Agricultural

Daily Market Update – Grain Futures – 11/17/2017

Posted 11/17/2017 9:45AM CTStephen Davis

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

 

Transcript for: Daily Market Update – Grain Futures – 11/17/2017

Hello traders, I’m Stephen Davis senior market strategist RJO Futures here to talk to you about the grain markets. Friday morning, downtown Chicago.

 

Corn Market

Our first chart today daily chart of corn, you can see the funds have been record short corn contracts and they have been right so far. We’ve had this sideways pattern and then trading lower here now today so we’ll kind of see. We’re higher here this morning corn is up 3 soybeans are up 6 so a little bit of a bounce and if the funds keep selling perhaps we keep going down in corn. If they stop, we’ll rally back so we’ll see about that. Exports are pretty good for corn, they were disappointing this week and it’s just so important for Mexico for example, to keep buying US corn. A week and a half ago Mexico did a daily announcement of corn purchases. One of the biggest in the history of our markets, we need this to continue. I think Mexico 18 billion dollars of Agriculture they purchased from the USA very important from the demand story for US corn. So we’ll keep talking about that. Also ethanol demand here, China is building ethanol plants sooner or later China’s going to be buying US corn, we’ll keep talking about that.  

 

Soybean Market

The fundamentals, the demand are a little different in soybeans. It’s hard to fly like an eagle when you’re in a flock of turkeys. Ok USDA announces maybe a hundred million metric tons that China is going to buy of US soybeans. Well the USDA says 97 million metric tons, so this number continues to be bigger and China is going to continue to buy US soybeans. It’s a little bit dry in Argentina right now as we speak, that’s what La Nina brings is southern Brazil, and Argentina gets dry so we’ll keep talking about that. It’s a little bit early, Brazil and Mata Grosso in pretty good shape as far as the rains go, but this demand story on soybean continues. We don’t have any USDA announcements today, export sales of soybean. We didn’t have any today exports this week posted yesterday, a little disappointing, but we’ll see if we can’t pick this up here. So we need this to demand story in soybean to provide some leadership here. I think that’s what’s going to happen. Okay then we got a chart here on soybeans, you can see we’re down for the week but we’re up here this week. Look for next week now next Friday’s the day after Thanksgiving we had a half day it’s a Thanksgiving week. Seasonally soybeans almost always trade higher the day after Thanksgiving. Look for strength in the soy market next week.

 

Wheat Market

Here’s our chart on wheat, you can see the bearishness and corn weighs on wheat. The wheat chart not as bearish as corn here. It is raining in Australia quite a bit, a big wheat producer in the world will see if we don’t see some short covering going into next week.

 

So wrapping this up it’s raining in Australia, it’s dry in Argentina, and the Midwest cash bids are firming up on some of the seasonal tendencies that we’re talking about. So look for soybeans to lead a rally back next week. Thank you! 

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.