Futures Market Technical and Fundamental Recap
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Today's Futures Analysis summary
July Soybeans fell on Tuesday on speculation that purchases from China would slow and on perceptions that prices are too high to generate strong demand.
Prices have been rising for several months as China has applied stimulus money to reportedly hoard soybeans. These aggressive purchases of U.S. soybeans may slow as China has committed to a program which buys both U.S. and domestic soybeans. Once the reserves are full, China is expected to back away from the market.
A slow down in the livestock market is also leading to less demand for soybean meal.
Technically, this market seems to have run out of buyers after it completed a 50% retracement of its almost year-long break from the all-time high. On June 1, July Soybeans touched 12.27 per bushel; this price was slightly above the retracement target at 12.23.
Currently, this market is still in an uptrend, but vulnerable to a correction. The best sign of weakness will be a break through an up trending Gann Angle at 11.75 1/4.
The rally in July Cotton produced another higher bottom which is a strong indication that the uptrend wants to resume. A trade through the recent top at 61.67 will reaffirm the uptrend. Major Gann Angle support from the 44.05 bottom held this market on the recent break. This angle is at 55.30 today. A break through this price will signal the start of a longer-term correction.
Supply concerns are helping to boost July Cotton prices. Remember that fewer acres were planted this year because many previously used cotton acres were used for soybeans. This created a bullish situation even before this year’s crop was put in the ground. Farmers are now concerned that the current crop may even be smaller than estimated. Not only is the crop only 77 percent planted versus the 5-year average of 81 percent but hot, dry weather is already putting stress on the newly emerging plants. Heavy hedge fund buying has been detected which should help drive this market higher
The June E-mini NASDAQ surged to the upside early Tuesday morning to keep the uptrend intact, but buyers slowing disappeared and the market settled into a range. Volume has been light this week and is expected to remain so ahead of Friday’s unemployment report
The charts indicate that this market is now poised to rally to the main objective of 1565.25. This price represents 50% of the contract range of 2091.00 to 1039.50. The current leg up is trading inside of bullish channel. The channel forms at 1450.25 and 1519.50 tomorrow. Additional Gann Angle support rises to 1442.00.
By FuturesHound.com the portal for Analysis, Education and exclusive timely market Gann Analysis .
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