Shore Capital Management LLC

During the first half of July, the Nov soybean futures contract was in a bottoming phase as it was testing the lows of $8.81 to $8.82 range. On 7/30/09 the market broke to the upside in a very quick way. By 8/6/09 the market reached a high of $10.4975. Since that time, Nov beans have moved into a very volatile trading range. However the market made a new high of the move on 8/13/09 at $10.66 and then immediately sold off the rest of the day and into the next day when it closed near the lows of $9.7875

Of the grain markets, soybeans have the best fundamentals to support their pricing, but they ran up almost $2 in a matter of a couple of weeks, and are well deserving of some consolidation. This story sounds hauntingly similar to equities. Even the timing of when the markets based and consolidated are very similar.

Nov beans have fallen into a very strong support level and could begin basing from this area. On 8/14/09 we received a long term sell signal after maintaining a long term buy signal since 7/20/09. On 8/13/09 we received a short term sell signal, that could potentially end within the first part of the week. Some of the pressure may have been due to the Aug beans expiring with more deliveries known than had recently been determined.

If the market should consolidate in the current area, $9.97 to $10.03 would be the first level of resistance. If the market pushes farther, $10.19 to $10.30 would be a major resistance level.

There is strong evidence the market will at least find short term support in the $9.65 to $9.50 area.