Soybean Complex Early Week Selling Pressure

John Lunney General Commentary Leave a Comment

  Soybeans   

     Early week action sees further declines as anticipated. Only thing of note is that the July Soybeans has entered into the first support zone as stated in earlier post( 910-900). This zone is an intersection of down sloping channel lines. It is difficult to recommend a long position at these levels , however, a technical rebound could play out. First upside would come in at 926.0. A fortification of this level could spark further interest. Dominant timeframe wave structure still points to further loses. A release below 900.0 unravels to +/- 850.0.

Soybean Meal

     Meal see’s a decline of roughly a full daily’s ATR ( average true range ). Also of note is the violation of last September’s inner low of 302.0. A few things of interest include the fact that prices have reached the .786 retracement level from the March of 2016 lows coinciding with an inner channel line. Extension levels rest just underneath at 288. Difficult to pin point an exact level, however this zone could produce a area of support. We will closely monitor this for clues of an impending corrective rebound. Longer term structure still supports views of continued weakness. A failure to at least stabilize at this 290.0 level would call for a future unraveling targeting +/- 270.0.

Soybean Oil

        As mentioned in earlier reports, weekly wave structure in a macro sense points to further selling pressure ultimately establish a new low violating the 26.50 low posted in August 2015 ( weekly continuation chart). This would complete the fifth wave of the c wave of an a-b-c correction. It can be a bit tricky, however, this is seen to be the most likely resolution. Todays action took prices in the July contract as low as 31.26 just shy of the prior 31.22 low posted in April of this year. Today’s low also tested trend line support at 31.50 , closing right on the point. A technical rebound off this level could unfold. We will monitor the market’s ability to rise and hold above the 32.00 level ( close above ). Until this unfolds it is difficult to recommend a long position. If prices can’t fight off this 31.5 level further weakness extends to 29.50-29.00. Long term projections target +/- 23.00.

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