Grain Market Insider: September 8, 2023
All prices as of 1:45 pm Central Time
| Corn | ||
| DEC ’23 | 483.75 | -2.5 |
| MAR ’24 | 498 | -2 |
| DEC ’24 | 508.5 | -1.5 |
| Soybeans | ||
| NOV ’23 | 1363 | 3.5 |
| JAN ’24 | 1378 | 4.25 |
| NOV ’24 | 1295.75 | 6 |
| Chicago Wheat | ||
| DEC ’23 | 595.75 | -4 |
| MAR ’24 | 621.75 | -4 |
| JUL ’24 | 647.75 | -4.25 |
| K.C. Wheat | ||
| DEC ’23 | 732 | -5 |
| MAR ’24 | 735.5 | -5.5 |
| JUL ’24 | 722.75 | -5 |
| Mpls Wheat | ||
| DEC ’23 | 770.75 | -4 |
| MAR ’24 | 787.75 | -4.25 |
| SEP ’24 | 795.25 | -6.5 |
| S&P 500 | ||
| DEC ’23 | 4507.25 | 2 |
| Crude Oil | ||
| NOV ’23 | 86.81 | 0.66 |
| Gold | ||
| DEC ’23 | 1943 | 0.5 |
Grain Market Highlights
- Disappointing export sales and anticipation of the USDA’s WASDE report next Tuesday kept the corn market in consolidation mode with prices looking for direction as they closed mildly lower going into the weekend.
- The soybean complex ended the day mixed as decent export sales and strength from soybean meal supported beans. Meal posted a bullish reversal following its recent slide from late August, while soybean oil posted relatively minor losses, following lower palm oil, as traders squared positions ahead of the weekend and next week’s report.
- Prices for December Chicago wheat rebounded into the close after making a new low for the move. Although prices rebounded in Chicago wheat, they still closed lower on the day along with K.C. and Minneapolis, following a relatively tight trade as traders squared positions ahead of Tuesday’s USDA report, and rain is expected to move into the southern Plains.
- To see the current U.S. Temperature and Precipitation Outlooks for September, 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
- Quiet price action is the norm in the corn market as Dec corn faded to a 2-½ cent loss on the day but closed the week higher, gaining 2 ¼ cents. The overall lack of news and anticipation of next Tuesday’s USDA report had prices consolidating this week, looking for direction.
- Weekly export sales are still disappointing overall. Old crop sales at the end of the marketing year saw new cancellations of 15,000 mt with any undelivered sales likely rolling into the new marketing year. New crop sales were 1.78 mmt, or 37.4 million bushels. The current book of new crop sales is the fourth worst for corn in the past 10 years as the U.S. struggles against foreign competition.
- Early harvest could keep pressure on the corn market. Forecasted wetter weather in the West could slow movement, but basis could fade as fresh bushels are moved into the cash market.
- Next week’s USDA report will be looking at crop production and likely making demand adjustments. Expectations are for yield to be lowered to 173.5 bushels/acre from 175.1 last month. If the USDA makes potential demand adjustments, forecast carryout could still be over 2.0 billion bushels.
- Corn prices have been trading in a sideways, consolidative pattern since mid-August. The narrowing, choppy pattern may be setting the market up for a break in either direction, likely triggered by the reaction to the report on Tuesday next week.
Above: After trading mostly sideways since the end of July, December corn posted a bearish reversal on 8/21 after testing the 495 – 516 resistance level. While the reversal is a bearish development, prices could turn higher if the market receives additional bullish input. Should that happen, resistance above the market remains between 495 – 516. If not and prices turn lower, 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 while products were mixed. Soybean meal maintained its momentum and closed higher, while soybean oil continued to be dragged lower by falling palm oil prices despite tight supplies.
- Trade in the grain complex has been relatively quiet ahead of Tuesday’s WASDE report in which yields, planted acres, and ending stocks will be revised. Most analysts are expecting yields to be lowered, but there is potential that acreage will be increased.
- Export sales were released from last week and showed an increase of 5.7 mb for 22/23, and an increase of 65.5 mb for 23/24, a good number. Last week’s export shipments of 44.9 mb were solid and produced total shipments for the 22/23 marketing year of 1.992 billion bushels, which was above the USDA’s previous estimate of 1.980 bb.
- There has been some concern regarding China’s economy after reports were released showing that China’s total imports were down by 7.3% in August. This is in contrast with China’s soybean imports which were up by 31% from a year ago but have mostly been supplied by Brazil. There have been rumors that China may be picking up 6 to 8 cargoes of U.S. soybeans for November shipment.
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
- The USDA reported an increase of 13.6 mb of wheat export sales for 23/24 and an increase of 0.4 mb for 24/25. Last week’s export shipments were 11.6 mb and below the 14.0 mb needed.
- Rain is in the forecast for the southern Plains and into southern Nebraska for this weekend and into next week. Amounts are expected to be favorable and should be beneficial for winter wheat planting conditions.
- Not many changes are expected in Tuesday’s WASDE update. The average trade guess for U.S. carryout is 613 mb, down 2 mb from last month, and the average guess for 23/24 world carryout is 265 mmt, 600k lower than last month.
- Statistics Canada released its estimate for Canada’s all wheat stocks as of July 31, and it came in at 3.584 mmt, below last year’s 3.663 mmt and the average trade guess of 4.0 mmt.
- The BAGE updated its estimate for Argentina’s wheat crop at 16.5 mmt versus 12.2 mmt for last year. The USDA is currently estimating the crop at 17.5 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 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, 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 800 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 825, 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: The Chicago wheat market continues to be rangebound with initial support at the low end coming in near 590 – 595, with resistance at the upper end near 650. If the market breaks out to the upside, the next level of resistance may be found near 665; if not and the market drifts lower, the next level of support below the market may be found near 573.
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
- We continue to look for better prices before making any 2023 sales. As more becomes known about this year’s crop with some reports of better-than-expected yields, questions remain about the world wheat supply. War continues in the Black Sea region, Ukraine’s export capabilities remain uncertain, and dryness continues in key production areas of the world. With a world stock-to-use ratio at its lowest level in 8 years, we continue to target 950 – 1000 in the December futures as a potential level to suggest the next round of sales. At the same time, we continue to watch the bottom end of the range that prices have traded in since late 2022. A close below the bottom end would reduce the probability of getting to 950 – 1000 and would increase the risk of prices falling into the 600 – 650 range.
- 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. Plenty of time remains to market the 2024 crop, and 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 850.
- 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: December K.C. wheat posted a bullish reversal on September 5 from oversold conditions and followed through into the previous trading range. If prices continue higher, resistance above the market remains near 772 – 780. Otherwise, support below the market rests near the September 5 low of 724-1/2, 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 to price volatility this growing season, with continued dryness concerns in not only the US, but also Canada and Australia. While there typically isn’t a strong likelihood of higher prices until after harvest is complete, both weather and geopolitical events can change suddenly to move prices higher. Insider will consider making sales suggestions if prices improve, 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 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. For now, plenty of time remains to market the 2024 crop and Insider is content to see how the market develops before suggesting making any additional sales. 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.
- 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 with some follow-through. 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
