Soybean Tech Update

A backwards day for soybeans as prices finish a session lower for only the second time in the last 15. Looming harvest and some rain relief in Brazil’s forecast were enough to keep prices from new highs despite continued demand and further declines in U.S. ratings. With funds pushing a net long close to 200k contracts, and an extremely overbought condition, some correction isn’t surprising. We’ll need to keep an eye on the charts as the market works to re-engage buyers.

Beans have been on a tear. Nov futures have Gained $1.45 since Mid-August and hit new contract highs Friday. Today marked the first real chink in the armor with prices closing 16c off Monday’s highs and scoring a lower daily low for the first time in eight sessions. With the composition and condition some further chart exhaustion is likely as the market looks now for some downside targets.

Unfortunately (or fortunately) with prices accelerating so fast there’s now space below current levels before chart support can be found. Even the fastest moving averages are playing catch up. The 12-day exponential moving average still sits 20c below the current market, and the 200-day moving average is some 90c lower. The main Fibonacci retracement is from 900-940, but the old congestion area from 966-975 looks like the first area of support to watch. Stay tuned.