Grain Market Insider: October 3, 2023
All prices as of 2:00 pm Central Time
| Corn | ||
| DEC ’23 | 487.5 | -1.25 |
| MAR ’24 | 502.25 | -1.5 |
| DEC ’24 | 514.5 | -2.75 |
| Soybeans | ||
| NOV ’23 | 1272.75 | -4.25 |
| JAN ’24 | 1292 | -4.75 |
| NOV ’24 | 1263.5 | -4 |
| Chicago Wheat | ||
| DEC ’23 | 568.5 | 3.75 |
| MAR ’24 | 597.75 | 1.75 |
| JUL ’24 | 632.75 | 1.75 |
| K.C. Wheat | ||
| DEC ’23 | 683.25 | 6.5 |
| MAR ’24 | 690.5 | 6 |
| JUL ’24 | 697.5 | 5.25 |
| Mpls Wheat | ||
| DEC ’23 | 725.5 | 6.75 |
| MAR ’24 | 748 | 6.5 |
| SEP ’24 | 784 | 2.5 |
| S&P 500 | ||
| DEC ’23 | 4263.25 | -61 |
| Crude Oil | ||
| DEC ’23 | 87.53 | 0.36 |
| Gold | ||
| DEC ’23 | 1841.1 | -6.1 |
Grain Market Highlights
- While corn closed lower on the day with a strong dollar and ongoing harvest, demand has seen an uptick in activity and ethanol margins remain strong, adding a level of support to the market.
- Higher crop ratings and weaker soybean meal and oil weighed on the soybean market, which ultimately closed in the red and 16 cents off its low, after trading on both sides of unchanged.
- Despite the influence of the strong U.S. dollar, all three wheat classes finished the day on the positive side of unchanged. Adding support to the market was a flash sale totaling 220,000 mt of SRW wheat to China, and a forecast of Ukraine’s 2023 wheat production at 21.7 mmt that came in below the USDA’s current estimate.
- The U.S. dollar continued its bull run to make another fresh 10-month high and add resistance to commodities, before giving up some of its gains before the grain market’s close. The dollar’s strength came from higher treasury yields, and more hawkish remarks from Federal Reserve officials stating that interest rates may need to increase once more and stay elevated for an extended period of time.
- To see the current U.S. 5 day precipitation forecast, and the 6 – 10 day Temperature and Precipitation Outlooks from the NWS and NOAA, scroll down to the other Charts/Weather Section.
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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. The 2023 growing season has been marked with many challenges that whipsawed the market up and down in a 140-cent range. And while we are at the time of year when lows are often made, the market is still subject to many unforeseen influences that can move prices higher, like in 2020 when the market went on to test contract highs and beyond after hitting market lows before harvest. For now, after locking in gains from previously recommended purchased 580 puts, Insider is content to wait until later in the year (when markets tend to strengthen) before considering suggesting any additional sales. Insider is also monitoring the market for any re-ownership opportunities, should it experience an extended rally.
- No new action is recommended for 2024 corn. Like the 2023 corn market, prices for the 2024 crop have been dominated by volatility from slow exports and adverse growing conditions which led to a near 80 cent trading range during the summer months. Plenty of time remains to market the crop, and while demand continues to be slow, many uncertainties remain that can move prices higher. After recommending an additional sale for the 2024 crop, Insider may not consider suggesting any further sales until later this winter or possibly even spring. We will continue to monitor the market for any upside opportunities in the coming weeks.
- No Action is currently recommended for 2025 corn. 2025 markets are very illiquid right 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 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
- Corn futures saw some back and fill price action, testing support before closing softer on the session as corn futures traded 1-2 cents lower. The price action could be considered positive as the market held onto yesterday’s gains and closed in the top half of the daily trading range.
- The corn market continues to be supported by a slight uptick in demand news. Mexico has been a more active buyer of U.S. exportable corn, and ethanol margins remain strong. While the overall demand news is still disappointing, slight positive news has helped put a possible fall low in prices going into harvest.
