75 -8

Mpls Wheat

JUL ’23 855 -7.25
SEP ’23 863.25 -9.25
SEP ’24 825.5 5.5

S&P 500

SEP ’23 4377 6.75

Crude Oil

AUG ’23 68.41 -0.96

Gold

AUG ’23 1930.8 -3

  • Corn is trading sharply lower this morning despite yesterday’s poor crop progress results as weather patterns turn wetter.

  • In corn, good to excellent ratings fell 5% from the previous week and are now at just 50%. 4% of corn is silking which is in line with the 5 year average.

  • Rain forecasts overnight have changed to include SE Nebraska, southern Iowa, and southern Illinois, areas of the Corn Belt that have been in the most need of moisture.

  • The June acreage report will be released on Friday and is expected to show a small decrease in acres at 91.85 ma which would be down from 92 ma the previous month.

  • Soybeans and both soybean meal and oil are lower this morning along with corn, again despite poor crop ratings and thanks to improved weather forecasts.

  • Soybean’s good to excellent ratings fell by 3% to 51% which is the lowest rating for this time of year since 1988. Anticipated rains could bring the crop back to life.

  • Friday morning’s acreage report is expected to show soybean acres up slightly from May intentions with average trade guesses at 87.67 ma, up from 87.45 ma.

  • Yesterday’s soybean inspections were poor as Brazil keeps control of the export market with their cheaper soybeans.

  • Wheat is lower with the rest of the grain complex with Chicago futures leading the way as the wet forecast dominates today’s trade.

  • Winter wheat good to excellent ratings actually increased by 2% to 40%, but spring wheat fell by 1% to 50%. Winter wheat is now 24% harvested vs 15% last week.

  • While it is looking less and less likely that Russia will extend the Black Sea deal, markets appear uncaring and are focused on US weather.

  • Friday’s stocks report will estimate the final ending stocks of 22/23 and the average trade guess is 611 mb, down from 698 mb last year.

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

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

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

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Grain Market Insider: June 26, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Disappointing rainfall and the anticipation of lower crop ratings in this afternoon’s Crop Progress report kept the corn market on the positive side of unchanged for most of the day, while weak export inspections weighed on the market.

  • Gaining support from a lack of rain in some key soybean growing areas and a strong soybean oil market, soybeans closed the day higher with Old Crop leading New Crop.

  • Soybean oil continued its rally from last Thursday’s bullish reversal, with additional support from higher palm oil. As for soybean meal, it saw both sides of unchanged and up to $6.10 higher before settling back to close in the green by 60 cents.

  • Globally, central banks are hawkish and continue to talk about raising rates which could trigger a recession, lowering demand for food and energy.

  • To see the current US 7 – day precipitation forecast and the US NOAA 8 – 14 day Precipitation and Temperature 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.   Any remaining old crop bushels that you may have should be getting priced into this rally. We won’t have any “New Alerts” for 2022 Corn — either 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 productions concerns. The market is currently about 40 cents off that high as traders book profits and liquidate long positions on poor export sales figures and a forecast that shows increased chances of rain in the next two weeks. The US Drought Monitor still shows drought conditions across much of the Midwest and it is estimated that 64% of the corn crop is experiencing some level of drought and is in desperate need of rain. If you missed getting any sales made or adding Dec 23 580 puts before today’s sharp break, for now we are looking at a level north of 610 as a catchup opportunity. 

  • Continue to hold current sales levels for the 2024 crop year.  The Dec 24 contract is trading weather much like the rest of the market and posted nearly an eighty-cent range between 5/18 and 6/21 as dry conditions affect the ’23 crop and the potential carryout for the 2024 crop year. We are currently eyeing the 670 – 700 level before we consider making additional sales recommendations for the 2024 crop. 

  • Corn futures finished the day mostly higher as prices tried to find a near-term bottom after last week’s disappointing end to the week. Corn futures were supported by overall weekend rainfall not hitting all key areas of the Corn Belt and the expectations of crop ratings slipping again this week.

