What’s Up, What’s Down: Uptrend Action for Grain Futures

Comments for April 1, 2011

Looking Ahead to Today by Reflecting Back at Thursday’s Price Action


Higher closes yesterday for rough rice while sharply higher for soybeans, soymeal, soyoil, Minneapolis, Kansas City and Chicago wheat along with corn and oats. The prospective planting report’s biggest surprise was the 200,000 decrease in the corn on hand which fueled the corn to limit up (30 cents) pulling the other grains along which had bullish numbers but nothing spectacular. The corn acreage was actually higher than anticipated. The key prices to watch in the may wheat complex is 971 1/2 for Minneapolis, 933 for KC and 800 for Chicago wheat while giving me a BUY SIGNAL for the latter. Corn settled up the daily 30 cent limit and could a probably gone another 45 cents based on the synthetic option prices.

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. Expect another gap on Friday. Please call for details on how to deal with the corn gaps if you are interested. Oats also settled sharply higher and did reach limit up(20 cents) while settling a couple of cents below. There is good resistance between 5750600(May). Rice also settled higher with its lower lows and highs still intact. The bean complex closed sharply with the key points to watch for the May beans are 1425 and 1450 and meal 375 while oil is at the upper end of its resistance.

Be careful of the wheat and bean complex because they will be the first to sell off and also be spread against by the corn. Also, new crop corn(Dec.) should lag significantly against the old crop (May, July). Rice and the bean contract are now in possible bottoming formations. BUY SIGNAL FOR CHICAGO WHEAT. SELL SIGNALS FOR OATS, ROUGH RICE, SOYBEANS, SOYMEAL, SOYOIL, MINNEAPOLIS AND KANSAS CITY WHEAT. CALL FOR DETAILS!

But in early morning trading, the Grains sector continues its rally. My Futures HeatMap, a color-coded view of the eight futures market sectors, shows that Grains, as of 8:25 am Central this morning (April 1), is up a composite 1.08%, led by strength in Corn. To view the HeatMap, click, or type this link into your browser: https://www.markethead.com/2.0

Rough Rice Chart

Corn Chart

Soybean Chart1

Soybean Chart2

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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.

The information in this Report and the opinions expressed are subject to change without notice. Neither the information nor any opinion expressed constitutes a solicitation by Rick Alexander or the Zaner Group of the purchase or sale of any futures or options. 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.