What’s Up, What’s Down: Spotlight on Grains

Comments for November 9, 2011

Looking ahead to Wednesday by reflecting back on Tuesday’s trading

Futures and options trading is speculative in nature and involves substantial risk of loss. Futures and options trading is not suitable for all investors


11/8/11 [CROP PRODUCTION. USDA SUPPLY/DEMAND REPORTS RELEASED TODAY].  Higher closes yesterday for  Minneapolis, Kansas City and Chicago wheat again along with corn, oats, soybeans and soyoil while lower for rough rice and soymeal ahead of all important monthly crop production and supply/demand reports. While  KC and Chicago wheat remain in long-term downtrends I’m now standing aside the Chicago wheat close to a buy signal along with KC wheat. However, I’m still keeping, however tenuous, my sell signal for KC wheat. Minneapolis remains the strongest of the grain complex after having a huge range along with making its highest high since early September and a new recent high close. Chicago has been trending basically sideways to slightly higher since October 3rd but closing over  650 has put me on the sidelines for now with 660 3/4 the key price to watch. Corn also had been trading sideways to higher since October 12th in choppy action on both sides of 650(Dec.) but today’s close which was its best since September 21st has given me a BUY SIGNAL. A gap in the December contract goes from 682 to 685 1/4 but there’s also strong resistance all the way up to around the seven dollar area basis that could make it a struggle to fill this gap. On the other hand If you’ve been reading my comments for a while you know how I feel about grain gaps especially in the corn. I expect corn to stall out anywhere up to filling the above mentioned gap. Corn’s struggle to fill its gap has been obvious so far but I feel that once farmer and fund selling dries up corn chould have its belated rally. Rice made its lowest low and close since October 10th also making lower highs and lows since September. Rice has good resistance above 165 and but hasn’t been able to completely penetrate this resistances leading to a nice droop over the last two weeks. Now 160 remains a critical area to hold. Oats settled higher after making its worst low since October 11th along with lower highs and lows since the beginning of September. The beans and oil settled higher and meal lower continuing to look the weakest of the grain complex. The beans, meal and oil have been in down-trends since the beginning of September. BUY SIGNALS FOR MINNEAPOLIS WHEAT AND CORN. SELL SIGNALS FOR KANSAS CITY WHEAT ALONG WITH OATS, SOYBEANS, SOYMEAL AND SOYOIL. CALL FOR DETAILS!

For more Grains commentary, please visit my Grain Futures Update blog. (https://grainfuturesupdate.com/)

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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 or call toll-free (888) 281-4158.

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.