  • The USDA will release weekly corn crop ratings on Monday afternoon. Expectations are for an additional drop to 52% good/excellent, down 3% from last week. The state of Illinois will stay as a focus of the market as rainfall missed many areas of the state and ratings were at 36% good/excellent last week, down 29% from the 5-year average.

  • Weekly corn export inspections were disappointing at 543,000 MT, and below market expectations. Year to date, corn inspections are still running 32% under last year’s pace.

  • Weather models in the longer term are trying to build a wetter forecast, which could limit market gains if realized. The key to all forecasts will be the coverage and location of rainfall.

  • The market may likely remain choppy as traders look to this Friday’s USDA Planted Acreage and Grain Stocks report.

Above: Weather is the dominant force for the corn market at this time. If the market can push through the 100-day moving average and the recent 625 high, it may be able to make a run for the March highs between 650 – 670. If not, support may be found between 580 and 540.

Above: Corn Managed Money Funds net position as of Tuesday, June 20. Net position in Green versus price in Red. Money Managers net bought 56,154 contracts between June 13 – June 20, bringing their total position to a net long 58,299 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 — either 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.  Changes in weather forecasts and crop conditions will continue to dominate the market. With having just recommended making a cash sale, and with one of the most volatile USDA report days of the year coming this Friday, we would need to see the market rally to 1400 – 1450 area before we would consider recommending any additional sales for the 2023 crop. Otherwise, in light of current crop conditions, we will suggest holding tight on further cash sales for now.

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

  • Soybeans closed higher today along with both soybean meal and oil after rainfall this weekend missed crucial dry regions including southern Illinois, and tensions within Russia grew which could affect veg oil exports.

  • Crop progress will be released shortly, and expectations are that good to excellent ratings will fall by another 3 to 4%, but the weekend rains may have helped limit the decline. Last week, Illinois’ rating fell by 14% to just 33% good to excellent.

  • Soybean oil was supportive for soybeans as palm oil rallied 2.65% today along with other veg oils. Palm oil supplies may end up being tight due to weather issues, and exports from other countries may be limited.

  • Soybean export inspections were poor for last week and could be a wet blanket over the market even with dry weather in the US. Inspections totaled 5.2 mb for 22/23 and put total inspections at 1.807 bb which is down 4% from the previous year.

Above: The market’s eye is squarely on the weather at this time. The August contract rallied through the 50-day moving average and hit resistance near 1450 and the 100-day moving average. If the market can rally beyond this point, the resistance area between 1500 and 1550 could be its next target. If the market drops back, support could be found between 1340 and 1300 with further support near 1270.

Above: Soybeans Managed Money Funds net position as of Tuesday, June 20. Net position in Green versus price in Red.  Money Managers net bought 29,068 contracts between June 13 – June 20, bringing their total position to a net long 76,950 contracts.

Wheat

Market Notes: Wheat

  • News of a mutiny by a private Russian fighting group, the Wagner Group, against the Russian government may be tied to early strength in the wheat market. However, it is believed that some sort of deal was reached, because the group was no longer headed to Moscow, but instead back to Ukraine. This could explain why wheat faded into the close.

  • Weekly wheat inspections at 7.5 mb bring the total 23/24 inspections to 28 mb. This total is down 43% from this time last year.

  • Managed funds are still said to be net short about 84,000 contracts of Chicago wheat as of last Tuesday. This could lead to more of a short covering rally if there is a catalyst in the form of friendly news.

  • Russia will reportedly reduce their wheat export tax from 2,613 rubles per ton to 2,473, equivalent to roughly $31 vs $29 per ton. While not a huge move, the fact that they continue to dominate on the export front with low prices does not bode well for US exports and prices.

  • Paris milling wheat futures gapped higher on the open, likely due to the uncertainty of the Russia news. However, they finished with losses and closed the gap, offering no support to the US markets.

Chicago Wheat Action Plan Summary

  • No new action is recommended for the 2022 crop. Grain Market Insider is done with the 2022 crop, and there will be no New Alerts posted for the 2022 crop going forward.

