Corn is trading slightly lower again on the momentum from yesterday’s 9.1 mb of sales cancellation to China. This week’s total cancellations are now at 25 mb.
Open interest in corn has fallen by 112,000 contracts over the last 7 sessions indicating massive long liquidation. Today’s CFTC data will show how much non-commercials have sold.
The Biden administration has issued an emergency waiver that will allow widespread sales of higher ethanol E15 gasoline this summer to combat high pump prices.
The Midwest has received early morning freezes in some areas that may damage emergent corn.
Soybeans are trading slightly higher this morning with support from soybean meal and oil. Soybeans have had 7 consecutively lower closes but today could end that streak.
The CME reported 199 deliveries of May soybean oil, but there were no deliveries for soybeans or soybean meal.
Barge shipments on the Mississippi declined to 657k tons from 756k the previous week, and soybean shipments were down 34% week over week.
Soybeans have not seen sales cancellations like those in corn, and that could make a bullish case for soybeans despite Brazil’s new supplies on the market.
Wheat contracts are trading slightly higher after a very sharp selloff yesterday caused by improving US weather and heavy fund selling.
The EU’s soft wheat production in the 23/24 season is now seen at 130.2 million tons versus the March estimate of 130.9 million tons.
India has ramped up their wheat purchases with more already bought in the current marketing year than the total purchases made in the previous year.
The CME reported 854 deliveries for May Chicago wheat, none for KC wheat, and 104 deliveries of Minneapolis wheat.
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 USDA confirmed this morning another cancellation of corn sold for the 2022/23 marketing year to China. This brings the weekly total of Chinese corn cancellations to 22 million bushels.
Soybeans could not shake off the weakness of falling corn and wheat prices as November soybeans closed at their lowest level since July 2022.
Soybean oil only added pressure to soybeans, by falling more than 3% on lower Malaysian palm oil prices.
All three wheat classes traded lower on follow-through pressure from larger-than-expected wheat acres in yesterday’s Stats Canada report.
Front month KC wheat prices traded to their lowest level since February 2022 on continued pressure from rains falling in the southern Plains.
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.
China cancelled another previous purchase of 233,000 tons, the second this week.
Export sales at 15.7 mb were disappointing. Year-to-date sales are 1.513 billion bushels, well below last year’s 2.264 bb and at a weekly pace that would suggest the USDA will likely lower the total sales forecast of 1.850 bb. Today’s figure was 49% below the prior 4-week average.
Corn futures contracts finished lower in 6 of the previous 7 sessions. Fund selling and triggered sell stops were features in today’s trade. Double-digit losses in wheat and soybeans may have also added pressure.
A long-standing chart gap on July futures from July 25, 2022, was filled this morning at 5.95-1/2. The market remains oversold by many technical indicators.
A cool but drier forecast for most of the Midwest will allow planting to stay on or ahead of the 5-year average pace.
Above: While the near-term trend is down and the market is severely oversold, nearby resistance sits near 612 and again near the 50-day moving average of 639. While key support for the July contract rests near the 575 level.
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 closed lower for the seventh consecutive day. November soybeans have lost 29-¾ cents on the week, under pressure from falling soybean and oil prices as well as Brazil’s nearly complete harvest.
The funds were heavy sellers of corn, beans, and wheat today, and the Chinese sale cancellation in corn was most likely the catalyst.
Weekly soybean export sales were decent for this time of year at 11.4 mb for 22/23, which was up 38% from the prior 4-week average. Shipments were 16.7 mb and were above the 13.2 mb needed each week to meet USDA estimates.
With Brazil taking over the number one spot for soybean production, they are also expanding their crushing capabilities. Cargill will be expanding their soybean processing, biofuel output, and storage and export capacity in Brazil.
As of last Friday’s CFTC, report, non-commercials held a net long position of over 100,000 contracts, but that number will very likely fall sharply as of tomorrow’s report.
Above: The market has given back most of the gains from the rally off the March lows. The near-term trend is down, and key support lies near 1400 with further support near 1350. Should support hold and buyers enter the market, resistance may be found between 1460 and 1501.
Wheat
Market Notes: Wheat
Moisture in the southern Plains states and spillover pressure from lower soybean and corn markets offered no support to wheat today.
Stats Canada estimated all wheat acres higher than expected. However, this survey was taken in December, prior to the cold and wet pattern and the steep drop in prices. This could mean that farmers may end up planting less wheat and more oilseeds.
