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

Comments for January 5, 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

THE BULL/BEAR DILEMMA FACING THE WHEAT MARKET

GRAINS: 1/5/11: Lower to sharply lower for Minneapolis, Kansas City and Chicago wheat along with oats, rough rice, corn, soybeans, soymeal and soyoil.  Here’s the problem or at least a potential problem. The fundamentals in South America, due to weather conditions is bullish. The general public is bullish. The commercials are bullish. Most expect the grains to rally at the beginning of the year. Corn prices are now so high it’s not economical to use ethanol in gas. What does all of this mean to me? Grains are ripe for a correction and that’s what seems to have started. Of course, how far will the retracement will go is what we need to figure out! Anyway, the lower closes for the grains across the board have not hurt them technically so far. Oats did make a new recent high before settling lower in reversal type action. The dollar seems to have started back up but my buy signal seems to have withstood the dollar’s correction so far which is also putting pressure on the grains. Minneapolis and the rest of the wheat complex were knocked down today but, overall, should hold up the best at this time but, so far, the spreading hasn’t reacted the way I thought it would. The long term trends are still obviously higher across the board so techncial traders shouldn’t panic but adjust your game plans accordingly. BUY SIGNALS FOR CORN, SOYBEANS, SOYMEAL, SOYOIL, MINNEAPOLIS, KANSAS CITY AND WHEAT. SELL SIGNAL FOR ROUGH RICE.CALL FOR DETAILS!

Download my newest report, “When Does Weather Matter?” Click or type the download link into your browser: http://www.zaner.com/3.0/ralexWeatherMatters.sap

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.