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kenny1703 (< 20)

Grain market continues bearish momentum



December 18, 2012 – Comments (0)

The grain market in Chicago continued their bearish momentum, with corn down once again in the March contract at 7.18 – closing right near session lows finishing down about $.06…also pressuring the wheat futures down another $.02 at 8.06 a bushel in the March contract.

In my opinion, wheat prices are headed sharply lower from these levels. I’m advising traders to be short this market, and if corn breaks 7.13 level hitting a new fresh 4-month low – I would advise traders to be short that market as well. In my opinion I believe that could happen here in the next couple of days.

Soybean futures have been relatively strong, hitting new highs in yesterday’s trade before profit taking set the complex lower…also pushing it lower today by $.27 in the March contract at 14.62 in sympathy with the rest of the other grains. But in my opinion, I’m still bullish soybeans…I still think there is a chance they will grind higher throughout winter and early spring.

The commodity markets were mixed today, with the energy sharply higher. However, the precious metals were sharply lower as well as the grain market. But I do think that once this fiscal cliff is resolved, soybeans could then start to rally once again.

Supplies of wheat are large at this point, and crops around the world are in solid shape keeping a lid on prices. The Euro currency was sharply higher once again. However, it had no effect on grain prices as the grain market has basically ignored what is going on in the U.S dollar…because generally when the dollar trades lower, grain prices head higher. That is not been the case in the month of December. However, in my opinion, if the U.S dollar does continue to trade sharply lower in the upcoming months, that will be a very bullish fundamental indicator for the grain market.

The corn market just might be too high-priced, remembering that $7.15 is a ridiculously high-priced if you look back on the yearly charts – in corn it generally trades between $3-$6 range for a long period of time. These are still exceptionally high prices due to the U.S drought last summer, so prices still could head back down the $6.50 level in the next month or so, especially if wheat prices continue to tumble.


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