Sharply lower crude oil yesterday (and so far today) may be the result of renewed economic concerns, with the Fed expected to raise interest rates this afternoon. This pressure could spill over into commodities.
The second crop (safrinha) corn in Brazil is in good condition. Southern and western Brazil have chances of showers over the next week or so.
Once the safrinha corn crop is harvested (around the July time frame) it could flood the market due to record crop size and lack of storage availability in Brazil.
A return to warmer and drier conditions for much of the Midwest should result in a pickup in planting pace.
Due to a lack of storage, Brazilian soybeans continue to flood the market. This is offering weakness to US futures and cash (and may lower US exports).
Higher temperatures (60s and 70s) in the Dakotas over the next couple weeks should help get the soybean crop planted there.
The drop in crude oil is weighing on soybean oil, which is in turn pressuring soybeans.
Daily stochastics show that both old and new crop soybeans are oversold – this could indicate that they are probing for a bottom.
Egypt bought wheat from Romania and Russia. The Russian wheat was purchased at $260 per ton. Russia had previously encouraged a $275 price floor on exports. (US SRW wheat is currently the world’s cheapest but is at a freight cost disadvantage).
Russia is engaging in talks to extend the Black Sea export deal. However, many feel that they will not extend the agreement again without reduced sanctions.
The Oklahoma wheat tour projected their crop at 54.3 mb. This would be the lowest crop since 1955.
The GFS weather model is projecting rains of up to 5-7 inches in parts of Nebraska and Kansas next week. The European model is drier, however.
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.
Sharply lower crude oil yesterday (and so far today) may be the result of renewed economic concerns, with the Fed expected to raise interest rates this afternoon. This pressure could spill over into commodities.
The second crop (safrinha) corn in Brazil is in good condition. Southern and western Brazil have chances of showers over the next week or so.
Once the safrinha corn crop is harvested (around the July time frame) it could flood the market due to record crop size and lack of storage availability in Brazil.
A return to warmer and drier conditions for much of the Midwest should result in a pickup in planting pace.
Due to a lack of storage, Brazilian soybeans continue to flood the market. This is offering weakness to US futures and cash (and may lower US exports).
Higher temperatures (60s and 70s) in the Dakotas over the next couple weeks should help get the soybean crop planted there.
The drop in crude oil is weighing on soybean oil, which is in turn pressuring soybeans.
Daily stochastics show that both old and new crop soybeans are oversold – this could indicate that they are probing for a bottom.
Egypt bought wheat from Romania and Russia. The Russian wheat was purchased at $260 per ton. Russia had previously encouraged a $275 price floor on exports. (US SRW wheat is currently the world’s cheapest but is at a freight cost disadvantage).
Russia is engaging in talks to extend the Black Sea export deal. However, many feel that they will not extend the agreement again without reduced sanctions.
The Oklahoma wheat tour projected their crop at 54.3 mb. This would be the lowest crop since 1955.
The GFS weather model is projecting rains of up to 5-7 inches in parts of Nebraska and Kansas next week. The European model is drier, however.
Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing by Stewart-Peterson and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Stewart-Peterson Inc. Reproduction of this information without prior written permission is prohibited. Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Reproduction and distribution of this information without prior written permission is prohibited. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing.
Stewart-Peterson Inc., Stewart-Peterson Group Inc., and SP Risk Services LLC are each part of the family of companies within Total Farm Marketing (TFM). Stewart-Peterson Inc. is a publishing company. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services LLC is an insurance agency. A customer may have relationships with any or all three companies.
Corn has turned lower this morning and has taken out the low from last Friday, in part due to hesitancy about today’s Fed announcement and also due to speculation about a large 2023 corn crop.
Today at 1pm central the Federal Reserve will announce their potential rate hike. They will likely announce a 25 basis point increase but there is a small possibility that rates are left unchanged due to the recent bank failure.
Brazilian corn prices have fallen to the equivalent of 5.18 for the July contract on the Bovespa exchange as their safrinha corn receives beneficial weather.
Ethanol production is projected to be lower than the previous week at 963k b/d, while the stockpile average estimate is 24.423 m bbl vs 42.306m a week ago.
Soybeans are trading lower this morning with both soybean oil and soybean meal trading lower as well, and crude oil continues its slide lower and is down over 2 dollars a barrel.
The Fed rate announcement is casting a bearish sentiment over commodities today but more bearish for soybeans is StoneX’s new estimate for the Brazilian crop which is now at 157.7 mmt for 22/23.
Earlier this week, NASS reported an increase in the soybean crush to 198 mb in March, but crush premiums have fallen significantly and may continue to drop.
In the North where fields are too wet, soybean plantings may increase as corn runs out of time, but temperatures are expected to rise over the next two weeks, drying things out.
