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

Comments for August 10, 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: 8/10/11 Higher closes for oats, rough rice, Minneapolis, Kansas City and Chicago wheat along with corn, soybeans, soymeal and soyoil ahead of Thursday’s crop production and supply/demand reports.  We’ve seen consolidation in choppy action over the last several weeks in the wheat complex in general. Minneapolis has been in a range between 820 and 860 with 860 and 800 the critical price areas to watch in my opinion.  KC’s key price to watch on the upside in my opinion is800. Chicago has good resistance nearby with the seven dollars the closest area to keep an eye on. The wheat complex, basically, has been consolidating over the last month and one-half and a breakout in either direction could be significant. Oats had its lowest low since June 28th before rallying to settle higher in reversal type action moving down with lower highs and lows since last April There’s good resistance from 380 to 420 basis December contract. which oats has been having trouble penetrating at this time. Rice settled up its daily 50 cent limit now in its last resistance area but acting like it will test its highs off of today’s action. Corn settled lower again still in a long-term uptrend with talk of poor yields in many areas but continues to be a choppy and nervous market! Corn had been trading between 625 and 680 most of the time before a private forecaster lowered its average yield estimate by six bushels per acre causing a sharp rally up to 718 1/2(Dec.) last week before selling off and settling down into a choppy trading range. I’ve heard from other contacts also that corn doesn’t look particularly good in several areas around the country keeping it the strongest of the grain complex. The bean complex followed through lower for its fifth trading session in a row  with the beans meal and oil making new  lowest lows and closes. The November bean contract settled below thirteen dollars for only the fourth time since last January while it never has so far this year on the weekly chart. The beans have been in a trading range going back to the beginning of April but looks toppy.They can be sold around the 1400(Nov.) area and bought around 1300 until it doesn’t work anymore. Meal wasn’t been able to get through its resistance area last week and has been dropping since then. However there is strong support down to the 340 area which it’s in at this time. Oil continues to lag behind overall due to meal/oil spreading and has been in a down-trend that’s been going on since early April. BUY SIGNAL FOR CORN. SELL SIGNALS FOR ROUGH RICE, OATS, SOYBEANS, SOYMEAL, SOYOIL, MINNEAPOLIS, KANSAS CITY AND CHICAGO WHEAT. CALL FOR DETAILS!

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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.