Tuesday Morning — June 16
Take a look at the version of SpaceX that soybeans are playing with this morning.
Crude oil is sharply lower again, yet soybeans have chosen to move in a completely different direction.
Recall that last week we kept talking about this massive support zone. The key level was around 11.34, with the 200-day moving average coming in near 11.25. We also showed how important this area was when looking at the move from the beginning of the year to the May high. The 50% correction level landed right at 11.34.
We also discussed how prior highs often become new support. When you put all of that together, it created a major support zone that soybeans had to hold. They successfully pushed through overnight and yesterday, and now we're seeing the market come alive.
What this probably suggests—and this is just my guess—is that we're going to see some movement regarding China and the removal of tariff barriers. If that happens, it could pave the way for China to resume buying soybeans during the typical August through December purchasing window.
Right now, attention shifts to the 25-day moving average. This average previously acted as support and helped drive the market higher. Now, it has become resistance in the 11.70 to 11.75 range.
If soybeans can push into that area quickly, it could become the next key test for the market.
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