- U.S. corn harvest is now 23% complete according to the USDA Crop Progress report from Monday afternoon. This is slightly ahead of the 5-year average of 21%. Harvest pressure will continue to limit rallies in the near-term
- A strong cold front will be moving through the Midwest going into the weekend, bringing rain chances for later in the week, but also the possibility of the first frost of the season. With the corn crop at 87% mature, damage from a frost/freeze event should be minimal.
- Ethanol margins will likely stay sideways, but supportive in the short term. The stronger ethanol grind has supported the market. The weekly Ethanol Production and Stocks report will be released on Wednesday morning.
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 above the market between 495 – 516, and support below the market may be found near 460 and again near 415.
Corn condition percent good-excellent (red) versus the 5-year average (green) and last year (pink).
Corn percent harvested (red) versus the 5-year average (green) and last year (purple).
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. This season the market has experienced a lot of volatility, not only from USDA reports but also from changing weather patterns, crop conditions, and export sales. While export demand currently lags last year’s numbers, ending stocks are also currently estimated at a tight 220 million bushels. For now, Insider may not consider suggesting any additional sales until after harvest. Although, we will continue to monitor the market for any upside opportunities in the coming weeks.
- No action is recommended for 2024 crop. Grain Market Insider continues to monitor any developments for 2024 soybeans, and while it may be toward year’s end before we will consider recommending any 2024 crop sales, Insider will keep an eye out for any upside opportunities, should the market experience an extended rally.
- No Action is currently recommended for 2025 Soybeans. 2025 markets are very illiquid right 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 ultimately ended the day lower, but came back significantly from their early morning lows, in which the low from June 28 was tested, but rebounded higher from there. Both soybean meal and oil ended the day lower as well.
- Yesterday’s Crop Progress report likely added some bearish pressure today after good to excellent ratings were increased by 2% to 52%, above trade expectations. Harvest is now reportedly 23% complete, which compares with 12% a week ago, and above the 5-year average of 22%.
- China was a buyer of both soybeans and wheat today, but for soybeans, they purchased 265,000 metric tons for delivery during the 23/24 marketing year. Soybean exports have been increasing slowly, but are still far below a year ago.
- Adding more pressure to soybeans are the USDA August soybean crush estimates, which are at 171.6 million bushels, which would be an 11-month low. Crush margins have slipped recently weighing on soy prices, as there has been less of an incentive for processors to crush beans.
Above: The soybean market remains in a downtrend and is oversold, which is supportive if prices turn back higher. Resistance above the market lies between 1285 – 1323. Initial support to the downside lies near 1238 – 1214, with further key support down near 1181.
Soybeans condition percent good-excellent (red) versus the 5-year average (green) and last year (pink).
Soybeans percent harvested (red) versus the 5-year average (green) and last year (purple).
Wheat
Market Notes: Wheat
- Wheat continued the uptrend from yesterday, though with less enthusiasm. Chicago futures posted small gains out to September, but December contracts onward were neutral to negative at the close. The U.S. Dollar Index did make another new near-term high, which continues to pressure the market.
- According to the USDA in Monday’s Crop Progress report, 40% of the U.S. winter wheat crop is planted versus 26% last week, with 15% said to be emerged.
- Adding support to the market, the USDA reported this morning that private exporters reported sales totaling 220,000 mt of SRW wheat for delivery to China during the 23/24 marketing year.
- According to Interfax, as of September 21, Russia has exported 17.7 mmt of grain, with wheat shipments totaling 13.5 mmt. The total grain export number is said to be 1.6 times that of total exported the same time last year. Reportedly, Ukraine’s Ag. Ministry also increased their grain harvest estimate to 21.7 mmt due to better than expected yield results so far.
- Over the next several weeks, the wheat market has the potential to see a short covering rally with U.S. wheat becoming more competitive globally, and several countries at risk of lower production due to weather.
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 wheat market in recent weeks has been sensitive to slow export demand, weather, and headlines regarding the Black Sea region. Now with harvest behind us, and new crop planting upon us, markets can still change suddenly due to El Nino and unforeseen geopolitical events, even though export demand remains weak. Following the recent recommendation to make an additional sale for the 2023 crop, Insider will continue to watch for any violations of support while also looking for prices to reach 650 – 700 before suggesting any further sales.
