Soybeans Tech Update

A weak session for beans as prices give back a third of yesterdays gains. The market has turned sideways awaiting yield confirmation, a trade war break through, Brazil planting, really anything to break it out of the 850-900 range. A new catalyst is needed as the market has lacked any type of follow through in either direction.

Looking at the chart shows prices have respected both a long standing downward trend line and the 850-857 range. These converging features have coiled the bean market since August into what is now relatively tight range. A major surprise in tomorrow’s USDA report probably breaks the market out one way or another, which would surely set a new tone.

To the upside look for the 50- and 100-day moving averages, both near 8.85, to provide initial resistance. Above there, the market hasn’t seen the 900 mark since July. If tested 900 will be a key psychological selling area for both speculators and farmers.

Below the market, Nov19 futures have closed only once below 857 since August 5^th despite trading below the area seven different times. Clearly there are some bargain hunters near 850. With that said, if prices fail to hold 850, there’s little in terms of chart support until contract lows, and those bargain buyers will quickly flip script.

A pivotal few sessions lie ahead in determining the short term momentum for beans. Look for either a breach of the long standing trendline, or a move below 850 as early indications. Otherwise a dud from the USDA puts us right back into the same waiting game we’ve played for over a month now. Stay tuned.