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360-289-9441(March 12, 2000) SOYBEANS: May beans have been tracing the chart very much like meal; it is in neutral territory moving between 5.20 and 5.08, presently moving with downward momentum. 9-day momentum is positive, 18-day negative and 40-day very strong--just to confuse you; this reflects the strong uptrend and sideways movement over the past month-and-one-half. Moving averages are in a bearish mode. I would treat this market as a "breakout" potential with a sell order below 5.00 and a buy-stop above 5.20--favoring neither and waiting for the move out of the trading range. This is the "breakout" strategy used when a definitive trading channel has the potential to "break" up.
Now to the fundamentals and talk around the pits: Talk of harvest delays in Brazil, fairly good export reports for the week and the possibility, or rather a rumor about the possibility of a tax on beans in Brazil circulated the bean pit. Pressuring prices were reports of better soil moisture here and in South America. The USDA report was ho-hum stuff for most professionals and received with bearish cynicism inasmuch as 5.20 could not be breached.
May dropped 3-1/4 cents to settle at $5.09-3/4, above the magic $5 mark say small bulls but the bears have "control," they feel.
SOYBEAN OIL--Soybean oil is suffering from a lousy, yes: lousy export business this crop year. Commercials knocked the price down further Friday but strength elsewhere in edible oils saved the decline; support is holding here, as the May dropped 18 points to close at 16.20.
May soybean oil rose to 16.70 on Tuesday and looked good that morning until the sell-off to the close at 16.29. This was sufficient for a cycle down signal and prices have moved to a 16.08 low on Friday but come back to 16.20 at the close for a lot of action, but very little price movement. Stochastics were bullish and have come together, barely positive and moving toward a "cross." RSI is not an issue. Short term direction and momentum indicators are bullish, though the overall trend call is bearish and intact.
SOYMEAL--Soymeal managed a modestly higher week, holding on to gains earned earlier in the week.
There's just a lack of fresh news and meal could do nothing more than follow beans Friday as new speculative selling came into the pits. Good export sales helped support prices. May went up $.70 to settle at $166.30 for the week.
May soybean meal is in neutral territory since late February. It reached 170 and then fell back to 160. It made another run at the high side and touched 173 two weeks ago. Since that time, prices fell to 154 last Monday and have struggled back to 169.10 Thursday, closing the week at 166.30. There is a little upward momentum working;. direction indicators are bearish but short-term momentum is positive; RSI is not an issue. We need a close above 168.00 to return to a rally mode. Neutral.
Martin B. Miller
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