Corn is mixed at midday with July higher and deferred contracts lower as the bull spreading continues and forecasts turn wetter.
The GFS weather model has shown more rain than the European, but the European has slowly been shifting to be more in line with the GFS and added rainfall over the next 10 days in the Midwest.
Net sales of corn for 22/23 were 172,700 mt and were down 8% from the previous week but up from the prior 4-week average. There were net sales reductions for the 23/24 marketing year of 106,800 mt.
Corn exports of 1,244,700 mt were down 13% from the previous week and 4% from the prior 4-week average as Brazil continues to sell corn for significantly cheaper.
The soy complex is mixed alongside corn with front months higher but November slightly lower. Soybean meal is lower while soybean oil is getting support from higher crude oil.
Palm oil futures have been a large bearish factor for the soybean oil market and palm oil fell 1.72% today as supplies continue to rise in both Malaysia and Indonesia.
China is ramping up their soy purchases chiefly from Brazil and taken in 12.2 mmt in April, which was an increase of 24% from a year ago. Estimates for their imports in May and June are between 12 and 14 mmt.
Net soybean sales for 22/23 were 207,200 mt, up 68% from the previous week, and up from the prior 4-week average. Sales for 23/24 were 264,600 mt, and exports of 247,600 mt were up 7% from the previous week.
Wheat is trading higher today with Minneapolis leading the way and KC following behind. It is possible that ramifications from the Ukrainian dam explosion are supporting the market today.
Russia continues to keep their grip on the export market making sales to Egypt, and there have been reports of Russian offers for August as low as $226/mt FOB Black Sea for 12.5 protein wheat.
In tomorrow’s WASDE report traders are expecting a slight increase to US ending stocks for wheat as a result of very sluggish export sales.
Net sales of wheat for 23/24, which began on June 1, were 234,800 mt, and a total of 877,400 mt in sales were carried over from the 22/23 marketing year. Exports for the period ending May 31 were 87,300 mt, which brought total exports to 17,758,500 mt and down 5% from the previous year.
Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing by Stewart-Peterson and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Stewart-Peterson Inc. Reproduction of this information without prior written permission is prohibited. Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Reproduction and distribution of this information without prior written permission is prohibited. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing.
Stewart-Peterson Inc., Stewart-Peterson Group Inc., and SP Risk Services LLC are each part of the family of companies within Total Farm Marketing (TFM). Stewart-Peterson Inc. is a publishing company. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services LLC is an insurance agency. A customer may have relationships with any or all three companies.
Corn is trading lower this morning following another change in the forecast yesterday evening that calls for wetter weather.
The GFS model has been calling for more rain than the European but yesterday the European started following the GFS more closely.
Today’s export sales will be likely show fair to poor numbers as South American offers remain significantly cheaper.
Brazilian corn production has been estimated higher by Bloomberg around 130.3 mmt, 4.7 mmt higher than the previous estimate.
Soybeans and soybean meal are mixed with front months higher but deferred months lower, but soybean oil slightly higher along with crude oil
Bloomberg has estimated the Brazilian soy crop higher by 0.7 mmt for a total of 155.6 mmt.
In May, Brazil’s shipments to China rose 60% compared to the same period last year, and shipments to Argentina were 979,000, a record high for that destination.
China’s soy imports have hit a record after previously delayed for inspection vessels were able to unload at once. The imports are 66% higher than the previous month.
Wheat is trading slightly higher after yesterday’s sharp selloff. The wheat fundamentals are strong but the market is largely controlled by funds who have an advantage in this thinly traded market.
Traders are waiting to hear the extent of the impact of Ukraine’s destroyed dam which has displaced thousands of residents and ruined the irrigation system.
India received 57% below average rains in the first week of June despite a large monsoon waiting off the southern coast.
Traders are expecting that Friday’s WASDE will show a jump in US winter wheat yields over last month’s USDA estimate.
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 closed sharply lower as weather forecasts continue to point towards cooler and wetter conditions for much of the Corn Belt late next week.
Soybeans ended mixed with Old Crop contracts higher on still tight domestic supplies, while New Crop contracts fell lower on a more favorable US weather outlook into the back half of June.
Soybean meal traded in line with soybeans as nearby contracts were higher, while deferred contracts slumped lower and soybean oil futures were lower across the board.
Wheat finished sharply lower with double-digit losses across all three wheats despite this week’s news of the Ukrainian dam collapse.
To see updated US 6-10 Day Temperature and Precipitation Outlooks from the Climate Prediction Center scroll down to the Other Charts/Weather Section.
Note – For the best viewing experience, some Grain Market Insider content is best viewed with your phone held horizontally.
Corn
Corn Action Plan Summary
No action is recommended at this time for Old Crop. July corn has had nearly a 60-cent rally in the last couple of weeks. Expect volatility to remain in the market, a changing weather forecast can push the market significantly in either direction. If you still have Old Crop to sell, consider using this rally to begin pricing some of those bushels. Don’t forget, there is about a 70-cent inverse between the July and September futures contracts, which could be lost when bids get rolled from one contract to the next in the next few weeks.