The wheat complex is mixed today with Chicago and Minn slightly lower but KC a bit higher. Overall, wheat is faring the best today between corn and soybeans as the US faces very tight wheat supplies.
The Oklahoma wheat crop is now seen at 54.3 million bushels, the lowest crop since 1955 due to extreme drought and low yields.
Russian wheat exports in this season are now seen at 44.4 mmt versus previous estimates of 44.5 mmt according to Sov Econ. Russian traders have struggled to compete due to the unofficial price floor of $275/ton.
Spring wheat areas should benefit from warmer temperatures forecast over the next two weeks, but some fields may still be too wet and may keep plantings below the 10.57 million that the USDA has estimated.
Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing by Stewart-Peterson and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Stewart-Peterson Inc. Reproduction of this information without prior written permission is prohibited. Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Reproduction and distribution of this information without prior written permission is prohibited. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing.
Stewart-Peterson Inc., Stewart-Peterson Group Inc., and SP Risk Services LLC are each part of the family of companies within Total Farm Marketing (TFM). Stewart-Peterson Inc. is a publishing company. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services LLC is an insurance agency. A customer may have relationships with any or all three companies.
The lack of threatening weather and a risk off mentality in outside markets, especially crude oil, led the corn market lower.
Soybeans traded lower today as planting gets off to a swift start. The USDA is estimating plantings at 19% complete.
Soybean meal traded lower on record production from the March census crush report, while soybean oil found support, despite record production, from lower-than-expected stocks.
All three wheat classes closed lower on improved winter wheat ratings.
Concerns regarding the US banking sector, debt ceiling and higher interest rates weighed on outside markets in a risk off type of trade, which likely bled over and added pressure to the grain markets.
Note – For the best viewing experience, some Grain Market Insider content may be best viewed in horizontal mode.
Corn
Corn Action Plan Summary
No action is recommended at this time for Old Crop. At this point in the crop marketing year most, if not all, of your Old Crop 2022 corn should be sold out. With the substantial inverse between old and new crop contract months, large rallies for Old Crop corn may be difficult to come by as we move forward. Consider using 40 to 50-cent rallies to sell any remaining inventory.
For 2023 New Crop corn, Grain Market Insider recommends buying December ‘23 560 and December ‘23 610 calls in equal quantities. The December corn contract is extremely oversold and has left tails on the daily pricing chart indicating that it is finding support near the 520 area. Additionally, with the market approximately 50 cents off the recent high and 115 cents off the fall high, it has eroded enough risk premium ahead of the long growing season that call valuations look attractive here.
Continue to hold current sales levels for the 2024 crop year. We will look for opportunities to make further sales as we move through the 2023 growing season as weather volatility builds.
Risk off trade across many markets weighed on corn prices. The market saw money flow out of corn as fear of the looming debt ceiling and fed interest rate announce on Wednesday led to broad based selling.
USDA Crop Progress report showed corn planting at 26% completed, even with the 5-year average, and slightly below market expectations. Cold temperatures continue to limit planting pace in the Northern and Western Corn Belt states, but Southern planting progress has been strong.
Planting should start to pick up more in some areas as forecasts are calling for warmer and drier weather into the second week of May for the Northern and Eastern Corn Belt.
Demand concerns remain an overall concerning theme for the corn market as export activity and corn bushels used for weekly ethanol production are running behind USDA forecasts. This brings fear that the USDA will make further demand adjustments on the May 12 WASDE report, potentially increasing corn carry out projections.
Above: The market is severely oversold and has exhibited a reversal after making a new low for the move, indicating short-term selling may be exhausted, which could be seen as supportive. Nearby resistance sits near 612 and again near the 50-day moving average, while support for the July contract rests near the recent low of 572.
Soybeans
Soybeans Action Plan Summary
We recommend holding current sales levels for Old Crop. We are beginning to push into the May-June seasonal window of opportunity, where prices could bounce as processors begin to push to keep supplies flowing.
We recommend not adding to current sales levels for the new 2023 crop at this time. Our research indicates there is about a 74% likelihood of improved prices moving into the June time frame. Also, weather conditions will begin to dominate the market as we begin to move through planting and into the growing season, and we may consider recommending sales in the 1400 to 1450 area if any significant concerns arise.
Continue to hold off on pricing the 2024 crop. We look to make sales further into the 2023 growing season when selling opportunities tend to improve seasonally.
Soybeans were higher for most of the day but ultimately turned sharply lower, as crude oil declined suddenly to a loss of nearly 4 dollars a barrel.
Soybean plantings in the US are ahead of pace at 19%, while the 5-year average is 11%. Illinois and Iowa are leading the way with the benefit of better planting conditions.
