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

Comments for October 19, 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: 10/19/11 Higher for corn, soymeal, Minneapolis and Chicago wheat while lower for Kansas City wheat, oats, rough rice, soybeans and soyoil although all of the grains are near both sides of unchanged .Although KC and Chicago wheat remain in down-trends overall and could be in bear continuation patterns, Minneapolis has been making higher highs and lows since the middle of July. KC has good support from 700 to 680(Dec.) and Chicago right now is in a support area and in my opinion, has little resistance up to the 675 area that could lead to a retracement rally in the near term. Corn closed higher for its third session in a row. The action over the last week leads me to believe the December contract is on its way to filling its gap that goes from 682 to 685 1/4. However, there is also strong resistance up to around the seven dollar area basis. 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.. Meanwhile, corn had a high of 655 last week before selling off and then gradually working its way back up since. Finally the December contract seems to be in a BULL PENNANT! The Russian and Chinese news along with a weak dollar at this time could also help the corn stabilize. Rice settled lower so stalling out in a resistance area(1650 to 1750 basis the November contract). Oats closed slightly lower again with the 350 area(Dec.) important to watch if there is going to be a turnaround. The beans and oil settled lower while the oil closed higher but no changes technically that I can see. 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 continue. Of course, that’s no guarantee it will happen and their trends are lower overall. Finally, the corn, beans, meal and oil all settled near the highs of their respective trading sessions which should mean a follow through higher in a least the night session. BUY SIGNAL FOR MINNEAPOLIS WHEAT. SELL SIGNALS FOR OATS, ROUGH RICE, CORN, KANSAS CITY WHEAT AND CHICAGO WHEAT. CALL FOR DETAILS!

For more Grains market 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.