Weekend Update

Chicago wheat moved higher just like I expected. From Tuesdays open to Thursday, March Chicago wheat moved up 23.4Â¢, and closed for a gain of 22.8Â¢ It moved down a little on Friday. There is a potential for more gains, I would just keep a close stop.

Oats also made a good bounce up just like I expected. From Tuesdays open to Thursday, oats moved up and closed for a gain of 14.4Â¢ They moved down a little on Friday, so I would watch them close, and keep a close stop. They are close to support so you may want to wait for a good sign for a re-enter.
Rough Rice also made a good rebound just like I said it would. From Tuesdays’ open to Wednesday, March rough rice actually made a jump of .520Â¢ and closed for a gain of .405Â¢ It closed the gap on Wednesday and started moving down again. It is hard to make a judgment on rice right now but it appears it could go lower.

Corn and soybeans broke through resistance on Wednesday, which would have been a good stop placement if you entered a short position. That really wasn’t what I expected since the indicators are extremely negative right now. When they do fall, they could fall hard, but they have been in a strong trend right now and that could push them higher. They moved down a little on Friday and that could be a sign they will drop, but for cautious investors, I would wait for a good sign to short. If you are riding the uptrend, I would be cautious of a fast drop, and buy some protective options or something. A stop placement will get you out, but in a fast market, you may not get out a a good price, and an opposing option will gain in value if the price corrects quickly.

Soybeans have been making some pretty large moves anyway, and I would be extremely cautious unless you are trading with a large account and can handle some draw-downs or loosing trades. Cautious investors could wait for a sure sign of a drop before shorting, or buy a put option, or buy a call option if you want to try to ride an uptrend, since you can’t lose any more than the option costs, (but you could lose all of it)Â You could buy both, a put and a call, and sell one when you see a sure sign of which way the market is going.

Since options have expired for March delivery dates, Next week I will start following the May delivery dates.

March Chicago wheat closed the week at 484.2Â¢

March corn closed the week at 430.2Â¢

March oats closed the week at 250.4Â¢

March soybeans closed the week at 778.2Â¢

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