No action is recommended at this time for New Crop. With dryness building in the Midwest and an estimated fund short position in excess of 40k contracts, we continue to target the 590 – 630 range in the December futures to suggest adding cash sales. If you don’t happen to have any New Crop sold, you should consider targeting the 550 – 560 area to begin pricing bushels.
Continue to hold current sales levels for the 2024 crop year. We will look for opportunities to make further sales as we move through the 2023 growing season as weather volatility builds.
Grain Market Insider Corn open positions listed above.
Corn prices traded lower on the session as strong selling pressure in the wheat market, and the weather forecast staying on the wetter side for the Corn Belt going into next week limited buying interest.
On Friday, the USDA will release the June WASDE report, and after the recent rally prices may have been squaring up and profit taking going into that report at the end of the week. The June WASDE is expected to show a weaker demand tone and overall increasing corn supplies.
The USDA will release the weekly Exports Sale report on Thursday morning. U.S. corn export sales are expected to remain weak as US exporters struggle for business against cheaper global competition.
Overnight and afternoon weather models are still looking for a change in the current weather patterns, moving to a cooler and wetter overall pattern next week. If realized, the weather premium in the market will likely be pulled out on the fear of improved production with the beneficial rain.
Above: The July contract is beginning to show signs of exhaustion, but Friday’s bullish surge higher is a positive sign that there is support near 575. If current prices can hold and close above the 50-day moving average near 610, the market would be poised to test April’s high of 647-1/2. Support below the market rests between 550 and 530, and again near the 2021 September low of 497-1/2.
Soybeans
Soybeans Action Plan Summary
May was a rough month for soybeans with a 175-cent range, but the market is consolidating, and found support just above 1270. July soybeans continue to be oversold with a tight Old Crop balance sheet, and with dryness concerns building and a seasonal window that is conducive for upside volatility and opportunity, continue to hold on progressing any Old Crop sales for now.
We recommendnot adding to current sales levels for the new 2023 crop at this time. A quick planting pace with favorable conditions and South American competition have pressed US prices down nearly 17% from the beginning of the year. The potential remains for a tighter New Crop balance sheet, as the US Drought Monitor map remains concerning. We would consider recommending the next sales in the 1300 to 1350 area.
Continue to hold off on pricing the 2024 crop. We look to make sales further into the 2023 growing season when selling opportunities tend to improve seasonally.
Soybeans were mixed today with front month July ending higher, but the deferred contracts closing lower as forecasts turn wetter. Soybean meal was bull spread and soybean oil closed lower despite higher crude oil.
Traders have been fixated on weather and lately, it has turned to a more favorable cooler and wetter forecast over the next 7 days. Old crop supplies remain tight supporting the July contract.
Friday’s WASDE report will likely show a revision to Argentinian production to be lower as the USDA has lagged behind other analysts to reflect the damage the drought has done to the soy crop. Trade will also look for an old crop carryout of 223 mb and 345 mb of new crop.
US soy exports have been slow due to Brazil’s significantly cheaper offerings, and analysts are now expecting June exports to be 13.1 mmt vs 9.9 mmt a year ago with China as the major buyer.
Above: After a strong close last week, July soybeans will look for follow-through momentum to turn around a down-trend that has been in place since April. Support should be found near the recent lows of 1300 with nearby resistance near the 1420 area.
Wheat
Market Notes: Wheat
Russia’s FOB offers are now said to be as low as $229 per metric ton. This is pressuring the US export market, as well as futures prices. Additionally, Egypt purchased 55,000 mt of wheat from Russia at some of these low levels.
Despite the recent news that a Ukrainian dam was destroyed by Russia, wheat traded sharply lower today. The damage is said to have caused flooding in agricultural areas, but the trade does not appear concerned.
Russian spring wheat areas could be facing drought with temperatures as high as 90-100 degrees. And due to the El Nino weather pattern, Australian wheat production could also be reduced below what the USDA is estimating to just 26.2 mmt.
Scattered showers across the Corn Belt today likely took away some weather premium in corn and soybeans with some of this weakness spilling over into the wheat market as winter wheat harvest looms on the horizon.
Chicago Wheat Action Plan Summary
No new action is recommended for the 2022 crop. The market is down more than 300 cents from its October high and has become extremely oversold. The July contract may also post its 8th consecutive down month in a row at prices not seen since early 2021, even though wheat inventories of major exporting countries are anticipated to fall to 16-year lows. With the market being this oversold and a fund net position short nearly 113k contracts, we continue to eye the 640 – 670 range to clean up and market any remaining Old Crop inventory.
We recommend not taking any action on the 2023 crop at this time. While the window of opportunity is quickly closing for Old Crop, it is still wide open for better opportunities ahead for New Crop. We are currently targeting a more aggressive window of 720 – 800 to suggest advancing sales and move more New Crop inventory.
