What’s Up, What’s Down: Spotlight on Grain Market

Comments for April 8, 2011

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

GRAINS:

[USDA CROP PRODUCTION & SUPPLY/DEMAND REPORTS RELEASED TODAY]. Lower closes Thursday  for oats, soybeans, soymeal, soyoil, Minneapolis and Kansas City wheat along with rough rice and corn. Chicago wheat has good resistance from 800-825 basis the May and even though it has been making lower highs and lows since February I still have a buy signal along with KC. Minneapolis has come close to a buy but still remains a sell. Rice settled lower again with its potential buy signal slowly fading away with a second sell now close by. A key price to watch is 135 basis the May contract. Oats closed sharply lower ending up close to its daily 20 cent limit. However, the oats are still forming a possible huge bottom. Corn made a new CONTRACT HIGH before settling lower in reversal type action. The May and July corn contracts still have two gaps below and, in my opinion, fill over 90% of them. The last gap not filled for corn, as far as I can tell, was back in 2009. Please call for details on how to deal with the corn gaps if you are interested. Oats also settled higher for the fifth consecutive trading session but still in a resistance area with 397 1/2 a key price to watch. The bean complex also settled lower with the beans, meal and oil all struggling lately. BUY SIGNALS FOR CORN, CHICAGO AND KANSAS CITY WHEAT. SELL SIGNALS FOR OATS, ROUGH RICE, SOYBEANS, SOYMEAL, SOYOIL AND MINNEAPOLIS WHEAT.

But in early morning trading today, Grains are reacting quite bullish in response to the USDA reports.  My Futures HeatMap, a color-coded view of the eight futures market sectors, shows that Grains, as of 8:30 am Central this morning (April 8), are up a composite 1.33%; led by strength in Oats and Soybean Oil. To view the Heat Map, click, or type this link into your browser: http://www.markethead.com/2.0

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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. 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 substantial risk of loss. Futures and options trading is not suitable for all investors. The information in this Report and the opinions expressed are subject to change without notice. All known news and events have already been factored into the price of the underlying commodities discussed.