  • Grain Market Insider sees an active opportunity to sell 2023 New Crop.  We are in a weather market and with the US Drought Monitor showing dryness across the Midwest, September Chicago Wheat has now rallied about 22% from its May 31 low into the March – April resistance area and is overbought. As of late, the wheat market has largely been a follower of the corn market, and this rally has been fueled in part by the Funds exiting their short positions. While there are production concerns in parts of the country, demand has been weak, and the potential remains for a rising carryout. Any change to a more favorable weather forecast could easily erase much, if not all, of the weather premium that has been added to prices. With the dry conditions and great uncertainty that many of you are experiencing about how much you will have to harvest, we understand there’s hesitancy to sell anything here. If you are concerned about committing physical bushels with a cash sale, consider selling futures or buying put options.

  • Grain Market Insider sees an active opportunity to sell 2024 Chicago wheat.  Prices for the 2024 crop have largely followed prices for the 2023 crop and are currently about 20% above the low set on May 31. Weather and production concerns have been the primary driver of prices lately, and the funds have likely been covering short positions, further feeding the rally.  As we all know, weather markets can be fickle beasts, and any change in the forecast or crop conditions can quickly turn traders from buyers to sellers, quickly erasing much, if not all, of the premium priced into the market.  Grain Market Insider recommends making a sale on next year’s 2024 Chicago wheat crop and using either a July ’24 futures contract or a July 24 HTA contract so basis can be set at a later date, as it should improve in time.

Above: September wheat has had a strong run and is near the 200-day moving average around 750, which it hasn’t seen since last October.  Above there, resistance may be found between the psychological resistance point of 800 and 865.  With further resistance coming in between 900 – 950. Should prices turn lower, initial support may be found near 670 and then again near 611. 

Above: Chicago Wheat Managed Money Funds net position as of Tuesday, June 20. Net position in Green versus price in Red. Money Managers net bought 29,296 contracts between June 13 – June 20, bringing their total position to a net short 84,134 contracts.

KC Wheat Action Plan Summary

  • No new action is recommended for the 2022 crop. Though most, if not all, of your Old Crop 2022 wheat may be sold, consider storing any remaining Old Crop, if possible, in anticipation of a short new crop this year, and marketing it along with the new crop.

  • We continue to look for better prices before making any 2023 sales. 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.

Above: The market has been able to trade out of the recent congestion area to near the 200-day moving average and into the 870 – 920 resistance area. If the market can push through, 970 – 1000 is the next major point of resistance. If it falls back, initial support could be near 825 with further support between 778 and 764. 

Above: K.C. Wheat Managed Money Funds net position as of Tuesday, June 20. Net position in Green versus price in Red. Money Managers net bought 2,328 contracts between June 13 – 20, bringing their total position to a net long 5,944 contracts.

Mpls Wheat Action Plan Summary

  • No new action for 2022 Old Crop MINNEAPOLIS Wheat. Prices haven’t moved much over the last couple of weeks, and it’s disappointing to see the lack of upside opportunities that the market has offered following the large snowfall and the late start to planting this spring. Yet, 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, especially given record European wheat shipments and falling Russian prices. Also, we typically recommend finishing up sales on any remaining Old Crop bushels by mid-June, as bids will soon shift from the July to September contract, and there is currently no carry offered.

  • K.C. Wheat Managed Money Funds net position as of Tuesday, June 20. Net position in Green versus price in Red. Money Managers net bought 2,328 contracts between June 13 – 20, bringing their total position to a net long 5,944 contracts.

  • 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 has rallied out of its congestion area on the Front Month Continuous chart towards the 200-day moving average. Resistance may be found above the market between 889 and 940, the April and December highs respectively.  While the upside breakout is a positive sign, the market will need additional bullish news to keep it moving. Should the market reverse course and turn lower, support below the market may be found between 770 and 760. 

Above: Minneapolis Wheat Managed Money Funds net position as of Tuesday, June 20. Net position in Green versus price in Red. Money Managers net bought 4,160 contracts between June 13 – June 20, bringing their total position to a net short 3,262 contracts. 

