Soybean Complex Trade Ideas
One of the most interesting aspects of trading commodities is the immediate impact any change in the narrative has on the underlying market. What is also interesting is that you get to see several facets of this change in sentiment – commodities often have what are known as complexes – that is, a series of related but not identical commodities.
The charts below represent the components of the Soybean complex – Soybeans, Soybean Oil and Soybean Meal.
Soybeans have struggled to break a resistance line that has been in place since September last year. Price has drifted away from resistance, and my long-term filter has shifted to neutral, but so far, there is no trigger.
Likewise, Soybean Oil has been struggling to break resistance that has been in place for over a year. It, too, has drifted back, but still no trigger.
Soybean Meal is slightly different in that it has been compressing in both price and volatility. Volatility has effectively collapsed, which is always an interesting setup.
Once again, it is essential to wait for a proper trigger – price drifting down is not a trigger, it is merely a signal to pay attention.
