Day Trading & Forex Forum

gene

I'm buying Soybean Meal. The fundamentals are/have been bearish, but the price hasn't kept dropping, lately. On the supportive side, farmers have been holding out for higher prices.

I expect (hope) to make a bundle in this market, but not very soon. I was thinking Soybeans and Meal are starting a saucer bottom that will last only a few or several months, but now, simply because of the very tight consolidation on the weekly chart, I'm wondering if the market will take off sooner than I expected.

My intention (always subject to change, of course) is to ride the market through thick and thin. I'm in for the long haul. When the chart shows a definite up trend, I will add to my position on dips.

Looking at the weekly chart, I believe Soybean Meal will reach the 190 to 200 range with no problem. If the market obeys the 50% retracement "rule", then about 245 is the target. And that's ignoring the top of the spike. If soybean rust becomes a problem....!!!! ... /

What do y'all think?

Attached Thumbnails

   

__________________
TRADERS: Always be afraid.

TWI

I agree, I have been scaling into a long in meal for a couple of months now even had a couple of oscillation profits. It may take a while but I believe it to be a good bet, the carry is not prohibitive for holding on for a while either.

__________________
"I refuse to tiptoe quietly through life
only to arrive safely at death"

Moneycat

Has anyone ever made a study on seasonal volatility of the agricultural commodities? When do they show the wider price excursion?

Aren't we in the least volatile period of the year?

__________________
Moneycat

TWI

What do you mean by price excursion?

__________________
"I refuse to tiptoe quietly through life
only to arrive safely at death"

gene

I dont know if we are or not. How volatile is volatile? Check the monthly chart above. Some December-Januarys are a little slow, some aren't. I don't rely on seasonals. A seasonal rally or break may be big or it may be little...or it may not happen.

I'm looking at an old publication (1998) right now. It says that May Soybeans have rallied between Dec. 10 thru Dec. 24 in 18 of the past 25 years. It also shows a break in the first couple of months for the majority of the past 20 to 25 or so years.

I believe the chart, above, gives a clearer picture; that picture being that the picture ain't clear... as far as seasonality goes.

Anyway, TWalker, I believe, and I are not really hoping for a quick profit on this one, but, rather, are hoping to be getting in on the ground floor of an extended uptrend. If I get shook loose, I get shook loose, but I'm thinking and hoping that this market has seen the bottom.

__________________
TRADERS: Always be afraid.

Moneycat

I would say that there must be certain periods of ht eyear when grains show more meaningful moves, and other when they don't. My assumption is based on fundamentals.

Say corn has been harvested and not yet sown, there is little risk for those involved in the commodity. Once it starts growing it is subject to wheather threats... This brings more risk, fear and volatility into the game. Suppose wheather is awful at harvest...

My take is winter is the least volatile period of the year.

__________________
Moneycat

TWI

Moneycat, I think you are right
For Soy there are 2 crop cycles the US and the South American. Now the US grain is in the sheds focus changes to Brazil which will start being exported around Mar/April. Brazil probably has slightly less influence on the Chicago market because the pohysicals trade a Brazil and Argy premium market against Chicago which can take up some of the South American volatility.
Therefore I think the most volatile time is definitely the July/Oct period when US weather market emerges and the least volatile around now when US crop is made and Brazil is about to become the crop focus.

__________________
"I refuse to tiptoe quietly through life
only to arrive safely at death"

gene

All that is very true, but I rely much more heavily on the charts, because the charts factor in EVERYTHING...short term fundamentals, long term fundamentals, overbought/oversold, the dollar is weak or strong, etc. Here's a copy/paste from the "Coffee..." thread:

When I do look at the fundamentals, I try to figure out which ones count.
"There's a drought in Kansas" and the prices go up.
"But it's rainin' cats & dogs in China" and the prices go down.
"There's lots & lots of corn out there" and the prices go down.
"But EVERYBODY'S buyin' the heck out of it" and the prices go up.
Or so much of the time the "fundamentals" follow the price, rather than the other way around.

__________________
TRADERS: Always be afraid.