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

Comments for December 7, 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: 12/7/11 Higher closes for Minneapolis, Kansas City and Chicago wheat along with soybeans, soymeal, rough rice and corn while lower for oats and soyoil in a relatively quiet day compared to most lately.  Minneapolis , KC and Chicago wheat, like most of the grain complex, had rallied off the credit news and then fallen back. So far we have just seen mild retracement rallies in bear markets. The percentage of these rallies compared to the overall down-trend has been minimal so far. In my opinion, Minneapolis is still in heavy resistance while KC has resistance is over 700 but stronger resistance over 720. Chicago has strong resistance over 650 based on the March contracts also. Looking at the Minneapolis pattern you can see it was previously in a similar one and we all know the market broke to the downside out of this pattern. Of course, ‘things change’ eventually but don’t assume when. Oats were only one of two grains settling lower but all look weak overall. Also, there little resistance up to the 350 area.  Corn(March) still has a gap at 698 with strong resistance from 650 to the 700 area. Also a major portion of its resistance is from 650 to 675 and history says the odds are that this gap will be filled but right now it looks like a fading memory. However, corn did make its lowest low since the middle of March before closing higher in reversal type action. Rice settled higher this time but continuing to act very weak overall. The beans and meal settled higher and oil lower but but none were far off of unchanged. Still, the bean complex continues to look weak overall but at least helped lately by the bean spreading against corn and wheat. DON’T FORGET THE CROP PRODUCTION AND SUPPLY/DEMAND REPORTS COMING OUT FRIDAY MORNING! SELL SIGNALS FOR MINNEAPOLIS,KANSAS CITY AND CHICAGO WHEAT ALONG WITHSOYBEANS, SOYMEAL AND SOY OIL ALONG WITH ROUGH RICE AND OATS. CALL FOR DETAILS!

Follow more Grain market related stories and commentary at my Grain Futures blog (www.grainfuturesupdate.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.