Grain Market Insider: September 15, 2023
All prices as of 1:45 pm Central Time
| Corn | ||
| DEC ’23 | 476.25 | -4.25 |
| MAR ’24 | 490.5 | -4 |
| DEC ’24 | 508.5 | -1 |
| Soybeans | ||
| NOV ’23 | 1340.25 | -20.25 |
| JAN ’24 | 1355.75 | -20 |
| NOV ’24 | 1282.5 | -18.75 |
| Chicago Wheat | ||
| DEC ’23 | 604.25 | 10.5 |
| MAR ’24 | 629.5 | 9.25 |
| JUL ’24 | 652 | 7.75 |
| K.C. Wheat | ||
| DEC ’23 | 746.5 | 10 |
| MAR ’24 | 751.5 | 10.25 |
| JUL ’24 | 736.25 | 8 |
| Mpls Wheat | ||
| DEC ’23 | 789 | 5.5 |
| MAR ’24 | 804 | 4 |
| SEP ’24 | 808.25 | 2.25 |
| S&P 500 | ||
| DEC ’23 | 4500 | -55 |
| Crude Oil | ||
| NOV ’23 | 90.2 | 0.59 |
| Gold | ||
| DEC ’23 | 1945.9 | 13.1 |
Grain Market Highlights
- Spillover weakness from the soybeans and early harvest pressure weighed on the corn market, which closed in negative territory despite the friendly rally in wheat.
- Poor August crush numbers pressured the soybean market following the release of the NOPA Crush report. The numbers not only came in well below trade estimates, but below last month’s and last year’s totals as well.
- Soybean meal was a follower of soybeans in today’s session, while bean oil got a boost from higher palm oil and an August stocks number that came in well below expectations from the NOPA report.
- Short covering ahead of the weekend on the possibility of further Black Sea escalations and continued southern hemisphere production concerns gave all three classes of the wheat market strength to trade higher through the day and close on the positive side of unchanged.
- To see the current U.S. 7-day precipitation forecast, and 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
- Despite a friendly turn higher in the wheat market, strong selling pressure in soybeans and likely early harvest pressure limited the corn market on the day. Dec corn lost 4 1/4 cents on the session and was down 7 1/2 cents for the week.
- Cash basis levels will likely be under pressure as corn harvest begins. Corn harvest was 5% complete last week and will likely see good progress again this week. Weather forecasts overall are likely to support an ongoing harvest.
- The corn market is still in a sideways to lower and overall consolidating type trade. $4.80-$4.85 remains a strong level of resistance over the Dec contract, with support off Tuesday’s low of $4.73 1/2 as the market moves deeper into harvest.
- Ethanol margins have remained strong, with softening corn prices, and crude oil pushing through $90 a barrel. Ethanol production will likely stay supportive in the market.
- Demand will stay a focus in the market as export demand is still soft. Current total sales commitments for the marketing year are at 439 mb, down 9% from last year’s levels, while the USDA is forecasting an increase in export sales.
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 lower with a loss of 22-3/4 cents for the week in the November contract following lackluster August soybean crush numbers. Soybean meal ended lower, while soybean oil ended higher with help from gains in palm oil.
- The August NOPA Crush report was released and showed 161.453 mb crushed, well below estimates of 167.8 mb. This crush number was well below last month’s 173.3 mb, but ahead of last year. Soybean oil stocks came in at 1.250 bp, which was below estimates of 1.527 bp.
- This week, soybeans were pressured by a reduction in usage on the WASDE report, although ending stocks were called at 220 mb, a very tight number that may only be offset by the expectations for another massive Brazilian crop.
- U.S. drought exposure for both corn and soybeans increased as of September 12, with soybean crops in drought rising by 5% and reaching 48%. This could cause another decline in soybean’s good to excellent ratings in Monday’s Crop Progress report.
Above: Since the end of August, November soybeans have drifted lower and posted a bullish reversal from support near 1330 on September 13. If prices continue higher, initial resistance could be found near the 50-day moving average, with further resistance remaining between 1400 – 1410. Below the market, support may be found near 1330 and again around 1300.
Wheat
Market Notes: Wheat
- El Nino, according to the U.S. Climate Prediction Center, has a 95% chance of continuing through the end of March. Typically, this weather pattern brings drought to areas like India and Australia, but rains to Brazil and Argentina.
- Argentina’s recent rains led to a 6% increase in their crop condition, but still only climbed to a low 24% good to excellent. Despite the El Nino pattern, October looks mostly dry for that region, but globally, drought is expanding in areas like Australia, which could affect their wheat production.
- Stats Canada said that due to drought, Canadian all wheat production will decline to 29.8 mmt versus 34 mmt last year. That represents a 13% year on year reduction as yields are anticipated to be down 17.6%.
- Ukraine is asking Poland not to impose a new grain import ban. Poland has stated that they will implement a ban if the EU ends their current restrictions. Also, while the Black Sea Grain Initiative remains closed for now, one ship has left the Odessa port, traveling via a different route.
- As of September 12, the USDA estimates about 59% of the U.S. spring wheat production area remains in drought.
Action Plan: Chicago Wheat
Calls
2023
No Action
2024
No Action
2025
No Action
Cash
2023
New Alert
Sell DEC ’23 Cash
2024
No Action
2025
No Action
Puts
2023
No Action
2024
No Action
2025
No Action
Chicago Wheat Action Plan Summary
- Grain Market Insider recommends selling a portion of your 2023 Soft Red Winter wheat crop. The wheat market has been very volatile in recent weeks following corn on weather, and headlines regarding Russia and Ukraine. Harvest is now behind us, and while war continues in the Black Sea, and weather continues to be variable, demand remains weak with cheap Black Sea supplies continuing to undercut U.S. offers. Of course, changing headlines can still jolt the market higher, prices have retraced into nearby resistance, and Insider recommends taking advantage of this rally to make an additional sale on your 2023 crop.
- 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. Currently, upside resistance remains 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 770 – 780. Otherwise, support below the market rests near the September 12 low of 709, and again near the September ’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. Currently, nearby resistance remains 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
