Soybeans Tech Update

Grain Market Commentary

Wednesday, February 7, 2018

by Jacob Christy, Freedom Program Trader

A rollercoaster ride so far this week for soybean prices. Futures gapped lower Sunday night before scoring a major upside reversal Tuesday then followed that up with a downside reversal today. The market is stuck holding Argentina weather concerns in one hand, and growing U.S. carryout in the other. Driven by the technicals trade has been back and forth waiting for fundamentals to confirm direction one way or another.

Looking at the chart shows beans just above the cluster of major moving average again. Prices have spent time on either side of the moving average already this week, and though the weekly range is already 26c the market sits only six cents higher since Friday. With the declines through Monday, the market did a good job solving its overbought condition and now sits in a neutral stance at mid-range. Last week’s high and this week’s low offer clear targets for both the bulls and bears with the moving average probably dictating things in between.

The bean market is juggling a few contradicting fundamental issues, but things definitely feel more technical this week. That fact should change tomorrow with the release of both the USDA and CONAB February crop reports.  With the funds nearly cleaned up, the market at mid-range, and momentum sideways, it feels like a new longer term trend could be on the horizon. Taking out either 1005 to the upside or breaking below 970 opens the door for bigger moves.  

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