Volatility In Grains Is Going To Stick Around–11-22-10


Grain futures have calmed down the past few sessions, but volatility is going to stick with us for a while.  Keep in mind that the market will be closed on Thursday for Thanksgiving and open until noon on Friday.  Many traders will close up shop tomorrow or Wednesday and take a long weekend.  This means that liquidity will be thin, which could generate some sharp price swings.  In today’s trade, corn was lower because of dollar strength, while soybeans were firmer from missed rains in Brazil over the weekend.


March futures bottomed last week at 522 and rallied to 562.25 on Friday.  Prices fell to 526 this morning and struggled the rest of the session.  Short-term, one of the momentum indicators is at its most oversold level since last June.  However, a rebound past 547 is needed to reverse the trend.  In this event, look for a move higher to 570, while a break below 522 warrants a decline to 503.  While the wave pattern of the daily chart shows the chance of climbing above the November high at 617.25 longer-term, the weekly chart is at odds with this assessment.  Right now, we need to trade beyond 593 to increase the odds of this happening. 

Currently, old crop sales should be at the 60 percent level. 


March soybeans bottomed last week at 1183 followed by a rebound to 1263.25 on Friday.  Prices backed off to 1114 in the overnight session and recovered.  Unless there is a sell-off below 1183, we are due for a recovery to 1268 or 1288.  The wave pattern on both the daily and weekly chart shows the chance of climbing the high made earlier this month at 1354.5.  However, for greater confidence of this happening, a close beyond 1310 is needed.  

Old crop sales should be at the 60 percent mark.


March wheat traded in a narrow range today and is consolidating the sell-off from 800.  Unless there is a decline below last week’s low of 656.26, the market is subject to a recovery near 728 or 745.  Meanwhile, a close past 764 is needed to turn the trend higher. 

 Old crop sales should be at the 70 percent level.

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