Grain Markets Outlook - 1/14/2019

January 14, 2019 11:16AM CST

Corn continues to trade within a 7-month consolidation, but we expect it to break out to the upside sooner than later.  The fundamentals seem to have the “story” for a push higher because of strong export tone and the lack of incentive for farmers to plant more acres in 2019/2020 season. China has revised both their production and consumption estimates. China is pledging to purchase a “substantial” amount of agricultural products and that may be exactly what corn needs to move higher with potential corn, ethanol and DDG exports to China. March corn has traded a pretty large range since June with the middle of this range being 376.75.  Resistance comes in around 382 and needs a close above this level to expect a longer term resumption of the uptrend.

In the beans market, the massive outlook on ending stocks for this year and next is looming on the markets right now.  The sell-off in beans overnight was sparked by bearish outside markets as well as bearish macro-economic concerns. China’s imports for December were down 40% from last year, which is somewhat expected, although this is the lowest since 2011.  Supply is the “major” factor holding the market down.  Supply is ample now, and expects to stay this way in the short term, despite China buying beans.  A close below 903 and even more so 898 will sour the charts for March soybeans and should push lower if broken.  917 is resistance today.

When it comes to wheat, dry areas in North Africa are dry enough to potentially boost world trade.  If outside market forces support, wheat should have the legs to break out of this 3 month consolidation.  Global prices are creeping higher and it should not take much weather issues to spark potential significant buying.  Support comes in at 515 and 512 with resistance at 524.

Corn Mar '19 Daily Chart

Corn Mar '19 Daily Chart

Soybeans Mar '19 daily Chart

Soybeans Mar '19 Daily Chart

Wheat Mar '19 Daily Chart

Wheat Mar '19 Daily Chart


RJO Futures | 222 South Riverside Plaza, Suite 1200 | Chicago, Illinois 60606 | United States
800.441.1616 | 312.373.5478

The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that RJO Futures believes to be reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgement at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.

This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.

Distribution in some jurisdictions may be prohibited or restricted by law. Persons in possession of this communication indirectly should inform themselves about and observe any such prohibition or restrictions. To the extent that you have received this communication indirectly and solicitations are prohibited in your jurisdiction with registration, the market commentary in this communication should not be considered a solicitation.