No new action is recommended for the 2024 crop at this time. Prices have rallied nicely off of lows to start the month of June. With continued Black Sea tensions July of 2024 futures prices should be able to build off of the recent lows. We are currently targeting the 750-775 area to advance further on sales.
Above: The market appears to have put in short-term lows to end the month of May near the 575 level. A close above the 660 area would be a supportive sign of a trend change to higher. The next area of possible support, if the late May lows do not hold, would be below the market near the September ’20 low of 533-1/4. Resistance above the market could be found between 670 and 724.
KC Wheat Action Plan Summary
No new action is recommended for the 2022 crop. Though most, if not all, of your Old Crop 2022 wheat may be sold, consider storing any remaining Old Crop, if possible, in anticipation of a short new crop this year, and marketing it along with the new crop.
We continue to look for better prices before making any 2023 sales. Crop ratings overall are at historically low levels, and production concerns persist. Additionally, any unforeseen geopolitical changes in the Black Sea region could cause the market to bounce and retrace 25% towards the 2022 high.
Patience is warranted for the 2024 crop. With continued issues in the Black Sea region and with major exporting countries’ stocks expected to fall to 16-year lows, we are willing to be patient with further sales of New Crop HRW wheat. We are targeting just below the 900 level on the upside while keeping an eye on recent lows for any violation of support.
Above: Last week Wednesday’s bullish reversal indicates that there is support near 760. Prices mostly failed to react to the heightened tensions in the Black Sea region to start this week. US harvest selling pressure should keep an upside to any near-term rallies. Resistance may be found above the market between 833 and 850, with further support resting below the market near 736-1/4.
Mpls Wheat Action Plan Summary
No action is currently recommended for the 2022 crop. With planting concerns and a seasonal tendency for old crop prices to increase over the next 4-5 weeks, we are continuing to wait for better prices to develop. The calendar is becoming a constraint though, and we’ll be looking to part with any remaining old crop bushels by mid-June or so.
No action is recommended on the 2023 crop at this time. The September ’23 contract had a 120-cent range in the month of May where it found support just above 770. While the planting pace has largely caught up to the 5-year average, dryness in some areas is increasing. With the market still largely oversold and a full growing season ahead of us, we are not looking to make any sales right now.
We continue to be patient to market any of the 2024 crop. The market for the 2024 crop continues to be illiquid, and it may be early summer before we post any recommendations, continue to be patient.
Above: The July contract continues to be weak and showing signs of being oversold after breaking back below the 800 level this week. With winter wheat harvest on the horizon, spill over selling pressure could plague the spring wheat market in the weeks to come. Resistance currently sits between 820 and 855 and then the recent high of 888-1/2. Support below the market may be found between 770 and 760.
Corn is trading mixed midday with front month July trading slightly higher, while deferred contracts are lower.
Forecasts for the Corn Belt trended a bit wetter and cooler overnight which is pressuring new crop, while on-hand supplies remain tight.
Brazil’s FOB corn offers are reportedly at an 85-cent discount to offers from the US at the equivalent of $4.60 per bushel giving Brazil a clear advantage over exports.
Corn good to excellent ratings came in at 64% and with recent dryness, ratings could decline further on next week’s report.
Soybeans are mixed as well, with July higher by a few cents but deferred contracts lower. Front month soybean meal is higher, while soybean oil is lower despite higher crude.
Scattered showers are falling from Minnesota into the eastern Corn Belt. The 15-day weather forecast is mixed with the GFS model showing more widespread rains and the European models showing modest coverage.
China’s imports of Brazilian soybeans have increased over the past month due to their significantly cheaper offers.
August palm oil fell by 1.9% after reports came out that Malaysia may end up with a surge in output of about 4.7%.
Wheat is trading sharply lower at midday after hovering near unchanged this morning. There are many bullish fundamentals that should be supporting prices, but Russia continues to undercut the market with offers as low as $299/mt.
The big news yesterday was the explosion of the Ukrainian dam which is causing major flooding in both residential and agricultural land, as well as disruptions to irrigation systems.
Argentinian wheat is being planted with poor soil moisture, Australia’s 23/24 wheat production was cut to just 26.2 mmt, and China’s wheat crop has been hit with heavy rainfall severely cutting into production.
In the US, crop ratings are not good but did increase slightly following rains in HRW wheat areas. US spring wheat should be watched for heat and dryness, 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 is trading lower this morning as the market continues to trade weather which is now calling for a large front that should move from Minnesota and into Iowa and Illinois.
Recent dryness has been a bullish factor and caused crop conditions to decline, but as soon as the Corn Belt gets a good rain in the upcoming weeks, crops should perk back up.
Friday’s WASDE report will most likely show a decline in Argentinian corn production as the USDA has stayed far above other analysts, but there is a slight chance they lower US yields too.
Brazilian corn exports continue to climb and reached 1.66 mmt in June vs 1.503 at this time a year ago.
Soybeans are mixed this morning with front month July higher but Nov lower, and both soybean oil and meal higher. Crude oil is higher as well.
