May soybean futures on the Chicago Board of Trade on Thursday hit a fresh 10-week high of $10.30 3/4 a bushel. A bullish USDA supply and demand report issued Thursday morning combined with bullishly postured “outside markets”–solidly higher crude oil and stock index prices and a weaker U.S. dollar–to propel soybean futures higher. Bulls have recently gained solid upside near-term technical momentum to suggest still more upside price pressure. May soybeans are in an accelerating nine-week-old uptrend on the daily bar chart. The two popular shorter-term moving averages (9- and 18-day) are in a bullish posture as the 9-day is above the 18-day moving average. One early technical clue that the uptrend in May soybeans is ending would be if these to moving averages produced a bearish line crossover signal, whereby the 9-day crossed back below the 18-day moving average.
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The next upside technical objective for the soybean bulls is to produce a close in May futures prices above strong chart resistance at the January high of $10.69 a bushel. A close above that key technical level would be significantly bullish and would then open the door to stronger upside price potential, including bigger daily price advances. The soybean bears would begin to gain some fresh downside near-term technical momentum by pushing and closing May futures prices below solid technical support at $9.80 a bushel. Just above that level does now lie major psychological support at $10.00, basis May futures. Importantly, look for soybeans and the other grain futures markets to continue to be heavily influenced by the aforementioned outside markets. Any sustained weakness in the U.S. equities market would very likely mean fresh selling pressure in the grain futures markets.–Stay tuned! Jim Wyckoff
***Jim Wyckoff’s Trading Workshop*** I am conducting a small-group trading workshop in May. This is a rare opportunity for you to obtain individual attention and “hands on” experience to improve upon your own trading skills. Click here for more details: Jim Wyckoff’s Trading Workshop Or, call me at 1-319-277-8643 if you have any questions.–Jim