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Soybeans vulnerable to short-term retreat

01/15/2014 @ 7:16am

March CBOT soybeans rocketed sharply higher Tuesday, posting gains for the fourth session in a row. Soybean bulls garnered support from dry weather in Argentina, which could stunt the growth of the currently growing crop there. Also, signs of strong export demand are underpinning the market this week.

Technically, the market has recovered back to price ranges seen during December. March soybeans have shrugged off the late December/early January price plunge and recovered back above the key $13.00 mark. That level roughly marked the bottom of the month-long trading range that confined prices during December.

The strong rally from the $12.62 zone hit in early January shows there remain eager buyers willing to support March soybeans on the buy side. Daily momentum is rising and pointing higher. The 9-day relative strength index climbed to 60% on Tuesday, from 30% at the beginning of January. Rising momentum will support the bulls.

Very short term, however, hourly momentum is overbought and turning lower. Modest downside correction could be seen early on Wednesday. Strong initial support lies at $12.88 1/2. The market has rallied sharply over the last four sessions and is vulnerable to a modest correction and some backing and filling.

  • $13.99 3/4 -- the contract high
  • $12.80 3/4  -- the 10-day moving average
  • $13.00    -- the 20-day moving average
  • $13.01 1/4 -- the 40-day moving average
  • $11.27 1/2 -- the contract low

MARCH SOYBEAN MEAL -- combined pit and electronic trading.

March CBOT soymeal also vaulted higher Tuesday. The bulls have regained control of the trend, with major upside targets at $436.80 and then $440.40. Daily momentum is rising and supportive. But a short period of downside correction and consolidation may be needed before the bulls attack those higher levels. Strong support lies at $419.60.

  • $440.40 -- the contract high
  • $415.20-- the 10-day moving average
  • $422.50 -- the 20-day moving average
  • $419.00 -- the 40-day moving average
  • $303.00 -- the contract low

MARCH SOYBEAN OIL -- combined pit and electronic trading.

March CBOT soybean oil edged slightly lower Tuesday, but traded within recent ranges. The market has shifted into a short-term consolidation and neutral phase. The primary trend remains bearish. Major nearby support lies at last week's low at 37.42. On the upside, the key level to watch remains the same at 38.30. Sustained gains above 38.30 would be needed to improve the short-term chart outlook. Additional bullish targets lie at 38.57 and then 39.19. Longer-term, the bears are targeting an eventual retest of the 35.80 level, the July 2010 monthly low.

  • 57.43 -- the contract high
  • 38.21 -- the 10-day moving average
  • 38.85 -- the 20-day moving average
  • 39.87 - - the 40-day moving average
  • 37.42 -- the contract low

Write to Kira Brecht at copydesk@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
January 15, 2014 08:00 ET (13:00 GMT)
DJ Soybeans Vulnerable to Short-Term Retreat -- Technical Analysis->copyright

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