Soybean Tech Update
Grain Market Commentary
Wednesday, June 14, 2017
by Jacob Christy, Freedom Program Trader
Another back and forth session for the bean market today as prices react to countering overnight and mid-day weather models. Prices started the overnight strong on thoughts of a dry LH of June and FH of July, but quickly lost momentum as models trended wetter and cooler in the near term at mid-day. Without the support of the grain markets, beans quickly fell under selling pressure. New crop Nov17 futures are at a key technical level, but might not have enough bullish news to breach the unique combination of resistance the lie just above the market.
Nov17 futures have spent the week chopping around from 940-950, after a technical bounce off the late May low. Prices have retraced back half of the May declines, but have struggled to uncover new buying interest above 950. The contracts 50-day moving average, major down trend line, and 50% retracement, all align from 947-951, which have been enough to cap the market the past four sessions. A breach above 950 would indicate a test of the old May high at 980, while the downside looks to start a third leg which could take prices past the old low near 915. Strong support in both the continuation and Nov17 daily charts exists below the May lows which should hold until more is known about U.S. acres and yield potential.
Soybeans look to be at the mercy of grains and the weather today. If corn and wheat struggle beans will have trouble rallying on their own. Momentum will be confirmed lower on a weekly close below 936 which could set the tone for another leg lower. However, technicals will take their rightful back seat to fundamentals if weather turns threatening. For now, keep an eye on the weather with technical flags at 950 for an upside indication, and 936 to the downside heading into week end.