What Hidden Forces Are Reshaping the Soybean Market’s Future?The soybean market stands at a crossroads, where familiar patterns of supply and demand are being challenged by a web of global forces. U.S. crops, though abundant, face domestic difficulties as adverse weather threatens yield projections. South America, poised to increase production, is battling its climate concerns, leaving traders and analysts questioning what the true state of global supply will be. Despite the current pessimistic outlook, is there more to this story than meets the eye?
On the demand side, the rising global appetite for vegetable oils, fueled by population growth and the biofuel industry, adds another layer of complexity. Yet, regulatory changes like the EU’s deforestation rules and China’s ongoing economic struggles continue to shape the trade landscape. How will these evolving dynamics impact global soybean trade flows, and what are the risks and opportunities hidden within?
As technological advancements in biotechnology and precision agriculture push the boundaries of efficiency and productivity, the soybean market finds itself on the cusp of transformation. Investors and traders must decipher this intricate puzzle, where geopolitical shifts, weather risks, and innovation collide. Will those who grasp the nuances of these forces be the ones to seize the emerging opportunities?
Zs1
SOYBEANS - Are We Close to a Major Bottom? Cycles Say YES.Here is what I am currently watching for SOYBEANS.
-We need to be aware that there is a major bullish divergence setup (not trigger) developing on the quarterly & monthly charts. We need to pay close attention to this setup, because if triggered/confirmed, it implies a massive move up for Soybeans would be on the horizon.
-Interestingly, the Weekly chart has confirmed bullish divergence. The first target (1090) has not yet been hit, but in my opinion, it looks probable that Soybeans will hit that target (and possibly go as high as the second target (1179). This implies that I believe Soybeans is likely to rally at least 5% in the near future, and possibly rally as much as 10% from current price levels.
-I will be aggressive with taking profits on any short setups that present, due to the bullish weekly divergence that has triggered.
-Utilizing the Weekly MAC & Valuation methods, I note that this market is in an area where we can look for H6/Daily short trades. As mentioned in previous paragraph, I will utilize more aggressive targets.
-The cycles for Soybeans...wow, they are quite something. Decennial cycle suggests significant low being put in, APZ's suggest major low around October 4th, major 5 year cyclical low RIGHT NOW. Other temporary and permanent blended cycles suggest a major low right now. Composite of the 3 most similar years of price action also suggest a major low could happen soon, with a major rally to March 2025.
-A combination of the cycles and the major timeframe bullish divergences have me leaning somewhat towards calling a possible major bottom in the Soybeans market. I would prefer to see commercials COT positioning support this idea, which makes me think maybe we get another nice selloff into the August lows before the real bottom is in. But time will tell.
Smart Money Positioned to LONG Soybeans - COT StrategyDISCLAIMER: This is not trade advice. This is for educational purposes only to demonstrate how I am looking to participate in this market. There is significant risk involved in trading, do your own homework and due diligence.
COT Strategy
LONG
Soybeans (ZS)
My COT strategy has me on alert for long trades in ZS if we get a confirmed bullish change of trend on the Daily timeframe. I note that I am already long as this market has been giving a buy signal for a few weeks.
COT Commercial Index: Buy Signal
Extreme Positioning: Commercials hovering around max long of last 3 years - bullish.
OI Analysis: "Bubble Up" in net positioning between commercials and large specs - bullish. Multi week down move has seen OI increase. When OI increases, we need to ask "who caused the increase in OI". When the OI increase is caused by Commercials adding to longs, it is bullish.
True Seasonal: Major seasonal low end of September and up to February.
COT Small Spec Index: Buy Signal
Supplementary Indicators: Acc/Dist, %R, UO, Stochastic & Confirmed Momentum Shift.
Remember, this is not a "Long Now" idea. These indicators are not timing tools. They simply tell us that this market could have a move of some significance to the upside, which we will participate in with a confirmed Daily trend change to the upside.
Good luck & good trading.
Upside Ahead for Soybeans - COT Strategy LongDISCLAIMER: This is not trade advice. This is for educational purposes only to demonstrate how I am looking to participate in this market. There is significant risk involved in trading, do your own homework and due diligence.
COT Strategy
Long
Soybeans (ZS)
I got long Soybeans last week. This week we see the COT strategy still giving us signals to be on alert for long trades in ZS if we get bullish signals on the Daily timeframe.
COT Commercial Index: Buy Signal
Extreme Positioning: Commercials close to the longest they have been in the last 3 years.
Valuation: Undervalued VS Gold
ADX: Paunch forming (but not confirmed yet)
Supplementary Indicators: %R & Stochastic Buy Signals
Remember, this is not a "Buy Now" idea. These indicators are not timing tools. They simply tell us that this market could have a move of some significance to the upside, which we will participate in with a confirmed Daily trend change to the upside.
