Grain Market Insider: September 13, 2023
All prices as of 1:45 pm Central Time
| Corn | ||
| DEC ’23 | 482.25 | 5.75 |
| MAR ’24 | 496.25 | 5.25 |
| DEC ’24 | 510 | 4.5 |
| Soybeans | ||
| NOV ’23 | 1349.75 | 3.25 |
| JAN ’24 | 1366.25 | 4 |
| NOV ’24 | 1293 | 3.75 |
| Chicago Wheat | ||
| DEC ’23 | 597.25 | 9.75 |
| MAR ’24 | 623.5 | 9.5 |
| JUL ’24 | 647.5 | 7.5 |
| K.C. Wheat | ||
| DEC ’23 | 744.75 | 14 |
| MAR ’24 | 748 | 13.5 |
| JUL ’24 | 733.75 | 13 |
| Mpls Wheat | ||
| DEC ’23 | 787.5 | 8.5 |
| MAR ’24 | 803.5 | 8.25 |
| SEP ’24 | 808.25 | 7.25 |
| S&P 500 | ||
| DEC ’23 | 4521.5 | 7.75 |
| Crude Oil | ||
| NOV ’23 | 87.88 | -0.28 |
| Gold | ||
| DEC ’23 | 1932 | -3.1 |
Grain Market Highlights
- Carryover strength from a firmer wheat market and some short covering supported the corn market as it not only settled higher on the day, but also within a ½ cent of the day’s highs.
- Strength from a sharply higher soybean oil market helped November soybeans close 16 cents off its low and higher on the day, while follow through technical selling from yesterday’s lower close weighed on soybean meal.
- Despite lower crude oil prices, higher palm, and heating oil (diesel fuel) lent support to the soybean oil market, as U.S. fuel distillate stocks for August fell 16% below the 10-year average.
- Black Sea escalation, and the lower than expected USDA Global wheat stocks estimate, continued to support all three wheat classes, which closed higher on follow through buying and short covering from yesterday’s bullish reversals.
- The U.S. dollar has been consolidating the last few sessions with little movement up or down ahead of next week’s Federal Reserve meeting. Long-term, the market may be friendly to the dollar as the U.S. economy is viewed as being in better shape than its European counterparts, and this could add resistance to the commodity markets.
- To see the current U.S. 8 – 14 day Temperature and Precipitation Outlooks, courtesy of 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 action is recommended for 2023 corn. Volatility has been a dominant feature this growing season with slow demand and increased planted acres, followed by hot and dry growing conditions that rallied prices nearly 140 cents and back down again. With the growing season mostly behind us, we are at the time of year when market lows are often made, and while the market may continue to recede into harvest, it is still subject to unforeseen influences that could move prices higher. For now, after locking in gains from the previously recommended purchased 580 puts, Insider is content to wait until after harvest when markets tend to strengthen before considering suggesting any additional sales.
- No 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.
Market Notes: Corn
- Corn futures saw some short covering after bouncing off the low on Tuesday following the USDA report. Buying strength in the wheat market supported corn futures on the session as December corn added 5 ¾ cents.
- Tuesday’s USDA report failed to provide any true positive news as the addition of nearly 800,000 corn acres kept the balance sheet heavy for corn, limiting any price rally. Even with a forecasted lower yield, carry out projections of 2.221 billion bushels for the marketing year were above expectations.
- Cash basis levels will likely be under pressure as corn harvest begins. Harvest was 5% complete last week, and weather forecasts overall are likely to support an ongoing harvest.
- Price action was firm on Wednesday, and that could trigger additional buying strength and short covering. Strong resistance at $4.85 over the December contract could limit buying strength.
- The USDA will release weekly export sales on Thursday morning. Marketing year sales are disappointing, which has limited the upside in the market, and expectation are for last week’s export sales totals to stay soft overall.
Above: The corn market has largely been rangebound since the beginning of August. Two bearish reversals have been posted, one on 8/21 and another on 8/29, and the market continues to be under their influence, though trade has primarily been sideways. Above the market, resistance remains between 495 – 516, and below the market, support 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 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 sales have improved, growing conditions have continued to be variable and questions remain regarding what final yields will be, keeping prices supported. 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 the 2024 crop, though it may not be until after harvest or toward year’s end before we will consider recommending any 2024 crop sales.
