Grain Market Insider: October 4, 2023
All prices as of 2:00 pm Central Time
| Corn | ||
| DEC ’23 | 486 | -1.5 |
| MAR ’24 | 501 | -1.25 |
| DEC ’24 | 513.5 | -1 |
| Soybeans | ||
| NOV ’23 | 1273 | 0.25 |
| JAN ’24 | 1292.25 | 0.25 |
| NOV ’24 | 1261.5 | -2 |
| Chicago Wheat | ||
| DEC ’23 | 560 | -8.5 |
| MAR ’24 | 589 | -8.75 |
| JUL ’24 | 623 | -9.75 |
| K.C. Wheat | ||
| DEC ’23 | 666.5 | -16.75 |
| MAR ’24 | 675.25 | -15.25 |
| JUL ’24 | 684.5 | -13 |
| Mpls Wheat | ||
| DEC ’23 | 711.75 | -13.75 |
| MAR ’24 | 736.75 | -11.25 |
| SEP ’24 | 776 | -8 |
| S&P 500 | ||
| DEC ’23 | 4278.5 | 13.75 |
| Crude Oil | ||
| DEC ’23 | 82.97 | -4.47 |
| Gold | ||
| DEC ’23 | 1832.1 | -9.4 |
Grain Market Highlights
- After rallying off the day’s lows, December corn once again hit resistance near 490 and the 50 day moving average as carryover weakness from crude oil and harvest pressure weighed on the market into the close.
- After trading both sides of unchanged, November soybeans settled near even on the day and 12 cents off the high as bull spreading (buying nearby contracts versus the deferred) brought support to the front end relative to the back on the recent uptick in Chinese demand.
- Weakness in crude oil added pressure to soybean oil, while meal followed through on yesterday’s strength before encountering resistance at the 20 day moving average.
- The wheat market continues to be volatile relative to headline news. Reports of more vessels using Ukraine’s export corridor to load grain out of their Black Sea ports weighed heavily on all three wheat classes in today’s trade.
- To see the current U.S. 7 day Precipitation forecast, and Monthly 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
- An overall quiet day in the corn market as the Dec futures failed to push through resistance at 490 and closed the day down 1 ½ cents. A strong selloff in crude oil futures and harvest pressure limited the potential in the corn market on the session.
- The crude oil market traded over 5% lower during the sessions as the latest Energy Information Association report saw gasoline demand drop to the lowest levels since 1998 last week, striking demand fears into an overbought crude oil market.
- The corn market continues to be supported by a slight uptick in demand news. Mexico added a new flash sale of 196,000 mt of corn split between 23/24 and 24/25 marketing years, and ethanol grind remains strong as current corn usage for ethanol production is trending 5.5% greater than last year.
- The USDA will release weekly exports sales on Thursday morning. Corn is expected to show a strong week with new sales for the 23/24 marketing year to range from 1.4-2.0 mmt, and 24/25 marketing year sales to range from 650,000 mt to 750,000 mt. Most of these sales are known with last week’s reported purchases from Mexico.
- U.S. harvest was 23% complete last week, and pace should continue to be firm this week. Harvest pressure will limit the corn markets as fresh supplies pressure the basis and the cash market.
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 490 – 516, and support below the market may be found near 460 and again near 415.
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 were a mixed bag today as they traded higher in the overnight session, but faded into the day. Then, they managed to close just slightly higher in the two front months, with the deferred contracts lower. Soybean meal ended the day higher and soybean oil lower on lower crude oil and palm oil prices.
- On the technical side, November soybeans found strong support at the previous June low of 1256 ¾ and moved higher. Soybeans are technically oversold and may have an opportunity to move higher. In addition, non-commercial traders have a net long position of just 30,058 contracts as of last week, which is relatively low for this time of year.
- Yesterday’s sale of 9.7 mb of soybeans to China during their Golden Week holiday was encouraging, but U.S. new crop bean sales are at just 16.2 mmt compared to 25.5 mmt last year. At this point, U.S. soybeans are now competitive with Brazil’s offers and should help U.S. exports.
- As the value of soy products has continued to decline over the past month, processors have lost some incentive to crush soybeans and yesterday’s Census Crush numbers for August revealed that only 169 mb of soybeans were crushed compared to trade estimates of 172 mb.
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.
Wheat
Market Notes: Wheat
- Rumors that Ukraine re-opened the Black Sea export corridor with Russian support had the wheat market under pressure today. As of this writing, it has not been confirmed, but the trade took notice, nonetheless. Also, two additional ships were confirmed heading toward Ukrainian ports, and 12 vessels are said to be waiting to load.
- While Russian wheat offers are still beating out the U.S., China’s surprise purchase of SRW wheat yesterday signifies that U.S. wheat is becoming more competitive. However, the fact that the U.S. dollar is still at an 11 month high, and still in an uptrend, could continue to weigh on U.S. exports.
- On the bullish side, heavy rains in parts of Brazil may cause concerns for their wheat crop. Additionally, the dryness in wheat growing areas of Australia and Argentina could reduce their production down the road. In any case, more friendly news may be needed to sustain buying interest.
- According to Ukraine’s Agriculture ministry, planting of winter grain has reached 2.99 million hectares as of October 3rd. Of that total, 1.7 million ha is winter wheat, which represents a 58% increase when compared to last year.
- According to SovEcon, as Russian wheat exports increase, on farm stocks have been falling from their record highs. They also estimated that Russian wheat exports will be 2 mmt above the previous year at 48.9 mmt.
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.
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 on September 29 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
