Can Soybeans Find Support?
Apr 04, 2017
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Since March 1st the May soybeans are down over $1.10. The expectations for the South American crop continue to rise and record US soybean acreage forecasted by the USDA have weighed heavily on soybeans. However, now that we have gotten the USDA Prospective Plantings and Quarterly Gain Stocks reports out of the way can soybeans find some support to stop the bleeding?
The month of March was a precipitous decline for soybeans. Thankfully the all important month of February (crop insurance) was able to hold on to strength before the bottom fell out in March. The lack for really any major issue in South America and expectations for big acreage increases in the US put a lot of pressure on soybeans. The Prospective Plantings report showed that US producers were intending to plant even more acreage than the average trade guess.
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However, we do still have to grow this soybean crop. And, from a technical perspective soybeans have gotten to an extreme oversold condition on a relative strength index. There are also layers of previous lows not far below current soybean prices that could act as support.
While the huge crop in South America and the intention of the US producer to increase soybean acres by a huge amount it might be difficult to turn the tide in soybeans. But seasonality and the oversold condition of the market could help soybeans find support sometime possibly in the near future. Longer term it is hard for me to not think that soybean prices could still go (maybe much) lower if we have another good crop this year, but at this point we may have to wait and see what the weather looks like before we can say that the crop is "made".
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Give us a call if you would like more info on the strategies we are using or if you would like to set up an account to put a plan in action. Ted Seifried - (312) 277-0113. Also, feel free to give me a call or shoot me an email if you would like to talk about your marketing plan, the markets, weather, or just to visit.Follow me on twitter @thetedspread if you like.
MayCorn Daily chart:
MaySoybeans Daily chart:
Producers looking to hedge all or a portion of their production may be rather interested in some of the options / options-futures strategies that I am currently using.
In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent. Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs. Be safe!
Ted Seifried (312) 277-0113 or firstname.lastname@example.org
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