Beans Bounce Back!
Soybean futures were not spared the recent “flight to liquidity” that triggered a large speculative liquidation in the commodity markets. November Soybeans were down the 50-cent limit last Thursday, but have rallied back modestly since then, rising 33 ½ cents from those lows to the end of the overnight session this morning. Some of the rally has been tied to weather concerns – in the northern Midwest, too much rain, raises the prospect of disease in the Soybean crop there, and in the South, too little rain and too much heat may adversely affect yields. On Monday, The USDA reported that 54% of the U.S Soybean crop was rated good-to-excellent, down 2% from last week and 4% from a year ago. With Soybean acres down this year due to increased Corn plantings, any “disappointment” in yields from current USDA estimates could send U.S. carryout totals to multi-decade lows!
Looking at the daily chart for November Soybeans, we notice prices moving above the 100-day moving average for the second consecutive day this morning. Yesterday’s attempt to close above this key moving average failed, so traders will be carefully watching today’s day session to see if bulls can once again regain the upper hand. Momentum has moved back into neutral territory with a 14-day RSI reading of 43.65. The next major resistance point is seen at the 20-day moving average near $8.52, with strong support at last Thursday’s lows of $8.04 ½. At the end of the overnight session, November Soybeans were trading at $8.38, up 7 cents.
Mike Zarembski, Senior Commodity Analyst
