Focus: Soybeans fall
After setting a six-week high of $9.53 on Monday of last week, May soybean prices fell 35¢ last week to close at $9.17. The 4% drop was due to profit taking and a lack of fundamental news to sustain further upward momentum. Prices could drop further depending on next week’s USDA prospective plantings report. There is also uncertainty about whether or not China will release some of its soybean reserves, thereby decreasing the demand for U.S. exports. In the 60-minute chart of soybeans, the uptrend ADX hit a strong 56 with the six-week high. Then the DMI lines contracted and crossed, causing ADX to decline to 25. This represents a retracement in soybean prices on the hourly timeframe. There can be continued weakness until the +DMI (green) is back above the –DMI red. There is technical support at 900.
Chart Courtesy of TradeStation.
Dr. Charles B. Schaap transitioned from health care to wealth care in the nineties. He is the author of ADXcellence —Power Trend Strategies and Invest with Success—Big Profits for Small Investors. Dr. Schaap is a commodity futures strategist and recognized authority in technical analysis of the financial markets. His website is www.adxcellence.com.
