Wednesday March 31st -

Soybeans -  The numbers this morning were bearish but after opening sharply lower, the market ran to the upside getting back to unchanged from Tuesday's close only to collapse, take out the lows.  At the close the market was able to rally 10 cents off of the lows but still closed off 21 cents in May.  What a day!!  Long term, this market will need bullish news to turn the tide.  That could be hard to get until the weather scare time period of the growing season.  Near term I'd be short on any rally.  Do not get caught up in the fundamentals of three weeks ago.  That's long gone and now we have both technical and fundamental confirmation of a significant top

Corn - Last night I said, "Anything under 79.7 will put this market sharply higher tomorrow."  The number came in at 79 and the close was 8 cents higher for the day.  Near term, corn will struggle if the beans sell off hard but the lows of this week should hold long term.  We bought the market today on the dip at noon and want to add to positions on any break.  

Rice - I thought the number was bullish in rice for stocks but the plantings was a bit bearish.  In reality, the market didn't like any of the numbers and started lower by 5 cents and was down 11 cents at the low.  At the close, there were no sellers and the market finished off 5 cents, exactly where it started.  Technically, today's action was positive but we need some follow through tomorrow to prove the market is still good.  I think we could stay in a sideways consolidation here for several weeks but I still see higher prices long term. 

Tuesday Night the 30th -

MAJOR REPORT TOMORROW MORNING.  Update here at 7:45 am.

Soybeans -  Beans didn't hold up today while corn moved sharply higher.  This could be a hint as to the report in the morning.  Beans acres up and corn acres not up as much as needed to cover long term demand.  At some point, beans are going to give up while corn works higher long term unless the weather turns off really hot and dry in the US by June 1st.  The market is looking for 74.5 million acres up 1.1 million from last year.  OK...maybe we should look at the range and take the high estimate.  That is at 76 million acres.  I'll go with that one going into the report. 

Stocks may be tighter in the report tomorrow than the 867 million bushels expected.

Corn - Good action today in front of the report.  I am bullish corn long term but the report tomorrow may put a damper on a near term rally.  Then again, it could be the force that causes corn to explode to the upside.  The market is looking for acres at 80.2 million acres.  Anything under 79.7 will put this market sharply higher tomorrow. 

Stocks are expected at 5.25 billion bushels.  I think that number is too high.

Rice - Rice is trying to hold up but continues to drift lower.  Percent Bullish is at 43% indicating a bearish tilt.  I will buy the market big on a good buy signal.  Most people I talked to expect the acreage report to show plantings up nation wide by around 225,000 acres.  I wouldn't be surprised if the report comes in around 175,000 given the attraction to soybeans.   Stocks are expected between 87 and 92 million.  90 is the swing number with anything under that bullish and and a number higher than 90 considered bearish. 

My guess...well, who owns the rice now.  Its not the farmer so look for a bullish number.  That's just how it seems to work.

Monday Night the 29th -

Soybeans -  Good action today as the market tried all day to go lower but ended unchanged.  The plantings report this week may be bearish beans but tight supplies will keep old crop supported.

Corn - Market is consolidating and losing some of the record open interest.  Long term I like the market but near term we could see more pressure.

Rice - Percent Bullish is now below 50% but the news from overseas remains bullish.  A break here over the next few weeks should be bought.  One point of note, the usual bulls in the market are not that bullish here.  If the market runs up, it will be led by the normal bears of the market who now own most of the rice stocks...the mills.  Very interesting!!!

Friday Morning the 26th -

Soybeans -  The chart is indicating a possible top.  Yesterday's action was negative following the reversal on Wednesday and the strength index we follow is turning down also indicating a top.  With the planting report next week, a top at this time would make sense.  A move through yesterday's low at 1016 is a major sell signal and if you are long, we would exit all positions if that occurs.  We day traded yesterday and made a few cents but is was all on the short side which has not been the direction of trade recently.  This is a change in our approach as we wanted to buy a break but now we are concerned of a hard sell off.  Overnight trade was higher so we if we start higher and then begin to sell off, I'll short the market.

Corn - We are not near as over bought in corn as the beans but we are also getting topping signals now in corn.  The market is set up to test the low at $2.91 in the May if we close below $3.04.  I'm long calls and will sell some if we close below this support zone.  Remember, the market is bullish long term but a hard break is not out of the question.  The acreage report may be the event that triggers a correction that lasts several weeks.  Then comes the summer weather market and look out.

Rice - We are setting right on major support.  The percent bullish has dropped to 68% indicating consolidation of gains at this level but if the other grains sell off, we could see more of a correction here as well.  The planting report will have an impact on rice but not near as much as soybeans.  I'm considering taking some of the money off of the table here as well as a correction could take 50 to 80 cents off of current levels.

The trip was great and now its back to work....

