Yesterday’s Dollar Rally had no effect on the beans

  • Posted on: December 30, 2009

Jan Beans look strong, along with march corn, despite the rally in the dollar index up to the 78.00 level. March Wheat took it on the chin, however, with a high at 555 before melting 14 cents to the 540 level. The beans remain the stalwart, however. Speculation is it might be early fund buying, or it may be the unwinding of the shorts who had to deliver on those ten dollar Jan calls.
In any event, for a quiet holiday day, it was an interesting trade.
SF posted a low at 1020, a high at 1040 and settled at 1038. We have rallied from the lows 4 sessions ago at 985, so a 55 cent spread in a week. That is an interesting development. It could be the market is telling us something via the price and chart action. The beans, at this point, look in a word, bullish.

In the March corn, we have a 2 day old gap now which looks bullish on the charts.
CH posted a high at 418 and a low at 413. A close above 425 would be bullish for the corn.

The metals took it on the chin, along with the crude oil, in reaction to the dollar rally. Anytime you have a contract showing strength in the face of a lot of selling, it suggests underlying bullish support. The most powerful, most significant rallies begin when there’s no clear fundamental factor to support it, and the contract rallies for no clear reason. Six weeks to three months from now, we may be looking at this present action as the beginning of a powerful move in the grains and corn.

Good Trading