Focus: Soybeans Surge
May Soybeans began a daily uptrend in early March and ended last week with three strong up days, pushing prices over $1 and setting a new seven-month high ($11.02). The recent surge may have been fueled by concerns over the possible effects of the swine flu. Increased demand resulted from a recent report by the USDA stating that weekly exports of soybeans had significantly increased. In addition, wet spring weather could delay plantings and cause an upward push on prices.Tecnically, soybeans have established a long-term support level over the last seven months, and it can complete a long-term trend reversal if prices go higher. The ADX is above 25 (strong) and the +DMI is dominant, so we are likely to see prices continue upward.
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.
