RJO FuturesCast

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Transcript for: Daily Market Update – Grain Futures – 9/15/2017


Hello traders I am Stephen Davis senior market analyst, RJO Futures. Friday September 15th here to talk to you about the grain markets.


Corn Market

Is there anything that’s bearish that’s not already worked into this price of corn? Granted the yields, the combines are going to start rolling in the weeks ahead, and these yields that we get compared to expectations of the yields are going to be the driving force on the corn market here at the Chicago Board of Trade. The demand is very good, but  again this is not going to turn into a bull market, but I think the corn price is going to base in here. Our first chart, you can see the daily chart of corn trying to base, and maybe the function of this market is to trade up to where all that price discovery is, 30 or 40 cents higher. I’m not like a lot of grain analysts I’m not that bearish this time of the year. So we’ll keep talking about it I think exports are the key, good exports this week, so we’ll see how we do going forward.


Soybean Market

Okay the soybean market. Our next chart, soybeans, you can see we went back and filled that gap, now we’re higher here. I’m impressed with soybean price discovery this week. We had that September crop report, my goodness that was a bearish report. And we heard from you folks, we’re getting emails, we’re hearing from you, “rain makes grain”. It’s going to be 95, 90 degrees here in northern Illinois, so we’re wrapping up this growing season warm and dry and almost ideal for crops for corn and soybeans. And yet, soybeans continue to trade higher. Why is that? The demand is so very very good. We’re in a time now where almost every day the USDA announces US soybean exports to China. I think this is going to continue in our lifetime. It’s the demand story and that’s what I’m talking about.


Lean Hogs Market

2.5 million hogs are killed every week here in our great country. 600,000 cattle are killed every week in our great country. The chicken processes are working on speeding up the amount of chickens, so they can produce more birds. So this demand story continues here. I like it I’m going to keep talking about it. Again, talking about hog herds and hog populations, China’s government came out and said their hog population are shrinking! That’s not true, you can’t go by what the Chinese government tells you, you almost have to be there to see it.  But hog herds in China are growing five to ten percent on a yearly basis. So we’ll see. And again, it’s protein it’s what the world wants. The middle class in China, they want ribs and steak just like we do here in America, and that’s what they’re going to get. So this story continues.


Wheat Market

It’s going to be hard for any of our farmers to grow wheat and be profitable. They’re going to plant wheat and maybe graze their cattle on the wheat farm. The only country that’s making money growing wheat in the world today is Russia, and what a powerhouse Russia’s turning out to be here. Perhaps the biggest wheat producer in the world today. So moving forward, we’ll kind of see how these yields come out.


I like the demand story, we’ve got a crush report on soybeans here at 11 o’clock. It’d be nice to close strong here this week and give these charts a little bit of umph and keep these fundamentals on the back pages. I think we’re moving into a demand driven, technical market, so we’ll keep talking about that. 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.