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.
Ontario Grain Marketing Commentary for February 27, 2019
| Commodity | Period | Price | Weekly Movement |
| Corn CBOT | May | 3.73 | ↓ 03 cents |
| Soybeans CBOT | May | 9.17 | ↓ 11 cents |
| Wheat CBOT | May | 4.67 | ↓ 18 cents |
| Wheat Minn. | May | 5.54 | ↓ 05 cents |
| Wheat Kansas | May | 4.54 | ↓ 04 cents |
| Oats CBOT | May | 2.66 | ↓ 08 cents |
| Canadian $ | Mar | 0.7603 | ↑ 0.55 points |
Corn
We are now analyzing and quoting the May contracts on all the grains.
Corn had a quiet week compared to the wheat. The support area on the May contract has replaced that of March and currently stands at or near the $3.70 level. The March contract, on the other hand, did fail to hold the $3.70 support and is now entering the cash phase of the futures for March.
March futures may continue to hold the May values down until it expires in mid March.
The intermediate indicators remain positive and a challenge of the $4 level seems imminent in the coming months, but the primary trend remains down.
Soybeans
The May soybean contract is sitting challenged the $9.15 and may approach the $9 level without fan fare. The May contract is now the lead month and will adapt the March futures support and resistance zones for the short term. This just means we will see the $9 – $10 range in soybeans continue until there is a reason to break out of this trading zone.
Short-term indicators are now neutral while the primary trend remains down. The support line is still at $9 on the May futures and resistance is near the $9.50 level.
Wheat
The red sell signal proved its worth again, hinting of aggressive selling in the front month futures. We are now quoting the May futures as the March contract has now become cash. The seventy-five cent drop in price from February 15 could be considered part of a final sell-off or capitulation of sorts. This is the signal I spoke of several months ago when we suggested that the final blow-off would see a significant break in prices before the bottom could be in place. The key here is to watch and wait. Don’t try to pick the bottom but use your technical analysis to trade these markets. This volatility is almost impossible to trade off news.
Here is what I am expecting. The May contract is showing the extension of this downward move to find temporary support at or near the $4.55 level. With the March contract going to cash, we could see more downward pressure on the March futures, possibly reaching down toward the $4.25 area. What we need to see here is the May contract firm up during the month of March and close above the $5 level before we can even consider a possible bottom. If this were to unfold, we may look back at this month and be able to agree that it was indeed the blow-off that we needed to start a slow, steady move higher over the spring months and into harvest.
May support is seen at the $4.50 – $4.60 level. Overhead resistance is now back at $5.
For the time being the short-term indicators are negative but as of this writing the longer term neutral to bullish indicators are still intact.
Grain Farmers of Ontario is hosting online webinars for those interested in learning how to utilize futures and options for hedging purposes in most agricultural products.
These webinars are hosted by myself. You can call me directly at 519-767-4123 or signup online at https://gfo.ca/event/grain-marketing-webinar-intro-to-futures/.
When you sign up you will be notified of upcoming dates and times.
Cash Grain prices as of the close,February 27, 2019 are as follows:
SWW @ $222.64/MT ($6.06/bu), HRW @ $225.06/MT ($6.13/bu),
HRS @ $238.10/MT ($6.48/bu), SRW @ $217.81/MT ($5.93/bu).
