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

Comments for April 21, 2011

Looking ahead to Thursday by reflecting back on Wednesday’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.

Wednesday’s Grain Trading: Strong Starts and Weak Finishes

GRAINS: 4/21/11″ Higher closes yesterday for the rough rice, soybeans, soymeal and soyoil while lower for Minneapolis, Kansas City and Chicago wheat  along with corn and oats. Strong starts for the grains and, basically, weak closes(at least near lower end of trading ranges). The wheat complex ended up lower after strong early trading which seemed to be the norm for the grain complex. I’m continuing to stay neutral for Minneapoilis and KC wheat while Chicago wheat continues to have good resistance from 800-825 basis the May. All are in the process of forming potential large bottoms at this time. Rice had its best high and close since April 16th with 145(KJULY) is a key price area to watch. Meanwhile, I still have a sell signal.  Oats had a huge range making its best high since February 2nd before selling off sharply to close lower in reversal type action pretty much wrecking its bull triangle. Oats have also been consolidating over the last week or so poised to move higher the way I read it technically. Corn started out strong helped by bullish fundamentals (weather) although the new crop(Dec.) contract didn’t react accordingly while old crop corn went sharply higher. In the end all of the corn tumbled sharply ending of lower in reversal type action leading me to believe either the weather forecast might be changing or corn is too high at this time. Either way, the December corn contract made a new CONTRACT HIGH and closed below Wednesday’s low making a KEY REVERSAL which doesn’t often happen at this time of the year.  Also, the May and July corn contracts still have two gaps below and, in my opinion, fill over 90% of them. The last gap not filled for corn, as far as I can tell, was back in 2009. Please call for details on how to deal with the corn gaps if you are interested. The bean complex settled higher with all making their best highs and closes in a week. The beans and meal still are sells in my opinion with the latter looking weaker than the former technically . Oil looks better with 6000(July) a key area to watch. BUY SIGNALS FOR OATS AND CORN. SELL SIGNALS FOR  CHICAGO WHEAT, ROUGH RICE, SOYBEANS AND SOYMEAL. CALL FOR DETAILS!

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Historical Note: Since 1885, the New York Stock Exchange has been closed on Good Friday, every year except 1898, 1906 and 1907.

The Good Friday/Easter holiday trading schedule for US futures exchanges is at the Hot Topics page of my website, https://www.zaner.com/3.0/market_information/hot_topics.asp.

 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.