Other Charts / Weather

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Midday Update June 26, 2023

ByGrain Market Insider

All prices as of 10:30 am Central Time

Corn
JUL ’23 636.75 6
DEC ’23 586.75 -1.25
DEC ’24 535.25 2
Soybeans
JUL ’23 1509 14.5
NOV ’23 1315.5 5.5
NOV ’24 1241 0
Chicago Wheat
JUL ’23 728.75 -4.5
SEP ’23 742.75 -3.75
JUL ’24 770 -0.5
K.C. Wheat
JUL ’23 863 4
SEP ’23 863.5 1.75
JUL ’24 821.25 -3.25
Mpls Wheat
JUL ’23 861.25 -3.5
SEP ’23 871 -2.75
SEP ’24 827.25 7.25
S&P 500
SEP ’23 4381.5 -7.5
Crude Oil
AUG ’23 69.05 -0.11
Gold
AUG ’23 1937.2 7.6

  • Over the weekend, there was good rain in the Dakotas and parts of the northern Midwest. However, several key growing regions appeared to get little to none of this moisture.

  • The 8-14 day forecast does have above-normal precipitation for the whole Corn Belt. But the key will be whether or not it materializes. 

  • CFTC data showed that funds were buyers of 140,000 grain contracts (corn / soy complex / wheat) as of last Tuesday. This now puts them net long corn (as well as soybeans).

  • This afternoon’s Crop Progress report is expected to show another decline in corn crop ratings. Traders look for a 2%-4% reduction in the good to excellent category.

  • As of June 17th, CONAB said 5.3% of Brazil’s second crop (safrinha) corn had been harvested. This is 5.8% behind last year’s pace.

  • Higher palm oil overnight is supporting soybean oil, which has reversed off of last week’s low. With both oil and meal higher at midday, soybeans are receiving a boost as well.

  • There are concerns about vegetable oil exports out of Ukraine, with uncertainties surrounding the Russian coup, as well as the potential closure of the Black Sea export corridor in July. This may also be supporting soybean oil.

  • This afternoon’s Crop Progress report is expected to show another decline in soybean crop ratings. Traders look for a 3%-4% reduction in the good to excellent category.

  • India’s oilseed exports are anticipated to increase by 10%-15% this fiscal year due to expanding acreage. For 22/23, their oilseed exports rose by 20%. There is still a question, however, as to what effect El Nino may have on the crop down the road.

  • Strength in the wheat market this morning may be tied to a mutiny by the Wagner group against Russia. However, at this time, it appears they may have made a deal, because the group heading towards Moscow has since turned around and went back to Ukraine. This does still raise questions about the war, and ultimately, what it will mean for wheat exports.

  • Managed funds are still net short Chicago wheat. With the uncertainty of global weather and geopolitics, the market may also be seeing some short covering today.

  • Matif wheat gapped higher on the open, likely for the same reasons mentioned above. In any case, this is also supportive to US futures. This is also despite the fact that some rains hit the dry areas of northern Europe over the weekend.

  • There is still question as to how much Chinese wheat was damaged or downgraded due to the heavy rainfall a few weeks ago.

  • Russia’s wheat export tax will reportedly be reduced from 2,613 rubles (per ton) to 2,473 rubles, according to their agriculture ministry.

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

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

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

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Opening Update: June 26, 2023

Bygmidev

All prices as of 6:30 am Central Time

Corn

JUL ’23 634 3.25
DEC ’23 587.75 -0.25
DEC ’24 535.5 2.25

Soybeans

JUL ’23 1501.25 6.75
NOV ’23 1320.5 10.5
NOV ’24 1245 4

Chicago Wheat

JUL ’23 752 18.75
SEP ’23 765.25 18.75
JUL ’24 783 12.5

K.C. Wheat

JUL ’23 878 19
SEP ’23 879.25 17.5
JUL ’24 840 15.5

Mpls Wheat

JUL ’23 876.5 11.75
SEP ’23 886.75 13
SEP ’24 820 0

S&P 500

SEP ’23 4383.75 -5.25

Crude Oil

AUG ’23 69.56 0.4

Gold

AUG ’23 1942 12.4

  • July corn is trading slightly higher while the deferred contracts are lower following weekend rains and beginning and end of a military coup in Russia.

