Ontario Grain Market Commentary for August 1, 2018

Commodity Period Price Weekly Movement
Corn CBOT September 3.66  07 cents
Soybeans CBOT September 8.91  25 cents
Wheat CBOT September 5.60  17 cents
Wheat Minn. September 6.06  19 cents
Wheat Kansas September 5.63  23 cents
Chicago Oats September 2.39 07 cents
Canadian $ September .7700  0.38 points

Corn

Last week we were convinced of a good rebound and were looking for at least $3.70; this  was realized since that last commentary was published. We also received a red buy signal which further strengthened our outlook. Going forward, we see resistance at the $3.80 – $3.90 level on the September contract with much tougher resistance at the $4.10 level on the lead month futures.

Major support is still seen at the $3.30 level.

Short term indicators are now positive but the primary trend is still down.

Soybeans

Soybeans held their important support level from last week, and as anticipated we did get the bounce we spoke of in our last commentary, rising almost a full dollar per bushel on the September contract since July 16. We hit the $9.10 level on the September futures July 31 before settling back below the $9 level. We also received a red buy signal which looks positive for the short haul.

Our next target is $9.40 then $9.75 before we hopefully challenge the all-important $10 level on the lead month futures. As I mentioned in our last commentary, unless there are more surprises from the Trump camp, I feel the worst is behind us.

Short term indicators are looking positive with immediate overhead resistance is at the $9.75 – $10 level while initial support is seen at the $8.75 level based on the September futures.  Our $8.20 lows are very critical at this point and a retest of this area, although not expected, would not be a good sign technically. The primary trend remains down.

Wheat

Wheat is behaving exactly as expected. We are marching toward our $5.80 – $6 target and hope to reach it soon. Once we are there, I would expect some significant resistance and a decent correction. I am, however, still of the belief that we have turned the corner on the bear market and that we are now in a neutral to bullish market which according to my analysis, could last for several years. This does not mean that we could not move back to the $5 area but it does look like we should see a steady move higher in the coming months and into 2019.

Support is now seen at $5 while overhead resistance is pegged at the $5.80 – $6 area based on the September futures.

Short and intermediate term indicators are now positive while the primary trend is neutral, and it has now moved back above the 10-year-old downtrend line.

Harvest 2018 Grain prices as of the close, August 1, 2018 are as follows:
SWW
@ $254.28/MT ($6.92/bu),  HRW @ $261.44/MT ($7.12/bu), HRS @ $249.51/MT ($6.79/bu),   SRW @ $259.05/MT ($7.05/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.