July soybeans declined 15.5¢ on Thursday ahead of the holiday-shortened week, but prices managed to advance 42¢ during the week to close at $12.43. While corn and wheat have continued to decline, soybeans have been trending up since the beginning of March. The strength in soybeans has been due to strong export demand and declining domestic supplies. The daily chart shows an uptrend with three strong ADX peaks (all >25), but the current upswing in price is being made on a weaker ADX. This suggests that prices are entering a period of retracement or range. The last support level of $11.50 may be tested on the next swing down.
Chart Courtesy of TradeStation
Dr. Charles B. Schaap 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.