Grain Market Insider: April 27, 2023
All prices as of 1:45 pm Central Time
| Corn | ||
| MAY ’23 | 627 | -14.5 |
| JUL ’23 | 581.5 | -19.5 |
| DEC ’23 | 530.75 | -12.75 |
| Soybeans | ||
| MAY ’23 | 1426.75 | -9.25 |
| JUL ’23 | 1403.75 | -11 |
| NOV ’23 | 1255.5 | -11.25 |
| Chicago Wheat | ||
| MAY ’23 | 614.75 | -12.5 |
| JUL ’23 | 629.25 | -12.75 |
| JUL ’24 | 670.75 | -11.25 |
| K.C. Wheat | ||
| MAY ’23 | 778.75 | -14.75 |
| JUL ’23 | 765.25 | -18 |
| JUL ’24 | 741.25 | -16.25 |
| Mpls Wheat | ||
| MAY ’23 | 769 | -39 |
| JUL ’23 | 785 | -28 |
| SEP ’24 | 760 | -10.25 |
| S&P 500 | ||
| JUN ’23 | 4150.75 | 74.75 |
| Crude Oil | ||
| JUN ’23 | 74.79 | 0.49 |
| Gold | ||
| JUN ’23 | 1997.6 | 1.6 |
Grain Market Highlights
- 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.
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Corn
Action Plan: Corn
Calls
2022
No Action
2023
No Action
2024
No Action
Cash
2022
No Action
2023
No Action
2024
No Action
Puts
2022
No Action
2023
No Action
2024
No Action
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.
Market Notes: Corn
- 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
Action Plan: Soybeans
Calls
2022
No Action
2023
No Action
2024
No Action
Cash
2022
No Action
2023
No Action
2024
No Action
Puts
2022
No Action
2023
No Action
2024
No Action
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.
Market Notes: Soybeans
- 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.
Action Plan: Chicago Wheat
Calls
2022
No Action
2023
No Action
2024
No Action
Cash
2022
No Action
2023
No Action
2024
No Action
Puts
2022
No Action
2023
No Action
2024
No Action
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.
Action Plan: KC Wheat
Calls
2022
No Action
2023
No Action
2024
No Action
Cash
2022
No Action
2023
No Action
2024
No Action
Puts
2022
No Action
2023
No Action
2024
No Action
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.
Action Plan: Mpls Wheat
Calls
2022
No Action
2023
No Action
2024
No Action
Cash
2022
No Action
2023
No Action
2024
No Action
Puts
2022
No Action
2023
No Action
2024
No Action
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.
Other Charts / Weather
