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Soybean Meal - When Fundamentals meet Technicals

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I shall reply to myself but Soybean Meal is up another 740 odd points today. The chart is looking extremely bullish. There are concerns that Argentina may have dry weather which may hurt crop yields. From a fundamental analysis there is a reason for the rise in prices. From a technical perspective the trend is strong and there is a clear breakout.

 

I think the one thing I have learnt is that it is not important what the share, commodity or cryptocurrency it is. What is important is the trend and can an investor or trader profit from it either on the long side or short.

 

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Hi Weakestlink, I am not suggesting that you should purchase anything.

 

Soybean Meal is not a company for which you can purchase shares from. Soybean Meal is a commodity. It is a grain like wheat and corn. It is classed within the 'softs' for commodities.

 

I am just stating the strong trend which can be seen from a technical perspective looking at the charts but stems from a fundamental bit of news which is the dry weather in Argentina and how it could destroy the crop yield. 

 

If you are still unsure with my explanation then may I suggest reading up about commodities either on the IG platform or via the internet. 

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The price action is wonderful for Soybean Meal. Hit 34658 today.

 

It is trading above the 20 day, 50 day and 100 day moving averages. This is what I like to see.

 

Soyabean Meal_20180125_14.34.png

 

 

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The greenback is helping Soybean Meal. It is weakening thus the price appreciation. Now for those who do not know or understand why this is? Well, overseas buyers have more purchasing power and they tend to buy more from the U.S. when the dollar is weak. It makes sense and is generally a strategy that is adopted by countries in Asia.

 

 

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Soybean Meal is up another 860 odd points. Current price at time of writing is 35957. 

 

Soybean Meal hit a two and a half year high. The price behaviour seems to be based on the weather conditions. This is based on dryness in Argentina.

 

 

From a fundamental perspective you have US and China trade relation issues. US exports were cancelled.

 

When Fundamental and Technicals meet then it increases the chances of a move in favour of the direction in which the trend is travelling.

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$37320 hit today.

 

It seems the rain that never fell in Argentina and potential short covering has led to this recent rally.

 

Argentina is a big player in the Soybean Meal market. It will be interesting to see what happens next. 

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Soybean Meal hit $39106 today. My experience tells me that these markets, speculators, commodity hedge funds all like nice round numbers. As simple and silly as that may sound but over the years this happens more often than not. 

 

I think Soybean Meal will hit $40,000.

 

Whether the dry 'weather' conditions can impact the price for it to hit $50,000 I don't know but the key is to let the price action determine whether you add to your position, hold your position or your stop loss gets triggered and you are out.

 

For me the biggest commodity trades have been Lumber, Soybean Meal and Orange Juice during Hurricane Irma in Florida. They may not be the sexiest commodities like Oil, Gold, Corn and Wheat but their price action has sure been sexy!

 

:smileywink:

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It looks Soybean Meal is playing out exactly as I thought. 

 

$40225 was hit yesterday. It may continue up briefly before a large / sharp correction. However, it will be interesting if it now goes for $50000.

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Soybean Meal seems to be trying to breaking beyond the $38000 level but is finding it difficult. However, it seems to be holding its own at the moment. If it does hit $40,000 again then it really will get very interesting.

 

Fundamentals are playing a very important part at the moment. Tariffs combined with increase in imports for certain countries meaning that demand vs supply is crucial in this set of circumstances.

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On Reuters today. “Concerns about trade wars could also hit some specific assets, such as U.S. soybeans and corn . Both products licked their wounds after having fallen 2.2 percent and 1.9 percent, respectively, on Wednesday on China's trade moves.”

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Soybean Meal has gone back above $40,000. Can it surpass the $42,000 + figure hit back in 2016? If it does then this may get very interesting.

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After the big correction in Soybean Meal is the downward trend going to continue or is there about to be a trend reversal? This will be an interesting one but remember we don't want to make any trades on what we think may happen but instead waiting for confirmation of any assumptions based on how the price does actually act. 

1356433428_SoyabeanMeal_20180906_20_28.png.3784d06a2cab9782434ed2c687289e70.png

I personally would be hold any short positions and waiting for at the 20 day moving average to be cleared before even considering any long trade as the chart below shows.

544810517_SoyabeanMeal_20180906_20_31.png.36074147b055da2df1bd825305e71672.png

 

Soyabean Meal_20180906_20.28.png

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As you can see from the chart below that Soybean Meal has continued to decline albeit at a slower pace than on prior occasions during this longer term downtrend.

1361442529_SoyabeanMeal_20190506_13_55.png.509ef8d8f636e2bb1d46480254489f37.png

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