Over the last few months, tracking soybean futures has been about as exciting as watching bread mold. Since peaking in early February, bean prices have been locked in a sideways trend with no sustained breakouts above or below the $14-$13 per bushel range.
But things weren't always so lukewarm. Back in late 2010, in fact, soybean prices were downright sizzling. To wit: From their June 2010 low, bean prices had soared 30% before cooling off at a two-year high in early November.
At the time, soybeans' fundamental backdrop was hit by a major bearish blow: A mid-November, anti-inflationary message from China, the world's largest soybean consumer. In a November 19 announcement, China's State Council pledged to use administrative measures to "crack down on speculators who have been driving up the price of agricultural commodities." (Bloomberg Businessweek)
YET -- despite the 800-pound bear-rilla in soybeans fundamental picture last fall, the market's Elliott wave picture told a completely different story at the time. In the November 2010 Monthly Futures Junctures, EWI's chief commodity analyst and long-time Futures Junctures Service editor Jeffrey Kennedy foresaw soybeans reclaiming the upside in a major way. There, in the "Featured Market" segment of Monthly Futures Junctures, Jeffrey presented the following close-up and wrote:
"This interpretation classifies the selloff from the November 2008 peak of 1348 ½ as wave (4) within a still developing motive wave that should push soybean prices into the $14-$15 bushel range. Supporting evidence in favor of this assessment is apparent in two price charts of the Continuous Commodity Index, which includes 17 commodities. Both charts suggest commodities [including soybeans], have farther to go over the next several months."
In the following months, soybean prices did indeed heat back up -- way up above their previous November 2008 peak to land smack dab into Monthly Futures Junctures' cited $14-$15 per bushel target. (Soybeans peaked in early February 2011 at $14.74 per bushel.)
And since then, soybeans have endured a painstakingly slow, sideways march to nowhere... until now. In the May 2 Daily Futures Junctures, Jeffrey Kennedy revisits the soybean market to reveal how price action since February has unfolded as a classic triangle fourth wave. This pattern is well known by Elliotticians as "frustrating, sideways affairs" that try even the most experienced analysts' patience.
But, triangles are also well worth their wait, because they usually signal a powerful move ahead, followed by a trend change. The best part is, in the May 2 Daily Futures Junctures, Jeffrey reveals when soybeans days could go from dull to dramatic.