Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Soybeans: Is The Commodity Laggard On The Cusp Of A Rebound?

By Investing.com (Barani Krishnan/Investing.com)CommoditiesOct 06, 2021 04:10AM ET
www.investing.com/analysis/soybeans-is-the-commodity-laggard-on-the-cusp-of-a-rebound-200604143
Soybeans: Is The Commodity Laggard On The Cusp Of A Rebound?
By Investing.com (Barani Krishnan/Investing.com)   |  Oct 06, 2021 04:10AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

It’s the only one of the three major US agricultural markets that is in the red for the year. It’s fallen almost 20% from its May highs and prices have just hit a nine-month low.

Nothing has gone well lately for soybeans, at least from the perspective of market bulls.

Futures of the basic resource for soy milk, soy flour, soy protein, tofu and many other non-food and retail products are down 5% on the year. 

Soybeans Monthly
Soybeans Monthly

All charts courtesy of skcharting.com

For comparison, futures of wheat, used primarily for making bread, noodles and crackers, are up more than 16% since the year began.

Futures of corn, used for making starch, sweeteners and biofuel, have gained more than 10% on the year.

Soybeans are also trailing prices of soyoil, which are up 41% since the start of 2021. Soyoil is largely up on demand for biodiesel, which has been tracking prices of both oil and ultra-low sulfur diesel, which have gained  62% and 68%, respectively.

The only component of the soy complex that’s lagging soybeans is soymeal, which is down 26% on the year on restrained demand from China’s hog industry and its revamped guidelines for import of feed.

Soybeans’ problem is basically overproduction, especially in top grower Brazil, whose exports to the United States are adding to the US supply situation. “Soybean planting moved up to 4% complete, which is double the pace of last year,” Dan Hueber, author of the Hueber Report on grains, said, referring to Brazilian production. 

But after five straight months of losses and heading into what could be its sixth month in the red, are soybeans on the cusp of a rebound?

Soybeans Weekly
Soybeans Weekly

The front-month contract for soybeans on the Chicago Board of Trade, November, was headed on Tuesday for its second positive week in three, though the gain itself was marginal, at 0.1%. 

Interestingly, in Tuesday’s session, November soybeans hit a nine-month low of $12.31 per bushel before settling up 1.3% at almost $12.50.

Soybeans Daily
Soybeans Daily

That’s a sign of more weakness ahead, said Sunil Kumar Dixit, chief technical strategist at skcharting.com.

“Soybean has been largely oversold with Stochastic Relative Strength Index readings of 0.5/0.4 on the weekly chart and 32/16 on the daily chart,” said Dixit. 

“Prices have tested $12.31 and oversold Stochastic is causing some bounce back from the lows. However, unless prices close above the 50-week Exponential Moving Average of $13.00 and the 50-EMA on the daily chart, it's very likely that the middle Bollinger Band of $11.84 on the monthly chart can be tested. Below this sits the 100-week SMA of $11.29, which can be a possible extension for bearish momentum.”

But beyond those levels, a rebound was very possible, Dixit said. 

“The long distribution phase leading to the oversold state of the commodity may find support at mentioned critical levels to regain the up move again. Resumption of uptrend may be affirmed with a weekly close above the 50-EMA of $13.00.”

Disclaimer: Barani Krishnan uses a range of views outside his own to bring diversity to his analysis of any market. For neutrality, he sometimes presents contrarian views and market variables. He does not hold a position in the commodities and securities he writes about.

Soybeans: Is The Commodity Laggard On The Cusp Of A Rebound?
 

Related Articles

Soybeans: Is The Commodity Laggard On The Cusp Of A Rebound?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (2)
Brian Anderson
Brian Anderson Oct 06, 2021 11:30AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The US is harvesting. Why the quote about planting being 4% complete - faster than normal. You talking about South America?
Barani Krishnan
Barani Krishnan Oct 06, 2021 11:30AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Hello Brian, yes. thanks for that. There should have been a preceding paragraph citing Brazilian production, that would have connected to that. That got dropped unfortunately.
Barani Krishnan
Barani Krishnan Oct 06, 2021 11:30AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I've reintroduced the Brazilian context to that paragraph
Farid Noori
Farid Noori Oct 06, 2021 11:30AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Next target will be 66 +
munir pulparambil
munir pulparambil Oct 06, 2021 10:32AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Informative article
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email