Wanna see an ugly chart?
Look at today’s Chicago Board of Trade electronic soybeans intraday chart.
It shows a gap-down, which means it opened below yesterday’s close and failed to make up that ground during the day. That’s often seen as significant by technical analysts for a variety of reasons. Sometimes it can mean – especially when a commodity is bumping around at a “support” level – that downside pressure is a lot more powerful than recovery pressure. But sometimes it can see seen in an opposite light, as the last gasp of an old nag of momentum. If things gap-up from here, this could be seen as a major reversal point.
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Unfortunately, that leaves soybean prices in the toilet right now, compared to where they were.
Everyone on the selling side is hoping that soybeans are finding a bottom right now. At $8.56 per bushel many feel the crop has paid its penance after getting cocky at over $16 per bushel. Today’s weakness is being attributed to weak oil prices, then late morning news about rain in Argentina possibly saving enough of that country’s crop to get some onto the world market this year.
But regardless of the reasons, soybeans are the dog crop right now and farmers aren’t being reassured by gap-down days like today.