Brazilian soy exports reached 13.11 mmt in June compared to 9.946 the previous year. Although Brazil dominates exports, the US had a surprise sale of soybeans to Spain yesterday.
Chinese May soybean imports reached a record 12 mmt which was the highest ever in a month, and June imports could reportedly be even higher.
Brazilian farmers will be receiving 7.6 billion reais to cover expenses in a new farming credit program for the 23/24 season.
Wheat is mixed this morning with Chicago higher but KC and Minn slightly lower. The quiet action is a bit confusing given the escalation in Ukraine yesterday that affects wheat growing areas.
The destruction of the dam in Ukraine presumably by Russia threatens agricultural production as the dam was used to help control irrigation.
The EU’s soft wheat exports rose 11.4% year over year to 28.9m tons, with leading destinations Morocco, Algeria, and Nigeria.
Ukrainian grain exports are at 45.6 million tonnes so far for the July-June season and are down from 47.2 mmt the same time 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 finished higher with July futures leading the surge, as traders digested lower-than-expected good to excellent ratings countered by a continued outlook for beneficial rains later next week.
Soybeans finished fractionally higher after the USDA reported a daily flash sale of Old Crop soybeans to Spain.
Soybean meal closed lower, while soybean oil held onto late day gains despite weakness in crude oil futures.
Wheat ended mixed after trading sharply higher in the overnight session on news of a major Ukrainian dam collapse in a Russian controlled portion of Ukraine.
To see updated US 8-14 Day Temperature and Precipitation Outlooks from the Climate Prediction Center, as well as the latest 7-Day Rainfall Outlook from NOAA, scroll down to the Other Charts/Weather Section.
Note – For the best viewing experience, some Grain Market Insider content is best viewed with your phone held horizontally.
Corn
Corn Action Plan Summary
No action is recommended at this time for Old Crop. July corn has had nearly a 60-cent rally in the last couple of weeks. Expect volatility to remain in the market, a changing weather forecast can push the market significantly in either direction. If you still have Old Crop to sell, consider using this rally to begin pricing some of those bushels. Don’t forget, there is about a 70-cent inverse between the July and September futures contracts, which could be lost when bids get rolled from one contract to the next in the next few weeks.
For 2023 New Crop corn, Grain Market Insider recommends liquidating December ‘23 560 calls. Since our previous recommendation to purchase December ‘23 560 and 610 calls, the December ‘23 corn contract has rallied enough that you should be able to liquidate your 560 call position with enough equity to pay for the December 610 call position. With dryness building in the Midwest, and an estimated fund short position in excess of 45k contracts, we continue to target the 590 – 630 range in the December futures to suggest adding cash sales. If you don’t happen to have any New Crop sold, you should consider targeting the 550 – 560 area to begin pricing bushels.
Continue to hold current sales levels for the 2024 crop year. We will look for opportunities to make further sales as we move through the 2023 growing season as weather volatility builds.
Grain Market Insider Corn open positions listed above.
After two-sided trade for the early part of the session, corn futures turned higher led by the July contract and supported by poorer-than-expected crop ratings, a drier afternoon weather model, and an escalation in the Russia-Ukraine war.
The USDA released weekly crop ratings on Monday afternoon, and the U.S. corn crop was rated 64% Good/Excellent This rating was down 5% from last week and below market expectations, as the crop conditions are reflecting the current dry weather across the Corn Belt. Most noticeable was the impact in the eastern Corn Belt with Michigan down 20%, Illinois down 19%, Ohio down 17%, and Indiana down 10% from last week.
Afternoon weather models are still looking to a more active pattern the second week of June, but models trended slightly drier than the overnight models, helping turn corn price higher into the end of the session.
The corn market will likely stay volatile and choppy this week, focusing on daily weather forecasts and preparing for the June WASDE report to be released on Friday, June 9. The June WASDE is expected to show a weaker demand tone and overall increasing corn supplies.
Above: The July contract is beginning to show signs of exhaustion, but Friday’s bullish surge higher is a positive sign that there is support near 575. If current prices can hold and close above the 50-day moving average near 610, the market would be poised to test April’s high of 647-1/2. Support below the market rests between 550 and 530, and again near the 2021 September low of 497-1/2.
Soybeans
Soybeans Action Plan Summary
May was a rough month for soybeans with a 175-cent range, but the market is consolidating, and found support just above 1270. July soybeans continue to be oversold with a tight Old Crop balance sheet, and with dryness concerns building and a seasonal window that is conducive for upside volatility and opportunity, continue to hold on progressing any Old Crop sales for now.
We recommendnot adding to current sales levels for the new 2023 crop at this time. A quick planting pace with favorable conditions and South American competition have pressed US prices down nearly 17% from the beginning of the year. The potential remains for a tighter New Crop balance sheet, as the US Drought Monitor map remains concerning. We would consider recommending the next sales in the 1300 to 1350 area.
Continue to hold off on pricing the 2024 crop. We look to make sales further into the 2023 growing season when selling opportunities tend to improve seasonally.