Thursday Morning the 25th -

Soybeans and Corn - Big reversals down yesterday in the beans and corn on the strike settlement in Brazil.  This break is a buying opportunity but should be entered into carefully with an eye on the planting report next week.  I will day trade beans today as they are setup for an interesting day.  Long term, $10.00 in May is major support on a close basis so if we break below that level, we could see a 20-30 cent further pull back in old crop.  We will remain long our corn calls and will allow the market some trading room.

Rice - China has cancelled some rice purchases and announced they will sell some supplies they have on hand.  What is up with that??  It is simple, the price of rice has risen so much in China that the government is now trying to slow the increase and announcing the cancellation of purchases and selling there dwindling reserves is an attempt by the government to show they are trying to lower prices.  I hate to say it, but their economist must be taking lessons from the bank of Japan on how NOT to lower prices.  This will last a few weeks only to back fire on them as the need for rice continues to escalate and now they have to buy back cancelled sales at even higher prices.  We will use any pull back to add to our current positions.

Last word Thursday Morning 10 AM, March 11th - Over the next two weeks, watch the beans against the two key reversals that are now in place.  If we take out the high of the 10th we should test the Major key reversal down from the 2nd.  If we take out that high, then there is something big going on and $10.00 should be taken out with no trouble.  As I write this, the market is up 13 cents, if we close lower today, odds are better than 70% we will correct.  If we don't, look for the market to consolidate and wait for news. 

Wednesday Night - Last report until March 24th.

Corn and Beans - As noted below in our pre-opening report.  The market took it on the chin today after the report was not bullish enough to keep the market making new highs.  I wouldn't be surprised if we don't see a healthy correction near term in these markets; however, I wouldn't be short either of them.  The one thing that did surprise me was how well the corn held today.  As I have been saying, I am bullish corn and mildly bullish soybeans.  We need more information to keep the bull market in tact in beans with a lot of bearish factors heading our way.  I expect huge acres attributed to the beans in the March 31st report.  In corn, we will see an increase but we need an increase and if we don't get much of one in the report, the market will move sharply higher.  A weather scare is very likely and if we get a weather problem, heaven help us all.  Bottom line:  I'm leaving long calls in corn and long some $9.00 May puts in beans as stated in our report this morning and seen below.  I hope I'm wrong on the puts!!!

Rice - We were down 20 cents today but on extremely light volume.  That is not bearish.  I still see this one higher long term and the only question remaining is what kind of break we will get near term.  I'm leaving long calls and would stay that way through a 75 cent break, which I doubt we get.

Dow - Today's close sets up a break in stocks.  Look for a lower move toward the 10,000 mark and then we will wait and see what signals we get.  There is an old adage that says, "you have to break a market to rally it."  That could be true here.  If we turn around and come back to make new highs...BUY IT!!!

Until March 24th....Good luck be careful out there!!!!

WEDNESDAY'S S&D Report - The early calls is for corn down 1-3 and beans down 3-5 on the S&D report this morning....DON'T YOU BELIEVE IT!!!

I expect a hard correction in corn and beans as a lost sense of urgency and profit taking combine for a disappointing reaction to this report.  Sometimes I think traders will call the market as they hope it opens so they can sell the TAR out of it.  The reports didn't change anything and Brazilian production was not dropped by that much.  I expect heavy profit taking with the record open interest coming out of the market near term.

For soybeans, I think this is the end of this run until we can get a good weather scare.  I believe the acres report later this month will also expedite a sell off in the bean market.  I'll be buying some out of the money puts ON THE OPEN this morning as I want a hedge on before I go to Europe.  THIS IS A HEDGE.  THIS IS NOT SPECULATION.

Rice - Buy the rumor sell the fact?  Very possibly.  They dropped the carryover 2 million Cwts. to EXACTLY WHERE WE HAVE BEEN SAYING IT SHOULD BE!!!  11 million cwt.  They increased the export numbers by 2 million cwt which we have been saying would happen on this site at the Rice Exports and  Carryover Reliability  links.  In addition, they raised the average price by 35 cents which will drop the final CCP payment to only 55 cents.  If this holds up, farmers will have to pay back about 8 cents of what they have already received.

I think rice could pull back here but not for long.  A 2-4 week correction could happen if the other grains pull back as well but long term this remains a buy on breaks.  I'll wait for the market to open and then decide if I want to roll up options to take some profit off of the table after the big runs the last few days.

Tuesday Night - March 9th

S&D REPORT FIRST THING WEDNESDAY MORNING!!!

Soybeans - Market reversed back up but didn't make new highs.  Tomorrow's S&D will be key to the next few days trade.  The reversal is still in control and still warns of a possible top.  I WOULDN'T BE SHORT FOR ANYTHING!!!  Puts are still not a bad idea. 

Corn - Tuesday's reversal is in control.  Today's rally is in front of what is expected to be a bullish S&D report.  If there is a bearish surprise this won't be pretty but a break won't last real long either.  We want to stay long with calls and buy breaks.

Rice - Volatility is rising as we trade up and down.  This is indicative of a top but I'm staying long even if we pull back.  Long term, we like this one on breaks.

