What’s Up, What’s Down: Buy Signal for Rice But Still Bearish on Wheat
Comments for Tuesday, February 16, 2010
Looking Ahead to Today by Reflecting Back at Friday’s Price Action
GRAINS:
Higher closes last Friday for soybeans, soymeal and oats while lower for Minneapolis, Kansas City and Chicago wheat along with corn, soyoil,and rough rice. All of the wheat continues to be in down-trends but are still forming possible bottoms at this time. Corn continues to be in a down-trend also but has held support under 350 extremely well so far as evidenced by recent action and is now forming a potential bottom formation. Everyone can see its support area between 325 and 350 basis the March contract as shown below. Also, most of the the bearish news is in the market and corn is holding up well and, traditionally, grains fill around 90% of their gaps with the March corn contract having one at 392 1/2. However, at this time of the year, expect choppy action going into the planting season with little direction evident. Rice settled lower and has been losing steam unable to close over 14500 basis the March contract in order to have a change of reaching its next resistance area around 15000. Oats settled unchanged with no changes technically and have been consolidating since January 22nd. A breakout in either direction should dictate which way this grain is headed in at least the short-term. Long-term, however, the trend is down. There is very little resistance up to to 255 basis the March contract posing a huge risk if taking a short position. The beans are still forming a potential bottom with meal not far behind while oil settled lower wrecking its small bull pennant is in a small BULL PENNANT also trying to bottom.
Read the balance of my morning comments, including the Metals, Softs, Energies and Grains, at my website. For my complete coverage, visit my commentary page at www.markethead.com.
Rick Alexander has been a broker and analyst in the futures business for over thirty years. He is a Vice-President for Sales and Trading at the Zaner Group (www.zaner.com) a Chicago-based futures brokerage firm. If you would like a free booklet explaining the charts mentioned above, email Rick at ralexander@zaner.com.
The information in this Report and the opinions expressed are subject to change without notice. Neither the information nor any opinion expressed constitutes a solicitation by Rick Alexander or the Zaner Group of the purchase or sale of any futures or options. Futures and options trading is speculative in nature and involves risks. Spread trading is not necessarily less risky than outright positions. Futures and options trading is not suitable for all investors.