Soybeans See Price Action Pause, Which is Not Bearish

soybean_July11.gifJuly soybean futures at the Chicago Board of Trade are presently in a pause mode on the daily bar chart, following last week’s strong gains that pushed prices to a three-week high of $13.96 a bushel. The present pause is not bearish and does suggest the bulls are building up energy for another upside assault soon. The next upside technical objective for the soybean bulls is to produce a close in July futures above major psychological resistance at $14.00 a bushel. Just above the $14.00 level is located a stiff layer of technical resistance, starting with the May high of $14.02 1/2, at $14.17 3/4 and then at the April high of $14.27.
A drop in July soybean futures prices below near-term technical support at $14.65 would begin to dent bullish near-term technical enthusiasm.

There is chart support located at $13.50, with stronger support seen at $13.40. The soybean market and the rest of the grain futures markets will continue to keep one eye on the key “outside markets” that have had such a strong influence over the commodity markets in recent months–the U.S. dollar index and crude oil futures. If crude oil futures can sustain an uptrend and the U.S. dollar index resumes a downtrend, that would likely help propel July soybeans back toward the contract high of $14.74 1/2, scored in February. If crude oil embarks upon a fresh leg down in prices in the near term, and the U.S. dollar index continues to rebound from its recent 2.5-year low, then upside price potential in the soybean market would be limited, barring a major weather scare in the U.S. soybean-growing region. Stay tuned!–Jim Wyckoff

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4 Responses to Soybeans See Price Action Pause, Which is Not Bearish

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