Grain Market Insider: October 13, 2023
All prices as of 2:00 pm Central Time
| Corn | ||
| DEC ’23 | 493.25 | -2.75 |
| MAR ’24 | 508.5 | -3 |
| DEC ’24 | 521.25 | -1.5 |
| Soybeans | ||
| NOV ’23 | 1280.25 | -9.75 |
| JAN ’24 | 1300 | -8.75 |
| NOV ’24 | 1251.75 | -8 |
| Chicago Wheat | ||
| DEC ’23 | 579.75 | 8.25 |
| MAR ’24 | 606.25 | 4.75 |
| JUL ’24 | 636.75 | 0.5 |
| K.C. Wheat | ||
| DEC ’23 | 669 | -6 |
| MAR ’24 | 678.5 | -5.5 |
| JUL ’24 | 688.25 | -5.25 |
| Mpls Wheat | ||
| DEC ’23 | 722 | -1.5 |
| MAR ’24 | 746 | -1.25 |
| SEP ’24 | 778.75 | -3 |
| S&P 500 | ||
| DEC ’23 | 4353.5 | -27 |
| Crude Oil | ||
| DEC ’23 | 86.23 | 4.43 |
| Gold | ||
| DEC ’23 | 1942 | 59 |
Grain Market Highlights
- The failure to trade above 500 resistance in the December corn contract likely led to profit taking from yesterday’s gains, despite decent export sales that put the total commitments up 14% over last year, but still behind the USDA’s forecast of a 22% increase.
- Soybean oil traded sharply higher on higher crude oil that showed 5.6% gains from greater Middle East uncertainty. While the strength in bean oil led to a 14 ½ cent gain in December Board crush margins, it didn’t spill over to support meal or soybeans, which succumbed to profit taking from yesterday’s gains and ahead of any potential headline risk over the coming weekend.
- The wheat complex closed the day mixed with Chicago higher, while both Minneapolis and KC finished lower. With a reasonably large short fund position, Chicago contracts may be seeing short covering ahead of potential headline risk over the weekend, whereas Minneapolis and KC likely saw profit taking in the wake of Thursday’s strong performance off of neutral to bearish domestic USDA supply and demand numbers.
- To see the current U.S. 7-day precipitation forecast and 8 – 14 day Temperature and Precipitation Outlooks from the NWS and NOAA, scroll down to other Charts/Weather Section.
Note – For the best viewing experience, some Grain Market Insider content is best viewed with your phone held horizontally.
Corn
Action Plan: Corn
Calls
2023
No Action
2024
No Action
2025
No Action
Cash
2023
No Action
2024
No Action
2025
No Action
Puts
2023
No Action
2024
No Action
2025
No Action
Corn Action Plan Summary
- No new action is recommended for 2023 corn. In the last couple weeks Dec ’23 corn has seen a bump from a low of 467 ¾ to a high of 499. Since mid-August, the psychological 500 level has served as market resistance on the front month. Without any more bullish input, the market remains at risk of sideways to lower price action. In years without bullish fundamental tailwinds at this time of year, the worst case scenarios have seen prices trend slowly lower into anywhere from late November to early January. If you’re new to Grain Market Insider and were not a subscriber during this summer’s rally, Grain Market Insider did recommend making sales into that rally when Dec ’23 was around 624. So for now, the thought process is to hold tight on any further sales recommendations until later this fall or early winter, with the objective of seeking out better pricing opportunities. If the market has not turned around by early winter, then Grain Market Insider may sit tight on the next sales recommendations until next spring. If you end up harvesting more bushels than you can store this fall and must move them, consider protecting those sold bushels with either July or September ’24 call options.
- No new action is recommended for 2024 corn. The Dec ’24 contract has held up better than Dec ’23 as bear spreading over the last several months has brought increased buying interest into Dec ’24 and other further out contract months. Back in late July, the Dec ’23 contract traded up to a 25-cent premium over Dec ’24. Now, Dec ’24 holds a 28-cent premium over Dec ’23. This bear spreading has the Dec ’24 price up about 28 cents from its year-to-date low. The risk for 2024 prices is the same as for 2023 prices, which is a continuation of a lower trend without further bullish input. Grain Market Insider is watching for signs of a change in the current trend to look at recommending buying Dec ’24 call options. This past spring, Grain Market Insider recommended buying 560 and 610 Dec ’23 call options ahead of the summer rally, and having those in place, helped provide confidence to pull the trigger on recommending 2023 sales into that sharp rally, knowing that if corn kept rallying and went to 700 or 800 that the call options would protect those sold bushels.
- No Action is currently recommended for 2025 corn. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted two springs from now. It will probably be late winter or early spring of 2024 before Grain Market Insider starts considering the first sales targets.