The USDA reported an increase of 5.7 mb of wheat export sales for 22/23 for a total commitment to date of 686.78 mb, and an increase of 7.4 mb for 23/24 for a total commitment of 37.2 mb.
Funds are said to be adding to short positions in wheat, and money flow may be moving out of commodities in general, on fears of lower demand and possible recession.
Inspections of shipping of vessels in the Black Sea is said to have slowed to a crawl, and Russia is asking vessel owners to sign a letter with the understanding that the export deal will end on May 18.
Despite yesterday’s firmer close, Paris milling wheat futures saw a significant drop. Their December contract led the way down with a decline of 6.25 Euros per metric ton to 240.50.
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 recommended at this time for the 2024 crop. We are looking for stronger markets to present themselves as we move further into the marketing year.
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 sharply lower again today with the July contract breaking below 6 dollars to fill the gap made in July 2022. Another sale cancellation to China of 12.9 mb of corn is pressuring the market.
Corn export sales of 15.7 mb for 22/23 were up 28% from the previous week but down 49% from the prior 4-week average. Last week’s export shipments of 42.4 mb were below the 48.1 mb needed each week.
Ethanol production slowed last week with production falling by 5.6% to just 967,000 barrels per day.
Brazil’s safrinha corn has benefited from very good weather and a record crop is expected. Because of this, Brazilian corn will most likely be cheaper than US offers this summer.
Soybeans are lower for the 7th consecutive day while July soybean meal is lower for the 8th day. Soybean oil is down as well for the 6th day as palm oil continues its decline and is off 3.22% for its lowest close since October.
Soybean export sales of 11.4 mb for 22/23 were up from the previous week and up 38% from the prior 4-week average. Shipments of 16.7 mb were above the 13.2 mb needed each week to achieve the USDA’s export estimates.
With Brazil’s harvest nearly complete, FOB basis has stabilized, and Paranagua basis has reportedly risen by 40 cents this week, which should be supportive to US prices.
Cargill’s head trader in Brazil has reported that Chinese demand for Brazilian soybeans has been lighter than anticipated, which has created a storage issue and has caused more producers to sell cash beans.
Wheat is lower for the 7th consecutive day as US weather improves, funds continue to add to their short position, and grains keep leaving from Black Sea ports.
Export sales of 5.7 mb for 22/23 of wheat were down 40% from the previous week and down 7% from the prior 4-week average. For the 23/24 marketing year, there was an increase of 7.4 mb.
Last week’s wheat export shipments were 11.2 mb and were below the 20.8 mb needed each week to achieve the USDA’s export estimate of 775 mb for 22/23.
There is doubt that the Black Sea Grain Initiative will be renewed by May 18, and Russia is insisting on changes to payments, logistics, and insurance on its own exports before agreeing to extend.
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 continues its downward trajectory and July futures are nearing their March low at 5.97 which could act as support. Pas that level is an unfilled gap from last July at 5.95-1/2 which may need to be filled.
There are chances for rain in the northwest part of the Corn Belt today and tomorrow, but Iowa and Illinois are dry with below-normal precipitation in the 8 to 14-day forecast.
The US had a good string of sales to China over the past few weeks but that one cancellation earlier this week put a negative tone on the market with traders fearing that there are more to come.
The spike in fieldwork as planting begins has increased demand for fertilizer, therefore, limiting supply and increasing prices.
Soybeans are lower for what would be the seventh consecutive day if this holds, and soybean meal has been a factor in dragging soybeans lower while soybean oil has struggled with a sharp decline in crude oil.
Cargill is now planning to expand their soybean processing, biofuel output, and storage and export capacity in Brazil. As Brazil’s soy production grows each year, they will become a bigger player in the exports of soy products.
Palm oil has been a big driver of soybean oil, and Indonesia announced that they will tighten their palm oil export ratio after the Ramadan holiday which could be friendly to bean oil futures.
The USDA attaché in Brazil sees their 23/24 crop rising to 159 mmt as planted area is forecast to increase by 3.9%. Crushing is expected to ride by 5% to 55.8 m tons.
Wheat is lower again with KC once again leading the way down. July Chicago wheat has fallen to its lowest level since July of 2021 as funds continue to short this market.
Canada is expected to plant 27 million acres of wheat which would be a 6.2% increase from last year, with canola acres expected at 21.6 million.
Soft wheat exports in the EU have rises 9.7% year over year at 25 m tons which compares with 22.8 m tons the previous year.
