January 8, 2009
CBOT soy futures have upside momentum
March soy futures at the Chicago Board of Trade this week hit a fresh three-month high of US$10.23 a bushel.
Importantly, prices have also closed above what was major psychological resistance at US$10.00 a bushel. Bulls have gained good upside near-term technical momentum recently as prices are in a four-week-old uptrend on the daily bar chart. Price action in mid-December did push above, and negate a five-and-a-half-month-old downtrend line on the daily bar chart, drawn from summertime and autumn highs.
The next upside technical objective for the soy market bulls is to push and close March futures prices above solid technical resistance at US$10.50. Above that lies psychological resistance at US$11.00 a bushel.
The bean market bears would obtain some fresh downside near-term technical momentum by pushing and closing prices below solid technical support at last week's low of US$9.36 a bushel. Below that lies psychological support at US$9.00 a bushel.
Soy market bulls are at least a bit worried about the approaching "February Break" seasonal phenomenon, whereby futures prices tend to experience a significant pullback after a rally to begin the New Year.