Yesterday’s Crop Progress report showed soybeans are 91% planted vs 83% last week, and 76% average. Additionally, 62% of the crop was rated good to excellent (the lowest since 2014).
Soybeans traded both sides of neutral in today’s session, as weather remains an uncertainty. Many areas of the Midwest have seen scattered rains, but no widespread coverage just yet.
Private exporters reported sales of 165,000 mt of soybeans for delivery to Spain during the 22/23 marketing year.
Higher soybean oil today lent some support, despite lower palm and crude oil. Crude oil has set back on doubt that OPEC will stick with their lower production targets, and palm oil was lower after news that Malaysia could see an uptick in output of 4.7%.
Above: After a strong close last week, July soybeans will look for follow-through momentum to turn around a down-trend that has been in place since April. Support should be found near the recent lows of 1300 with nearby resistance near the 1420 area.
Wheat
Market Notes: Wheat
Yesterday’s Crop Progress report showed winter wheat was 4% harvested, which is in line with the average. In addition, 36% of that crop was rated good to excellent vs 34% last week. Finally, spring wheat was said to be 93% planted (in line with average), and 64% of that crop was rated good to excellent.
Wheat was up sharply overnight and early this morning after news that Russia destroyed a key hydroelectric dam in Ukraine. The explosion and destruction occurred at the Nova Kakhovka Dam on the Dnipro River in southern Ukraine. This region produces approximately 6% of Ukrainian wheat.
The Australian agriculture department is projecting a decline wheat production of 30% due to the El Nino weather pattern. This provided some support to wheat early in the session.
On Friday’s WASDE report, the market will receive updated estimates of US wheat production, but the export estimate of 775 mb may have to be lowered due to the current slower export pace.
Chicago Wheat Action Plan Summary
No new action is recommended for the 2022 crop. The market is down more than 300 cents from its October high and has become extremely oversold. The July contract may also post its 8th consecutive down month in a row at prices not seen since early 2021, even though wheat inventories of major exporting countries are anticipated to fall to 16-year lows. With the market being this oversold and a fund net position short nearly 113k contracts, we continue to eye the 640 – 670 range to clean up and market any remaining Old Crop inventory.
We recommend not taking any action on the 2023 crop at this time. While the window of opportunity is quickly closing for Old Crop, it is still wide open for better opportunities ahead for New Crop. We are currently targeting a more aggressive window of 720 – 800 to suggest advancing sales and move more New Crop inventory.
For 2024 New Crop SRW wheat, Grain Market Insider recommends adding to current sales levels. Prices have rallied nicely off of lows to start the month of June. Rallies have recently been difficult to come by for wheat and this is historically a good area to add to current sales levels.
Above: The market appears to have put in short-term lows to end the month of May near the 575 level. A close above the 660 area would be a supportive sign of a trend change to higher. The next area of possible support, if the late May lows do not hold, would be below the market near the September ’20 low of 533-1/4. Resistance above the market could be found between 670 and 724.
KC Wheat Action Plan Summary
No new action is recommended for the 2022 crop. Though most, if not all, of your Old Crop 2022 wheat may be sold, consider storing any remaining Old Crop, if possible, in anticipation of a short new crop this year, and marketing it along with the new crop.
We continue to look for better prices before making any 2023 sales. Crop ratings overall are at historically low levels, and production concerns persist. Additionally, any unforeseen geopolitical changes in the Black Sea region could cause the market to bounce and retrace 25% towards the 2022 high.
Patience is warranted for the 2024 crop. With continued issues in the Black Sea region and with major exporting countries’ stocks expected to fall to 16-year lows, we are willing to be patient with further sales of New Crop HRW wheat. We are targeting just below the 900 level on the upside while keeping an eye on recent lows for any violation of support.
Above: Last week Wednesday’s bullish reversal indicates that there is support near 760, and any follow-through buying could be supportive with the market still showing signs of being oversold. Resistance may be found above the market between 833 and 850, with further support resting below the market near 736-1/4.
Mpls Wheat Action Plan Summary
No action is currently recommended for the 2022 crop. With planting concerns and a seasonal tendency for old crop prices to increase over the next 4-5 weeks, we are continuing to wait for better prices to develop. The calendar is becoming a constraint though, and we’ll be looking to part with any remaining old crop bushels by mid-June or so.
No action is recommended on the 2023 crop at this time. The September ’23 contract had a 120-cent range in the month of May where it found support just above 770. While the planting pace has largely caught up to the 5-year average, dryness in some areas is increasing. With the market still largely oversold and a full growing season ahead of us, we are not looking to make any sales right now.
We continue to be patient to market any of the 2024 crop. The market for the 2024 crop continues to be illiquid, and it may be early summer before we post any recommendations, continue to be patient.
Above: The July contract continues to be weak and showing signs of being oversold. Additionally, open interest is falling, indicating liquidation. The market is showing signs of being oversold, which could be supportive if buying returns. Resistance currently sits between 820 and 855 and then the recent high of 888-1/2. Support below the market may be found between 770 and 760.
