Monthly Analysis: November Soybeans

2022-03-01T07:17:16-06:00March 1st, 2022|Monthly|

The continuous monthly chart for November soybean futures only is interesting as it gives both market bulls and market bears ammunition to continue their argument:

  • Bears
    • The 2022 contract was not able to hold its February spike, closing the month back below the previous high of $14.80.
      • This means the move was nothing more than Wave B of the major (long-term) 3-wave downtrend
      • and established a double-top pattern on the continuous monthly chart.
      • Given this, look for November futures to come under pressure over the coming months.
  • Bulls
    • The 2022 contract extended its major uptrend to $15.55
      • This is the highest a November soybean contract has been priced since November 2012
      • The move is supported by long-term bullish fundamentals, as indicated by inverted new-crop futures spreads.
      • Regardless of if US plants more soybeans, the market is indicating it won’t be enough to loosen the tighten global supply and demand situation.

My take: I’d rather be long than short, for now. That being said, producers could certainly make small forward sales as of expected 2022 production while keeping plenty of powder dry for later.

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