Grain Market Commentary for January 31, 2018

Grain Farmers of Ontario farmer-members are invited to attend two full-day marketing seminars on grain marketing: Intro to Futures & Options, as well as the more advanced Options & Technical Analysis.

Commodity Period Price Weekly Movement
Corn CBOT March 3.56 ↑ 03 cents
Soybeans CBOT March 9.92 ↑ 23 cents
Wheat CBOT March 4.33 ↑ 13 cents
Wheat Minn. March 6.08 ↑ 04 cents
Wheat Kansas March 4.33 ↑ 05 cents
Chicago Oats March 2.75 ↓ 21 cents
Canadian $ March 0.8115 ↑ 1.50 points

CORN

Last week’s commentary hit our $3.55 resistance and closed just above it. I was reluctant to call it a reversal until we saw how the next session would play out. Well, it gave us a red buy signal on the daily chart and I’ll take that as a positive sign. We now have our sights set on the four- year-old trend line that cuts across the $3.70 – $3.80 price point on the lead month chart. Our gap on the continuation chart worked picture perfect and it is confirming that our $3.70 target is in its sights. Short term indicators have turned positive and the weekly charts are also positive. This leaves just the monthly charts in a negative mode. One step at a time. If you want an excuse for this move, my reason would simply be the weakness in the U.S. dollar which technically has a lot more room on the downside. Initial support is now at $3.60 while overhead resistance is at $3.60 The primary trend is still down.

SOYBEANS

The soybean chart, which has given us two red buy signals, is behaving as expected. The four-year-old down trend line has been negated. Once the momentum starts to push prices higher, we will be looking for a break above the stubborn resistance between $10.25 and $10.75 to turn this market back into a bullish mode for the first time since it ran its course in 2012. The weekly chart shows a clear break of the down-trend line, and the momentum is starting to build as we push through the tough resistance from $10.25 – $10.75. Support is seen on the March charts at the $9.70-$9.80 level while our overhead resistance level is still at the $10.25 level.

Short term indicators are positive and a close above $11 would convince me that we have turned the corner on this bear market. Meanwhile, the primary trend is still down.

WHEAT

Another great week for the March wheat contract as we broke above the $4.35 resistance level and went directly to our next resistance level of $4.60. Like corn, wheat pulled back to our trading gap perfectly and then moved higher.

We will leave our support line on the March chart at $4.10 for the time being, but our overhead headwinds now appear on the March chart at $4.60 – $4.80

The weekly trend line has not only broken the down-trend, but came back, tested it, and flashed a red buy signal all in the past two weeks.

Indicators are positive. Both daily and weekly indicators are now bullish, but the primary trend is still down.

Cash Grain prices as of the close, January 31, are as follows: SWW @ $202.10MT ($5.50/bu), HRW @ $199.84/MT ($5.44/bu), HRS @ $226.97/MT ($6.18/bu), SRW @ $197.58/MT ($5.38/bu).

Marty Hibbs is a grain merchandiser with Grain Farmers of Ontario. Hibbs is a 25 year veteran futures trader, analyst, and portfolio manager. He was a regular guest analyst on BNN for four years and is currently authoring the Market Side education series on futures trading basics in the Ontario Grain Farmer magazine.