Grain Market Insider has issued the following number of corn recommendations:
• 2023: 1 Cash/2 Call/2 Put
• 2024: 2 Cash/0 Call/0 Put
• 2025: 0 Cash/0 Call/0 Put
Market Notes: Corn
- The corn market saw some end-of-the-week profit taking, as it faded off the top end of the Thursday price range. December corn closed 2 ¾ cents lower but finished the week with a small 1 ¼ cent gain.
- The USDA released weekly export sales on Friday morning. Corn sales last week were above expectations at 910,000 mt (35.8 mb) and 87,400 mt (3.4 mb) for 2024-25. Total sales commitments for 23/24 are at 602 mb, up 14% from last year’s levels, but still behind the pace needed to reach the USDA export target of 2.025 billion bushels.
- A strong move higher in crude oil prices helped limit corn selling pressure. Ethanol margins remain positive and have been helping support the corn market.
- On Thursday, the USDA lowered expected corn yield to 173.0 bushels/acre and reduced corn carryout 2.111 billion bushels for the 23/24 marketing year. The friendly report has corn prices challenging resistance over top prices at 498 ¾. This is a key technical barrier and if broken could allow prices to push higher on short covering.
- Harvest pressure limits the market’s upside. Rainfall across the Corn Belt on Friday likely limited harvest progress on Friday. Last week, the corn harvest was 34% complete, and that number should push higher with a strong harvest pace in the front half of the week. The next harvest pace number will be released in Monday’s USDA Crop Progress report.
Above: The corn market has largely been rangebound since the beginning of August, with some minor short covering lifting prices in recent days. Resistance remains between 490 – 516, with initial support between 475 – 480 and then near 460.
Soybeans
Action Plan: Soybeans
Calls
2023
No Action
2024
No Action
2025
No Action
Cash
2023
No Action
2024
No Action
2025
No Action
Puts
2023
No Action
2024
No Action
2025
No Action
Soybeans Action Plan Summary
- No new action is recommended for 2023 soybeans. The Nov ’23 contract has been finding buying interest around the June 2023 low of 1256 ¾, and since the beginning of October, it has also traded largely between 1260 and 1280. The close over 1287 ¼ on October 12 could be a signal that a harvest/fall low is in. The bigger picture, since May 2023, Nov ’23 has traded in a range from 1256 ¾ on the downside to 1435 on the topside. Last summer, Grain Market Insider did make two sales recommendations in the 1310 – 1360 price window versus Nov ’23. Given that those sales recommendations were made and given that now is not the time of year to be making many sales, if any, Grain Market Insider is content to hold tight on any further sales recommendations until later this fall or early winter. The focus for strategy right now is to be on the lookout for any call option buying opportunities. If you end up harvesting more bushels than you can store this fall, consider protecting any sold bushels with July or Aug ’24 call options.
- No action is recommended for the 2024 crop. Nov ’24 continues to trade at a discount to Nov ’23. That discount was over 90 cents in late summer yet has stabilized lately to around the 10-20 cent range. Since July, the Nov ’24 contract has largely traded between 1250 and 1320, so this contract is currently testing the bottom end of that range. To date, Grain Market Insider has not recommended any sales for next year’s soybean crop. First sales targets will probably be early winter at the soonest. Currently, Grain Market Insider’s focus is also on watching for any opportunities to recommend buying call options.
- No Action is currently recommended for 2025 Soybeans. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted two springs from now, and it may be some time before conditions are conducive to consider making any recommendations. Be patient as we monitor the markets for signs of improvement.
Grain Market Insider has issued the following number of soybean recommendations:
• 2023: 2 Cash/0 Call/0 Put
• 2024: 0 Cash/0 Call/0 Put
• 2025: 0 Cash/0 Call/0 Put
Market Notes: Soybeans
- Soybeans ended the day lower following a higher start due to likely end-of-week profit taking and some weakness in soybean meal. Soybean oil closed higher thanks to big gains in crude oil. For the week, November soybeans gained 14-1/4 cents, December meal gained 17.90, and soybean oil lost 0.97.
- The big bullish news of the week was the WASDE report which saw the national yield at just 49.6 bpa, down from the USDA’s last guess of 50.1 bpa. Ending stocks remained at a very tight 220 mb, and world ending stocks fell much further than anticipated. If exports increase through the end of the year, the soybean market could be poised to rally.
- Today’s export sales report was very supportive, with soybean sales at 1.057 mmt, above the upper end of trade estimates, and total soy exports at 1.44 mmt. In addition, daily sales totaling 117,300 mt of soybeans were reported for delivery to unknown destinations for 23/24, and 100,000 mt of soybean cake and meal were reported for delivery to unknown destinations for 23/24.
