I am Stephen Davis, senior market strategist at Walsh Trading, Inc., Chicago, Illinois. You can reach me at 312-878-2391.
Markets are all about numbers, in my opinion. The number today is 1201 for January 2027 soybeans. See the 200-day moving average represented by a black line on the chart below. The 200-day moving average is a key indicator used in trading grain futures. It helps identify long-term trends by averaging closing prices over the past 200 days. When prices are consistently above the 200-day moving average, it indicates a bullish trend, while prices below suggest a bearish trend.
Soybeans are currently at oversold levels, which could support a reversal. Momentum indicators, such as the Relative Strength Index (RSI) and Stochastics, measure the rate at which prices are changing or accelerating and can provide insight to when the trend might end or when prices may potentially reverse.
Meanwhile, weather conditions in South America could affect U.S. soybean prices this month. Dry conditions in central and northern Brazil and perhaps too much rain in Argentina and southern Brazil, could result in lower than predicted yields due to current El Nino conditions. This affects production and may cause prices to go up. Soybeans in South America are typically planted between September and December, with harvests occurring from February to June depending on the region.
A trade strategy is to buy January 2027 soybeans at 1201, good til cancelled (GTC). Risk the trade 1191 stop, GTC ($500 risk per contract). Profit objective is to sell January 2027 soybeans at 1235, GTC. This trade risks $500 to make $1,700 per contract.
An option trade strategy is to buy January 2027 soybeans at 1240 call at 15.0, GTC. Today's settlement price was 15.2. Profit objective is to sell the January 2027 soybean 1240 call at 30, GTC. That would be a $750 profit per option.
To discuss trading strategies, contact me anytime. Have an excellent day.
Stephen Davis
Senior Market Strategist
Walsh Trading
Direct 312 878 2391
Toll Free 800 556 9411
sdavis@walshtrading.com
www.walshtrading.com
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