Tomorrow’s Federal Reserve announcement for interest rate changes likely put pressure on crude oil today and therefore soybeans. The Fed is expected to increase rates by 25 basis points, but there is a small chance of no change due to the most recent banking failure.
While export demand remains sluggish, domestic demand is still firm thanks to the still profitable crushing margins. There have been no deliveries so far against May soybeans or soybean meal, which is a testament to the tight supplies.
Above: July soybeans have reversed and closed lower after making a new high for the move, which could lead to profit taking and possibly lower prices. Support lies near the recent low of 1396 with further support near 1350. Should support hold and buyers enter the market, resistance may be found between 1450 and 1460, and again near 1500.
Wheat
Market Notes: Wheat
After strength earlier in the session, wheat closed lower in all three US futures classes. Paris milling wheat futures were also sharply lower at the close.
The USDA’s Crop Progress report showed spring wheat was 12% planted vs 22% average. Additionally, winter wheat condition was rated 28% good to excellent (up 2% from last week).
As of this writing, crude oil is down roughly $4 per barrel, and the Dow is down about 450 points. This outside market pressure may have spilled over into the grains today.
The Fed is expected to raise interest rates by one quarter percent at the FOMC meeting this week. This could, in part, be offering weakness to financial and commodity markets.
Further rains are needed in the US Southern Plains. In Kansas the winter wheat poor to very poor crop rating is at 64% (2% worse than last week).
Egypt’s GASC is tendering for wheat. With the recent drop in price, they could look to source it from the US. However, the freight costs may be the deciding factor.
Chicago Wheat Action Plan Summary
No new action is recommended for the 2022 crop. At this point in the crop marketing year most, if not all, of your Old Crop 2022 wheat should be sold out. With large rallies difficult to come by at this time of year, consider using 40 to 50-cent rallies to sell any remaining inventory.
We recommend not taking any action on the 2023 crop at this time. Corn and K.C. wheat are near historic premiums to Chicago wheat, which could lend support to the Chicago contracts if HRW production concerns persist, or if any production concerns develop for corn.
No action is currently recommended for the 2024 crop. While we are looking for stronger markets to present themselves in this currently weak environment, there are factors that could be supportive, should they occur. Such as any escalation of the Ukraine war or disruption of grain movement in the Black Sea, or a significant devaluation of the US Dollar back to 2021 levels, as that market is showing characteristics of a potential drop.
Above: The market broke below the March low of 654 and is oversold. Initial resistance could be found near 668 and again between 718 and 724, while key support may be found near 592.
KC Wheat Action Plan Summary
No new action is recommended for the 2022 crop. Though most, if not all, of your Old Crop 2022 wheat may be sold, consider storing any remaining Old Crop, if possible, in anticipation of a short new crop this year, and marketing it along with the new crop.
We continue to look for better prices before making any 2023 sales. Crop ratings overall are at historically low levels, and production concerns persist despite recent the recent rain. Additionally, any unforeseen geopolitical changes in the Black Sea region could cause the market to bounce and retrace 25% towards the 2022 high.
Patience is warranted for the 2024 crop. The 2024 market has limited liquidity, and it may be until mid-summer before recommendations are posted.
Above: The short-term trend is down, and the July contract is oversold, which could be supportive should buyers enter the market. Support may be found near 742 with further chart support near 690. Initial resistance lies between 835 and 850 and then near 886.
Mpls Wheat Action Plan Summary
No action is currently recommended for the 2022 crop. We look for better pricing opportunities for the 2022 crop with potential planting concerns and a seasonal tendency for better prices as we move through springtime.
No action is recommended on the 2023 crop at this time. The snowy and cold winter has given rise to wet conditions and planting concerns which may present good selling opportunities in the coming weeks.
We continue to be patient to market any of the 2024 crop. Due to the lack of liquidity for the 2024 crop, there may not be any recommendations until late spring or early summer. This is the time for patience, not action.
Above: The short-term trend is down, though the July contract is oversold, which can be supportive should buying return to the market. Nearby support may be found near 778 and again near 760, while resistance may be found near 870 and 895.
The USDA said 26% of the corn crop is planted (vs 14% last week and 26% average).
Central Brazil is drying out and looks to remain mostly dry through the end of the month. However, their soil moisture may be enough to get through the dry pattern.
Barge traffic on the upper Mississippi River has been halted because of high water levels.
China is on May Day holiday until Thursday. As of Friday’s close, July corn on their Dalian exchange hit a contract low.
The USDA said 19% of the soybean crop is planted (vs 9% last week and 11% average).
NASS said soybean oil and soybean meal stocks (at the end of March) are down 7% from last year.
On the Fats & Oils report, census crush for April was pegged at 198 mb.
