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Middle Tennessee | In my last post, I suggested that Friday’s violent violation of support levels in the soybean market looked conspicuously hurried. The best explanation I can see for the urgency of the pressure is an attempt to mine as many stop sells as possible as quickly as possible, for a corrective turn around into the unofficial start of summer, after the long Memorial Day weekend, beginning this evening.
This week’s CFTC report showed Managed Money short 90k contracts of soybeans. Open interest is up another 12k since end of trade Tuesday, which I believe is the largest fund-short position ever, at least in several years (see bottom panel of the chart on link below)
http://www.barchart.com/chart.php?sym=ZSN15&style=technical&templat...
In the meantime, July soy meal actually closed in the green Friday with bean prices sharply in the red. Furthermore, prices on the Chinese Dalian exchange appear to be breaking resistance as Chicago prices break support (see price-chart below which includes Friday trade, Dalian beans were up again on Monday).
On the fundamental side, meal and bean shipments out of Argentina appear to be “paralyzed” by strikes and obstruction of vessel channels at the port,
http://en.mercopress.com/2015/05/23/argentina-s-soy-market-paralyze...
The El Nino pattern looks to be in full force, bringing heat waves to South Asia and East Asia,
http://www.bbc.com/news/world-asia-india-32872846
and threatening to drive up palm oil prices,
http://in.reuters.com/article/2015/05/22/indonesia-palm-elnino-idIN...
Time to cover those shorts guys!
 (DalBean.png)
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 DalBean.png (48KB - 190 downloads)
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Unofficial Start to Summer in the Bean Market
