Monthly Analysis: Soybeans

2023-10-01T10:40:15-05:00October 1st, 2023|Monthly|

Soybean Cash Index: The monthly close-only chart of the cash index I track for basis and monthly available stocks-to-use continues to show a classic head and shoulder top pattern. The strong rally at the end of June looks to be a return move to the neckline, usually followed by renewed selling. The long-term downside target is still $10.26 (bottom dashed red line) based on range from the head (high monthly close of $16.51, May 2022) to the neckline and the breaking of that neckline at the close of April 2023. The index finished September at $12.09. Theoretical Positions: Short the cash soybean market. End-users could continue to go hand-to-mouth.

November Soybeans: Technically, Nov23 completed a bullish 2-month reversal at the end of June. This tells us the major trend turned up. Building on that idea, it’s possible the August selloff to $12.8225 was Wave 2, particularly with the higher monthly close at $13.6875. The selloff during September looks to be a continuation of Wave 2, meaning a characteristic 80% retracement of Wave 1 is not out of the question. If so, the downside target would be near. $11.91.

Theoretical Positions:

  • Short Nov23 from roughly $13.5975 (October 12)
    • Investors may have lifted these short positions at the completion of the bullish 2-month reversal at the end of June, closing price of $13.4325.
    • Some may have gone long at this price, though risk is all the way back to the June 2023 low of $11.4425.
  • 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
  • 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
  • Hedgers could look at lifting short Nov23 positions on a move to the target area this fall, or as harvest progresses.
    • The guaranteed price from this past February (US) is $13.76.
    • The fall price will be calculated during October, the daily closing price of the Nov23 futures contract.

The Teucrium Soybean Fund (SOYB) monthly chart remains a mess. The bottom line is it looks like the fund is still in a major uptrend following a bullish 2-month reversal completed during June. Theoretical Positions: Investors might’ve gone long at the June close of $27.32. If so, technically, sell stops would be below the previous 4-month low of $23.83. That seems like a sizable amount of risk.

Go to Top