Soybean Tech Update

Grain Market Commentary

Tuesday, October 27, 2020

by Jacob Christy, Senior Merchant, The Andersons

Beans remain in their uptrend but took a definite step backwards today. After scoring new contract highs for a fourth straight day this morning, January soybeans floundered finishing the day lower and making new lows into the close. Not only did the lower close end a six session upward streak, but since it followed a move to contract highs, today’s price action forms a falling star candlestick. Typically regarded as a clear reversal signal, today’s falling star is a red flag for bulls. This week’s subsequent technical action will be watched closely, particularly with month end Friday.

So the reversal has been scored. Where do we go from here? 1060-1065 will be key. This area held closes for much of the past two weeks. The former resistance also now contains the 12-day exponential moving average, an indicator the market hasn’t closed below since the September 30th stocks report. Falling below this 1060-1065 range, an area the market once had to work hard to get above, would open the door for a deeper correction and confirm todays reversal.

An important few sessions lie ahead for the soybean market to finish up the month. Prices remain in their uptrend and there’s still a lot of space in the chart before that is even questioned. However every rallies sees corrections. Today’s falling star and potential test of 1060 should, at the very least, put some late to the party bulls on notice. Stay tuned.