Ontario Grain Market Commentary for November 21, 2018

Commodity Period Price Weekly Movement
Corn CBOT December 3.62 ↓ 04 cents
Soybeans CBOT January 8.83 ↑ 00 cents
Wheat CBOT December 4.99 ↓ 05 cents
Wheat Minn. December 5.72 ↓ 04 cents
Wheat Kansas December 4.69 ↓ 12 cents
Chicago Oats December 2.91 ↑ 02 cents
Canadian $ December .7555 ↓ 1.05 points

Corn

We did indeed move back quickly towards the $3.60 support line as expected in our last week’s commentary. My concern now is that the $3.50 – $3.60 may not hold as I have one of my red sell signals on the daily charts. This indicated short term pressure on prices in the coming weeks. The $3.50 line now comes into play and if we were to close any day below this level, we can expect even more downside, possibly a test of the $3.30 – $3.40 level on the December contract before it goes off the board in December. Initial support is still seen at the $3.50 – $3.60 level on December. Indicators are mixed, with daily signals being negative and the primary trend is still down.

Soybeans

Another boring week of price activity as the January contract continues to track between the $8 and $9 level. The Chicago oat contract has been on my radar lately as the December contract had a run from $2.35 – $3.20 per bushel in the last eight weeks. This is a 30% gain in value. We had an old saying in the business years ago which went like this “as go the oats so go the other grains.” I feel we may have seen the top of this move in oats and if the saying is valid, and if I’m right about a short-term top, we may now see more downside in the other three grains. Time will tell.

Short term indicators are still positive, while the primary trend remains down. The $8 – $9 box remains intact and if we were to break to the upside, there is tough resistance around the $9.50 level. A break below $8 could give us a $7.50 handle very quickly.

Wheat

Wheat has moved back to support as suggested in my last commentary. We are getting into a very tight range on our charts and the one-year-old support line, which runs across the $4.90 area, is about to be challenged once again. A close below this line could spark more selling pressure and a possible test of the $4.60 level once again. Note that our main uptrend line is located around the $4.20 mark on the weekly charts but unless we have a complete rout in corn and soybeans, it is unlikely that we will see these numbers tested for support this year. Support is still seen at the$4.85 – $5 level on the December contract.

Short term indicators are neutral, and the primary trend is neutral to bullish.

Harvest 2018 Grain prices as of the close, November 21, 2018 are as follows:
SWW @ $225.82/MT ($6.15/bu), HRW @ $233.12/MT ($6.34/bu),
HRS @ $234.58/MT ($6.38/bu), SRW @ $225.82/MT ($6.15/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.