The first trading day of 2007 left many commodity bulls grasping for air .At the close ,most markets settled near the sessions lows. Positive economic news moved the dollar higher, crude oil sold off under $60 loosing over $2.70 a barrel and metals were sharply lower. The grains opened sharply lower and closed the day right off there lows. The CRB Index settled 9.75 lower for the day. Not a real impressive start to the year.

Thin markets, lack of buyers and sell stops quickly pulled corn prices back to prices we have not seen in weeks. The funds are at record longs ahead of next weeks crop report and are taking some profits ahead of it. We may need to see some bullish surprises in the January crop report to prevent further short term weakness in the grains. Do not be surprised to see CH7 trade to the gap of 354 on day session only charts sometime in the next 2 weeks. Many of our clients are participating in corn via spread strategies and multiple option strategies. This is a good way to prosper from the volatility that lies ahead and not be run over by it. Contact your RJOFutures representative for more information

The bear spreads in wheat continue to work. Fundamentals for wheat still look weak. Export sales have been disappointing and new crop production is expected to increase. Traders are looking ahead to the Jan.12 crop report for indications on winter wheat planting and demand.

Some spreads from Moore Research have caught our eye this month in the soybean complex. Buy July Soy meal and sell December Soy meal this first week of January and stay with the spread to the middle of April. The last week of January buy August Soybeans and sell August Soybean Meal and stay with this spread till March 19.We like the chart pattern of these two spreads and you just may enjoy the diversification that they bring. In this bio diesel world we live in no one is talking about spreads like these and that is another reason we mention them.