Soybean Technical View into Friday's WASDE

Soybean Technical View into Friday's WASDE
Soybean Technical View into Friday's WASDE
Soybean Technical View into Friday's WASDE Getty Images

Since Christmas, soybean futures have been trading with mostly sideways rangebound price action. With the 2017 harvest complete, the market does tend to be a quiet time for this market; however, this Friday, January 12th, the World Agricultural Supply and Demand Estimates Report (WASDE) report is due out at 12:00 p.m. EST.  This is the most volatile report for the soybean market.

The WASDE will offer relevant end-of-the-year 2017 numbers for the harvest as well as stocks and will give a glimpse into the 2018 growing season. Today’s technical view of soybean futures will use the hourly chart below, which covers the range over the past couple of weeks since December 27th.

Please note that this technical view may still be relevant heading into Friday’s report and after the report; however, we advise caution ahead of such report.

Currently, beans are trading the $961.00 area.  The upper trend line in green follows a series of lower highs going back to last Friday. If this market breaks through that trend line, then we would first target Tuesday’s $965.00 regular session low, marked in red, where we would anticipate some resistance.

Should bulls control the $965.00 level, the next target would be Tuesday’s overnight high at $968.50, marked in yellow, at which we believe this market will find resistance.  This would then be followed by Monday’s high of $971.00, marked by green.

At the recent double top area marked in orange at the $975.50 to $977.00 area, we expect to see stronger resistance if price should trade there. However, we would not want to short this in the hour following Friday’s report.

To the downside, the first target will be the yellow lower trend line at the $957.50 area. We do not expect support here; however, aggressive longs may differ from our opinion and attempt to buy here.

Ultimately, we look for support in the blue area from $954.75 to $955.25, which was the area late in December that became support and led to a bounce. The September pre-harvest low in this market is also in this blue area, which adds to the support theory.

Should the blue area fail, we do not anticipate being buyers anytime soon, as we would look for a drop down to the August $937.50 low.

 

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