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Are Beans Oversold?


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FUNDAMENTAL:

A major scandal rocked Brazil causing the Brazilian Real currency to sharply devalue by 7% to 8%. This immediately makes Brazilian soybeans cheaper on the world market and caused a major drop in US Futures prices. Soybean inspections posted the lowest total of the marketing year. Not a huge surprise since the main supplier to the world is currently South America. Export sales were also slow. New crop sales are starting to become a big worry. Current pace is the slowest in 4 years and is well behind the 5 year average. The USDA has a very aggressive export number for the next year but the current new crop sales don’t support that.

SEASONAL TRADES (Entry and Exit of positions at the market close):

The current seasonal trade is to go Long the Soybean Futures contract on the 30th of May and exit the position on the 9th of June. This trade set up has a 87% success rate over the last 15 years.

TECHNICAL:

The moving average cross over indicates a possible developing short-term downtrend. Daily stochastics are trending lower but have declined into oversold territory. The close below the 9 day moving average is a negative short term indicator for trend. The Swing pivot shows a positive bias.

RECOMENDATION

Soybeans July 2017 (ZSN7)

BUY July Soybean $9.20 calls for 12'0 cents or better ($600). Looking for a reverseal to the upside with a target of $9.59.

Call or Email me with any Questions.

Cody Hoffman

(312)474-7853

Cody.Hoffman@SystraAssetManagement.com

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About the author


I started in the industry with BB&L Farms Research based out of Boon Iowa. There I learned the in's and out's of the grain and livestock markets.

 

Understanding what some of the driving factors in the commodity markets are. I was then offered a position at BRICS Global Markets based out of Chicago as a order desk clerk.

 

At this point I started developing personal relationships with farmers. Icon Alternatives then offered me a job with the opportunity to become a Futures Broker. Here I teamed up with Russell Tanner and started developing private clientele. In the last few months we, as a team have transferred companies to Systra Asset Management.

 

The company is based out of Dusseldorf Germany with the main headquarters in Chicago.

Cody.Hoffman@SystraAssetManagement.com

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