  • This weekend, beneficial rains fell in a good portion of Iowa and Indiana, but only covered the Northern portion of Illinois.

  • The 7-day forecast shows wide coverage over the Corn Belt, but those rains are slated to fall over the weekend again which is still a ways off and will need to materialize.

  • Funds were net buyers of corn last week increasing their net long position by 56,000 contracts to 58,000 contracts.

  • Soybeans are trading higher this morning along with both soybean meal and soybean oil due to worries about veg oil exports from Ukraine being closed off.

  • As soybean conditions worsen in the US and drive domestic prices higher, it has also had an effect on global markets with Brazilian prices rising as well.

  • India’s oilseed exports are expected to grow by 10 to 15% this year as orders from southeast Asia, Latin America, and Africa increase.

  • Funds were net buyers of soybeans last week and their net long position was increased to 77,000 contracts.

  • Wheat is trading higher this morning after the Wagner group in Russia began a military coup this weekend and marched towards Moscow, but once they were a few hours from the city, the leader agreed to leave for Belarus in exchange for charges being dropped against him.

  • The begin and end of this insurrection combined with the apparent end of the Ukrainian grain deal next month has been supportive of prices.

  • China has been experiencing excess rainfall in their wheat growing regions which has been another bullish factor.

  • Funds were buyers of wheat last week by 29,296 contracts, reducing their net short position to 84,134 contracts, still a very short position.

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Grain Market Insider: June 23, 2023

ByGrain Market Insider

All prices as of 1:45 pm Central Time

Grain Market Highlights

  • Follow through selling and long liquidation with disappointing export sales weighed heavily on the corn market as traders took profits ahead of the weekend.

  • A shift in the weather forecast for the better across the “I” states of the Midwest, along with a 4% drop in soybean meal, added pressure to the soybean market as traders liquidated long positions from this week’s rally ahead of the weekend.

  • Soybean oil was the strong leg of the bean complex as it found follow through buying from yesterday’s bullish reversal and a stronger palm oil market.

  • All three wheat markets trade lower as spillover weakness from corn and soybeans weigh on prices and traders take profits from the recent rally.

  • To fight inflation, European central banks are raising interest rates, and there are growing concerns that this could put us into a global recession, reducing demand for food and energy.

  • To see the current US NOAA 7 – day US Precipitation Outlook and the US NOAA 8 – 14 day Precipitation and Temperature 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. Any remaining old crop bushels that you may have should be getting priced into this rally. We won’t have any “New Alerts” for 2022 Corn — either Cash, Calls, or Puts, as we have moved focus onto 2023 and 2024 Crop Year Opportunities.  

  • Grain Market Insider recommends buying Dec 23 580 corn puts today for about 30 cents in premium plus commission and fees. Additionally, Grain Market Insider sees an active opportunity to sell New Crop 2023 corn. With the Dec 23 contract trading at the upper end of our 590 – 630 target range, Insider recommends buying December puts today to add downside coverage on New Crop in case prices move significantly lower. Despite the ongoing drought concerns, we still have confidence to continue to recommend selling into this rally as the Dec 23 610 Call options have been in place since May 2nd. On May 2nd, Insider recommended buying 560 and 610 Dec calls, and then recommended exiting the 560s on June 2nd once the 560 calls had gained enough in value to offset the cost of the 610 calls. Owning both calls and puts can be very beneficial in a market as volatile as this. If it doesn’t rain, and Dec corn continues to rally, the 610 calls will continue to gain in value and protect your new sale.  Meanwhile, buying puts will allow you to protect the downside on more bushels without committing to a sale when your production may be uncertain. For now, the market is strong, though demand remains sluggish, and with Brazil beginning to harvest another possible record crop, both domestic and world carryout figures could potentially rise further.  Any change to a more favorable weather forecast could easily turn the market lower and erase much, if not all, of the 125 cent rally from the May 19th low. 

