Monthly Analysis: Soybeans

The Barchart National Soybean Price Index (NSPI, intrinsic value of the market) remains in a major (long-term) 3-wave downtrend. Wave 8 (the final wave of a 5-wave uptrend and 3-wave downtrend cycle) is expected to take out the Wave 6 low of $12.9987 from October 2022. Additionally, the NSPI completed a head and shoulder topping pattern as it took out trendline support at $13.8622 with April’s low of $13.9787. This projects a downside target near $8.9475, a test of the previous Wave 1 peak of $9.0199 from January 2020 (see monthly Supply and Demand for similar Commentary). 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. Sell stops would be above the previous 4-month high of $15.1197 from February.

November Soybeans: The market remains in a major 3-wave downtrend with initial support at the March low of $12.4750. The next downside target is near $12.00, the 50% retracement level of the previous uptrend.

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