Grain Market Insider: September 22, 2023
All prices as of 2:00 pm Central Time
| Corn | ||
| DEC ’23 | 477.25 | 2 |
| MAR ’24 | 492.25 | 2.25 |
| DEC ’24 | 507 | 2 |
| Soybeans | ||
| NOV ’23 | 1296.25 | 2.5 |
| JAN ’24 | 1313.5 | 2.75 |
| NOV ’24 | 1256.75 | 2.75 |
| Chicago Wheat | ||
| DEC ’23 | 579.5 | 3.75 |
| MAR ’24 | 606.5 | 4.25 |
| JUL ’24 | 633.5 | 4.75 |
| K.C. Wheat | ||
| DEC ’23 | 711.25 | 0.75 |
| MAR ’24 | 718.5 | 1.5 |
| JUL ’24 | 711.25 | 2 |
| Mpls Wheat | ||
| DEC ’23 | 770.5 | 3 |
| MAR ’24 | 787.25 | 3.5 |
| SEP ’24 | 795.5 | 5.75 |
| S&P 500 | ||
| DEC ’23 | 4368.75 | -3.25 |
| Crude Oil | ||
| NOV ’23 | 90.36 | 0.73 |
| Gold | ||
| DEC ’23 | 1944.4 | 4.8 |
Grain Market Highlights
- Corn futures recovered from Thursday’s sell off managing to close a penny higher on the week, concerns over slow exports continue to plague corn as harvest continues to ramp up.
- Soybeans were slightly higher to end the week, the trade awaits harvest reports as combines have just started rolling across the Midwest.
- Soybean meal futures were weaker while front month soybean oil found support at the 200-day moving average and followed soybeans and crude oil higher to end the week.
- All three wheats closed higher to end the week but remain near recent lows and under pressure from a continued strong US Dollar.
- To see the current US 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
- The corn market saw some price recovery after Thursday’s risk off trade. December corn gained 2 cents on the session but found enough strength to turn 1 cent higher for the week, closing 9 ½ cents off the contract low from Tuesday morning.
- Corn harvest continues to ramp up with early yield results being extremely variable based on the weather for the past growing season. Harvest pressure will likely affect the cash basis. Corn harvest was 9% complete last week and has advanced this week, despite some areas receiving rain.
- Concerns regarding barge traffic on the Mississippi River due to low water levels will limit the corn market and likely pressure basis. Grain barge traffic on the Mississippi River last week was down 38% year-over-year and 76% below the 3-year average.
- Corn demand will stay a focus in the weeks ahead. Ethanol margins are good, but higher gas prices could limit ethanol demand. Current corn export sales commitments for the marketing year are at 462 mb, which is down 6% year-over-year. The USDA is forecasting a 23% rise in US corn exports for the marketing year.
- Corn futures are trying to carve out a bottom, and overall price action was improved this week. The corn market will need additional short covering and follow through next week to mark a possible turn higher in the near term.
Above: The corn market has largely been rangebound since the beginning of August, and it continues to be under the influence of two bearish reversals, one posted on 8/21 and the other on 8/29. 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 ended the day slightly higher but backed off from higher gains earlier in the day. Soybean meal started the day higher but ended lower, and soybean oil ended higher. Trade is quiet to lower with harvest beginning.
- Argentina plans to plant the same number of acres this season as last but is anticipating a much higher production as drought should not be as much a factor this season. Brazil’s crop is forecast to grow significantly to 162.4 mmt, which is much bigger than the previous record crop.
- Basis is expected to erode further into harvest as low water levels on the Mississippi River once again affect barge traffic. Heavy rains are expected from the northwestern Plains through Texas and Arkansas over the week which could help improve water levels.
- There were no soybean sales reported today, and yesterday’s export sales report was far below expectations, but there were large soybean meal sales recorded with some being record large. It seems that the US is picking up some soymeal business from Argentina after the drought cut their production.
Above: While the soybean market recently broke through the 1300 level of support, it continues to show signs of being oversold, which can be supportive. Currently, the next level of support lies near the May 31 low of 1270, with initial resistance above the market may be found near 1325 and again near the 50-day moving average.
Wheat
Market Notes: Wheat
- Wheat stopped the bleeding today with a positive close, however, it still remains near contract lows as exports weigh on the market. Additionally, the fact that the Federal Reserve may issue interest rate increases for a longer timeframe pressured commodities yesterday, and may continue to do so in the near future.
- News outlets have reported that another vessel has left Ukraine and is destined for Egypt, carrying 18,000 tons of wheat. Additionally, three new vessels are headed for Ukrainian ports to be loaded with grain and iron ore that will be shipped to China and Egypt.
- The International Grains Council increased their estimates of world wheat and corn stocks. According to the IGC, the 23/24 stockpiles are projected at 588 mmt of grain, with 263 mmt of that being wheat. That is a 2 mmt increase in the wheat estimate; the decline in production may be offset by less demand.
- Ukraine’s grain harvest is now 14% complete, totaling 29.8 mmt so far. That total includes 22.19 mmt of wheat (which is up 16% year on year).
- Due to falling water levels, barge traffic on the Mississippi River is decreasing, while shipping rates are on the rise. According to the USDA, total shipments have declined to 130k tons of grain through September 16th. This compares to 173k tons the previous week. This is also a concern for the availability and cost of fertilizer for those areas that rely on river shipments.
- According to the USDA, as of September 19th, about 59% of the US spring wheat production area remains in drought conditions. Additionally, 47% of the winter wheat area is also in drought.
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
