What’s Up, What’s Down: Wheat Higher, Lower Again for Metals

Comments for Tuesday, August 12

Looking Ahead to Today By Reflecting back at Monday’s price action


Higher closes for Minneapolis, Kansas City and Chicago wheat along with rough rice, oats, soybeans and meal, while lower for corn and bean oil ahead of the crop production report. This report is the first of the more important ones going into the fall. All wheat continues to look bearish overall but does seem to be trying to base over the last week in choppier action than it has been.

Corn continued its slide down towards the 500 area basis the December contract in pretty quiet action ahead of the crop. Oats also closed higher but are still in a large bear pennant or a small bear triangle. Either way its looks like a bearish continuation formation, in my opinion, looking to continue down. Rough rice took out the highs of the last 5 trading sessions to settle higher but still is looking weak overall. We’ll have to see if there is much of a follow through signaling a retracement may be starting. However, it’s too soon to tell yet. The beans and meal closed higher while the oil lower over meal/oil spreading but nothing has changed. All three made new recent lows with the oil also making a new recent low close.


Limit up (300 points) for the February bellies again, higher for live and feeder cattle while mixed for lean hogs. The October cattle still looks neutral, while the December contract is in a bear pennant looking lower overall. The October feeders bounced off the 11500 area basis the October contract which is in the middle of a very strong support area. However, as I’ve been saying, this has been the weakest bull market I’ve seen in a while against falling corn (feed) prices. The October hog contract settle lower but is in a bull flag in a market looking very strong helped along by falling corn prices. The December contract is now close to a breakout to the upside as it struggles to get out of a month long holding pattern. Bellies settled limit bid in the February contract again, giving me a buy signal while now in a resistance area.

Pork Bellies Future Chart


Lower for platinum, copper, gold and silver with the latter 3 sharply lower. New recent lows and closes for copper, gold and silver again this time also joined by platinum. Copper settle slightly lower looking very bearish at this time. All of the metals continue to look lower.


LUMBER: This market is still forming a very impressive larger bottom at this time and does look higher. A close over 260 basis the September contract would be pivotal.

COCOA: Cocoa made a new recent low and close finally settling below 2700 basis the December contract. One more close below 2700 would make my next objective around 2600.

SUGAR: This market settled lower again still following through from last Thursday’s reversal type action. Sugar is also forming a possible larger bottom.

COTTON: Cotton closed higher, in a bear pennant and continuing to look lower.

COFFEE: Closed sharply lower back at the lower end of its 135-14000 trading range.

ORANGE JUICE: OJ settled lower in a bear pennant looking very bearish overall.

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. If you would like a free booklet explaining the charts mentioned above, email Rick at ralexander@zaner.com.