Soybeans Tech Update

A nice run for beans has prices up in six of the last seven sessions. A combination of the murky impacts of coronavirus on Brazil and Argentine ports along with Chinese crusher concerns have sparked a big round of short covering. Prices have erased almost all the early month losses with funds now even in their positions.

As stated in previous tech updates the soybean market has stayed true to its stochastic indicators all year. This month has been no different.  Prices initially dipped as trade was overbought to start the month. However, once the market reached oversold territory prices began their recent recovery run.

The stochastic remains in an upward position today but is beginning to creep back towards overbought territory. Not surprisingly we’re starting to see buying interest wane as the overbought condition worsens.

Not only is the market reaching overbought conditions again, prices are also closing in on the longer-term moving averages and key psychological mark at 900. Today’s reversal type session, the overbought condition, and waning volume all indicate the rally might be getting over extended. Baring fresh fundamental inputs a corrective phase may lie ahead.

It’s been a back-and-forth, emotional month for markets. Without doubt there’s rampant anxiety which isn’t going away. For now, soybeans should continue to follow their stochastic. Keep an eye on the 50-day moving average and 900 market here this week to gauge if some corrective action is on the horizon.