RJO FuturesCast

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Transcript for: Daily Market Update – Grain Futures – 7/7/2017

I am Stephen Davis, Senior Market Strategist, RJO Futures. It’s Friday, July 7th. We’re here to talk to about the grain markets. Okay, I get up early in my beautiful home in the southwest suburbs of Chicago, 20 miles from downtown Chicago. Corn and soybeans were lower when I got up this morning. I got to the office and they’re higher, so that type of trade mentality. Next week, the forecast, it does look to be hot and dry, and my analysis; perhaps these markets are going to continue to rally. The corn market, okay, we had exports again this morning. They’re a little bit disappointing. Really in the last three out of the five weeks it’s been a little bit lackluster, so we need to see this pick up in corn exports. That’s a big part of the demand story for our grain markets.


Corn Futures Chart


Our first chart today is corn. You can see we went back and filled the gap from the gap higher opening earlier in the week, so that’s good. Many times these markets go back and fill these gaps. Now the corn market can continue to trade higher. Again, we need exports to keep on going. We’ve got a lot of corn to sell to the world. So I’ll be talking about that.


Soybean Market


Okay, the soybean market. Let’s face it, this is what’s going on here. The managed funds are short corn and beans, they’re record short soybeans, and soybeans continue to go higher.


Our next chart is the daily chart of soybeans. We have not filled that gap earlier in the week in soybeans, so here we are trending higher in the short term. Kind of looks like it could continue, but be aware of these charts on your charts and patterns. It’s fun to talk about and be aware that they’re there.


At this time of the year, the technicals aren’t the driving force. It’s weather. Sunday night weather is going to set the tone for how the corn and beans start next week. Again, it looks a little bit hot and dry to me so we’ll continue talking about that. Export sales in soybeans continue to be stout. Old crop soybeans, very good numbers here this morning, and with South America and all the soybeans they have, that’s really, really impressive. Also, Brazil has probably record June shipments of corn to the world this year. I think it’s 1.5 million metric tons of corn, so this might be crimping and cutting in on some of our corn business.


Wheat Market


Okay, the wheat market. Our next chart, wheat, and you can see again the bulls in corn and soybeans hope that it trades like the wheat market has. Wheat went back and filled the gap like we’ve had. Minneapolis wheat, the spring wheat that’s the protein that’s used for bread, this has been leading the rally. Early in the week we had a 94.5 cent trading range between the low and the high, so you really can’t make this stuff up. That’s very, very volatile. Be careful trading that market.


Grain Futures Summary


Again, exports are real good this morning in soybeans and wheat, kind of lackluster in corn. We need to see that pick up. Managed funds are still short corn and soybeans. Soybeans are up double digits as we speak, so a little bit of that going on, and we’ll bring this in. Sunday night weather will set the tone.


Everybody have a 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.