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Soybeans continue choppy trade -- technical analysis

12/27/2013 @ 8:18am

Continuing the recent pattern of choppy, volatile trade, January Chicago Board of Trade soybeans reversed Tuesday's gains to close with healthy losses on Thursday. Rain in the forecast in Argentina and Brazil weighed on Chicago soybean prices, amid speculation that the wetter weather would bolster the currently growing crops there.

Technically, recent price action has been range-bound since the beginning of December. A minor bull-trend pattern is seen off the November low, but in recent weeks, the short-term outlook has turned neutral between support at $13.11 1/4 and resistance at $13.53 1/2.

The market has fallen to the lower third of that recent price range. If support at $13.11 1/4 were to give way, it would be a bearish signal and would suggest a minor top was forming on the chart. Daily momentum has been choppy, but the 9-day relative strength index (RSI) fell to 45% on Thursday, its lowest level since late November. The bears are poised to test the $13.11 1/4 floor near term.

  • $14.09 3/4 -- the contract high
  • $13.30 1/2 -- the 10-day moving average
  • $13.30 1/2 -- the 20-day moving average
  • $13.09     -- the 40-day moving average
  • $ 9.22 1/2 -- the contract low

JANUARY SOYBEAN MEAL -- combined pit and electronic trading.

January CBOT soymeal plummeted to a lower close Thursday. The bulls have been unable to retest resistance at the Dec. 18 contract high at $454.00 in recent days. A top could be forming on the daily chart. The trend is bullish, but the market is under the influence of a bearish momentum divergence, and price action has been heavy. The bears are gunning for a short-term test of initial support lies at $437.30. If that level were to fall, it would open the door to a quick test of support at $425.90, the Dec. 13 low.

  • $454.00 -- the contract high
  • $441.20 -- the 10-day moving average
  • $436.90 -- the 20-day moving average
  • $422.20 -- the 40-day moving average
  • $234.00 -- the contract low

JANUARY SOYBEAN OIL -- combined pit and electronic trading.

January CBOT soybean oil collapsed to a new contract low at 38.80 on Thursday. The bears remain in charge and have used recent gains as an opportunity to sell. The technical trend remains bearish. Looking out on the weekly continuation chart, January soybean oil has fallen to levels not seen since late July 2010. On the downside, minor support lies at the 38.51-38.32 zone. But, a major bearish objective comes in at 35.80, the July 2010 weekly low. On the upside, chart resistance comes in at 39.69 cents. The bulls would need to close the market back above that ceiling to improve the very short-term technical outlook.

  • 59.89 -- the contract high
  • 39.40 -- the 10-day moving average
  • 39.88 -- the 20-day moving average
  • 40.50 -- the 40-day moving average
  • 38.80 -- the contract low

Write to Kira Brecht at copydesk@dowjones.com
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(END) Dow Jones Newswires
December 27, 2013 08:00 ET (13:00 GMT)
DJ U.S. Soy Complex Futures -- Technical Analysis->copyright

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