March Soybeans
The structure of the bean market is a tricky one to label accurately. There are a few alternate scenarios that I see. I’m currently favoring the bullish one based on the nature of the recent advance which commenced at the 944 ½ low. That clearly appears impulsive in nature. We have achieved the first target level of +/- 1002 and a pullback would make sense seeing that it is a five wave sequence. Targeted convergence level confirmed in several timeframes comes in at roughly 974. This also marks the .50 retracement level. It must be stated that the .618 comes in at 966 which is a common second wave extreme. This is what I am currently labeling it. From this level (more likely the 974 area) I’d be expecting another advancing five wave pattern to unfold. The proportional measurement would suggest a 1028 -1031 projection. Any breakdown that extends below the 944 level would negate this setup.
We are suggesting an aggressive options strategy to take advantage of a move to the 1030 level in March futures that gives May futures a target of 1042.
Look to buy the May 2018 1020 call and sell 2 May 960 puts for even money. Target would be to take long calls off for 40 cents per spread.
Futures spread. Look to buy the July18/Nov 18 bean spread at 2 cents July over. Target 24 cents over. Stop loss at 6 cents under risking 8 cents from entry.