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Transcript for: Daily Market Update – Grain Futures – 8/18/2017

Hello traders I am Stephen Davis, senior market strategist. It’s Friday August 18th here to talk to you about the grain markets. Okay we’re still recovering from that August 10th USDA crop report and markets have been trending lower.


Corn Market

You can see our first daily chart of corn here, you can see that high on August 10th, the reversal down, prices have been trending lower. We’ll kind of see where we go from here. I’m a little bit cautious about selling in here and I would remind everybody to be a little bit cautious about being short these grain markets at these levels. Whether you agree or disagree with me there’s a lot of growing season left in this corn market, soybean market so we’ll see where we go from here. Exports on corn very good, demand very good, so at some point I believe that the market’s gonna factor in all these big grain productions and start focusing on the demand which is very very good. Just a note on Brazil, now they have a lot of corn so they’re a competitor of ours. Brazil a big ethanol producer over there, they’re opening their first ethanol plant making ethanol from corn. Usually Brazil makes all their ethanol from sugarcane so there’s the first ethanol plant in Brazil from corn. There’s ten more coming just to give you an idea of how much corn that Brazil has. So it’s a lot of corn in the world the demand is good, we need to see this demand story on a daily basis pick up. So our first chart of corn again daily chart of corn down and very good support.


Soybean Market

Okay the soybean market. Still again you can see these charts on soybeans. Our next chart, you can see that August 10th crop report we’re still trying to recover from there. A lot of growing season left here in the market. This week in Omaha 3.9 million metric tons the Chinese delegation announced buying US soybean last month in Des Moines Iowa the Chinese delegation announcing 33.4 million metric tons of US soybean. This is a good story the market barely moved so when markets don’t go up on bullish news they’re not that bullish. It just reminds us this time of the year the most important thing is weather and it’s cooler temperatures, it’s been raining this week in Iowa, Nebraska supposed to get a little hot next week so we’ll see about that.


Wheat Market

Then our last chart here the wheat market really down in good support. There’s a lot of wheat in the world and Egypt the biggest wheat buyer ten years ago used to buy a lot of wheat from USA, now it’s Russia and Ukraine type of origin. Russia’s got record wheat production going on in their part of the world so kudos to them. Crude oil is not above $50 here, so Russia can sell their wheat to the world and bring in money into their coffers. So again I would caution everybody about being short these markets in here. There’s still a lot of growing season left.


September 6th is a full moon and how about an early frost this year, it would go perfect with the weather scenario that we’ve had. The rain deluges early in the summer, the drought that we had middle of the summer. September 6 a full moon. We get an early frost in here that’s gonna change things. So we’ll keep talking about that as we move into September.

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.