Good luck & good trading.
A Trade as Simple as "Shooting Ducks in A Barrel" Soybean ShortIf you follow my channel, you know I love to trade a strategy that I like to call "Ducks in a Barrel". Its a strategy that is as easy as shooting ducks in a barrel.
We have a setup forming on the Daily timeframe for the Soybeans market.
Step 1: Identify trend (I like to see the 52 & 39 period SMA's sloping strongly and pulling away from each other). In the case of Soybeans, we see a strong bearish trend.
Step 2: In a down trending market, we want to see an asset become OVERVALUED VS GOLD & US TREASURIES. We see with Soybeans, we are now overvalued on the Daily timeframe vs gold & treasuries. Assets that are overvalued in a strong downtrend are assets that we want to SELL.
Step 3: In a down trending market, we want to see an asset become OVERBOUGHT. We see on the Daily stochastic that Soybeans are overbought. Assets that are overbought in a strong downtrend are assets that we want to SELL.
Step 4: In a down trending market, we want to see advisor SENTIMENT become BULLISH. The advisors and general public are usually wrong, so when they become overly bullish in a strong down trend, we want to sell into that bullish sentiment.
Step 5: We can also look at accumulation/distribution indicators and momentum for further confirmation of our idea. But realistically, we just need to see 2 or more of the above indicators confluent with each other to have a setup market.
Step 6: For the Daily timeframe, I utilize the H4 chart for my entry. The safest entry is to wait for 2 full range days to form beneath the 18 period SMA, and from there market enter when the lowest low of these 2 candles is hit. There are other entry techniques to get into the market earlier, but they come with greater risk.
NOTE: If you follow my channel, you will know that I am long Soybeans based on my COT strategy. Commercials are close to the max long positioning of the last 3 years (bullish), OI grinding up on the multi-month down move caused by CM's (bullish), paunch forming (bullish), bearish weekly sentiment (bullish), undervalued on weekly vs gold and treasuries (bullish), major cyclical lows (bullish). I have different accounts for different strategies, as sometimes we get conflicting signals.
If you have any questions about these "ducks in a barrel" trade setups, feel free to give me a message.
As always, I wish you good luck & good trading.
Fundamentally Setup Markets For This WeekI have identified the following markets are "set-up" for moves of some significance.
This video goes into the fundamental reasons for these trade ideas.
NOTE: I am not looking to go long/short these markets immediately. I will wait for a change in trend on the Daily to get involved with these markets. The tools used to identify these trade setups are not timing tools. The tools do give us an idea of how market participants with significant size and intelligence (commercials) are positioning themselves. The tools also give us an idea of sentiment, valuation, seasonality, and also an idea of what the (usually wrong) public/small traders are doing.
LONGS:
HEATING OIL (HO)
GASOLINE (RBOB)
MEXICAN PESO (6M)
SOYBEANS (ZS)
COTTON (CT)
SUGAR (SB)
SHORTS:
EURO CURRENY (6E)
JAPANESE YEN (6J)
SWISS FRANC (6S)
GOLD (GC)
30 YEAR TREASURIES (ZB)
Good Luck & Good Trading.
Soybeans Drift LowerSoybeans
Technicals (May)
May soybean futures attempted to hold ground yesterday, but it lacked conviction. Prices are giving back those gains in today’s trade. 1155-1160 is the first resistance pocket the Bulls need to overcome to help spark a bigger relief rally. A failure to do so keeps the potential for new lows alive and well.
Bias: Neutral/Bearish
Resistance: 1155-1160, 1170-1175
Pivot: 1150
Support: 1128 1/2-1133 1/2****
Fund Positioning
Friday’s Commitment of Traders report showed Funds were net sellers of roughly 1k contracts, putting their net short position at 139,310 contracts. Broken down that is 54,057 longs VS 193,367 shorts.
Seasonal Trends
(Past performance is not necessarily indicative of future results)
Below is a look at price averages for November soybeans, using the 5, 10, 15, 20, and 30 year averages.
Check out CME Group real-time data plans available on TradingView here: www.tradingview.com
Disclaimers:
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
SOYBEANS Excellent buy opportunity.Soybeans (ZS1!) has been trading within a Channel Down pattern since early 2023 just last week, it almost hit its bottom (Lower Lows trend-line). So far the price has reacted with a minor rebound, while the 1D RSI has been on a major Bullish Divergence (Higher Lows against the price's Lower Lows).
This is the best buy signal since the May 31 2023 bottom where again after an RSI Bullish Divergence, the price rebounded aggressively to the 0.618 Fib on a +12.56% rally. So far within this long-term Channel Down, we have had similar rebounds of +12.56%, +14.26% and +11.86%.
