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January Soybean Futures Chart Fractured


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Last Thursday's USDA post report reaction in the January futures soybean contract began fracturing the support trendline drawn off the August low. This was an early warning signal that this market was walking on thin ice. Additionally, the 40 DMA had been a good support level the past couple of months but Monday's selling pressure violated that line of defense as well. These two simple yet powerful technical concepts visually show what happens when support is breached. Monday's close below the late October swing low point at $9.81 wasn't beneficial to the bullish cause. However, it actually takes a price close below $9.63 to technically end the uptrend drawn off the August low. This uptrend is defined as the "process of higher highs and higher lows". Therefore even though some technical damage has been done to the bean chart, the overall uptrend remains intact. Incidentally there is a wild card now appearing with the recent price weakness which happens to be a short term cycle turn point that could give this market a dead cat bounce back up. Resistance to the upside begins at the 40 DMA at 9.85 followed by the former support trendline currently at 9.93.



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Steve Fast is the owner and technical analyst of Commodity Concepts LLC based in Ohio. It is a futures chart based grain advisory service which utilizes professional trader techniques to assist in the decision making process. Clients normally utilizing this expertise are farmers, futures brokers, and grain buyers. He has been involved in the grain industry for over 36 years. Thirty-four of those years were in grain elevator management, merchandising and origination.  He began both the farmer advisory service and farming part-time in 2000. In 2015 he transitioned into full time grain farming as well as broadening the scope of the advisory service. More information can be obtained by logging onto www.commodityconceptsllc.com

 

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