August soybean futures (ZSQ26) present a buying opportunity thanks to new price strength.
See on the daily bar chart for August soybean futures that prices have fallen to the lower limit of a choppy trading range. My view is that technical support at the bottom of the trading range will hold and that bean prices will recover at some point sooner rather than later.
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Basically, the global balance of supply and demand for soybeans is not bearish. Global food inflation is rising and China has promised the United States that it will make additional purchases of American soybeans. Additionally, most years, some degree of weather market recovery occurs in soybean futures during the summer. It’s about time for a rebound in the soybean weather market.
A move in August soybean futures prices above the chart resistance at $11.80 would become a buying opportunity. The upside price target would be $12.60 or higher. Technical support, for which a protective sell stop can be placed below, lies at the bottom of the trading range, at $11.48 3/4.
IMPORTANT NOTE: I am not a futures broker and I do not manage any trading accounts other than my personal account. My goal is to point you to potential business opportunities. However, it is up to you to: (1) decide when and if you want to initiate any trades and (2) determine the size of any trades you can initiate. Any trade I analyze is hypothetical in nature.
Here’s what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%):
Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before investing money in futures or options contracts, you should consider your financial experience, goals, and financial resources, and know how much you can afford to lose beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations when entering into those contracts. You should understand your risk exposure and other aspects of trading by carefully reviewing the risk disclosure documents your broker is required to provide you.
As of the date of publication, Jim Wyckoff had no (directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. This article was originally published on Barchart.com