There still have not been any soybean or soybean meal deliveries against the May contract. This is an indicator of tight supplies.
The USDA said 28% of the winter wheat crop is rated good to excellent (vs 26% last week and 27% last year).
The USDA said 12% of the spring wheat crop is planted (vs 5% last week and 22% average).
Despite some rains last week in the southern plains, Kansas winter wheat poor to very poor condition increased 2% from last week to 64%.
The US Dollar Index is beginning to trend higher, and the Fed is anticipated to raise interest rates another 25 basis points at this week’s FOMC meeting.
GASC in Egypt is said to be tendering for wheat. With the recent decline in price, it is possible that they purchase from the US but freight cost could be the deciding factor.
Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing by Stewart-Peterson and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Stewart-Peterson Inc. Reproduction of this information without prior written permission is prohibited. Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Reproduction and distribution of this information without prior written permission is prohibited. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing.
Stewart-Peterson Inc., Stewart-Peterson Group Inc., and SP Risk Services LLC are each part of the family of companies within Total Farm Marketing (TFM). Stewart-Peterson Inc. is a publishing company. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services LLC is an insurance agency. A customer may have relationships with any or all three companies.
Corn is trading slightly higher after prices reversed on Friday and have been trying to work higher since.
Yesterday afternoon the USDA released their crop progress report which showed corn at 26% planted which is in line with the 5-year average. Iowa is at 29% complete and Illinois at 40%.
Strong winds blew through the Midwest yesterday causing dust storms, and one in Illinois caused a 100 car pileup. There are currently red flag warnings in Minnesota.
Barge traffic has been closed along the Mississippi River due to high water levels impacting the already slow export business.
Soybeans are higher again which would make it the third day in a row if the trend continues. Export inspections were good and domestic demand has been robust.
The USDA reported that 19% of the soybean crop is planted which is well ahead of the 5-year average of 11% for this time of year. Illinois is at 39% complete and Iowa is at 16%.
Both soybean meal and oil are higher and supporting soybeans, and soybean oil continue to work higher despite declines in crude oil.
The Fats and Oils report from NASS showed both soybean oil and soybean meal stocks down 7% from a year ago.
Wheat is trading slightly higher and is trying to find a bottom after is fell to its lowest levels since mid 2021.
Last week’s rain in some of the southwestern Plains was not enough to significantly help the winter wheat crop with the USDA reporting an increase of only 2% in the good to excellent rating to 28%.
The poor to very poor rating for winter wheat increased from 41% to 42% with the ratings for Kansas even worse and increasing from 62% to 64%.
The USDA has said that 12% of the spring wheat crop has been planted, below the 5-year average of 22%. Warmer temperatures this month should help increase that number, but a lot of prevent plants are likely.
Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing by Stewart-Peterson and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Stewart-Peterson Inc. Reproduction of this information without prior written permission is prohibited. Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Reproduction and distribution of this information without prior written permission is prohibited. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing.
Stewart-Peterson Inc., Stewart-Peterson Group Inc., and SP Risk Services LLC are each part of the family of companies within Total Farm Marketing (TFM). Stewart-Peterson Inc. is a publishing company. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services LLC is an insurance agency. A customer may have relationships with any or all three companies.
Corn traded lower to begin the week with pressure coming from good planting weather ahead and a lower wheat market, while tight on-hand supplies supported the nearby contracts.
Soybeans found strength following Friday’s reversal higher as last week’s short sellers continued to cover their positions.
Despite weaker palm and crude oil markets, and less expensive South American meal offers, soybean oil and meal closed mid-range and on the positive side of unchanged, while adding support to soybeans.
All three wheat classes closed lower today from follow through selling on expected crop improvements from last week’s rain and that more is forecasted for this week.
Likely adding some pressure to the corn and wheat markets, the US Dollar traded higher today in anticipation of another 0.25% rate hike by the Federal Reserve on Wednesday.
Note – For the best viewing experience, some Grain Market Insider content may be best viewed in horizontal mode.
Corn
Corn Action Plan Summary
No action is recommended at this time for Old Crop. At this point in the crop marketing year most, if not all, of your Old Crop 2022 corn should be sold out. With the substantial inverse between old and new crop contract months, large rallies for Old Crop corn may be difficult to come by as we move forward. Consider using 40 to 50-cent rallies to sell any remaining inventory.
Be patient to take further action for New Crop. We are moving into a time of year when we may be looking for option buying opportunities given the market is very oversold and weather-related issues could pop up at any time to move the market significantly. Additionally, owning both calls and puts could be warranted depending on market conditions and volatility.
Continue to hold current sales levels for the 2024 crop year. We will look for opportunities to make further sales as we move through the 2023 growing season as weather volatility builds.