- No new action is recommended for 2024 Chicago wheat. Considering slow export demand and cheap Russian prices continue to be major headwinds for U.S. prices, Insider recommended buying July ’24 puts to protect unsold grain if prices continue to retreat further. Plenty of time remains to market the 2024 crop with many uncertainties that could shock prices higher, like the world stocks to use ratio at an 8-year low, war in the Black Sea and production concerns in the southern hemisphere. If prices turn around and rally higher, Insider will be looking for opportunities to consider recommending additional sales north of 800, if not, and prices make new lows, unsold bushels will be protected by the recommended July ’24 590 puts.
- No action is currently recommended for 2025 Chicago Wheat. 2025 markets are very illiquid right 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 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: Chicago wheat broke out of its recent range to the downside following the Sept. 29 Grain Stocks report. Nearby support may be found between 524 – 533, while initial resistance above the market is near the low of the previous range, around 570, with heavier resistance near 618.
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. Since the end of May, the wheat market has been influenced by weak demand, changing headlines from the Black Sea region, and the corn market with its own demand and weather concerns. With harvest in the bin, U.S. production has been better than expected and demand remains weak. Still, many supply questions remain unanswered from the Black Sea region and the southern hemisphere, which could push prices in either direction. While Insider will continue to monitor the downside for any breach of major support, we would need to see prices pushed toward 750 – 800 before considering any additional sales.
- No new action is recommended for 2024 K.C. wheat. This year has been dominated by production concerns regarding the 2023 crop, and considering slow export demand and cheap Russian prices continue to be major headwinds for U.S. prices. Insider recently recommended buying July ’24 puts to protect unsold grain if prices continue to retreat further. While war persists in the Black Sea region, production concerns continue in the southern hemisphere due to El Nino, and the world stocks to use ratio remains at an 8-year low. There are still many uncertainties that could shock prices higher, and plenty of time remains to market the 2024 crop. After recommending buying July ’24 660 puts, unsold bushels will be protected if prices make new lows, and if prices turn around and rally higher, Insider will be looking for opportunities to consider recommending additional sales north of 800.
- No action is currently recommended for 2025 KC Wheat. 2025 markets are very illiquid right 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 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 beginning of September, the market has drifted sideways to lower. The recent breakout to the downside has Dec. K.C. wheat looking toward 630 and 575 for the next levels of support, while nearby resistance on the upside rests between 710 – 722.
Winter wheat percent planted (red) versus the 5-year average (green).
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. Weather has been a dominant feature this season with production concerns not only in the U.S., but also Canada and Australia. While prices have been weak due to low export demand, weather and geopolitical events can change suddenly to move prices higher. If prices begin to improve, Insider will consider making sales suggestions, while also continuing to watch the downside for any further violations of support.
- No new action is currently recommended for 2024 Minneapolis wheat. This year has been dominated by production concerns regarding the 2023 crop, and considering slow export demand and cheap Russian prices continue to be major headwinds for prices. Insider recently recommended buying July ’24 K.C. wheat puts to protect unsold grain if prices continue to retreat further. While war persists in the Black Sea region, production concerns continue in the southern hemisphere due to El Nino, and the world stocks to use ratio remains at an 8-year low. There are still many uncertainties that could shock prices higher, and plenty of time remains to market the 2024 crop. After recommending buying July ’24 K.C. wheat 660 puts for the liquidity and high correlation to Minneapolis wheat’s price movements, unsold bushels will be protected if prices make new lows, and if prices turn around and rally higher, Insider will be looking for opportunities to consider recommending additional sales north of 800.
- No action is currently recommended for the 2025 Minneapolis wheat crop. 2025 markets are very illiquid right 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 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: Since early September, Dec. Minneapolis wheat has been largely rangebound, and the recent breakout to the downside, and Sept. 29 push lower has the market poised to test support near the May ’21 low of 665. If prices turn higher, initial resistance may be found between 745 – 760.
Other Charts / Weather