  • Continue to hold current sales levels for the 2024 crop year. Much like the Dec 23 contract, the Dec 24 contract has rallied significantly from the May 18 lows as the market prices in possible crop reductions that could carry over into the 2024 crop year. Be watchful, as we are, entering into the time frame where we would consider suggesting making additional sales recommendations for the 2024 crop year. 

  • The corn market traded down in excess of 5% with traders booking profits ahead of the weekend on disappointing export sales and forecasts call for rain next week across the “I” states.

  • Forecasts for rain across the Midwest dominated the trade with the longer range 6 – 10 and 8 – 14 day outlooks shifting to more normal to above normal precipitation patterns, while the 7-day forecast has rain favoring the northern Midwest with less in MO, central IL and IN.

  • US export sales came in at a disappointing 36k tons for Old Crop versus 272k last week, well below the 470k tons in sales needed each week to reach the USDA’s goal. As for New Crop sales, the USDA reported 47k tons sold.

  • Further hampering US export sales, Brazilian offers continue to be $30 – $40 per ton cheaper than the US as they continue to harvest their large second (safrinha) corn crop.

  • It’s estimated with the latest run of the US Drought Monitor, that 64% of the corn crop is in areas with some level of drought, which includes 82% of Illinois and 83% of Iowa.

Above: Weather is the dominant force for the corn market at this time.  If the market can push through the 100-day moving average and the recent 625 high, it may be able to make a run for the March highs between 650 – 670.  If not, support may be found between 580 and 540.

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 — either 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 New Crop 2023 soybeans. Grain Market Insider sees an active opportunity to sell New Crop 2023 soybeans.  November soybeans have rallied over 200 cents from the May 31st low and hit the upper end of our 1300 to 1350 target range. With the November contract a little bit over the upper end of this range, an Active sales opportunity continues to get some New Crop priced.  KC Wheat has demonstrated that domestic drought conditions do not necessarily guarantee higher domestic prices if global supplies are ample. US wheat country has been extremely dry for many months, yet prices are about even with where prices were in late 2021, before Russia invaded Ukraine. Global soybean supplies could be record large, and this could be a rally risk factor.

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

  • Soybeans closed lower today with New Crop leading the way lower and July only down slightly.Soybean meal closed sharply lower, while soybean oil moved higher thanks to a jump in palm oil of 1.7% today.

  • Changes in the weather forecast have pressured both corn and soybeans with the 7-day forecast from NOAA showing an accumulated 0.5 to 1.5 inches of rain over the next week in the very dry areas of Iowa, Illinois, and Indiana.

  • Export sales were better this week at 16.8 mb for 22/23 and increases of 6.2 mb for 23/24. Last week’s export shipments of 14.2 mb were better than expected and above the 11.7 mb needed each week to meet the USDA’s expectations.

  • Next week, crop progress will be released, and conditions could decline after this week’s dryness. If weekend rains come through, conditions could remain steady with last week.

Above: The market’s eye is squarely on the weather at this time.  The August contract rallied through the 50-day moving average and hit resistance near 1450 and the 100-day moving average. If the market can rally beyond this point, the resistance area between 1500 and 1550 could be its next target. If the market drops back, support could be found between 1340 and 1300 with further support near 1270.

Wheat

Market Notes: Wheat

  • The USDA reported an increase of 4.0 mb of wheat export sales for 23/24, and an increase of 0.5 mb for 24/25. The figures for corn and soybeans were not much better and may have contributed to today’s weakness.

  • Several other factors are likely weighing on markets today – weather being number one. With both the American and European models putting rain in the forecast mid to late next week for the Midwest, wheat followed corn and soybeans lower today. Other factors may be profit taking, as well as the recent interest rate increases by European banks, which are causing renewed concern about recession.  

  • US futures received no support from Matif wheat, which traded lower today. Matif wheat is also overbought on daily stochastics and is showing potential sell signals, painting a weak technical picture despite the fact that French wheat conditions have declined for four weeks in a row.