The corn market saw choppy, pressured trade overall to start the week, with support staying in the old crop due to potential tighter supplies helping support the front end of the market. The lack of deliveries against the May futures reflects this tighter old crop corn supply picture.
Strong selling pressure in the wheat markets limited the potential gains in the corn futures market as wheat futures broke to new nearby lows to start the week.
Weather forecasts are turning more favorable for improved planting pace, as recent cold temperatures likely limited planting in the north and northwestern corn belt this past week.
Money flow is a concern in the corn markets as managed money funds moved back to a net short position in the corn markets of 15,297 short contracts, selling over 64,000 net corn positions last week.
Weekly export inspections for corn were strong this week at 1.518 MMT, which was a market year high. Despite the strong shipment week, export inspections are still down 35% year-over-year.
Above: The market is severely oversold and has exhibited a reversal after making a new low for the move, indicating short-term selling may be exhausted, which could be seen as supportive. Nearby resistance sits near 612 and again near the 50-day moving average, while support for the July contract rests near the recent low of 572.
Soybeans
Soybeans Action Plan Summary
We recommend holding current sales levels for Old Crop. We are beginning to push into the May-June seasonal window of opportunity, where prices could bounce as processors begin to push to keep supplies flowing.
We recommend not adding to current sales levels for the new 2023 crop at this time. Our research indicates there is about a 74% likelihood of improved prices moving into the June time frame. Also, weather conditions will begin to dominate the market as we begin to move through planting and into the growing season, and we may consider recommending sales in the 1400 to 1450 area if any significant concerns arise.
Continue to hold off on pricing the 2024 crop. We look to make sales further into the 2023 growing season when selling opportunities tend to improve seasonally.
Soybeans kept their momentum from Friday and moved higher again today with support from both soybean meal and oil.
While lower crude oil pressured soybean oil earlier in the day, bean oil recovered to close on the positive side of unchanged.
Basis for Brazilian soybeans appears to have put in a bottom and has rallied between 30 and 50 cents in the last week. Farmers initially sold everything they could not store but are now holding onto what they can to avoid making sales below their cost of production.
Argentina’s soy-dollar incentive to get farmers to make cash sales has not worked nearly as well as it did the two previous times and has resulted in sales of just 2 mmt. Argentinian farmers are keen to hold on to their old crop due to the drought which significantly cut into production.
Soybean inspections were on the lighter side last week with 14.8 mb inspected for export. Total inspections are now at 1,744 mb and are even with the previous year. The USDA is estimating soybean exports at 1.990 bb for 22/23, which is down 8% from the previous year.
Above: The market has retraced itself back to the March lows and has exhibited a reversal after making a new low for the move. This reversal indicates short-term selling may be exhausted and could be seen as supportive. Support lies near the recent low of 1396 with further support near 1350. Should support hold and buyers enter the market, resistance may be found between 1450 and 1460, and again near 1500.
Wheat
Market Notes: Wheat
The managed funds are said to have sold 146,000 grain contracts in total last week. With all three US wheat classes posting double-digit losses, it is likely that they continued to add to shorts today.
Spring wheat planting conditions should improve mid to late week, with temperatures in the Dakotas expected to reach the 70s.
The EU struck a deal with several eastern European countries: Five nations will ban imports of Ukrainian grain to maintain profitability for their farmers, but they will allow the grain to be transported westward to other countries through their regions.
At this point in time, it does not seem like Russia intends to renew the Black Sea Grain Initiative. The current deal is set to expire on May 18.
Wheat inspections of 13.2 mb for the week bring total 22/23 inspections to 671 mb. That is down 3% from last year.
Chicago Wheat Action Plan Summary
No new action is recommended for the 2022 crop. At this point in the crop marketing year most, if not all, of your Old Crop 2022 wheat should be sold out. With large rallies difficult to come by at this time of year, consider using 40 to 50-cent rallies to sell any remaining inventory.
We recommend not taking any action on the 2023 crop at this time. Corn and K.C. wheat are near historic premiums to Chicago wheat, which could lend support to the Chicago contracts if HRW production concerns persist, or if any production concerns develop for corn.
No action is currently recommended for the 2024 crop. While we are looking for stronger markets to present themselves in this currently weak environment, there are factors that could be supportive, should they occur. Such as any escalation of the Ukraine war or disruption of grain movement in the Black Sea, or a significant devaluation of the US Dollar back to 2021 levels, as that market is showing characteristics of a potential drop.
Above: The market broke below the March low of 654 and is oversold. Initial resistance could be found near 668 and again between 718 and 724, while key support may be found near 592.
KC Wheat Action Plan Summary
No new action is recommended for the 2022 crop. Though most, if not all, of your Old Crop 2022 wheat may be sold, consider storing any remaining Old Crop, if possible, in anticipation of a short new crop this year, and marketing it along with the new crop.