Corn is trading higher today with front month July leading the way up, while December is showing only slight gains. Crop progress was supportive, while wetter forecasts may limit upward movement.
64% of the corn crop was rated good to excellent which is a decline from last month and the lowest rating for this date since 2013. Illinois is a concern with only 50% of the crop rated good to excellent.
DTN’s 7-day forecast is calling for moderate rain ranging from Montana to the US Gulf, and beneficial amounts in Kansas and Missouri. A front is also expected to move through the US this weekend.
In Brazil, the second crop corn is off to a good start and could be a record crop, but there is a potential frost threat in June which could move through safrinha corn areas.
Soybeans began the day lower but have reversed higher, while soybean meal and oil have reversed positions as well, with meal now lower and oil higher despite a slip in crude oil.
62% of the soybean crop is rated good to excellent which is the lowest rating for that date since 2014 due to the dry weather. Iowa was rated at 70% while Illinois was rated at only 51%.
Brazil continues to dominate the export market with soybeans, but demand from China may be lagging as their economic growth is potentially slower than expected.
August palm oil fell by 1.9% after reports came out that Malaysia may end up with a surge in output of about 4.7%.
Wheat was an early leader in the grain complex after news of escalations in Ukraine were reported, but prices have backed up from their highs and are now lower on the day.
Ukraine claims that Russia blew up a major dam that could threaten hundreds of thousands of residents, the nuclear power plant, as well as major wheat-growing areas.
Yesterday, the USDA said that 82% of the winter wheat is headed and 4% harvested with 36% being rated good to excellent which was up 2% from the previous week.
On Friday, NASS will update its estimate of winter wheat production and the USDA will do the same in the WASDE. Traders are expecting the USDA to reduce export estimates for wheat for the 22/23 year.
Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing by Stewart-Peterson and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Stewart-Peterson Inc. Reproduction of this information without prior written permission is prohibited. Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Reproduction and distribution of this information without prior written permission is prohibited. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing.
Stewart-Peterson Inc., Stewart-Peterson Group Inc., and SP Risk Services LLC are each part of the family of companies within Total Farm Marketing (TFM). Stewart-Peterson Inc. is a publishing company. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services LLC is an insurance agency. A customer may have relationships with any or all three companies.
Corn is trading higher this morning following yesterday’s crop progress report that showed ratings falling, but support is also coming from a 20-cent rally in wheat today as well.
Corn is now estimated at 96% planted, above 92% last week, but good to excellent conditions have fallen due to recent dryness. Ratings have fallen to 64% from 69% a week ago.
Yesterday at midday, weather forecasts changed and called for more rain within the next 7 days on the GFS model, but traders are unsure if this will hold.
Yesterday’s export inspections showed 46.5 mb inspected for 22/23 putting total inspections down 32% from the previous year.
Soybeans are trading higher along with corn following yesterday’s crop progress, but soy products are mixed with soybean meal higher again but soybean oil lower due to lower palm oil prices.
Crop progress showed that soybeans were 91% planted compared to 83% last week, emergence is at 74% vs 56% a week ago, and the good to excellent rating is at 62% which was below trade estimates at 65%.
On Friday, the USDA will release this month’s WASDE and expectations are for old crop ending stocks to rise slightly and for Argentinian production to be lowered.
India’s palm oil imports hit a 27-month low as buyers seek cheaper soft oils, and palm oil stocks in Malaysia are expecting an output surge that could pressure prices further.
Wheat is leading the grain complex higher this morning following news that a Ukrainian dam was blown up, fighting there has escalated, and Russia says it does not see a way forward to renew the Black Sea Grain deal.
Australian wheat production is now expected to decrease by a third due to extreme drought and the second driest May on record.
Wheat sowing is beginning in Argentina, the major origin country of wheat imported by Brazil. 6.3% of the crop has reportedly been sown so far.
Crop progress for wheat showed winter wheat 4% harvested vs 5% a year ago with a good to excellent rating of 36% vs 24% last week. Spring wheat is 93% planted and 76% is emerged.
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 futures closed lower after trading sharply higher in the Sunday night open. Weather models trended slightly wetter in their mid-day run for areas of desperate need in the eastern Corn Belt.
Soybeans and soybean oil closed lower despite crude oil moving higher on news of a Saudi Arabian production cut. Soybean meal managed to hold onto gains and close back above the $400/ton level.
All three wheats closed higher bucking the lower trend in the row crops. Spring wheat was the biggest winner adding double-digits as forecast models continue to point towards dryness into mid to late June for key producing regions.
To see updated US 6-10 Day Temperature and Precipitation Outlooks from the Climate Prediction Center, scroll down to the Other Charts/Weather Section.