  • Position squaring before month end could be playing into the grain complex trade as well. With the recent strong rally and the June 30 Stocks and Acreage reports due for release next week, traders may be taking profit ahead of uncertain results.

  • Russia has essentially said they are unwilling to extend the Black Sea grain deal beyond the July 18th deadline. This does not seem to be impacting the market much, however, perhaps because traders have heard this story before.

Chicago Wheat Action Plan Summary

  • No new action is recommended for the 2022 crop. Grain Market Insider is done with the 2022 crop, and there will be no New Alerts posted for the 2022 crop going forward.

  • Grain Market Insider sees an active opportunity to sell 2023 New Crop. We are in a weather market and with the US Drought Monitor showing dryness across the Midwest, September Chicago Wheat has now rallied about 22% from its May 31 low into the March – April resistance area and is overbought.  As of late, the wheat market has largely been a follower of the corn market, and this rally has been fueled in part by the Funds exiting their short positions. While there are production concerns in parts of the country, demand has been weak, and the potential remains for a rising carryout. Any change to a more favorable weather forecast could easily erase much, if not all, of the weather premium that has been added to prices.  With the dry conditions and great uncertainty that many of you are experiencing, about how much you will have to harvest, we understand there’s hesitancy to sell anything here.  If you are concerned about committing physical bushels with a cash sale, consider selling futures or buying put options.

  • Grain Market Insider sees an active opportunity to sell 2024 Chicago wheat. Prices for the 2024 crop have largely followed prices for the 2023 crop and are currently about 20% above the low set on May 31. Weather and production concerns have been the primary driver of prices lately, and the funds have likely been covering short positions, further feeding the rally. As we all know, weather markets can be fickle beasts, and any change in the forecast or crop conditions can quickly turn traders from buyers to sellers, quickly erasing much, if not all, of the premium priced into the market. Grain Market Insider recommends making a sale on next year’s 2024 Chicago wheat crop and using either a July ’24 futures contract or a July 24 HTA contract so basis can be set at a later date, as it should improve in time.

Above: September wheat has had a strong run and is near the 200-day moving average around 750, which it hasn’t seen since last October.  Above there, resistance may be found between the psychological resistance point of 800 and 865.  With further resistance coming in between 900 – 950.  Should prices turn lower, initial support may be found near 670 and then again near 611.

KC Wheat Action Plan Summary

  • No new action is recommended for the 2022 crop. Though most, if not all, of your Old Crop 2022 wheat may be sold, consider storing any remaining Old Crop, if possible, in anticipation of a short new crop this year, and marketing it along with the new crop.

  • We continue to look for better prices before making any 2023 sales. 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.

Above: The market has been able to trade out of the recent congestion area to near the 200-day moving average and into the 870 – 920 resistance area. If the market can push through, 970 – 1000 is the next major point of resistance.  If it falls back, initial support could be near 825 with further support between 778 and 764. 

Mpls Wheat Action Plan Summary

  • No new action for 2022 Old Crop MINNEAPOLIS Wheat. Prices haven’t moved much over the last couple of weeks, and it’s disappointing to see the lack of upside opportunities that the market has offered following the large snowfall and the late start to planting this spring. Yet, 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, especially given record European wheat shipments and falling Russian prices. Also, we typically recommend finishing up sales on any remaining Old Crop bushels by mid-June, as bids will soon shift from the July to September contract, and there is currently no carry offered.

  • No action is recommended on the 2023 crop at this time. The September ’23 contract had a 120-cent range in the month of May where it found support just above 770. While the planting has largely been completed, dryness in some areas is increasing. With a full growing season ahead of us, we are not looking to make any sales right now. (Updated 6/22)

  • 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 has rallied out of its congestion area on the Front Month Continuous chart towards the 200-day moving average. Resistance may be found above the market between 889 and 940, the April and December highs respectively.  While the upside breakout is a positive sign, the market will need additional bullish news to keep it moving. Should the market reverse course and turn lower, support below the market may be found between 770 and 760. 

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