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

Comments for April 13, 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: 4/13/11: Lower to sharply lower for Minneapolis, Kansas city and Chicago wheat along with oats, rough rice, corn, soybeans, soymeal and soyoil. I was wrong with my buy signal for Chicago (lowest low and close in 7-8 trading sessions) in which has now given me a SELL SIGNAL. I’m continuing to stay neutral for Minneapolis (lowest low and close in 9 trading sessions) which is now joined by KC(lowest low and close in 9 trading sessions) as I look for a direction for both of these grains. On the other hand both are forming potential huge bottoms especially Minneapolis. Chicago wheat continues to have good resistance from 800-825 basis the May which has lately proven to be a correct analysis on my part. Rice made its worst low and close since March 17th giving me a second sell signal. Oats also closed weak but still looks strong overall. Corn  settled down sharply but not affected technically at this time but did feel heavy to me as I mentioned yesterday. 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 sharply lower also with beans and meal making their worst lows and closes since the middle of March and the oil in two weeks further confirming my sell signals in the former two. I’m still neutral the oil. BUY SIGNALS FOR OATS AND CORN. SELL SIGNALS FOR  CHICAGO WHEAT, ROUGH RICE, SOYBEANS AND SOYMEAL. CALL FOR DETAILS!

But in early morning trading, the Grains sector is showing moderate strength. My Futures HeatMap, a color-coded view of the eight futures market sectors, shows that Grains, as of 8:00 am Central this morning (April 13), are up a composite 0.50%, with Beans and Wheat being the strongest of the eight grain contracts that comprise the sector, is Wheat. To view the Heat Map, click, or type this link into your browser: https://wwwmarkethead.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.