The soybean futures market has had little movement lately, but that could be about to change. In prior articles we have followed the progress of this market using the daily chart and trend lines on the chart below, which show increasingly smaller movements in price over the past month.
However, beans are going into harvest season, and with the big WASDE (World Agricultural Supply and Demand Estimates) report coming up a week from today, this market is unlikely to stay very quiet for very long.
Currently, price is struggling to hold above the lower trend yellow line; and if it does bounce, it may meet resistance at the upper green trend line and the 50% mark of this year’s range, shown by the central red line. Both of these converge at the $974.00 to $977.00 area, and we expect this area to offer resistance on the next touch.
However, if price does rally above the $974.00 to $977.00 area, the target would then become the big round $1,000 level where the August $999.00 high printed. We would also expect resistance there.
To the downside, if the current lower yellow trend line fails as support, then the natural target becomes the $937.50 September low, followed by the $921.00 August low, and then possibly by this year’s $907.00 low.
Right now the bulls have in their favor the series of higher lows that beans have made over the past few months. However, for bulls to turn this into a dip buyers, market, they must make a new high at the $1,000 level.
Bears have the overall trend in their favor as well as more solid resistance levels than bulls have support levels.
Soybean traders should keep in mind that the WASDE report is next Thursday; the technical picture should clarify as the market responds to that report going into the end of next week.