The USDA attaché is forecasting the Australian wheat crop for 23/24 wheat at 29 mmt, a strong but nowhere near record-breaking number.
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 corn market opened the day session in the green and quickly traded lower on improved planting weather and slow demand.
Soybeans ended the day mixed with Old Crop trading weaker versus the New Crop, as cheaper Brazilian supplies dominate the world export market.
The soybean products ended the day mixed while weighing on Board Crush margins, with the July Crush losing 10 cents/bu.
All three wheat closed in the red as rain falls in some of the driest HRW areas, and Stats Canada’s acreage estimates came in above expectations.
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. China’s recent purchases have slowed, weighing on prices. Our intent is to maximize any remaining opportunities the market may present as we begin to move towards the latter stages of the marketing year when end-users vie for tightly held supplies and weather concerns can build premium.
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 and given market factors that could move the price of corn above $7 or below $5, owning both calls and puts could be warranted for a period of time.
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.
A cool but drier forecast should allow for planting to remain mostly on schedule. Though not an ideal end of April/early May for many. The fact is that based on a five-year average, planting this past week is ahead of schedule, especially in key corn-producing states.
Weekly corn used for ethanol production last week at 97 million bushels was lower than expected and below the pace needed to meet the USDA projection of 5.250 billion bushels.
Spillover weakness from yesterday’s export cancellation of over 12 million bushels likely added to today’s sluggish price tone.
U.S. corn prices (at the Gulf) are still over-priced compared to Brazil and Argentina. Expect exports to remain slow. A potential downgrade from USDA is a likely reality.
Wheat’s sixth day in a row lower, and double-digit loss also weighed on corn prices.
Above: While the near-term trend is down, and the market is oversold, resistance now lies near the recent high of 647-1/2, with further resistance between 660 and 670. Support below the market for the July contract rests between 607 and 600, and then again between 568 and 562.
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. Our research indicates there is about a 74% likelihood of improved prices moving into the June time frame as weather premium is built into the market.
Continue to hold off on pricing the 2024 crop. We look to make sales further into the 2023 growing season when selling opportunities tend to improve seasonally.
Soybeans traded either side of unchanged today before ultimately selling off to make a 6th consecutive lower close.
Soybean meal moved to its lowest levels since December, while soybean oil closed higher despite a drop in crude oil of over 2.50 a barrel.
Crop consultant, Dr. Michael Cordonnier, said today that he expects soybean planting in the US to reach 88.0 million acres, 500,000 acres above the USDA’s estimate, with a trendline yield of 52 bpa.
With Brazil’s soybean harvest nearly concluded at over 95% complete, their soybean premiums have stopped falling this week, which could be supportive of US prices.
Early soybean planting should pick up a bit in the middle of the Corn Belt this week, as more favorable weather is forecast in the 7-day outlook.
Above: The market has given back most of the gains from the rally off the March lows. The near-term trend is down, and key support lies near 1405 with further support near 1350. Should support hold and buyers enter the market, resistance may be found between 1460 and 1501.
Wheat
Market Notes: Wheat
An improved weather forecast and rain falling in the Southern Plains pressured the wheat markets lower.
Stats Canada’s seeding intentions showed all wheat acres up by 1 million (to 27 ma) and that is 6.2% above last year.
Offering little support, a group of millers estimated US soft wheat production up 20% at 400 mb this year, up from last year’s roughly 337 mb.
Reportedly, Russia has asked vessel owners and captains in the Black Sea to sign a letter, with the understanding that the export corridor deal will be ended on May 18.
Russia is also asking to be let back into the SWIFT program and for sanctions against their banks to be dropped before any consideration of renewing the export corridor.
Funds are suspected of adding to their already sizable short positions in wheat, which may be confirmed in the next Commitments of Traders report, and could be supportive if the market receives friendly news.
Chicago Wheat Action Plan Summary
No action is currently recommended for the 2022 crop. The Chicago wheat contracts are oversold, which can be supportive to prices should buying enter the market to cover short positions. We continue to look for any remaining opportunities the market may present as the marketing year begins winding down.
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 recommended at this time for the 2024 crop. We are looking for stronger markets to present themselves as we move further into the marketing year.
Above: The market broke below the March low of 654 and is oversold. The reversal off the 642-1/2 low could add further support if buyers come into the market to cover short positions. Initial resistance could be found near 668 and again between 718 and 724. While initial support may be found near 642-1/2 and again near 610.