We continue to look for better prices before making any 2023 sales. Crop ratings overall are at historically low levels, and production concerns persist despite recent the recent rain. Additionally, any unforeseen geopolitical changes in the Black Sea region could cause the market to bounce and retrace 25% towards the 2022 high.
Patience is warranted for the 2024 crop. The 2024 market has limited liquidity, and it may be until mid-summer before recommendations are posted.
Above: The short-term trend is down, and the July contract is oversold, which could be supportive. Support may be found near 753 and again near 742, while initial resistance lies between 835 and 850 and then near 886.
Mpls Wheat Action Plan Summary
No action is currently recommended for the 2022 crop. We look for better pricing opportunities for the 2022 crop with potential planting concerns and a seasonal tendency for better prices as we move through springtime.
No action is recommended on the 2023 crop at this time. The snowy and cold winter has given rise to wet conditions and planting concerns which may present good selling opportunities in the coming weeks.
We continue to be patient to market any of the 2024 crop. Due to the lack of liquidity for the 2024 crop, there may not be any recommendations until late spring or early summer. This is the time for patience, not action.
Above: The short-term trend is down, though the July contract is oversold, which can be supportive should buying return to the market. Nearby support may be found near 778 and again near 760, while resistance may be found near 870 and 895.
The Fed is expected to again raise interest rates at this week’s FOMC meeting. But the second largest bank failure in US history (First Republic Bank) could cause them to think twice.
Funds are now estimated to be net short 40,000 corn contracts. They are said to have sold 146,000 contracts in total last week in the grain room.
This week should be mostly cool and dry across the Midwest, but widespread rains are forecast to return this weekend.
The USDA may need to lower their US corn export estimate. Commitments are currently still down 33% from last year.
The E15 waiver may be passed to allow for sales of ethanol blended gasoline during the summer months.
China’s PMI data was lower in April than in March – this could indicate a shrinking economy.
Funds are said to have substantially reduced their long positions in soybeans and soybean meal.
The third iteration of the soy / peso exchange rate program in Argentina is said to have resulted in 2 mmt of soybean sold.
So far there have been zero deliveries (for the May contract) of soybeans or soybean meal. However, there have been some soybean oil deliveries.
On this afternoon’s Crop Progress report, winter wheat is expected to show better ratings after the rains last week in the southern Plains.
The EU made a deal with countries in eastern Europe that will allow Ukraine’s exports to continue to pass west through that region, but imports would be banned in 5 countries.
North Dakota could see high temperatures by the middle of the week, which may improve planting conditions for spring wheat.
The deadline for an extension of the Black Sea grain deal is May 18. At this time, it seems unlikely that Russia will renew.
Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing by Stewart-Peterson and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Stewart-Peterson Inc. Reproduction of this information without prior written permission is prohibited. Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Reproduction and distribution of this information without prior written permission is prohibited. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing.
Stewart-Peterson Inc., Stewart-Peterson Group Inc., and SP Risk Services LLC are each part of the family of companies within Total Farm Marketing (TFM). Stewart-Peterson Inc. is a publishing company. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services LLC is an insurance agency. A customer may have relationships with any or all three companies.
Corn is trading slightly lower this morning under more bearish pressure from Brazil’s expected record safrinha corn crop which has good weather forecast for this week.
Chinese markets are closed for holiday but on Friday, July corn on the Dalian exchange posted a contract low as they expect large supplies from Brazil.
In the US, temperatures have been cool and the Midwest received some rain this weekend but the forecast going forward is warmer and drier which should get the planters rolling in bigger numbers.
Last week’s CFTC data showed what everyone was anticipating which was funds taking a net short position in corn. They sold 64,731 contracts bringing them to a net short position of 15,297 contracts.
Soybeans are trading higher this morning and appear to be continuing the reversal seen on Friday. Tight on hand supplies may be supporting the soy complex.
Soybean meal is slightly higher while soybean oil is lower as crude oil falls by over 1.50 a barrel to 75 dollars a barrel.
Brazil’s record harvest may be priced in for the moment after Brazilian farmers sold everything they could not store and now hold everything they can causing prices there to rise.
Friday’s CFTC data as of April 25 showed funds as sellers of 47,574 contracts reducing their net long position to 87,208 contracts.
Wheat is trading lower again and is now the lowest it’s been since July of 2021. Improving winter wheat crop ratings following last week’s rains add to the pressure.
European officials made a deal with five eastern European countries which allows them to ban imports of Ukrainian grain as long as they allow grain to pass through the rest of Europe.
Russia is looking unlikely so far to extend the Black Sea grain deal on May 18 unless their demands are met, and the missile attacks on Ukraine continue. If grain shipments slow out of the Black Sea, it could be supportive for US prices.
