As everyone has been following the July soybeans contract from $9 to almost $13 in the past few months, there has been a widening of the July November spread from about $1 to $2.
On 6/12/09 November beans topped at $10.9950 and the market began to consolidate. On 6/15/09 we received a sell signal and the market has fallen about a dollar since topping in mid June. Our initial target of $9.90 was reached.
There is major support in around $9.80. If this level holds, the next resistance level is $10.02 to $10.10. If the market should break above $9.96 we could see at least a short term bounce up to $10.10 to $10.16.
If the market doesn't hold the recent lows, the next support level would be $9.70 to $9.60. If that level is taken out, the next support level would be $9.40 to $9.15.
From a fundamental standpoint, recent talk over the weekend of China's
economy growing by 9% and discussions last night of Japan's potential to have passed the worst of the recession, may cause the grain markets to rally, at least in the short term. Thus causing commodity related currencies to also rally. Exports have always been a strong inducement for the grain markets to rally and this time would be no exception. However, if the dollar should have a strong appreciation in the near future as some are expecting, it could slow or cap the upside potential of the grain markets.
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