Monthly Analysis: Soybeans

2023-03-01T09:26:56-06:00March 1st, 2023|Monthly|

The Barchart National Soybean Price Index (NSPI, intrinsic value of the market) remains in a major 3-wave downtrend with the ongoing rally off the Wave A low (October) of $12.9987 looking to be Wave 7 (usually Wave B). The NSPI hit a high of $15.1197 during February before closing lower for the month, completing a bearish spike reversal and indicating Wave 7 has peaked and Wave 8 (usually Wave C) has begun. Given that, the NSPI is expected to take out the Wave 6 (usually Wave A) low of $12.9987. Theoretical Positions: Short from the June settlement of $15.9058 based on the completion of a bearish key reversal. Additional shorts may have been put in place with the move to below the previous 4-month low of $15.1946 during July. If so the average short would be roughly $15.55.

November Soybeans: The major trend remains down, with short Nov22 positions rolled to Nov23 during October. The target is the July 2022 low of $12.8850. Theoretical Positions:

  • Short Nov23 from roughly $13.5975 (October 12)
  • Previously short Nov22 from the June close of $14.58 (the completion of a bearish key reversal)
    • Bought back on October 12 at $13.96 for a gain of roughly 62.0 cents
    • Raising the short Nov23 to about $14.1275
      • With a stop above the previous 4-month high of $15.0875
  • Previously sold Nov22 $13.40 put options for approx. 55.0 cents on August 3
    • Stopped out at approx. 9.0 cents on September 23 for a gain of roughly 46.0 cents

The Teucrium Soybean Fund (SOYB) remains in a major downtrend with the recent rally to the December high of $28.73 and February peak of $28.75 looking to be double-top peak to Wave B (second wave) of the 3-wave pattern. If so, then Wave C would be expected to take out the Wave A low of $24.26 (July 2022) with the next downside target at $23.17. This price marks the 38.2% retracement level of the previous uptrend from $13.27 (April 2020) through the high of $29.29 (June 2022). Theoretical Positions: Longs were sold at the June 2022 close of $27.06 based on the completion of a bearish key reversal.

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