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Corn
Corn Action Plan Summary
No action is recommended at this time for Old Crop. July corn has had nearly a 60-cent rally in the last couple of weeks. Expect volatility to remain in the market, a changing weather forecast can push the market significantly in either direction. If you still have Old Crop to sell, consider using this rally to begin pricing some of those bushels. Don’t forget, there is about a 70-cent inverse between the July and September futures contracts, which could be lost when bids get rolled from one contract to the next in the next few weeks.
For 2023 New Crop corn, Grain Market Insider recommends liquidating December ‘23 560 calls. Since our previous recommendation to purchase December ‘23 560 and 610 calls, the December ‘23 corn contract has rallied enough that you should be able to liquidate your 560 call position with enough equity to pay for the December 610 call position. With dryness building in the Midwest, and an estimated fund short position in excess of 45k contracts, we continue to target the 590 – 630 range in the December futures to suggest adding cash sales. If you don’t happen to have any New Crop sold, you should consider targeting the 550 – 560 area to begin pricing bushels.
Continue to hold current sales levels for the 2024 crop year. We will look for opportunities to make further sales as we move through the 2023 growing season as weather volatility builds.
Grain Market Insider Corn open positions listed above.
Corn futures reversed off overnight highs as weather models are still forecasting rainfall chances to increase around June 12, with a potential pattern shift coming in the back half of the month. The weak price action could lead to additional selling pressure on the Monday night open.
Demand keeps the market cautious as weekly corn export inspections were at 46.5 mb for the week ending June 1. This number was within expectations, but overall export inspections are running 32% behind last year versus a predicted drop in exports of 28% for the marketing year by the USDA. Total inspections are still behind the pace needed to reach USDA targets.
The USDA will release weekly crop ratings on Monday afternoon, and the market is expecting a 2% drop to 67% good/excellent, reflecting the current dry weather across the Corn Belt. Corn planting should be nearly complete, analyst estimate US corn at 97% planted as of Sunday.
The corn market will likely stay volatile and choppy this week, focusing on daily weather forecasts and preparing for the June WASDE report to be released on Friday, June 9. The June WASDE is expected to show a weaker demand tone and overall increasing corn supplies.
Above: The July contract is beginning to show signs of exhaustion, but Friday’s bullish surge higher is a positive sign that there is support near 575. If current prices can hold and close above the 50-day moving average near 610, the market would be poised to test April’s high of 647-1/2. Support below the market rests between 550 and 530, and again near the 2021 September low of 497-1/2.
Soybeans
Soybeans Action Plan Summary
May was a rough month for soybeans with a 175-cent range, but the market is consolidating, and found support just above 1270. July soybeans continue to be oversold with a tight Old Crop balance sheet, and with dryness concerns building and a seasonal window that is conducive for upside volatility and opportunity, continue to hold on progressing any Old Crop sales for now.
We recommendnot adding to current sales levels for the new 2023 crop at this time. A quick planting pace with favorable conditions and South American competition have pressed US prices down nearly 17% from the beginning of the year. The potential remains for a tighter New Crop balance sheet, as the US Drought Monitor map remains concerning. We would consider recommending the next sales in the 1300 to 1350 area.
Continue to hold off on pricing the 2024 crop. We look to make sales further into the 2023 growing season when selling opportunities tend to improve seasonally.
Soybeans ended the day lower after trading either side of unchanged, while soybean meal ended higher but soybean oil was lower despite higher crude oil prices. Weather forecasts changed around midday causing prices to turn negative.
Weather has been the focus for the price movement in corn and soybeans, and up until around noon, forecasts were calling for dryness until mid-June. Forecasts have changed slightly now calling for more rain within the next 7 days in the heart of the Corn Belt where it is sorely needed.
Soybean inspections totaled just 7.9 mb for the week ending Thursday, June 1, bringing total inspections to 1.788 bb and down 3% from the previous year. The USDA is estimating soybean exports at 2.015 bb for 22/23 which is down 7% from the previous year, but those numbers could change on Friday’s WASDE report.
Crop progress will be released this afternoon and planting progress is being estimated at 92% complete from 83% last week, and we will get our first glimpse of the soybean ratings for which analysts are estimating at 65% good to excellent.
Above: After a strong close last week, July soybeans will look for follow-through momentum to turn around a down-trend that has been in place since April. Support should be found near the recent lows of 1300 with nearby resistance near the 1420 area.
Wheat
Market Notes: Wheat
Weekly wheat inspections of 8.6 mb bring the total 22/23 inspections to 728 mb. The USDA is estimating exports at 775 mb, and with only a few weeks left in the marketing year, they may need to revise that estimate on Friday’s USDA report.
As of May 30th, funds have increased their net short position of Chicago wheat to 127,034 contracts (equivalent to about 635 mb).
News outlets are reporting that Russia stated they will not extend the Black Sea grain corridor again in July. However, time will tell. They have made similar statements in the past before the deal was renewed. Russia does appear to still be delaying vessel inspections though.
Weather is improving in China’s wheat-growing regions, where recent heavy rains may have caused some crop damage. From a bigger-picture perspective, there is some concern that global wheat supply could be lower than anticipated, especially if there is adverse weather.
