Thoughts on Bean Pricing Coming Into Harvest

Published on: 11:02AM Oct 06, 2011

This morning grains are trading mixed: C1Z uparrow 3 1/4, S1X uparrow 5 1/4, and W1Z downarrow 3 1/2

Today, we wanted to highlight some price action from the November soybean contract. At the time of this post it is trading at 1167 3/4 - down 20.3% since the high we printed on August 31st. You can see that this high came on the heels of a sharp move out of the 1300 - 1400 range we were stuck in for a six month period.

We included an RSI indicator on this chart and you can see that after taking 297 cents off this contract since August 31st it has reached oversold territory. With this being said, the soybean market is a very different beast than the corn market coming into harvest as soybean yields have been projected higher and export sales remain sluggish. We are looking for minor support around the 1128 figure, but if we continue to trade lower through these levels - look out below.

Right now the market is paying producers to store their 2011 crop. For producers that have not yet priced their bushels being long basis may pay off as we move away from harvest.

GrainHedgelogo                                                             Grainhedgebutton

Beans10 6

THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR RISK DISCLOSURE.