Assuming the minimum of +11.86%, we are setting a Target on Soybeans at 1263'5, which may almost make contact with the 1D MA200 (orange trend-line), which has been the natural technical Resistance since April 24 2023.
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10 year Bean Projection (potentially)10yr Corn outlook: Potential course of the Bean market for the next 10 years. Previous inflationary markets have caused for the multi year market structure to step up in price ranges. Before that range is found, Beans will need to mark a pivot high enough to ration some future demand. The low found after a major high is made, could mark an area for the future multi year market structure. The market should remain very sensitive for another few years. Sensitive to world demand and production misses across the globe. There are many climate cycles coming ahead that could add to potential Ag production shortages.
**Not a prediction, something to watch**
Tofu FuturesBanks might be toast but the Fed isn't done until tofu comes crashing down in a H&S pattern. If they don't raise rates next week, everything pops back up.
My guess at this point is .25% because the Fed is usually more hawkish than ECB, so I doubt the Simple Jack Powell keeps rates the same. I doubt he does .5% though, that would absolutely tank the market. Of course that is what he needs to do, but he won't do it because he's the Village Idiot. the ECB apparently is now willing to do it though.
Soybean Futures ( ZS1! ), H4 Potential for Bearish DropTitle: Soybean Futures ( ZS1! ), H4 Potential for Bearish Drop
Type: Bearish Drop
Resistance: 1535.00
Pivot: 1514.00
Support: 1490.75
Preferred case: Looking at the H4 chart, my overall bias for ZS1! is bearish due to the current price being under the Ichimoku cloud, indicating a bearish market. If this bearish momentum continues, expect price to possibly drop from the pivot at 1514.00, where the 23.6% Fibonacci line is before continue heading towards the support at 1490.75, slightly below where the -27.2% Fibonacci expansion line is.
Alternative scenario: Price may head back up to retest the resistance at 1535.00, where the 61.8% Fibonacci line is.
Fundamentals: There are no major news.
Soybean Futures ( ZS1! ), H4 Potential for Bearish DropTitle: Soybean Futures ( ZS1! ), H4 Potential for Bearish Drop
Type: Bearish Drop
Resistance: 1535.00
Pivot: 1492.25
Support: 1457.75
Preferred case: Looking at the H4 chart, my overall bias for ZS1! is bearish due to the current price being under the Ichimoku cloud, indicating a bearish market. If this bearish momentum continues, expect price to possibly continue heading towards the support at 1457.75, where the 61.8% Fibonacci line is.
Alternative scenario: Price may head back up to retest the pivot at 1492.25, where the 38.2% Fibonacci line is.
Fundamentals: There are no major news.
Soybean Futures ( ZS1! ), H4 Potential for Bullish ContinuationTitle: Soybean Futures ( ZS1! ), H4 Potential for Bullish Continuation
Type: Bullish Continuation
Resistance: 1535.00
Pivot: 1492.25
Support: 1457.75
Preferred case: Looking at the H4 chart, my overall bias for ZS1! is bullish due to the current price crossing above the Ichimoku cloud , indicating a bullish market. If this bullish momentum continues, expect price to possibly continue heading towards the resistance at 1535.00, where the recent high is
Alternative scenario: Price may head back down to break the pivot at 1492.25, where the 38.2% Fibonacci line is before heading towards the support at 1457.75, where the 61.8% Fibonacci line is.
Fundamentals: There are no major news.
ZS1! Potential For Bearish DropLooking at the H4 chart, my overall bias for ZS1! is bearish due to the current price crossing below the Ichimoku cloud, indicating a bearish market. Looking for a sell entry at 1509.00, where the 38.2% Fibonacci line is. Stop loss will be at 1537.50, where the recent high is. Take profit will be at 1465.50, where the 38.2% Fibonacci line is.
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Soybean Futures ( ZS1! ), H4 Potential for Bullish ContinuationTitle: Soybean Futures ( ZS1! ), H4 Potential for Bullish Continuation
Type: Bullish Continuation
Resistance: 1508.75
Pivot: 1469.00
Support: 1423.25
Preferred case: Looking at the H4 chart, my overall bias for ZS1! is bullish due to the current price crossing above the Ichimoku cloud , indicating a bullish market. If this bullish momentum continues, expect price to possibly break the pivot at 1469.00, where the previous high and 78.6% Fibonacci line are before heading towards the resistance level at 1508.75, where the previous swing high is.
Alternative scenario: Price may head back down to the support at 1423.25, where the 38.2% Fibonacci line is.
Fundamentals: There are no major news.