MARKET UDPATE

In todays update you only get 2 small portions of the update. You get the seasonal outlook for soybeans & the possible downside risk objective for soybeans.

You miss the entire corn update, entire wheat update, downside risk objective in wheat & more.

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UPDATE PREVIEW

Soybean Seasonal Hope

Seasonals are not perfect, but the bean seasonal gives bulls some hope.

Here is the past 5 years of soybean prices.

From Top to Bottom:

2020: Green
2022: Purple
2019: Red
2021: Violet
2023: Pink
2024: Blue

Every year except 2023, we bottomed around the first of December and rallied throughout the month of December and into January.

Now here is some data from Moore Research.

The red line is the past 5 years.

The black and pink line are the past 15 and 30 years.

Back a decade ago, Brazil wasn’t this huge player in the bean market. But now they are.

So we have essentially created a Brazil weather month for December, similar to the US and June.

Since Brazil has become a bigger player, the past 5 years we historically bottom on December 1st and rally into January.

In the 15 and 30 year seasonals, we do not see that rally. We went more sideways as Brazil wasn’t this major player.

Here is another study done by Moore Research.

They go long soybeans on November 17th, and close the position on December 29th.

This trade has been a winning trade the past 13 of 15 years.

The only years it was a losing trade were 2023 and 2017.

Soybeans do not have to rally from here, but the data says history is on our side.

If this rally occurred, it would likely be……..

…..even without a trade war, if Brazil has this huge crop, that alone could send prices much lower.

I REALLY want to see us hold those contract lows.

PURELY based on technical patterns, we are sitting in a descending triangle. The implied move if we were to bust below this support is well below $9. Something to be aware of. (Desending triangle pattern below).

To negate this pattern, we need to bust that downward trendline.

My next spot I am looking to re-hedge or make a few sales will be if we can crawl up and test that downward black trendline.

Here is an illustration to show you the potential implied move for beans.

The patterns says the move to the upside usually sees an equal move to the downside.

From the lows of $9.74 to the highs of $10.87 was a $1.12 upside move.

So the downside target would be $9.76 minus $1.12 = $8.64

I really hope this does not happen, but you have to be aware of all possibilities and what the charts say.