KC Wheat Action Plan Summary
We continue to look for any remaining opportunities the market may present as the marketing year begins winding down for Old Crop. No action is recommended at this time for the 2022 Old 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 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 July contract continues to be under the bearish influence of the key reversal left on 4/03. Support may be found near 791 and again near 772. While initial resistance lies near 835 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 slightly lower with the markets relatively quiet so far. The US Dollar has fallen sharply, which should be friendly to commodities, and with corn so oversold, funds may be easing on their selling.
There has been little in the way of fresh news, but tight old crop supplies in the western Corn Belt have kept basis firm while improving ethanol margins keep domestic demand strong for old crop.
The Black Sea grain deal has been a point of contention and it looks as though Russia will not renew a third extension of the deal unless sanctions on them are lifted, which would be supportive for corn and wheat.
Planting in the US is beginning to kick off in a bigger way as weather improves, and most combines should be rolling by the beginning of next month as rain chances are below normal in the Midwest.
Soybeans are trading slightly higher thanks to a bounce in soybean oil that comes despite another drop in crude oil prices, as well as a 1.76% decline in palm oil futures. Soybean meal is currently trading lower.
While Brazil’s harvest is now over 95% completed and those bushels are dominating exports, Argentina has stopped offering exports now that their production is estimated at only 22-25 mmt.
A longer-term bearish factor is that Brazil is planning to expand their planted acres for 23/24 and their production estimate for that marketing year is coming in at 159 mmt compared to the 153 mmt this year.
Canada is expected to release their seeding intentions with canola seeding up 500,000 acres to 21.8 million acres, which is up 0.9% from last year.
All three wheat products are lower today, but Minneapolis is leading the way down with KC wheat trailing behind as weather improves slightly.
Rains are expected to continue tonight in the hard red winter wheat areas and may even go into the weekend, while heavy storms will hit the Texas panhandle and go into western Oklahoma early on Wednesday.
As with corn, wheat traders are looking closely at the Black Sea grain deal which is at risk of not being renewed if Russia doesn’t have their sanctions lifted. This could be friendly for wheat if the deal is not renewed.
Today, Stats Canada released their seeding intentions which showed that all wheat will rise by over 1 million acres to 27 million acres which is up 6.2% from a year ago.
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 higher this morning as funds who were previously exiting commodities may now see the oversold technicals as a buying opportunity.
Brazilian corn exports are now seen at 166,552 tons in April vs 186,552 estimated tons. Brazil still has corn to sell but may begin running low.
China plans to grow 88% of their own grain by 2032 which will mainly effect corn, soybeans, wheat, and rice.
Below normal temperatures in the Midwest have caused some early morning freezes the past few days which could damage emerging corn.
Soybeans are trading slightly higher while both soybean meal and oil are lower. The fundamental picture is not friendly short term with Brazil’s harvest, so today’s bounce is likely technical with soybeans oversold.
Traders will continue to watch the Brazilian export values vs those of the US, and as long as Brazil remains so much cheaper it will be difficult for futures to gain momentum.
The USDA attaché now sees the Brazilian 23/24 soy crop at a whopping 159 mmt as their planted acres are planned to expand.
As US exports lag, Brazilian soy exports are seen reaching 14.1 million tons in April vs the 15.15 million tons expected in previous estimates.
Chicago and KC wheat are trading slightly higher while Minn is a bit lower. Not much has changed in the fundamental picture, but the grain complex has a friendlier feel today with the sharp decline in the US dollar.
Poland has signaled that they will not lift the Ukrainian import ban in June. The ban came after the influx of Ukrainian grains drove down local prices in Poland, hurting their producers.
Canadian wheat farmers have asked their country to step in to end the strike in the country. The public sector started a massive strike which is threatening shipments of grain.
On Monday, the International Grains Council estimated that world wheat production will drop from 803 mmt in 22/23 to 787 mmt in 23/24, and will be short of demand by 7 mmt.
Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing by Stewart-Peterson and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Stewart-Peterson Inc. Reproduction of this information without prior written permission is prohibited. Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Reproduction and distribution of this information without prior written permission is prohibited. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing.
Stewart-Peterson Inc., Stewart-Peterson Group Inc., and SP Risk Services LLC are each part of the family of companies within Total Farm Marketing (TFM). Stewart-Peterson Inc. is a publishing company. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services LLC is an insurance agency. A customer may have relationships with any or all three companies.