- 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.
Market Notes: Soybeans
- Soybeans ended the day higher after a rocky lower start, and yesterday’s selloff following the USDA report. Soybean meal ended lower, but soybean oil was able to gain some traction and closed 3% higher in the October contract.
- Yesterday’s WASDE report was not particularly bearish, but elicited a negative market reaction as trade was possibly expecting friendlier numbers. Final production was pegged at 4.146 bb compared to 4.205 bb in August, while the new crop carryout was called at 220 mb, which was 7 mb higher than the Dow Jones average trade guess. World ending stocks were increased slightly, which added pressure.
- Chinese imports were raised to a record large 102 mmt for old crop and 100 mmt for new crop, which has shown up in more active export sales in the U.S. While the Chinese economy may be sluggish, their demand for Ag products has remained firm.
- Brazil’s total soy exports are expected to reach 99 mmt in 2023, up significantly from a month ago, and soymeal exports are expected to reach 2.16 mmt in September versus 2.06 mmt the previous week.
Above: After filling in the chart gap that was left between 1390-1/2 and 1394-3/4, the market has drifted lower in conjunction with stochastic indicators crossing over in overbought conditions indicating a possible downward market reversal. For now, if prices continue to slide lower, the market may find support near 1330 and again around 1300. If prices regain upward momentum, initial resistance will be in the 1400 – 1410 area.
Wheat
Market Notes: Wheat
- After yesterday’s report, wheat may be finding support at these lower levels, with a positive close in all three U.S. futures classes, as well as Paris milling wheat futures.
- Ukrainian attacks on the Sebastopol port in Crimea, which is controlled by Russia, lent support to wheat today. The war premium may be acting as a catalyst for short covering by the funds, who still hold a large speculative net short position. Additionally, yesterday’s USDA data showed a large 7 mmt reduction in global production as well, which is likely adding fuel to the fire.
- This Friday, September 15, the current EU ban on Ukraine grain imports will expire. Several European nations including Hungary, Romania, Slovakia, Bulgaria, and Poland have indicated that they will issue their own bans if the EU does not extend theirs. The concern of these nations is that a flood of Ukrainian supply could cause their domestic prices to fall. Currently, grain is allowed to flow through these countries on its way to other destinations; at this time, it is not known how that flow of grain may be impacted by any new bans.
- According to the European Commission, EU soft wheat exports since July 1 have reached 5.84 mmt as of September 8, and represents a 27% decline from 8.02 mmt in the same timeframe last year. Also, while Ukraine’s July 1 – September 13 grain exports were down overall, wheat exports totaling 2.5 mmt, were up 36.5% year on year.
- December Chicago wheat stochastics are showing a crossover signal in oversold territory, indicating a potential buying opportunity. Additionally, when looking at historical patterns, wheat tends to establish a seasonal low around this time frame.
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 action is recommended for 2023 crop. Since the end of May, the wheat market has been largely rangebound, 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 rearview mirror, 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 the 600 level before considering any additional sales.
- No 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.
Above: Although the Chicago wheat market recently broke out of the lower end of its trading range, it is also showing signs of being oversold, which can be supportive with the recent bullish key reversal that was posted following the USDA’s recent update. If prices can continue higher, initial resistance may come in between 590 and 615, with further resistance around 645 – 665. Below the market, the next level of support lies between 570 and the December 2020 low of 565.
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 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 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.
Above: Following the USDA update on September 12, the December contract posted a bullish key reversal, where the market made a new low for the move, yet closed higher. If prices continue higher, resistance above the market remains near 772 – 780. Otherwise, support below the market rests near the Sept. 12 low of 709, and again near the Sept. ’21 low of 670.
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 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 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.
Above: On September 5, the December contract posted a bullish reversal from oversold conditions, and while the market retreated, the reversal was not negated. If prices continue to the upside, nearby resistance could be found near 785 – 795 and again around 810 – 820. Otherwise, the next support level below the market is near the Sept. 5 low of 756-3/4, and then near the June ’21 low of 730.
Other Charts / Weather