Friday’s CFTC data showed funds adding to their net short position. They sold 10,029 contracts increasing their net short position to 113,012 contracts.
Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing by Stewart-Peterson and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Stewart-Peterson Inc. Reproduction of this information without prior written permission is prohibited. Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Reproduction and distribution of this information without prior written permission is prohibited. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing.
Stewart-Peterson Inc., Stewart-Peterson Group Inc., and SP Risk Services LLC are each part of the family of companies within Total Farm Marketing (TFM). Stewart-Peterson Inc. is a publishing company. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services LLC is an insurance agency. A customer may have relationships with any or all three companies.
Corn finished the day mixed with Old Crop contracts firmer and New Crop weaker. Traders covering short positions in the July contract, and the lack of deliveries versus the May contract, helped the market reverse after making a new low for the move.
Soybeans closed the session near the upper end of the 27-cent range, as profit taking on short positions ensued following 7 straight days with lower prices.
Both soybean meal and oil joined the fun by trading higher and supported soybeans with higher crush margins.
All three classes of wheat closed higher on the day from deeply oversold conditions as traders covered short positions and took month end profits.
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Corn
Corn Action Plan Summary
No action is recommended at this time for Old Crop. At this point in the crop marketing year most, if not all, of your Old Crop 2022 corn should be sold out. With the substantial inverse between old and new crop contract months, large rallies for Old Crop corn may be difficult to come by as we move forward. Consider using 40 to 50-cent rallies to sell any remaining inventory.
Be patient to take further action for New Crop. We are moving into a time of year when we may be looking for option buying opportunities given the market is very oversold and weather-related issues could pop up at any time to move the market significantly. Additionally, owning both calls and puts could be warranted depending on market conditions and volatility.
Continue to hold current sales levels for the 2024 crop year. We will look for opportunities to make further sales as we move through the 2023 growing season as weather volatility builds.
Corn futures lifted off early session lows as prices saw some recovery off the recent selling pressure and early session lows to finish mixed on the day.
The May/July spreads became active again on Friday supported by short covering in the front month contracts and by the lack of deliveries versus the May contract, reflecting a tight near-term corn supply.
Deferred contracts stayed under pressure as crop planting will likely be supported overall by the weather forecast, and the concerns for demand because of competition against the cheaper Brazil corn that will be harvested in late June/July.
A cool but drier forecast for most of the Midwest will allow planting to stay on or ahead of the 5-year average pace. This will keep the pressure on the deferred corn futures contracts.
Old crop charts (May, July) turned more technically friendly with the close on Friday as price action posted a hook reversal, which could lead to additional strength and short covering going into next week.
Above: The market is severely oversold and has exhibited a reversal after making a new low for the move, indicating short-term selling may be exhausted, which could be seen as supportive. Nearby resistance sits near 612 and again near the 50-day moving average of 639, while support for the July contract rests near the recent low of 572.
Soybeans
Soybeans Action Plan Summary
We recommend holding current sales levels for Old Crop. We are beginning to push into the May-June seasonal window of opportunity, where prices could bounce as processors begin to push to keep supplies flowing.
We recommend not adding to current sales levels for the new 2023 crop at this time. Our research indicates there is about a 74% likelihood of improved prices moving into the June time frame. Also, weather conditions will begin to dominate the market as we begin to move through planting and into the growing season, and we may consider recommending sales in the 1400 to 1450 area if any significant concerns arise.
Continue to hold off on pricing the 2024 crop. We look to make sales further into the 2023 growing season when selling opportunities tend to improve seasonally.
Soybeans finally broke their downward trend and closed higher today as funds take end-of-the-month profits and Brazilian premiums rise. For the week, July soybeans lost 29 cents.
Both soybean meal and oil moved higher and were supportive along with crude oil which rose over 2 dollars a barrel.
Malaysian palm oil fell by 11% in April which put significant pressure on soybean oil.
Last week, Brazilian FOB basis levels had plunged due to a lack of storage for the record crop and producers were flooding the market with whatever they could not store, but basis levels have started to rise since yesterday as Brazilian farmers hold on to what they can store.
While the Brazilian harvest is nearly complete, in Argentina the harvest is only 28% complete with production estimated between 20 and 23 mmt. Last year Argentina produced 43.5 mmt, and the USDA’s most recent estimate was 27 mmt so they will most likely lower that number in the next WASDE.
Above: The market has retraced itself back to the March lows and has exhibited a reversal after making a new low for the move. This reversal indicates short-term selling may be exhausted and could be seen as supportive. Support lies near the recent low of 1396 with further support near 1350. Should support hold and buyers enter the market, resistance may be found between 1450 and 1460, and again near 1500.
