Soybeans Tech Update

Early this month bean futures filled an open chart gap and saw a quick bounce thereafter. Selling picked up near 900 and put the market into a downtrend for the past seven sessions. Pressured by benign weather but supported by yield uncertainty, prices haven’t found enough momentum to clear 900 but lack selling interest below 864. For now, beans looked rangebound, waiting for the next domino to fall.

Futures broke a five-day trend of lower highs today while also scoring a second day with a higher low. Albeit in low volume today looked like an attempt to reverse the most recent downtrend. The stabilizing action above the gap now puts some pretty clear targets into the charts.

Nov futures have not closed below 864 since gapping above the mark in early May. Closing below 864 would be a blow technically, opening the door for another leg lower. To the upside prices will face initial resistance at a couple of trendlines from the summer highs. While difficulty surely rests at the combination of major moving averages clustered around the 900 mark.

Hard to say what will push beans out of their range, but there are some clear lines in the sand. We’ll see if today’s reversal signals lead to any follow through to finish the week. Stay tuned.