December 12, 2008
Soy futures at the Chicago Board of Trade this week have seen a short-covering bounce from Friday's contract low of US$7.76 1/4 a bushel. Prices, however, remain trapped below a five-month-old downtrend on the daily bar chart, from the early July contract high of US$16.48 a bushel. Bears do retain the overall near-term technical advantage in the soy futures market.
For the soy bulls to get some significant upside near-term technical momentum uncorked, they would have to produce a close above solid technical and psychological resistance at US$9.00 a bushel, basis January futures. Below that price level lie the technical resistance at the US$8.75 level.
On the downside, technical support for January soy is located at Thursday's low of US$8.26 3/4 and then psychological support is located at US$8.00. Solid technical support is located at the contract low of US$7.76 1/4. A close below the present contract low would then open the door to a quick price move to longer-term technical support at the US$7.50 level, basis January futures.