Last week July 2012 soybeans opened at 1438¾ and closed the week at 1449½. July soybeans open 2012 at 1251. On the daily chart, technicals show beans in a strong trend with ADX at 38; however, ADX is dropping. MACD is riding just below the signal line with little divergence, and Stochastics are hovering just below overbought territory. Keep in mind that the bean high was achieved on July 7 2008 at 1663.
Proceed to Page 2 for the latest COT Data...
Looking at the weekly chart below, you can see the increased selling by producers on the Disaggregated COT report. In the last COT report of 2011, Producers came in at -122,176 contracts net short and beans were trading around 1200. This past week, Producers showed a net short position of -298,376 contracts. So who is buying? Managed Money and Swap Dealers. And where are beans trading now?
If you need help understanding how to understand how to use the NEW COT report to your benefit get instant access to my new e-book "What Lies Beneath ALL Trends". It is filled with eye opening information.Commercial Net Tracker instructions: This form tracks the Commitment of Traders (COT) data for the commodity futures market. This form "looks" at the most recent five weeks of COT data and provides visual indications of the data. A) If the current value is at a 12-month low, the cell will display a red/burgundy background. B) If the current value is at a 12-month high, the cell will display a green background. C) If the current value went from net negative to net positive, the cell will display a blue background (indicating a bullish condition). D) If the current value is both a 12-month high and also went from a net negative to a net positive, the background will be green. You should view the data with green backgrounds to determine if they also went from net negative to net positive.
Proceed to Page 3 for this week's detailed fundementals...
With the Europe debt crisis escalating, once again, and news from China about an economic slowdown, we may see a slight drop in demand for soybeans. We also see an excellent planting season underway here in the United States, especially in corn and spring wheat. If bean planting is as successful as the other grains so far this year, this also could push beans down a bit. Keep a eye on the COT as we currently see a large amount of buying and selling, and realize any issues with planting or growing beans here in the United States could cause beans to take-off to retest 1663 or beyond. Beyond 1663 puts soybeans ever closer to $20.
Have a prosperous trading week.
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