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 – 11/10/2017

Hello Traders, I am Stephen Davis, senior market strategist RJO Futures. It’s Friday November 10th, here to talk to you about the grain markets.


Corn Market

All right the corn market. We had the USDA November crop report yesterday, and really a bearish report. Big crops get bigger, and you’re seeing this in the corn market. So our first chart today, a daily chart of corn, you can see it’s a reversal down. My work states a lot of times this weakness goes in days of two or three. We’re higher here this morning both in corn and soybeans, so maybe in the short term that’s saying something. We need to buy a little time, build a base, if corn can be higher today. And again Sunday night, it’s just the wrong time of the year. Look for capitulation on this selling where it dries up in the corn market rallies back. So we’ll see about that. Yesterday’s export sales in corn, the biggest export sales in ten years for the week. Last week Mexico bought 1.4 million metric tons of US corn. One of the biggest daily sales of 10 days in all history of these markets. Does the market care about this? Not too much today. Yesterday’s report trumps everything. My point being the demand is very very good. Exports, they are lagging, a year-ago levels but we need this type of demand that we’ve seen here to continue. This week, last week, perhaps it will. We’ll be able to get ourselves out of these doldrums of lower prices.


Soybean Market

Okay the soybean market. Same thing in soybeans, big crops get bigger. Yesterday’s yield on soybeans were 49.5. Last month’s yield on soybean 49.3. So yields on soybeans they can be anywhere 50 to 48, you know and if they’re 49 that’s bullish, and if they’re 49.3 that’s bullish, but if they’re 49.5 that becomes bearish. So that was the bearish numbers that we had yesterday in soybean. You can see the daily chart of soybean, our next chart. Daily reversal down. We’re higher here this morning so we’ve got to buy some time here. Close higher today, open higher Sunday night, it’s the time of year for soybeans to trade higher. I think that’s what’s there going to do. People’s Republic of China, our President Trump is over there, we had the announcements of China/US purchases of soybeans. That’s expected, that’s a good headline, but those are the numbers that China’s going to buy anyhow. Good headline, good news, we’ll keep looking for China to buy US soybeans. I’ll say that every week and I’ll continue to say that every week.


Wheat Market

And lastly the daily chart on wheat here, you can see a little more friendly report yesterday on wheat. The global stocks of wheat are declining a little bit, but again there’s a lot of wheat in the world so we’ve got our work cut out for us. Years ago Kansas farmers used to plant wheat to sell to Russia, now Russia’s the lowest wheat producer in the world today.


So wrapping this up, four things I want to mention that’s going to drive the prices higher. First, People’s Republic of China buying of US soybean. Second, South American weather. Third, the continuation of the long’s buying crude oil and the CRB index. See if they still have this bullish appetite for those commodities. And then fourth will be these managed fund shorts in corn and wheat. Do they add to their shorts or do they take money off the table here on this weakness? So we’ll talk about that next week. 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.