Corn traded lower into support near 600 for the July contract on slow demand but reversed off the lows to close mixed with only the May contract closing lower on the day.
Soybeans closed in the red as funds liquidate long positions on demand concerns with Brazilian export prices well below US offers.
Soybean meal and oil also continued to slide lower on slowing meal demand, and weaker crude and Malaysian palm oil.
The forecast for rain in the Southern Plains continued to weigh on the wheat markets today with KC contracts leading the way.
Adding pressure to the grain markets, the US Dollar traded higher, overtaking yesterday’s losses on renewed concerns in the banking system.
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Corn
Corn Action Plan Summary
No action is recommended at this time for Old Crop. China’s recent purchases have slowed, weighing on prices. Our intent is to maximize any remaining opportunities the market may present as we begin to move towards the latter stages of the marketing year when end-users vie for tightly held supplies and weather concerns can build premium.
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 and given market factors that could move the price of corn above $7 or below $5, owning both calls and puts could be warranted for a period of time.
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 May contract was likely pressured due to traders rolling long positions to the July contract to avoid the delivery process which begins with First Notice Day on Friday.
The lack of export activity reflects good weather for Brazilian corn production and their cheaper export values versus the US.
Most deferred contracts posted a small hook reversal meaning prices closed higher after trading below yesterday’s low price. This might be a signal that selling interest is beginning to wane.
The forecast looks drier but still below normal temperatures for most of the Midwest implying many will not get started until the first week of May, or later.
The USDA’s planting progress report from Monday indicated 14% of the crop was planted, ahead of the 5-year average of 11%. Illinois is 18% complete versus the 5-year average of 11%. Despite less-than-ideal weather in the north, planting progress, so far, is slightly ahead of schedule.
While the near-term trend is down, and the market is oversold. The firm close off the 601 low could provide additional support if buyers enter the market and take profits. Resistance now lies near the recent high of 647-1/2, with further resistance between 660 and 670. Support below the market for the July contract rests between 607 and 600, and then again between 568 and 562.
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. Our research indicates there is about a 74% likelihood of improved prices moving into the June time frame as weather premium is built into the market.
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 for the fifth consecutive day and were under pressure from both soybean meal and oil, but bean oil posted the biggest losses as crude fell over 1.50 a barrel.
The US Dollar moved higher today putting pressure on most commodities including the soy complex, but the downward momentum is also coming from major selling of cash beans out of Brazil at relatively much cheaper prices.
Brazil’s harvest is now over 95% complete with yields exceeding original estimates, and storage is becoming an issue there prompting many producers to unload on cash sales which has weakened prices and basis.
US soybean planting is 9% complete and ahead of the 5-year average of 4% with Illinois at 15%, Iowa at only 5%, Louisiana at 41%, and Mississippi at 34% complete.
The market has given back most of the gains from the rally off the March lows. The near-term trend is down, and key support lies near 1405 with further support near 1350. Should support hold and buyers enter the market, resistance may be found between 1460 and 1501.
Wheat
Market Notes: Wheat
Though all three wheat classes posted losses, they all finished roughly 9-10 cents above their daily lows.
The forecast for rain in Kansas and Oklahoma offered some weakness, with general coverage of up to 1.5 inches of rain expected, while some areas could see as much as 2 inches.
On the Crop Progress report, the USDA rated winter wheat 26% good to excellent, down 1% from last week. Additionally, they said that only 5% of the spring wheat crop has been planted versus 12% on average.
The next renewal of the Black Sea grain deal is in a few short weeks, but there is still uncertainty about whether Russia will renew or not.
According to APK Inform, Ukraine’s grain production could fall to only 45.6 mmt in 23/24, versus 86 mmt prior to the war.
The higher US Dollar Index today offered no help to the wheat market. As of this writing, it is up about 0.52 at 101.87.
Chicago Wheat Action Plan Summary
No action is currently recommended for the 2022 crop. We continue to look for any remaining opportunities the market may present as the marketing year begins winding down.
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 any develop for corn. There is also a 53% likelihood of better prices in the next 60 days according to our research.
No action is recommended at this time for the 2024 crop. We are looking for stronger markets to present themselves as we move further into the marketing year.
The market broke below the March low of 654 and is oversold. The reversal off the 642-1/2 low could add further support if buyers come into the market to cover short positions and take profits, with initial resistance near 668 and again between 718 and 724. While initial support may be found near 642-1/2 and again near 610.
