RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Feel free to contact Stephen here to leave a question or comment on his video.


Transcript for: Daily Market Update – Grain Futures – 10/6/2017


Good morning traders, I am Stephen Davis senior market strategist RJO Futures. Friday morning here to talk to you about the grain markets. All right, in one of the headlines I saw this week, the agricultural commodity markets in the early phases of a bull market. You know I don’t know that, it’s interesting what we read and hear. But certainly this is why we look at the chart, the chart patterns. Many times I’ve been schooled, chart patterns will show you where the big money is made.


Corn Market

Our first chart today of corn, you could see it’s in very good support. I don’t think it’s going to turn into a bull market, but I think there’s some upside 10 or 20 cents here possibly. October 12th crop report next week is very big. This is a big report, I kind of think this big production is getting factored into the price of corn. You’re going to get big yields on this report, and the markets going to try to rally. So we’ll keep talking about that. Ethanol demand is very important. We’ve got big, good, ethanol numbers here for our US corn. I think also exports are really really important. We’ve got a lot of corn to sell to the world, for example, Mexico buys a lot of US corn and we have to keep this continuing. The demand is good, we’ve got to keep hitting on all cylinders. These hog numbers, these beef numbers, these chicken numbers in our country, very very strong all-time record high numbers and this is corn sensitive demand. It’s a good story, we’ll keep talking about it.


Soybean Market

Okay the soybean market. The Chinese, they’re on holiday this week, lots of talk that they’re going to come back here at the end of October and be very aggressive buyers of US soybean. Maybe that’s a reason why we rallied yesterday. Markets are forward-looking mechanisms and so look for good export sales here in the next couple of weeks when the Chinese come back. They have insatiable demand for US soybean, I think this is going to continue in our lifetime. Here’s our next chart of soybeans, you can see a little different chart than the corn chart. It’s going a little bit higher here in soybeans, I think there’s some rallies that lie ahead here. Soybean meal has been showing some strength, the demand for a meal is very strong. All these, again, hog and pig and chicken numbers, soybean meal is in very good demand. Keep watching that. Remember the best and biggest and bullish soybean markets we’ve ever had have been soybean meal leads. Keep watching that.


Wheat Market

And then lastly here the wheat market. You can see the chart of wheat in pretty good support. International wheat prices have been bottoming here, they’ve been rallying the last couple of weeks. If we could get some export sales on US wheat, I think that could be a trigger for this wheat market to go 10 or 20 cents higher on news like that. We’ll keep looking and talking about that.


Okay, I’m very excited about these markets. If you’re thinking about doing this, I am waiting for your phone call. If you’re trading somewhere where you’re not getting any service, I’m waiting for your call. I’ve got some of the first accounts I ever opened 20 years ago, and as they say, that’s a good thing. Everybody have an excellent weekend!

Stephen Davis

Stephen E. Davis is a 25-year+ veteran of the markets, who has been a retail broker with RJO Futures since 1998. He is a graduate of the University of St. Thomas in Minnesota and started as a runner at the Mid America Commodity Exchange in 1981. Davis' past experience involved working with firms Stotler Grain, O'Connor Grain, Dean Witter, R.J. O'Brien and Rosenthal Collins. His trading floor experience in agriculture and financial markets is the foundation of his brokerage approach. Throughout his career, he has worked with clients ranging from retail clients to some very large institutional clients. "My focus is on price and my philosophy is that chart patterns will show you where the big money is made," he says. In his time as a broker, he has seen an evolution of the trading process. "As all of these markets move from the trading floor to the computer screen, we are all like locals on the trading floor-and we do not have to pay millions of dollars for our memberships." His advisory experience includes CQG, Moore Research, Dennis Gartman (The Gartman Letter), The Hightower Report, Financial Times and the Wall Street Journal.