Most of the grains complex is experiencing a morning in the red, with soybean futures and soybean meal futures leading the way down. The month of September was not kind to soybean bulls, as prices in the NOV 12 contract dropped from the high of just over $17.75 all the way down to today's current low of approximately $15.30. Our view is that we don't see soybeans falling too much more from here, but we do take note of a very important chart level of $14.75, as this is the next unfilled gap below current prices. We believe soybeans can potentially fill that gap at $14.75. We also believe that if and when this happens, that level should hold as powerful support for this market.
The upper end of August 2012's range (before the breakout) at around $16.60 is our upside pivot level, and this market is obviously way below this important level. We think longs will be very excited to re-establish some bullish positions if soybeans break below $15.
In a roundup of other key markets, many of the key commodities and futures are having quiet mornings. Gold and silver are in the red by a small margin, the S&P 500 is holding above our key pivot level of 1430, and sugar futures are continuing their rally, and could be targeting our key upside level of $22.50.
Click to enlarge