Chicago Wheat Action Plan Summary
No new action is recommended for the 2022 crop. The market is down more than 300 cents from its October high and has become extremely oversold. The July contract may also post its 8th consecutive down month in a row at prices not seen since early 2021, even though wheat inventories of major exporting countries are anticipated to fall to 16-year lows. With the market being this oversold and a fund net position short nearly 113k contracts, we continue to eye the 640 – 670 range to clean up and market any remaining Old Crop inventory.
We recommend not taking any action on the 2023 crop at this time. While the window of opportunity is quickly closing for Old Crop, it is still wide open for better opportunities ahead for New Crop. We are currently targeting a more aggressive window of 720 – 800 to suggest advancing sales and move more New Crop inventory.
No action is currently recommended for the 2024 crop. Although the market is down nearly 17% from the beginning of the year, the July ’24 contract is finding support near 2021 lows. With major exporting countries’ stocks expected to fall to 16-year lows, and the great amount of economic and geopolitical uncertainty in the world, it wouldn’t take much to trigger a 23% retracement of the 2022 highs, toward the 700-750 level, which we are targeting to suggest adding coverage on next year’s crop.
Above: The market is currently oversold and testing support between 593 and 565, with the next area of possible support below the market near the September ’20 low of 533-1/4. Resistance above the market could be found between 670 and 724.
KC Wheat Action Plan Summary
No new action is recommended for the 2022 crop. Though most, if not all, of your Old Crop 2022 wheat may be sold, consider storing any remaining Old Crop, if possible, in anticipation of a short new crop this year, and marketing it along with the new crop.
We continue to look for better prices before making any 2023 sales. Crop ratings overall are at historically low levels, and production concerns persist. Additionally, any unforeseen geopolitical changes in the Black Sea region could cause the market to bounce and retrace 25% towards the 2022 high.
Patience is warranted for the 2024 crop. The 2024 market has limited liquidity, and it may be until mid-summer before recommendations are posted.
Above: Last week Wednesday’s bullish reversal indicates that there is support near 760, and any follow-through buying could be supportive with the market still showing signs of being oversold. Resistance may be found above the market between 833 and 850, with further support resting below the market near 736-1/4.
Mpls Wheat Action Plan Summary
No action is currently recommended for the 2022 crop. With planting concerns and a seasonal tendency for old crop prices to increase over the next 4-5 weeks, we are continuing to wait for better prices to develop. The calendar is becoming a constraint though, and we’ll be looking to part with any remaining old crop bushels by mid-June or so.
No action is recommended on the 2023 crop at this time. The September ’23 contract had a 120-cent range in the month of May where it found support just above 770. While the planting pace has largely caught up to the 5-year average, dryness in some areas is increasing. With the market still largely oversold and a full growing season ahead of us, we are not looking to make any sales right now.
We continue to be patient to market any of the 2024 crop. The market for the 2024 crop continues to be illiquid, and it may be early summer before we post any recommendations, continue to be patient.
Above: The July contract continues to be weak and showing signs of being oversold. Additionally, open interest is falling, indicating liquidation. The market is showing signs of being oversold, which could be supportive if buying returns. Resistance currently sits between 820 and 855 and then the recent high of 888-1/2. Support below the market may be found between 770 and 760.
Corn is mixed at midday with front month July lower by two cents but the December contract 4 cents higher. Traders will be fixated on weather and dryness should drive prices higher.
The 6–10 day forecast is mostly dry in the Corn Belt with scattered showers, but European and GFS models show rain in the second half of June.
The USDA will release crop progress this afternoon which will likely show a decline in the corn crop ratings. Last week’s rating showed 69% good to excellent, but it may drop by a few points due to lack of rain.
Brazilian corn remains significantly cheaper with their FOB corn prices in June below the US July futures. On the Bovespa exchange, July corn is trading at the equivalent of $4.58 a bushel.
Soybeans are trading slightly lower, while soy products are mixed. Soybean meal is about 1% higher, while soybean oil is 1% lower despite gains in crude oil.
The lack of rains recently has helped support soybeans as it has with corn, but more substantial rains will likely fall in the second half of this month, and soybeans are able to deal with the temporary dryness a bit better than corn.
Brazil is said to have harvested 5.7 billion bushels of soybeans, which would be the most on record for a single country. Additionally, they are said to have exported 15.1 mmt in May, which is 40% above last year.
According to the USDA, about 28% of US soybean production areas are in drought as of May 30.
All three wheat contracts are trading higher this morning despite the fact that both corn and soybeans turned around and are now trading lower on the day.
There is concern that the world wheat supply will be much tighter than anticipated, and traders will get an idea of that when the WASDE report is released this Friday.
The Crop Progress report today will give an indication if the recent rains in HRW wheat areas were enough to improve crop ratings. Last week’s ratings pegged US winter wheat’s good to excellent rating at 34%.
The wet weather has subsided for now in China’s wheat growing regions. However, the recent heavy rains could cause quality reductions, or even crop loss.
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.
