Tuesday, February 12, 2008

Grains - Volatility Falls in Overnight Trading


After a trading range of 80 cents yesterday, wheat and other grains volatility has fallen dramatically (1st chart, a tick chart showing overnight trading), trading within a range of only 13 cents of yesterday's settlement price thus far today. Yesterday's settlement price appears as a faint burgundy-colored dotted line about 1/3 way up from the bottom. I can be used as a point of reference for overnight trading.
In the 2nd chart below, a daily one, corn has been trading flat now, within a range of $4.95-$5.20 (and around $5.00 this morning) per bushel, for a full month. This seems to suggest that the bull market is over for corn, at least for now. Soybeans and wheat are not as clear. This chart is indicative of a consolidation. One can only wonder how long it will last. However, with the spring planting season in the Norther Hemisphere just about one month away, I am told that grains futures can often trade quite erratically as the prospects of weather constantly change; so do the plans of farmers as they make decisions regarding their land crop allocation. If grains trade within a range instead of continuing their bull trends, this will be beneficial to me, since I am a swing trader.