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

Comments for March 30, 2011

Looking ahead to Wednesday by reflecting back on Tuesday’s trading

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GRAINS: 3/30/11: Higher closes yesterday for Minneapolis, Kansas City and Chicago wheat along with corn, oats, soybeans, soymeal and soyoil while lower for rough rice. I EXPECT CHOPPY ACTION TO CONTINUE THIS WEEK AHEAD OF THE FIRST PLANTING INTENTIONS REPORT COMING OUT THURSDAY MORNING.The wheat complex continues to look lower overall making lower highs and lows sincethe middle of February with little support below. Key points to watch on the upside for Chicago wheat is 750(May) on the upside and 700 on the downside. Also, Minneapolis and KC have been consolidating for almost two weeks setting up for a breakout in one direction or the other. Corn settled higher this time with a nice 10 cent rally off its lows after dropping 50 cents from last week’s high to this week’s low in spite of good exports and a bullish expectation for the report on Friday.  With all the bullish news around the corn may be at the level it should be since its been unable, so far,to follow through to the upside. Even so, I don’t expect the grains to break much, if at all, ahead of Thursday’s reports since most everyone I talk to is especially bullish the corn. Meanwhile, the May and July corn contracts still have 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. Oats settled higher and, although its been making lower highs and lows since February, it seems to be in a BULL TRIANGLE at this time. Rice was the only grain(that if watch) to close down unable to get through a resistance area keeping its overall trend lower. The bean complex closed higher this time with the beans, meal and oil overall making lower highs and lows since February. However, the oil is approaching a good resistance area which should keep a lid on this market unless the report on Thursday is a big surprise. SELL SIGNALS FOR OATS, ROUGH RICE, SOYBEANS, SOYMEAL, SOYOIL, MINNEAPOLIS, KANSAS CITY AND CHICAGO WHEAT. CALL FOR DETAILS!

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But in early morning trading, the Grains sector is showing slight 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 (March 30), is down a composite 0.07%, though Beans are higher and the weakest 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://www.markethead.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.