Fundamentally, am I really looking at the biggest slump in soybeans in over 40 years?
The soybeans (CBOT:SNU14) are like a falling knife in terms of the price, and according to a great Bloomberg article yesterday, "Soybean futures capped the longest slump in 41 years after a government reported showed supplies will climb in the U.S., the world's biggest grower."
I am usually a big, big technical guy, but this is some juicy fundamental news. The second paragraph explains the numbers a little, "Stockpiles of soybeans on Aug. 31, 2015, before next year's harvest, will total 415 million bushels, the U.S. Department of Agriculture said today. That's up from 325 million (8.84 million metric tons) forecast in June. World inventories will be a record 85.31 million tons, compared with 82.88 million predicted last month. Traders expected 84.69 million, on average." Whoo-wee, that's some bullish fundamental's.
However, as Ted Seifried VP and Chief Marketing Strategists of Zaner Ag Division explained, "...we are in a weather market, and there is still a lot of weather left". I couldn't agree more in terms of the new crop, but the old crop was what really got smashed yesterday after the monthly USDA supply/demand report and the USDA crop production report. So we'll see how sharp and how deep this knife eventually goes in the soybeans.
Technically, I have added my favorite technical indicators to this chart below. They are the 9- (red line), 20- (green line), and the 50- (blue line) day simple moving averages (SMA). I have also added Bollinger Bands or BB's (the light blue shaded area) and Candlesticks (the red and green bars with the wicks, on this daily chart each bar represents a day of trading). These few technical indicators tell me 8-10 different characteristics about the market at a quick glance so I have them saved on my charts in MARKETHEAD, so they can populate a chart at the click of a mouse.
My favorite technical indicators show me that soybeans are in a "SUPER-TREND" down. The soybeans are in what I have coined a "SUPER-TREND" down that started on June 30 when the 9-day sma (red line) crossed down and under the 20-day sma (green line) as both indicators pointed sharply lower and the market traded below the 9-day sma. It's been like this since then until now.