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

Comments for March 11, 2011

Looking ahead to Friday by reflecting back on Thursday’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: 3/11/11 (Some of the charts are Weekly bar charts, to give a better perspective of how the Grains have been trading. We are now entering the beginning phases of planting season in the U.S. for Corn & Beans, which could significantly alter their potential large tops)

Lower to sharply lower closes for Minneapolis, Kansas City and Chicago wheat along with rough rice, corn, oats, soybeans, soymeal and soyoil. The wheat complex along with the rest of the grains, possibly still excluding corn, look like their long-term uptrends are being seriously threatened especially by yesterday’s action. Minneapolis wheat made its worst low and close since January 12th,KC since December 22nd and Chicago last December 1st. However, keep in mind that all of the wheat are in their respective support areas at this time. The grain report was considered neutral to bearish but the way the grains have been acting, it looks like a bearish report was expected. Corn started out very weak with the rest of the grains, had a nice intra-day retracement rally but sold off sharply at the end of its session making a new daily low telling me that its not done going lower. The 650-670 area basis the May contract is critical to hold in my opinion in order to keep its long-term trend up. Oats had their lowest low and close since the end of September 2010 with 350(May) critical to hold in my opinion. Rough rice settled down its daily 50 cent limit making its worst low and close since last October 1st. Unusual action for the bean compex to have the beans settle higher while the meal and oil closed lower. Also, meal had its lowest low since December 13th and close since Dec. 17th and needs to hold the 350(May) area in my opinion. Fundamentally, corn emains the strongest of the grain complex and should hold up the best overall due to spreading against the wheat and possibly the beans even when retracements take place as has been proven lately. BUY SIGNAL FOR CORN. SELL SIGNALS FOR OATS, ROUGH RICE, SOYBEANS, SOYMEAL, SOYOIL, MINNEAPOLIS, KANSAS CITY AND CHICAGO WHEAT. CALL FOR DETAILS!

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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.