Soybean futures had a nice start to the week but gave it all back and them some in today’s trade as the market retreated back towards the lows from last summer. Is there any hope for a relief rally into spring time?
Transcript
“Good afternoon. This is all over slow Blue Line futures coming to you from the Chicago Board of Trade with another episode of the two minute drill. I’ve got two minutes or less, to cover a couple of different things that have crossed our radar in today’s trade. Before we get into the markets, though, I do want to remind you that we will be headed down to the commodity classic, next week in Houston. So if you’re going to be down there, stop by the booth, we’d love to chat with you about the markets and what we’re looking at going into the springtime and summertime at 2024. And hear what you’re looking at as well. If you’re not headed down there, follow us on social media for all the updates, Blue Line futures pretty much across the board, Facebook, Twitter, YouTube, you name it, Blue Line futures follow us on social media, we really do appreciate the support. Now. I guess without further ado, we can get into the charts. We got soybeans here, may specifically March option expiration is this Friday. And once you get past option expiration, you look at first notice day and all that volume really shifts out to the May contracts in the grain. So we’ve got may soybeans pulled up here, there really hasn’t been a whole lot to write home about as of late. We had a nice rally last couple of days. And then today, we gave it all back. But the silver lining is that we’re continuing to defend the May 31. And June 1 lows comes in near 1155 to 1165 for that May soybean contract. So from a risk reward perspective, at least if you want to be long the market you know where you’re wrong breaking close below this support pocket. And you’re probably just look to get out of the way. Now on the resistance side, we got trend line resistance kind of converging as well. So we’re nearing an inflection point for the market. And seasonally I think that aligns up with a pop and volatility now moving over to the volatility. We go over to see vol.com CME Group has a list of volatility indices for basically any commodity for soybeans, right at about 18%. And that is fairly steady with where we’ve been over the last several months. But seasonally again, you can kind of see the volatility start to pick up into the prospective plantings report and into the summer. So with volatility relatively sideways, I think options might be a decent play, whether you’re looking to speculate and take a position in the market or whether you’re looking to hedge a position as well I think options with where volatilities at really makes sense and gives you staying power in the markets. Now looking at the commitment of traders report funds, obviously been big net sellers here 13 consecutive weeks, which is a record now net short about 124,000, futures and options contracts. So again, I like the risk reward here to the buy side, but we need to defend this the support and maybe more importantly get out above trendline resistance and potentially that would be the catalyst regardless of the fundamentals to spark a little bit of a short covering rally. So that’s two minutes and that’s all I’ve got. If you’ve got any questions about any other markets, feel free to give us a shout 312-837-3938 Blue Line futures.com Remember trading futures and options involve substantial risk of loss and is not suitable for all investors.”