WASSA DEAL WITH SOYBEAN MEAL?
I want to try a new feature that you might find helpful. If you think it is useless let me know, that way I won’t waste my time in the future. If many of you like this I will continue and expand it to a wide array of commodities and even take requests. So what is going on with Soybean Meal which in my opinion has been the recent upside leader of the soybean complex?
Let us start with what we know or better yet what we believe we know (WWKTWK).
WWKTWK: Continued rains in Argentina have caused the official reporting office to reduce Soybean acres by 1,754,448. It appears that the market may have expected more since the initial reaction was negative. Keep in mind that Argentina is the worlds’ largest exporter of Soybean Meal.
WWKTWK: A little research shows us that going back to the October 2016 report to the latest report the projected ending stocks of Soybean Meal for 2017 has declined a bit.
WWKTWK: Sources involved in the international trade have told us that they believe it is funds taking profits from long held short positions.
In this section we are going to examine the Soybean Meal market from the vantage point of the LAWG647 model.
WWKTWK: According the LAWG647 model Soybean Meal is in a definite uptrend which it triggered the week ending Friday January 13. It is interesting to note that prior to turning higher the LAWG647 model had Soybean Meal flat lining for 15 weeks.
WWKTWK: According the LAWG647 model in order to turn bearish March Soybean Meal will need to close this Friday at or below $252.40.
WWKTWK: You may have noticed that I did not recommend buying Soybean Meal in Monday’s addition of Numerology but rather recommend a short term selling position. The reason is that according to the LAWG647 model Soybean Meal is getting quite overstretched to the upside and very close to a negative equivalent. It can still go higher but I am uncomfortable getting long at this degree of overstretched and prefer to wait for a potential profit taking dip.
WWKTWK: On daily basis a trade and close above $353.70 would strong indication it may want to go higher yet before breaking.
WWKTWK: According to the LAWG647 Model if March Soybean Meal rolls over and heads lower first level of support is about the $332/331 level and then $320/$319.
Let me know what you think.
The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.