Brazil planted a record soybean crop only to see unusually dry and hot weather create concerns for the harvest. Furthermore, Argentina had an extreme shortfall of soybean meal crops. Meanwhile, the USDA numbers were bearish for corn and soybeans, as U.S. crops came in larger than expected. However, China bought around 3 MMT of soybeans or 110 million bushels from the U.S. last week, a volume that reportedly surprised the market. They added another 7.5 million bushels on Monday.
Meanwhile, the Teucrium Soybean Fund SOYB saw a huge influx of investor money. The monthly chart featured shows prices hovering around all-time highs. In 2012 the high was 28.88. In July this year, SOYB made a new high at 29.43. The sideways consolidation on this monthly chart suggests a move to 34-35 is possible.
The futures chart is also interesting.
This is the January 2024 contract of soybean futures. It is in a bullish phase, well above the 50 and 200-DMAs. 1360 is the closest support level to hold. 1385 is pivotal — above bullish, below more neutral, until beans break below 1320. At that point, give this a big never mind.
Over 1400 and then 1420? This could then run the way of cattle, cocoa, orange juice and most likely sugar — that is to say, UP, way UP.
Naturally, on the heels of the supposed cooler CPI and PPI numbers, some havoc will be wreaked. Most importantly, DBA will fly higher and the deflation talking heads will have well, beans on their face.
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- S&P 500 (SPY): 450 clears, see 465; Under 450, 435 support.
- Russell 2000 (IWM): 181 resistance, 174 support.
- Dow (DIA): 360 resistance, 346 support.
- Nasdaq (QQQ): 388 must clear and 370 must hold.
- Regional banks (KRE): 45 big resistance.
- Semiconductors (SMH): 160-161 now pivotal support.
- Transportation (IYT): 235 support.
- Biotechnology (IBB): 120 pivotal.
- Retail (XRT): 65 resistance and 60 pivotal support.
Director of Trading Research and Education