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 – 9/29/2017

Hello traders, I am Stephen Davis, senior market strategist RJOFutures. It’s Friday morning here, we’ll talk to you about the grain markets. Okay it’s the end of the month, the end of the quarter, and we’ve got a crop report at 11:00 am Central Standard Time. So let’s see if we can get a little bit of volatility in the air, and we’ll start with the corn market.


Corn Market

I think the demand is really good. In my story here the last few weeks, I think the corn market is going to base here, it’s not going to turn into a bull market, but we’re going to try to rally here. Our first chart of corn, you can see it down into very good support, so we’ll see if I’m right about that. Demand is good and I think at some point we’re going to shift over from this big supply that we have, and focus on demand, and demand is good. We can get a rally going here. This is how commodity agricultural cycles go, you know back in 2012 we had the drought here in North America. And after that, all the farmers/producers planted corn acres fence post to fence post, and here we are three/four years later with very good yields and lots and lots of corn. US farmers are going to store corn, the Chinese farmer is going to store corn, so we’re looking for higher prices here and typically that’s what happens as we go into the end of the year.


Soybean Market

Next is soybeans and what an export sales announcement on Thursday for soybeans. USDA announced massive soybean export sales. Now, granted, some of these countries were on holidays so they come back really aggressively buying our US soy, but this is a good story and I think it’s going to continue in our lifetime. Soybeans, the protein that the world wants. Our next chart is soybeans and you can see it’s all over the place this chart and that’s how soybeans are. They’re volatile, they trade like that. Last Friday we had a rally, January beans up to 997, November beans up to 990. Look at that on the charts and now we’re 25 cents lower here today from that point. Typical, textbook rally in soybeans, farmers came in selling and now we’re back down. This crop report is supposed to be supportive of soybeans, this export demand that we talk about on a weekly basis, old crop soybeans are supposed to disappear a little bit, so look for a friendly report here in a couple of hours in the soybean. You know one other thing we talk about, Canada. They’re a big producer. Canada, in the last five years, their soybean seedings their acreage in the soybean has increased seventy five percent! That’s a big number and you can see a lot of countries here growing soybeans. South America, North America, obviously in Canada getting involved as well, so we’ll kind of keep talking about all of that. Okay and then the wheat market here, it seems like the wheat is bottoming. You know, Kansas back in the day many years ago used to grow wheat to sell to Russia, and now Russia is the lowest-cost wheat producer in the world today. Just a sign of the times!


Wheat Market

Our next chart is wheat. Same kind of situation on these technicals you saw three days ago a bullish chart pattern up, a reversal up, and you’ve got no follow-through. So really here in the short term in these technicals we can’t hold on to any leads so we’ll see about that.


Okay stay tuned here, in a couple hours a crop report, we’ll get it in here next week and talk 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.