Wheat
Market Notes: Wheat
After trading both sides of unchanged, wheat made a nice recovery with all three US classes posting gains at the close on month-end profit-taking.
Russia is said to have encouraged a $275 per ton price floor on wheat exports. US FOB prices of soft red winter are now cheaper than those offers, which could lead to increased US export demand.
Though the Southern Plains had good rainfall this week, more will be needed in the region to see conditions improve.
The bleeding appears to have stopped today in the wheat market, but there are legitimate concerns about inflation and recession further down the road, which could continue to weigh on commodities.
French soft wheat crop conditions are the best since 2011; 94% of the crop is rated good to excellent.
Chicago Wheat Action Plan Summary
No new action is recommended for the 2022 crop. At this point in the crop marketing year most, if not all, of your Old Crop 2022 wheat should be sold out. With large rallies difficult to come by at this time of year, consider using 40 to 50-cent rallies to sell any remaining inventory.
We recommend not taking any action on the 2023 crop at this time. Corn and K.C. wheat are near historic premiums to Chicago wheat, which could lend support to the Chicago contracts if HRW production concerns persist, or if any production concerns develop for corn.
No action is currently recommended for the 2024 crop. While we are looking for stronger markets to present themselves in this currently weak environment, there are factors that could be supportive, should they occur. Such as any escalation of the Ukraine war or disruption of grain movement in the Black Sea, or a significant devaluation of the US Dollar back to 2021 levels, as that market is showing characteristics of a potential drop.
Above: The market broke below the March low of 654 and is oversold. Initial resistance could be found near 668 and again between 718 and 724. While key support may be found near 592.
KC Wheat Action Plan Summary
No new action is recommended for the 2022 crop. At this point in the crop marketing year most, if not all, of your Old Crop 2022 wheat should be sold out. With large rallies difficult to come by at this time of year, consider using 40 to 50-cent rallies to sell any remaining inventory.
We continue to look for better prices before making any 2023 sales. Crop ratings overall are at historically low levels, and production concerns persist despite the recent rain.
Patience is warranted for the 2024 crop. The 2024 market has limited liquidity, and it may be until mid-summer before recommendations are posted.
Above: The short-term trend is down, and the July contract is oversold, which could be supportive. Support may be found near 753 and again near 742, while initial resistance lies between 835 and 850 and then near 886.
Mpls Wheat Action Plan Summary
No action is currently recommended for the 2022 crop. We look for better pricing opportunities for the 2022 crop with potential planting concerns and a seasonal tendency for better prices as we move through springtime.
No action is recommended on the 2023 crop at this time. The snowy and cold winter has given rise to wet conditions and planting concerns which may present good selling opportunities in the coming weeks.
We continue to be patient to market any of the 2024 crop. Due to the lack of liquidity for the 2024 crop, there may not be any recommendations until late spring or early summer. This is the time for patience, not action.
Above: The short-term trend is down, though the July contract is oversold, which can be supportive should buying return to the market. Nearby support may be found near 778 and again near 760, while resistance may be found near 870 and 895.
Corn is trading lower for the third consecutive day and the July contract has lost approximately 71 cents from last week’s high following the Chinese sales cancellations.
Total cancellations by China this week were 21 mb, and yesterday’s export sales were disappointing at just 15.7 mb with total sales commitments down 33% from a year ago.
There were no deliveries against the May contract, and open interest fell by 13,000 contracts yesterday as funds build a net short position.
In order for the Black Sea agreement to be renewed, Russia is asking for terms that will likely not be met, so the deal may expire which could be bullish for corn and wheat.
Soybeans have been trading either side of unchanged today but are currently slightly lower. There is support from higher soybean oil as crude oil rises, while soybean meal is lower.
There were 199 deliveries against May soybean oil but no deliveries against soybeans or soybean meal.
Malaysian palm oil futures fell by 2.95% on Friday and are down nearly 11% for the month of April due to poor exports and a large Indonesian supply.
The Argentinian soybean crop is just over 28% harvested with new production estimates between 20 and 23 mmt which compares to last week’s harvest of 43.5 mmt.
Wheat is trading mixed today with Chicago and KC wheat lower but Minneapolis wheat slightly higher. If the trend lower continues, July wheat would be on track for an eighth consecutively lower close.
On a friendlier note, soft red winter wheat US FOB prices are now cheaper than the offers from Russia after Russia established a price floor at $275 per ton.
There was a total of 854 contracts delivered against the May Chicago wheat contract yesterday but no deliveries for KC or Minn wheat.
Paris milling wheat futures hit a new low today and have fallen 6 out of the past 8 trading days as French soft wheat is now rated at 94% good-to-excellent which is the best rating since 2011.
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.
