Have we turned the corner in grains?

Published on: 14:55PM Apr 13, 2010
 Have we turned the corner in grains? Or are we still headed down? No, and No. As of today’s close, corn is the least enthusiastic prospective bull, and it is not looking like a bear. Sure, there is no surprise here: we are into the time of year where things get dicey. But don’t you wish there were no surprises in the grain business, or at least no bad surprises? The chart says (and the charts generally know – it has to do with something physicists call self-organizing critical mass feedback loops) corn is undecided but more bullish than bearish.

 

Another non-surprise is that the bean chart thinks beans are teetering on the edge of a bull market. A week of prices above 984 basis July should do it. That’s not a prediction for $15 prices, but it is a prediction for prices above $11.

 

This week’s big surprise is wheat. Wheat has been the unloved step child of the group, but is now looking more bullish than corn. On the other hand, unless the world’s wheat supply suddenly collapses, it isn’t clear how we will get much above $6.50 - $7.00 this year, and we may not do that well. One more day of advances will set 470 basis July as the price the bears have to destroy to have any chance to take control of the chart. The bulls will be looking to push prices through 500.

 

As always, expect two steps forward and one step back until and unless weather gets ugly.