Soybeans need a bullish story.
The information and opinions expressed below are based on my analysis of price behavior and chart activity
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November Soybeans (Daily)
Today, November Soybeans settled at 10.12 ¼, up 3 ¼ from Wednesday’s close. The view of the chart above goes back a year, longer than the typical 6-month view that I use in this space. I’ve done that to give you a better look at how the market has traded for the past year. One thing that you might notice by looking at this chart is that Bean prices have been stuck in a range for quite some time. There are trendlines that I’ve drawn on this chart, to help illustrate that. The upper one is drawn off of the February and June highs (blue, near 10.73 or so, today) and the lower is drawn off of the December 2024 and April 2025 lows (red, near 9.85 or so, today). We’ve seen the market bounce off of the lower trendline in August, but the market didn’t quite get to the upper trendline, stalling out just north of 10.60 on Aug 22nd. Time will tell if the lower one is tested again, but prices are certainly closer to the lower end of the trading range now. Looking at the long-term moving averages that I’ve added (green is the 50-day, grey is the 100-day and purple is the 200-day moving average) you may notice that those three are basically flat lines, and clustered between 10.26 and 10.30 ¼. By my reasoning, that shows a lack of trend and direction in the long- to medium-term view. The 5-day and 10-day moving averages (blue, 10.14 and red,10.29, respectively) made a bearish crossover earlier this week, with Monday’s trade activity, indicating to me that the short-term trend is down. Stochastics (bottom subgraph) are in the “oversold” condition, but a quick glance back in time seems to show that this market has been a little more comfortable being oversold than overbought, during the past 12 months. By my count, there have been 19 instances of oversold (red) vs 16 of overbought (blue), with the red periods apparently lasting a bit longer in duration.
Soybeans need a “Bullish” story. I’ve read many analysts that expect China to be that story and spark the market higher, but at this moment, I’m not confident that will happen. China has spent a lot of time and money bolstering their supply chain, specifically in Brazil and Argentina, over the past few years, and I don’t think they’ll allow that to go to waste. I’ve read that they are building the world’s largest export facility in Brazil and just this week, Argentina sold some 30 (or more) cargoes of Soybeans to the Chinese. I don’t suppose it’s been any great secret that they’ve opted out of US purchases this year, due to tariffs and other geo-political concerns. That’s a huge hit to our bottom line, as roughly ½ of last year’s Soybean exports went to China. I think that some folks are expecting that if/when the trade differences get settled, they’ll immediately jump back in and start buying US Beans hand over fist. I’m not certain that they have the capacity to do that, both physically and financially. I’m not sure they have the storage/processing space, given their South American purchases this year. And perhaps they’ve already spent the budget, so to speak, and may not have the cash to make additional Soy purchases from the US. While I do think that the trade deals will be settled, eventually, I’m not sure what the time frame will be. Neither side appears willing or eager to budge yet.
This year’s crop, while not a record, is still expected to be large. The most recent estimate from the USDA (Sept 12) pegged the crop at 4.3 billion bushels. Shy of the 2021 record of 4.46 billion, but still in the top 4 or 5 out of the past 10 years. Domestic demand got a bullish bump in June due to the Soybean Oil usage in the increased biofuel mandates, but our foreign demand is certainly not where it has been, or needs to be. We still have a ways to go before harvest is complete, and that yield number will likely change as the combines make progress.
Can prices break out of the trading range? Absolutely, but it will take a demand event or imminent crop failure to push prices higher. And while I think the downside should be somewhat limited, due to inflation, if the crop gets larger and no new demand appears, the path of least resistance is always down, in my opinion.
For producers with unsold or unhedged bushels, perhaps the November 10.00 put options could be a reasonable choice. Today those settled at 11 7/8, or $593.75 before your trade commissions/fees. As there isn’t much time left in those, with 29 days until expiration, I’d look to set a GTC profit target at 2x what you paid for the puts and risk ½ of what you paid out in premium. If that time frame is too short for you, contact me directly for strategies going out into 2026.
Aggressive and well-margined traders with patience, may do well to consider establish long futures positions, should the lower trendline near 9.85 be tested. The profit target from there might be the upper trendline near 10.70. As I don’t know your account size or risk tolerance, I’ll leave the entry and protective stop levels up to you.
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Every morning, at about 8 AM CST, I post a short video highlighting where I see opportunities in the futures markets. You can view my most recent video here
November Soybeans (Weekly)
As of Thursday’s close, November Soybeans are down 13 ¼ cents. If there’s no significant price recovery tomorrow, this would mark the lowest weekly close since the first week in August. I don’t think that’s a particularly positive or bullish development. The lower trendline is ascending, so that may limit the downside from here. Looking back over the chart, it seems like the market tends to rally from the trendline, following a big week down in price movement. According the Barchart’s Seasonal Data September is usually a bearish month, but October and November typically result in gains, on average.
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Every morning, at about 8 AM CST, I post a short video highlighting where I see opportunities in the futures markets. You can view my most recent video here
Jefferson Fosse Walsh Trading
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