I don’t know what to think of this monthly chart for a cash soybean index with more history I follow. The market spiked to a high of almost $13.87 during January, its highest mark since June 2014, before closing at $13.26. While this was still the highest monthly close since $13.62 (also at the end of June 2014), the pullback from the monthly high was enough for stochastics to establish a bearish crossover not only above the overbought level of 80%, but above 90%. However, this isn’t the first time cash soybeans have established a potential turn signal. with the previous one occurring at the end of October when the index was priced at $10.06, and we can all see how that turned out. The other technical item I want to point out is the cash index spiked above its next price target of $13.52, the 61.8% retracement level of the previous downtrend from $17.48 (August 2012) through the low of $7.12 (September 2018). Lastly, all these technical indicators combined make it look like the cash soybean index has established its Wave 5 high, a prelude to a new major (long-term) 3-wave downtrend.
Fundamentally the soybean market is the most bullish it has been since the 2013-2014 marketing year when this cash index topped out at $14.97 during May 2014. Recall it was 2013-2014 when the final September Quarterly Stocks number came in at 92 mb, the only sub-100 mb ending stocks figure in modern history.
It looks like the cash soybean market has reached a crossroads where technical indicators are bearish and real fundamentals of basis and futures spreads remain bullish. It will be interesting to see where the market is a month from now, after South America starts harvesting its next crop.