Monday Night - March 8th

Soybeans - The key reversal remains in control and today's sell off may be the lead off a hard correction.  We would buy breaks but it could be several weeks before we want to own this one again.  $8.96 is support and odds are 60-40 it will be tested as early as tomorrow.  This could get ugly.  If your long, consider some puts just to be safe.

Corn - Tuesday's reversal is in control.  Today's sell off is below the sell signal indicating a correction is ahead.  May could correct 15 cents with little trouble.  Long term, we want to own this market so any sell off could be short lived.  As in beans, we could be down for 4-8 weeks IF we are getting a major correction.

Rice - I think traders are learning the hard way that grains and rice don't trade together.  Today's 48 cents higher close followed a move 24 lower in the first hour on the grains selling off.  Once again, anyone selling rice because of Soybeans got plucked and good as the market turned around 76 cents from the low. 

This market is WAY over bought now with an 85% bullish factor.  We rolled calls higher today and took some money off of the table.  I expect a correction soon but it could start from 50 cents higher.  We remain in calls and a good correction wouldn't hurt our feelings a bit.  Support is 80 cents lower so it will be interesting to see what happens. 

Just remember....The market is always the most bullish at the top.  This weeks S&D report may be the event that stalls the current rally.  Buy the rumor sell the fact.

Thursday Night - March 4th

Soybeans - We warned you Monday night before we left to DC that Tuesdays were know as "Turn Around Tuesdays."  That may be what we got.  The Key reversal down on Tuesday is now in control but the follow through has not been that impressive.  News remains hard to come by as we expected the negative export sales in beans the last few weeks.  From a technical perspective, if we consolidate at this level a few more days it could be set up to make new highs.  A close under $9.24 and we should have a correction that should be bought long term.  REMEMBER...THE MARKET IS MOST BULLISH AT A TOP.    Long term I like beans and want to own dips and in no way would I be short right now but taking profits is not a bad thing with the technical action we have in place; however, if we take out Tuesday's high, you have to go with it.  I still like day trading support and resistance.  Oh, one more point, when day trading becomes harder to make money during a bull market, it usually means a top is forming.  Today was not a good day for day trading. 

Corn - Tuesday's reversal is in control here as well.  Sell signals are rising as we consolidate.  Tomorrow, the selling should come in around $2.92 in the May.  I'll buy a close into new highs.   

Rice - News that Vietnam and Thailand may both be out of rice selling position for a few weeks along with the news that Iraq needs rice and soon, has the market still going in to new highs.  The Limit day higher yesterday was met with a spike top formation today and a lower close after being higher almost all day.  We are due a correction but that doesn't mean we will get one right now.  Markets can expand but again, the technical indicators are flashing warnings that a top may be occurring for all of these grains right now.  Tomorrow will be interesting.  I am out of futures but holding calls. I may roll them up tomorrow morning.

Monday Night - March 1st

Soybeans - New highs again.  Yes, we are over bought but remember, the market can be irrational longer than you can be financially solvent.  For the first time today we are getting warnings of an impending top.  Percent bullish is setting at 80% tonight and that's the first flag.  We can stay at this level for up to 10 days but odds favor a top in the next few days and then a test to see if we can go into expansion phase which could take this market over $10.00.  Will it expand?  Don't know, there are bearish fundamentals out there.  If I were long, I'd pull up my stops.  Tomorrows stop should be at $9.37.  DO NOT GO SHORT...Just take your profit and smile all the way to the bank. 

Here is my suggestion for Tuesday (sometimes called turn around Tuesday).  If we make new lows on the day after 10:30, odds are higher of a correction; however, if we make new lows after 10:30 and then consolidate above that low for over 30 minutes AND THEN make new lows again, odds are over 80% of a hard correction and major profit taking.  Place a stop on the second low after 10:30.  DO NOT GO SHORT.  We are not trying to pick a top we are trying to protect profits.  I'm still day trading when I can.

Corn - Huge open interest here by the funds has everyone concerned but the small specs are still short 23,000 contracts.  I think we are closing in on a high but it could come from ten cents higher than we are right now.  Percent bullish is at 75%.  That leaves room for new highs but with the situation in beans, be very careful.  We are going to take off the $2.70 call on a sell signal and buy the $2.90 call so we can take some money off of the table but I will do it on a sell signal.  Even with a 20-30 cent sell off in corn (if it comes) I'll be a buyer later this year.  We are a long way from this marketing year being over.  In other words, long term we are very bullish corn.

Rice - NEW CONTRACT HIGHS....There is just not anything bearish out in the fundamentals.  I doubt the Iraq tender has US rice in it and even if it does I'll be watching out for "buy the rumor sell the fact."  The market still has room to go higher on our system but we are looking for a correction with the other grains.  As I tell the shoe clerks calling me right now wanting to buy rice, it won't always go up.  For you long the market, we will wait for a reason to roll up calls and/or move them to July.  I'm taking some profit off the table again here over the next few days just because its prudent with the over bought condition rising on beans.