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

Comments for January 20, 2011

Looking ahead to Thursday by reflecting back on Wednesday’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

OATS HAD A HUGE RALLY WHILE CORN DISPLAYS A KEY REVERSAL

GRAINS: 1/20/11: Higher closes yesterday for rough rice, soyoil, Minneapolis, KC and Chicago wheat while lower for soybeans, corn and oats. Although Chicago wheat has been basically in a sideways to higher mode since the begining August it continues to test the 8 dollar area (Mar.) for a breakout but has been unable to close over it so far which would give me a buy signal. Once again Minneapolis and KC made their highest highs and closes since August 2008 leading the grain complex. Oats had a huge range finally closing around 13 cents lower (lowest close in a week) still in roughly a trading range between 350 and 400 basis the March contract even though it did make a new contract high and close on Tuesday. The oats have traded over 400 four different trading days but not settled over it as of yet. Rice had its best high and close since Dec. 12th but forming a potential bottom at this time. Corn made a new CONTRACT HIGH and  then proceeded to settle sharply lower making a KEY REVERSAL. Although the trend is still higher I feel one should liquidate longs until awe see how this grain plays out. Beans and meal settled slightly lower and oil higher not changing anything as their uptrends remain strong for now. BUY SIGNALS FOR SOYBEANS, SOYMEAL, SOYOIL, MINNEAPOLIS AND KANSAS CITY 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.