- With soybeans out of the PNW becoming more competitive, China appears to have stepped up its U.S. purchases. Offers out of the PNW are reportedly 30 cents cheaper than Brazilian offers for November and with Brazil’s soybean supplies running low, now is the window for the U.S. to increase exports.
Above: October 12 soybeans were shocked higher and traded into the resistance area of 1285 – 1323. If the market can maintain upward momentum, it would be poised to make a run to test mid-September prices around 1370. Otherwise, initial support below the market remains near 1250, with key support coming in between 1180 – 1200.
Wheat
Market Notes: Wheat
- Overall wheat had a mixed close today. Chicago futures finished higher alongside Matif wheat, however, Minneapolis and KC contracts posted losses. This may be a delayed reaction to yesterday’s report which wasn’t necessarily bullish for wheat on the U.S. numbers alone. However, the reduction in global production is lending a helping hand to the market.
- The USDA reported an increase of 24.0 mb of wheat export sales for 23/24, but last week’s shipments at 12.6 mb were behind the 13.8 mb per week pace needed to meet the USDA’s 23/24 export goal of 700 mb.
- This morning, private exporters reported sales of 181,000 mt of U.S. SRW wheat for delivery to China during the 23/24 marketing year. This is the second recent sale to China, suggesting that U.S. wheat has become more competitive on the global market.
- The USDA left the Russian wheat crop unchanged at 85 mmt despite some higher private estimates, and they also kept Argentina’s production unchanged at 16.5 mmt in the face of a 14.8 mmt estimate by the Rosario Grain Exchange. This is also despite the growing concern over drought in that region. Interestingly, the USDA did reduce Australia’s crop for the same reason – drought.
- December Chicago wheat today closed above the 21-day moving average for the first time since the end of July. From a technical perspective, this may indicate that wheat has a near-term bottom in place.
- Ukraine’s grain harvest is said to have reached 31% complete with 35.6 mmt of grain collected. Of that total, 22.2 mmt is said to be wheat. Elsewhere, the French soft wheat crop is said to be 17% planted as of October 9th, up from 3% last week, but behind last year’s pace of 19%.
Action Plan: Chicago Wheat
Calls
2023
No Action
2024
No Action
2025
No Action
Cash
2023
No Action
2024
No Action
2025
No Action
Puts
2023
No Action
2024
No Action
2025
No Action
Chicago Wheat Action Plan Summary
- No new action is currently recommended for 2023 Chicago wheat. The Dec ’23 contract has been in a downtrend since making highs in late July, but has found support near 541 following the September 29 Production report and has since been rangebound between 541 and 581 ½. With weak U.S. export demand driven by cheap Russian exports being the dominant headwind, it appears that prices may be finding value in the current trading range. If a bullish catalyst were to enter the market and push prices over 616, it may signal that a fall low is in place, which would line up with the historical tendency for prices to appreciate into the winter months. If you are a newer subscriber, Grain Market Insider made sales recommendations in the late June rally around 720, and again earlier this fall near 604. With those two sales, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales in the 600 – 650 range. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.
- No new action is recommended for 2024 Chicago wheat. Currently, July ’24 is trading at a 68-cent premium to the Dec ’23 contract as bear spreading, due to fund positioning and weak fundamentals, has driven the Dec ’23 contract closer to 550, while the July ’24 contract remains near 625. The risk for the July ’24 contract remains the same as for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. At the end of August, Grain Market Insider recommended purchasing July 590 puts to prepare for this possibility, and back in June, Grain Market Insider recommended two separate sales that averaged about 720 to take advantage of the brief upswing. If the market receives the needed stimulus to move prices back toward June’s highs, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.
- No action is currently recommended for 2025 Chicago Wheat. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted a year from now. It will probably be mid-winter before Grain Market Insider starts considering the first sales targets.
Grain Market Insider has issued the following number of Chicago wheat recommendations:
• 2023: 1 Cash/0 Call/0 Put
• 2024: 2 Cash/0 Call/1 Put
• 2025: 0 Cash/0 Call/0 Put
Above: December wheat has been consolidating since the break on September 29. The market’s previous range of 570 – 618 is an area of resistance which will need more bullish input to rally through. If the market retreats lower, support below the market resides between 540 – 533.
Action Plan: KC Wheat
Calls
2023
No Action
2024
No Action
2025
No Action
Cash
2023
No Action
2024
No Action
2025
No Action
Puts
2023
No Action
2024
No Action
2025
No Action
KC Wheat Action Plan Summary
- No new action is recommended for 2023 K.C. wheat crop. The Dec ’23 contract has been in a downtrend since making highs in late July and continues to search for support while trading about 40 cents off the contract lows from July ’21. With weak U.S. export demand, driven by cheap Russian exports, being the dominant headwind, the market is in need of bullish input to stabilize and rally prices back higher. If a bullish catalyst were to enter the market and push prices towards 750 it may signal that a fall low is in place, which would line up with the historical tendency for prices to appreciate into winter and early spring. Earlier this year, Grain Market Insider made a sales recommendation in the late May rally around 1170. With that sale, Grain Market Insider’s strategy is to look for price appreciation going into this winter as weather becomes a more prominent market mover, with an eye on considering additional sales north of 700, and again around 750 – 800. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.
