September 29, 2009
CBOT soy still trapped in a downtrend
Chicago Board of Trade November soy futures are still in a six-week-old price downtrend from the August spike high of US$10.66 a bushel. Bears do still have the overall near-term technical advantage.
The next downside price objective for the bears is to produce a close in November soy futures below psychological support at US$9.00 a bushel. Below that lies solid chart support at the September low of US$8.92. And then below that comes support at the July low of US$8.81 1/4 a bushel.
A price move in November soy below the July low would produce more serious chart damage to then suggest a price move down to major psychological support at US$8.00 a bushel.
For the soy market bulls to regain some fresh upside near-term technical momentum, they would have to push and close November futures prices above solid technical resistance at US$9.50 a bushel. Above that lies strong chart resistance at the mid-September spike high of US$9.77 3/4.
Seasonality studies do show soy futures prices trending lower into the October timeframe, at which time a "harvest low" is typically secured. Prices then typically trend higher into the end of the year, according to seasonal studies.
