March soybean futures at the Chicago Board of Trade on Tuesday hit a fresh three-week low of $13.77 1/4 a bushel. Market action the past four trading sessions has seen prices drop by around 70 cents from the Feb. 9 high of $14.55 3/4. The soybean market bulls have been weakened technically just recently, but no serious chart damage has occurred. Prices are still in a 7.5-month-old uptrend on the daily bar chart. However, a drop below the last “reaction low” of $13.64 1/4, scored in late January, would at least temporarily negate the price uptrend on the daily chart.
Veteran grain market traders are now thinking present downside price action in the grain futures markets is the “February Break” seasonal price weakness phenomenon setting in. This is likely the case and the question now is how deep will be this present price correction. There is solid technical support for March soybean futures at the last reaction low on the daily chart, at $13.64 1/4. Just below that lies more strong chart support at the January low of $13.55 1/4. A drop below the January low would produce more significant near-term technical damage and then open the door to a challenge of major psychological support at $13.00 a bushel. The soybean market bulls would gain some fresh upside near-term technical momentum by pushing and closing March futures prices back above major psychological resistance at $14.00 a bushel. Stay tuned!–Jim Wyckoff
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