Soybean Futures–-Soybeans in the July contract is trading lower by 4 cents at 8.90 a bushel hitting a 6 month low as the grain market as a whole remains bearish across the board.
In my opinion I think prices will retest the October 31st low of 8.83 and then test major support at the contract low at 8.65 in the coming days ahead as I see no reason to be bullish soybeans at this time. Soybean prices are trading under their 20 and 100 day moving average as the trend remains negative as the first planting progress report will be released this afternoon as that should have very little impact on prices.
Large money manage funds are short 91,000 contracts as they are short the entire grain market as they have been right so far and they still believe lower prices are ahead and I agree with them. Fundamentally speaking soybeans remain very bearish as we have 900 million bushel carry over which is an all-time high coupled with the fact of weak demand due to the situation regarding trade with China & until that situation is fixed it will be very difficult for soybean prices to rally unless some type of weather event develops such as drought.
Volatility will certainly increase to the upside as the summer season is the most volatile for the grain market and especially for soybeans, but in the short-term lower prices look to be ahead so if you are short stay short.
TREND: LOWER
CHART STRUCTURE: SOLID
VOLATILITY: AVERAGE
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