- No new action is recommended for 2024 K.C. wheat. Currently, July ’24 is trading at an 18-cent premium to the Dec ’23 contract, up from a 60-cent discount last July, as bear spreading due to weak fundamentals has driven the Dec ’23 contract closer to its contract lows, while the July ’24 contract remains more elevated as it tests Feb ’22 lows. The risk for the July ’24 contract is much like that for Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode, and in mid-August, Grain Market Insider recommended purchasing July 660 puts to prepare for this possibility. Also, back in July, Grain Market Insider recommended a sale near 800 to take advantage of elevated prices before they eroded further. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further, and Grain Market Insider will be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.
- No action is currently recommended for 2025 K.C. Wheat. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted a year from now. It will probably be mid-winter before Insider starts considering the first sales targets.
Grain Market Insider has issued the following number of K.C. wheat recommendations:
• 2023: 0 Cash/0 Call/0 Put
• 2024: 1 Cash/0 Call/1 Put
• 2025: 0 Cash/0 Call/0 Put
Above: Since the end of September, K.C. wheat has been consolidating with initial support just below the market near the September 12 low of 655. If the market retreats lower and breaks through 655, the next levels of support come in around 630 and 575. Initial resistance to the upside may be found around 700 and again near 722.
Action Plan: Mpls Wheat
Calls
2023
No Action
2024
No Action
2025
No Action
Cash
2023
No Action
2024
No Action
2025
No Action
Puts
2023
No Action
2024
No Action
2025
No Action
Mpls Wheat Action Plan Summary
- No new action is currently recommended for the 2023 New Crop. The Dec ’23 contract has been in a downtrend since making highs in late July and continues to search for support while showing signs of being oversold. With weak U.S. export demand driven by cheap Russian exports being the dominant headwind, the market is in need of bullish input to stabilize and rally prices back higher. If a bullish catalyst were to enter the market and push prices towards 800, it may signal that a fall low is in place, which would line up with the historical tendency for prices to appreciate into winter. Earlier this year, Grain Market Insider made a sales recommendation during the July rally near 820. With that sale, Grain Market Insider’s strategy is to look for price appreciation going into this winter with an eye on considering additional sales around 750 – 800, and again north of 825. If at that point the market remains strong and continues to rally, Grain Market Insider will consider potential re-ownership strategies to protect current sales and add confidence to make additional sales at higher prices.
- No new action is currently recommended for 2024 Minneapolis wheat. In the last three months, the Sep ’24 contract has gone from a 60 – 80 discount to Dec ’23, to a nearly 60-cent premium. Weak fundamentals led bear spreading to drive Dec ’23 in search of new contract lows, while Sep ’24 remains nearly 30 cents off its low from last June. The risk for the Sep ’24 contract is much like that of Dec ’23. The market needs bullish input to move prices higher, and without it, prices may continue to erode. In mid-August, Grain Market Insider recommended purchasing July K.C. 660 puts (for their greater liquidity, and correlation to Minneapolis pricing) to prepare for this possibility, and back in July, Grain Market Insider recommended a sale near 815 to take advantage of elevated prices. If the market receives the needed stimulus to move prices back toward 800, Grain Market Insider is prepared to recommend adding to current sales levels. Otherwise, the current recommended put position will add a layer of protection if prices erode further. Grain Market Insider will then be prepared to recommend covering some of those puts to offset some of the original cost and move toward a net neutral cost for the remaining position.
- No action is currently recommended for the 2025 Minneapolis wheat crop. Grain Market Insider isn’t considering any recommendations at this time for the 2025 crop that will be planted two springs from now. It will probably be mid-winter before Grain Market Insider starts considering the first sales targets.
Grain Market Insider has issued the following number of Minneapolis wheat recommendations:
• 2023: 1 Cash/0 Call/0 Put
• 2024: 1 Cash/0 Call/1 Put
• 2025: 0 Cash/0 Call/0 Put
Above: For much of September, December Minneapolis wheat was rangebound, and the breakout to the downside on September 29 set the market up to test support near 665, the May ’21 low. Since then, the market has been consolidating, and while support below the market remains near 665, initial support may also be found near 700. If prices turn higher, initial resistance remains between 745 – 760.
Other Charts / Weather
