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

Comments for March 23, 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: 3/23/11: Higher closes Tuesday for Kansas City and Chicago wheat along with rough rice, corn and soybeans while unchanged for soymeal and lower for Minneapolis wheat along with oats and soyoil.. The wheat complex continues to look lower overall making lower highs and lows since the middle of February with little support below. Corn rallied back off its lows to settle one tick higher in the May contract. Meanwhile, the May and July corn contracts have gaps below and, in my opinion, fill over 90% of their gaps. The last gap not filled for corn, as far as I can tell, was back in 2009. Corn did make its best close in over a  week once again on the other side of the coin(for now). There is strong resistance over the 700 (May) area also. Oats settled eight cents lower following through from Monday’s reversal type action which used to be a lot for one trading session and while oats fill less gaps than the other grains, it shouldn’t be ignored that there is one down at 335(May). Also oats have been making lower highs and lows since February and don’t see any good support or resistance nearby. Rice closed higher for the fourth session in a row but has good resistance over 140 while making lower highs and lows since the Middle of February. The beans settled higher, meal unchanged and oil lower covering the full spectrum for the bean complex. Beans and meal also have been making lower highs and lows since February. The bottom line is the grain complex overall should work lower as we head towards the first prospective plantings report  next week. SELL SIGNALS FOR OATS, ROUGH RICE, CORN, SOYBEANS, SOYMEAL, SOYOIL, MINNEAPOLIS, KANSAS CITY AND CHICAGO WHEAT. CALL FOR DETAILS!

But in early morning trading, the Grains sector is showing strength. My Futures HeatMap, a color-coded view of the eight futures market sectors, shows that Grains, as of 8:10 am Central this morning (March 23), is up a composite 0.54%, led by Rice. To view the Heat Map, click, or type this link into your browser: https://www.markethead.com.

001 chart

002 chart

003 chart

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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.