Market Overview

Soybean Futures Tumbling But Could Be Oversold

 

PowerShares DB Agriculture Fund (NYSEARCA: DBA)

 

We see many “risk-on” markets continue their tumble this morning, with soybean futures leading the way down at negative almost 2 percent. As we have been noting recently, precious metals continue to climb.  Platinum futures are the strongest of that group today, currently posting +1.8% gains. Silver is also up 1.32%, while Gold continues its climb from the October sell off. Gold is up almost 11$ today, or +.63%.

The US equity market futures showed strong selling before the NYSE open, with DEC 12 emini SP futures hitting an overnight low of 1363.50. After the NYSE open however, stock indices rallied and the emini SP futures are actually up 4 points as of this writing. They bounced hard off of a key support level at 1365.75.

Soybeans, have not experienced such a bounce however. USDA raised the size of the soybean crop by 111 million bu. from last month to 2.971 billion bu., coming in around 80 million bu. above the average trade guess. They are trading well below our key pivot level of $15.60, and down another 30 cents today. After an incredible rally through the summer, soybeans have shown they can indeed be be very volatile. Our next major support area is $13.90-$14.00.  If Soybeans get to this level, we believe this will be oversold territory.

 

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Soybean futures chart

Soybean futures chart

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