KC Wheat Action Plan Summary
We continue to look for any remaining opportunities the market may present as the marketing year begins winding down for Old Crop. No action is recommended at this time for the 2022 Old Crop.
We continue to look for better prices before making any 2023 sales. Crop ratings overall are at historically low levels, and concerns continue with the dry growing conditions. Additionally, our research shows there is a 53% likelihood of better prices in the next 30 days.
Patience is warranted for the 2024 crop. The 2024 market has limited liquidity, and it may be until mid-summer before recommendations are posted.
The July contract continues to be under the bearish influence of the key reversal left on 4/03. Support may be found near 791 and again near 772. While initial resistance lies near 835 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.
The July contract continues to be under the bearish influence of the reversal left on 4/03. Support may be found between 845 and 825. While resistance could be found between 895 and 913.
Corn is trading lower for the fifth consecutive day, as planting continues in the US and South America sells their cash corn for significantly less than the US offers.
The US Dollar is moving higher today and that, along with lower crude and lower stocks, is putting pressure on grains.
Weekly exports were poor for corn last week and a net cancellation of 326,000 tons of US corn that were to be shipped to China was a bearish influence.
Corn plantings are estimated at 14%, above the 5-year average of 11% with planting ahead of schedule in the South.
Soybeans are trading sharply lower again today and the May contract is over 50 cents off yesterday’s high. Both soybean meal and oil are lower, but oil is posting the biggest losses with crude oil declining over 2 dollars a barrel.
Crop progress showed soybean plantings slightly ahead of schedule with 9% of the crop planted – with Illinois at 15%, Indiana at 8%, Ohio at 6%, and Nebraska at just 4%. One crop scout put the US soybean yield at 52 bpa.
Brazilian soybean export prices have dropped significantly but may be bottoming out as farmer selling slows down for new crop sales.
Last week there was talk that China purchased between 40 and 50 cargoes of soybeans from Brazil which would explain poor export sales in the US.
Wheat is lower with the rest of the grain complex and is being led lower by KC wheat again as weather forecasts call for well-needed rain in Kansas and Oklahoma.
Crop ratings showed the good-to-excellent rating for winter wheat fell by 1% to just 26% which is well below the 5-year average, but 18% of the wheat crop is heading vs 14% on average. For spring wheat, only 5% of the crop is planted vs 17% on average.
Russia is threatening to end Ukrainian grain shipments through the Black Sea which could be supportive for US prices.
APK Inform sees Ukraine’s grain harvest potentially falling by 13% to just 45.6 million metric tons in the 23/25 marketing year compared to 86 mmt before the Russian invasion.
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 slightly lower again this morning with the pressure in large part due to China’s cancellation of a big corn shipment from the US, sparking fears that more will come.
Yesterday, new crop corn declined sharply but rallied to end the day steady, hinting that traders may be concerned about weather delays effecting yields down the road.
Yesterday’s crop progress showed corn planting advancing from 6% planted to 14%, above the 5-year average of 11% despite weather challenges.
The 6 to 10 day forecast is calling for lower than normal precipitation in the Corn Belt which will be helpful for planting, but below normal temperatures may slow germination on planted acres.
Yesterday, soybeans closed sharply lower but are only down slightly this morning with the majority of losses in new crop contracts. Both soybean meal and oil are steady so far despite a decline in crude oil.
The spread between May futures and Nov is approaching 2 dollars, and as time presses on, Nov will likely gain value to narrow that spread as the Nov contract retains good crush margins which are valuable to processors.
The crop progress report showed soybean plantings at 9% which were in line with expectations and are also in line with the 5-year average.
Brazilian cash prices have recently declined sharply, and both the US and Argentina have purchased Brazilian beans, with Argentina needing the soybeans to meet their export needs for soybean meal and oil.
Wheat is lower again this morning and continues to be pulled down by KC wheat due to the forecast which says that most of Kansas and Oklahoma will receive significant and sorely needed rainfall over the next 7 days.
Crop progress showed winter wheat good to excellent conditions slipping by 1% to 26%, and the crop conditions for winter wheat are the lowest ever for mid-April. 18% of winter wheat is headed vs the 5-year average of 14%.
Spring wheat plantings are at 5% complete which is well below the 5-year average of 12%, and better weather will be necessary to improve this crop.
Russia has threatened to retaliate if the G7 proceeds with a total ban on most exports to Russia, and said they would withdraw the safe-transit deal allowing Ukraine to export through the Black Sea.
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.
