Soybeans Could Be Finding Support Base At $15
SPDR Gold Trust (NYSEARCA: GLD)
PowerShares DB Agriculture Fund (NYSEARCA: DBA)
Almost the whole commodities complex is positive today, along with US equity indices. US bonds are down slightly. Today is election day, and needless today, markets will likely remain quiet until there is clarity on a winner and the ensuing economic and fiscal policy.
After a steep drop on Friday, Gold futures have found some footing over the past couple of days. The $1675 high last August served to be the support level of Friday’s sell-off. We would not be surprised to see silver test the $30 level to the downside.
Lumber futures have had a very bullish October and today are one of the leaders on the commodities boards. Lumber futures are trading up over 2% as of this writing. As USA housing data continues to improve, and foreign real estate data shows positive growth (specifically China), lumber futures could be in demand.
Today we focus our technical analysis on Soybean futures. JAN13 Soybeans have tried 3 times over the past month and a half to stay below the $15 level, and were not successful at this point. We see $15 as a key support level which could serve as the base for another move up. There is an important “upside breakout line” we marked on the chart for you – we are watching this line closely. With that said if JAN13 soybeans make another move down, we anticipate a downside target of $14.70, as this would be a 1 dollar sell-off from recent swing highs, to mirror the 1 dollar sell off in late September. We don’t see soybeans staying below this level of $14.70 as global demand will likely continue to increase and a true next crop picture won’t develop until after the winter.
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