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Soybean bears gain strength

10/29/2013 @ 8:45am

November CBOT soybeans plunged sharply lower Monday, as the current U.S. soybean harvest progresses quickly and there are anecdotal reports that yields are higher than expected. Recent weather conditions have been dry and conducive to harvest work.

Technically, the November soybean contract has extended the decline off the $13.18 3/4 peak hit last week. That zone is major resistance and likely to remain out of reach near term. The market is now trading under its 20-day, 40-day, 100-day and 200-day moving averages, which is a negative position.

Very short-term, hourly momentum is deeply oversold which could usher in a modest corrective bounce or help to stabilize the market at least early on Tuesday. Rallies are likely to be used as selling spots.

Overall, the bears are focused on a retest of major support at the October lows in the $12.63-12.61 range.

Bottom line? The primary trend off the late August peak is bearish for Nov soybeans. A minor bottom formed at the October lows, but the recent rally attempt failed. The October lows will be vulnerable near term.

If the $13.63/13.61 floor gives way, Nov soybeans will be vulnerable to more significant declines. Minor congestive support lies at $13.40, but that would likely only act as a temporary stalling point. The market ultimately could be vulnerable to a 100% retracement of the August rally. Major multi-week support lies at the August low at $11.62 1/2.

$14.09 3/4 -- the contract high 
$12.92 1/4   -- the 10-day moving average 
$12.87 1/2    -- the 20-day moving average 
$13.15 1/2 -- the 40-day moving average 
$ 9.22 1/2 -- the contract low

DECEMBER SOYBEAN MEAL -- combined pit and electronic trading.

December CBOT soymeal collapsed sharply lower Monday. Action during October has been volatile, wide swinging and the trend moves have been short-lived. Currently, Dec soymeal is in retreat from major resistance at $428.10. Initial downside support and a target for the bears lies at $407.20. Below there, additional bearish supports and objectives are seen at $400.70 and ultimately a major floor at $397.80.

Very short-term, hourly momentum is deeply oversold, which could open the door for a modest corrective bounce, at least early on Tuesday. Resistance lies at $416.80 and then $420.10.

$451.20 -- the contract high 
$414.70-- the 10-day moving average 
$413.20 -- the 20-day moving average 
$418.60 -- the 40-day moving average 
$234.00 -- the contract low

DECEMBER SOYBEAN OIL -- combined pit and electronic trading.

December CBOT soybean oil posted another day of declines. The bears have been in charge in recent days and a minor top and strong resistance is seen at the Oct. 21 peak at 42.09. Hourly momentum is deeply oversold and a modest corrective bounce could be seen early on Tuesday. Initial resistance lies at 40.65.The bears are targeting a retest of the 40.10 low hit on Oct. 14. If that zone cracks, it would open the door for a retest of major support at the Oct. 2 low at 39.20. The longer-term primary trend remains bearish.

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