Shore Capital Management LLC

March witnessed a rally in the grain markets that coincided with a depreciation of the dollar and a very strong rally in equities. Since last week the grain markets were getting a bit overbought. On March 24th we received a sell signal in wheat, followed by a sell signal for soybeans on March 27th. Today March 30th we received a sell signal for corn. Keep in mind movement of the dollar, weather and plantings and perception of moving out of a recession will all factor into the grain markets over the next few months. The markets are also waiting for the USDA report due out on March 31st. The anticipation will be for increased acreage especially for soybeans.

Corn (basis the May 09 contract) has resistance at $3.90 and initial support in the $3.73 to $3.70 level. If the selling continues we could see corn in the $3.56 to $3.33 level, thus testing the recent lows earlier this year before it rallied.

Soybeans (basis the May 09 contract) has resistance in the $9.35 to $9.45 level and is currently sitting at its initial support of $9. If it breaks this area we could see soybeans in the $8.65 support level and possibly try to test the recent lows around $8.40

Wheat (basis the May 09 contract) in the  $5 range is sitting at an initial support level and is testing the recent lows of $4.9850 from March 3rd. If it breaks this level the next support level would be $4.76 to $4.62. Ultimately we could see wheat in the low $4 to $3.70 range.

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