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

Comments for October 26, 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


GRAINS: 10/26/11 Higher for Kansas City wheat and rough rice, slightly higher for soymeal while slightly lower for Minneapolis wheat, corn and soybeans along with lower for Chicago wheat, oats and soyoil. Although KC and Chicago wheat remain in down-trends overall even after retracing higher lately, Minneapolis along with rough rice are the only grains good up-trends at this time with Minneapolis. Also now there is resistance right overhead which is around 920 to 940 basis the December contract. Corn settled one tick  but still looking like it should be on its way up to filling a gap that goes from 682 to 685 1/4. However, there is also strong resistance all the way up to around the seven dollar area basis that could make this a struggle. On the other hand If you 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. Also, corn closing over 650(Dec.) for the first time since September 27th and being in a possible BULL PENNANT, indicates its retracement rally may not be over. The Russian and Chinese news a couple of weeks ago along with a weak dollar at this time seems to have helped stabilize corn and to a lesser extent the bean complex. Finally, corn’s struggle to fill its gap, after talking to many of my clients, seems be caused by the selling of corn that the farmers have been holding. Rice has good resistance from 172 to 178 basis the January contract along with more over 180 but did have its highest high and close since September 21st.  Oats had its worst low and close in two weeks really needing, in my opinion to close over 350 area(Dec.) if there’s going to be a turnaround. The bean s and oil closed lower while the oil settled higher all looking weak overall. Also, the beans look like they’re in a BEAR PENNANT.There is little resistance for November beans up to the 13 dollar level, meal 340(Dec.) and oil 5600(Dec.)setting up, potentially, for a nice retracement rally to possibly continue. Of course, that’s no guarantee it will happen and their trends are lower overall. BUY SIGNAL FOR MINNEAPOLIS WHEAT AND ROUGH RICE. SELL SIGNALS FOR OATS, CORN, KANSAS CITY WHEAT AND CHICAGO WHEAT. CALL FOR DETAILS!

Follow my grains commentary daily at the GrainFutures 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.