November soybeans gained 3 cents on volume of 144,170 contracts. Total open interest declined by 3,098 contracts, which relative to volume is approximately 20% less than average. As this report is being compiled on September 30 after the release of the grain stocks report, November soybeans are trading 28.50 cents lower and have made a new low for the move at $12.84. We have been cautioning clients to avoid the long side of soybeans because we felt a short-term sell signal was imminent. We will provide a rundown on the grain stocks numbers in tomorrow’s report. It is a certainty that soybeans will generate a short-term sell signal on September 30.
From the September 26 report:
“Although the fundamentals for the crop look terrific, clients should not be lulled into a false sense of security on the long side. Although soybeans are on a short and intermediate term buy signal, we think it is unwise to be long at current levels. We are entering the seasonally weak period due to the impending harvest, and though beans will probably move higher later on in the season, we think the upside has been played out for now.”