Grain Market Insider: September 19, 2023
All prices as of 1:45 pm Central Time
| Corn | ||
| DEC ’23 | 476.25 | 4.75 |
| MAR ’24 | 490.5 | 4.75 |
| DEC ’24 | 506.75 | 2.5 |
| Soybeans | ||
| NOV ’23 | 1315.5 | -1.25 |
| JAN ’24 | 1331.75 | -1 |
| NOV ’24 | 1264.25 | 0 |
| Chicago Wheat | ||
| DEC ’23 | 584 | -7.25 |
| MAR ’24 | 610.25 | -6.5 |
| JUL ’24 | 636 | -4.5 |
| K.C. Wheat | ||
| DEC ’23 | 731 | -4 |
| MAR ’24 | 736.25 | -3.5 |
| JUL ’24 | 722.5 | -1.25 |
| Mpls Wheat | ||
| DEC ’23 | 779.75 | 2.25 |
| MAR ’24 | 795 | 1.5 |
| SEP ’24 | 800.75 | 2.5 |
| S&P 500 | ||
| DEC ’23 | 4487.25 | -14.25 |
| Crude Oil | ||
| NOV ’23 | 90.45 | -0.13 |
| Gold | ||
| DEC ’23 | 1951.7 | -1.7 |
Grain Market Highlights
- Short covering and value buying brought the buyers out in the corn market today after the December contract printed the lowest price in two years during the overnight session.
- With crop conditions reported above expectations, soybeans were pulled in both directions through the day from higher soybean meal and lower bean oil, before settling lower on the day though 7 ½ cents off the day’s low.
- Soybean oil finished 1% lower with follow through selling from Monday’s losses on nearby excess supply concerns, while meal settled moderately higher on the day with traders likely covering short positions as the market consolidated.
- Spring wheat harvest is in the final stretch, 93% complete as of September 17, and may have contributed to the bounce in the Minneapolis contracts, while K.C. and Chicago contracts continued the selloff from Monday’s weakness, though they finished off the day’s lows.
- To see the current U.S. 7-day Precipitation Forecast and the 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
- Buyers returned to the corn market after December futures pushed to the lowest level in two years in the overnight session. During the day session, December futures reversed higher, closing 4 ¾ cents higher on the day, with the market supported by short covering and value buying.
- The strong price action sets the corn market up for some potential bullish follow through. Managed money is holding a large short position in the corn market, and the turn higher could trigger additional short covering and technical buying.
- The weekly crop progress report showed corn maturity at 54% mature, up 20% from last week and 10% over the 5-year average. Corn harvest is beginning to pick up, at 9% harvested versus 5% last week. The 5-year average is 7% harvested for this time frame.
- Harvest pressure will likely push on cash basis. Weather forecasts overall are likely to support any ongoing harvest. The long-range forecast should support harvest activity overall as rainfall totals will be variable, but the temperature trend is above-average for the next two weeks.
- Strong crude oil prices will likely stay supportive of the corn market, helping support ethanol margins. Last week ethanol production was strong, and the latest EIA report will be released on Wednesday to potentially show additional production strength for the fuel.
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. 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 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 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 closed slightly lower but bounced off sharper lows earlier in the day after finding support near the 100-day moving average. Soybean meal ended higher, while soybean oil was pressured by lower global veg oils.
- Yesterday afternoon, the USDA released crop progress which surprisingly showed no change in the good to excellent ratings for soybeans and was kept at 52%, but focus is turning to the early maturation and soybeans dropping leaves which came in at 54%, up from 31% last week.
- In central and southeast Brazil, dryness and intense heat is forecast throughout the week which is bringing concern for recently planted soybean seedlings. With such a tight U.S. carryout, Brazilian weather problems this season could provide bullish momentum to the market.
- Low water levels on the Mississippi River are negatively impacting basis for many producers, but rains forecast in the northwestern Plains and Midwest through Saturday could make their way to the river to raise levels in the next two weeks.
Above: Since negating the bullish reversal of September 13, the market has retreated into the 1300 – 1330 support area and is becoming oversold. Should 1300 support fail, the next target area of support is near the May 31 low of 1270. If prices turn higher, initial resistance now sits between 1368 and the 50-day moving average, about 1385.
Wheat
Market Notes: Wheat
- According to the USDA, 15% of the winter wheat crop is now planted, up from 7% last week. Additionally, 93% of U.S. spring wheat is harvested versus 87% last week.
- Russia continues to dominate on the export front with wheat export values reportedly falling again. Consultancy IKAR is indicating $235 per tonne FOB, while Sov Econ is reporting $245 per tonne. Their dominance also includes sales to China. China’s January – August wheat imports total 9.6 mmt, up 53% from last year.
- The first of two civilian vessels to have entered Ukrainian ports have reportedly left with 3,000 mt of grain. While it is unclear what percentage of that was wheat, what is clear, is the fact that Ukraine is doing everything in their power to export in spite of the war.
- Rio Grande Do Sul is the top wheat producing state in Brazil, and the rain they are receiving could cause damage and quality concerns. Apparently, the rate of disease is increasing. Nevertheless, Brazilian wheat prices are declining due to harvest pressure and good supply. Like Russia, this could put pressure on U.S. exports.
- The Australian Bureau of Meteorology has come out and stated that El Nino is likely to last through February. This pattern typically means less rainfall in eastern Australia. With a heat wave going through, and dryness already expanding, this does not bode well for their crop.
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 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 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: Following the USDA’s 9/12 update, the market posted a bullish reversal and traded into the 590 – 615 resistance area. If the market breaks through to the upside, further resistance could be found between 645 – 665. Otherwise, if the market turns lower, 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 initially retreated, the reversal was not negated. Currently, nearby resistance remains near 785 – 795 and again around 810 – 820. The next support level below the market remains near the September 5 low of 756-3/4, and then near the June ’21 low of 730.
Other Charts / Weather
