There are a lot of questions in agriculture that don’t have any answers right now: What will happen with NAFTA renegotiations? Are we going to be in a trade war with China and possibly the European Union? What will the acreage mix be? What should we do with old crop corn? Will I be able to turn a profit in 2018 with current commodity prices? How will the weather in South America impact U.S. prices?
The list of questions goes on, and soybeans are another point of conversation as well.
The soybean market is exhibiting strong technical signals, and Mike Florez of Florez Trading said he is a speculator and he’s short November soybeans.
“To me, the market is a little bit top heavy, and as markets start to decline in price, a lot of those longs that have been recently purchased are now losers,” he said.
This is an indicator to Florez that the market is forming a technical top, or a 1-2-3 top.
“We’re going to go down probably somewhere around the $9.98 area before the market can really find their footing again,” said Florez. “It’s going to take some time to get of all this market length that it has accumulated over these few weeks.”
Hear Florez explain a 1-2-3 top and his full comments on AgDay above.