How Much Lower Will Soybeans Go?

Soybean pods on plant by Mailson Pignata via iStock

November soybean futures (ZSX25) present a selling opportunity on more price weakness. 

See on the daily bar chart for November soybeans that a price uptrend has stalled out as prices overnight hit a nearly three-week low. See, too, at the bottom of the chart that the moving average convergence divergence (MACD) indicator is in a bearish mode as the blue MACD line has just crossed below the red trigger line and both lines are trending down. 

Fundamentally, a bountiful U.S. soybean harvest is set to begin in earnest this month, which includes increasing commercial hedge selling pressure in soybeans. China appears to be avoiding purchasing U.S. soybeans, after having historically been a solid buyer of U.S. beans. And soybean meal (ZMZ25) futures are slumping badly. All of the above suggest more price pressure in the soybean market in the coming weeks.

A move in November soybean futures prices below chart support at $10.25 would give the bears more power and it would also become a selling opportunity. The downside price objective would be $9.60 or below. Technical resistance, for which to place a protective buy stop just above, is located at $10.50.

www.barchart.com

IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any trades and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.

Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%): 

Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you. 


On the date of publication, Jim Wyckoff did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.