What’s Up, What’s Down: Grains and the Dollar

Comments for Wednesday, November 4, 2009

Looking Ahead to Today by Reflecting Back at Tuesday’s Price Action


Higher closes yesterday for rough rice, corn, soybeans, soymeal, soyoil and oats while slightly lower for Minneapolis, Kansas City and Chicago wheat. All of the wheat settled slightly lower and continue to show bottoming signs and should only be played from the long side at this time. Call for details. DON’T FORGET WHEN TRADING THE GRAINS AT THIS TIME YOU MUST PAY CLOSE ATTENTION TO THE DOLLAR! The reason that I’m mentioning this now is now is because the dollar is showing signs of bottoming and, if it does, this could put a lid on grain rallies in the near future. The major story this week is heavy fund buying especially of corn. Corn closed strong again well off its highs but still the best close in a week pretty much eliminating a potential topping formation. Fundamentally, corn’s recent rally really seemed like a lucky break for farmers so they could hedge even if corn technically looked higher at that time but this rally can’t be ignored as it approaches the four dollar level. We’ll continue looking at the dollar’s weakness for guidance but there still should be a record crop being harvested and that can’t be ignored either. Rice had another strong close making its highest high and close since November ’08 once again. Oats settled higher still in a long-term up-trend but having choppy action over the last month. The bean complex closed higher again with the beans and meal closing in on buy signals while eliminating my sells. Oil continues to look higher.

Spring Wheat Chart

Corn Chart

Soybeans Chart

See 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.