This is just the beginning
Updated
Commodity prices are still going, several commodities have gone past all time highs, such as Palladium, Lumber, Steel...
And grains are also going up very strongly, Corn hit an 8 year high after 6 years of price stability, and they're all not far from ATH.
Corn imports have fallen as buyers are put off by the high prices (they are going against the trend, what if it never goes back down?).
Soybean demand should continue to increase, it is in high demand for the green transition (as a meat replacement, fuel additive or replacement, lubricant, etc).
And based on past years it seems farmers do not sell before summer (they plant in April-May).
This is now the 12th month in a row food prices have been going up.
History will show this was more than just some short term fluctuation or some economic recovery.
If we look at the past 10 years we might expect that soybean volatility is set to soar, every year as farmers plant their crops volatility increases by about 50%.
It fits with what you would expect after a range breakout, a trend that gets stronger and stronger ending parabolic (and bears screaming "this is ridiculous"), followed by a significant correction.
Corn has been the big runner and I think I will avoid it now, but wheat is interesting, after a long period of being choppy and lagging behind other grains, it has gone vertical finally!
If this keeps going I will look to go long wheat on a pullback.
Resistance (ATH) is far away:
The price stopped at the $15 psychological level, gathered reinforcements, and then continued up.
In many ways the situation is similar to 2007, but much crazier, with Rudolf Havenstein running the central bank.
We have seen this several times in the last year: After hesitating a bit around resistance, the price makes a new high giving confirmation to sidelines traders.
No reason to think this time is different, and as more people notice the trend it can be expected to get stronger.
We can look at previous vertical price rallies, and expect it to go at least to $18. It does not make sense to me that the rally would stop now.
It would be like a big truck running at full speed instantly stopping for no reason.
On the weekly chart clearly it does not have that much distance left to get to all time high, it's not far fetched at all, especially with all the other commodities that went well beyond ATH.
The trick is getting in on H4 to grab a fantastic risk to reward.
The main difficulty with these crazy vertical price moves is you can never enter and once you get in it reverse.
But with Soybeans... It is granting perfect pullbacks and breakouts, at least it has for the past 9 months.
And cherry on the cake, it could just fly past ATH, again. Who knows how far it can go? If this was the winter low volatility, what could the year peak volatility be? Up 25% in a week? Hey it's even possible it ends up in the news and retail goes insane and starts a bubble with dumb money arguments "new paradigm", "market of 7 billion eaters with the green transition", "we are very early" and so on.
The past centuries were full of all sorts of commodity bubbles, tulips that's the one everyone knows about, rabbits, silk, and others ones no one knows about but still have a few traces left in old books.
And grains are also going up very strongly, Corn hit an 8 year high after 6 years of price stability, and they're all not far from ATH.
Corn imports have fallen as buyers are put off by the high prices (they are going against the trend, what if it never goes back down?).
Soybean demand should continue to increase, it is in high demand for the green transition (as a meat replacement, fuel additive or replacement, lubricant, etc).
And based on past years it seems farmers do not sell before summer (they plant in April-May).
This is now the 12th month in a row food prices have been going up.
History will show this was more than just some short term fluctuation or some economic recovery.
If we look at the past 10 years we might expect that soybean volatility is set to soar, every year as farmers plant their crops volatility increases by about 50%.
It fits with what you would expect after a range breakout, a trend that gets stronger and stronger ending parabolic (and bears screaming "this is ridiculous"), followed by a significant correction.
Corn has been the big runner and I think I will avoid it now, but wheat is interesting, after a long period of being choppy and lagging behind other grains, it has gone vertical finally!
If this keeps going I will look to go long wheat on a pullback.
Resistance (ATH) is far away:
The price stopped at the $15 psychological level, gathered reinforcements, and then continued up.
In many ways the situation is similar to 2007, but much crazier, with Rudolf Havenstein running the central bank.
We have seen this several times in the last year: After hesitating a bit around resistance, the price makes a new high giving confirmation to sidelines traders.
No reason to think this time is different, and as more people notice the trend it can be expected to get stronger.
We can look at previous vertical price rallies, and expect it to go at least to $18. It does not make sense to me that the rally would stop now.
It would be like a big truck running at full speed instantly stopping for no reason.
On the weekly chart clearly it does not have that much distance left to get to all time high, it's not far fetched at all, especially with all the other commodities that went well beyond ATH.
The trick is getting in on H4 to grab a fantastic risk to reward.
The main difficulty with these crazy vertical price moves is you can never enter and once you get in it reverse.
But with Soybeans... It is granting perfect pullbacks and breakouts, at least it has for the past 9 months.
And cherry on the cake, it could just fly past ATH, again. Who knows how far it can go? If this was the winter low volatility, what could the year peak volatility be? Up 25% in a week? Hey it's even possible it ends up in the news and retail goes insane and starts a bubble with dumb money arguments "new paradigm", "market of 7 billion eaters with the green transition", "we are very early" and so on.
The past centuries were full of all sorts of commodity bubbles, tulips that's the one everyone knows about, rabbits, silk, and others ones no one knows about but still have a few traces left in old books.
Note
Soybean price action looking very similar to what happened back in September.I would add (a second time!) on a retest of the trendline by Monday.
Soybean is one of the 2 positions really saving my butt and wiping out the many many losers I had lately 🤗.
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