What’s Up, What’s Down: Spotlight on Grains
Comments for June 1, 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.
SPOTLIGHT ON GRAINS
GRAINS: 6/1/11 Higher closes yesterday for oats while lower to sharply lower for Minneapolis, Kansas City and Chicago wheat along with corn, rough rice, soybeans, soymeal and soyoil. The wheat complex settled basically sharply lower but no changes technically. Minneapolis continues to be in a uptrend overall while KC and Chicago remain neutral in my opinion both trading in a large sideways pattern since April 1st and the middle of March respectively. Oats, on the other hand, had their best high and close since the end of April once again 26th and while still continuing neutral for me,it has been trading over 375(July) with one major resistance overhead around the 400 area. I have missed a 60 cent move in oats but the long term picture is still difficult for me to call at this time. Of course, they could be forming a huge bottom as evidenced below. Rice settled slightly lower which isn’t a problem for its uptrend at this time. The problem is it needs to take out its last important high at 155.5(July) relatively soon in my opinion or else rice could drop back to a good support area between 140 and 145. Corn also settled lower and, while in a strong bull market, has good resistance from 750 to 775. The December (new crop) corn contract however is around 80 cents cheaper than the old crop at this time which could keep present demand for corn down. The bean complex closed lower again keeping my sell signal in tact for the meal while I continue to stand on the sidelines for the beans and oil. The beans and oil have been sideways since the middle of February and the meal lower. However, oil has been rallying since the middle of May in the short-term. BUY SIGNAL FOR ROUGH RICE. SELL SIGNAL FOR SOYMEAL. CALL FOR DETAILS!
But in early morning trading, the Grains sector is moderate weakness. My Futures HeatMap, a color-coded view of the eight futures market sectors, shows that Grains, as of 8:20 am Central this morning (June 1), are down a composite 0.66%; with all contracts lower except for Canola. To view the Heat Map, click, or type this link into your browser: https://www.markethead.com/2.0
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.