In late January 2010, soybean prices were circling the drain of a four-month low. And, according to the mainstream experts, the grain's fundamental backdrop had more bears in it than the Alaskan wilderness, such as:
- "Above-normal precipitation improved soil moisture and yield potential" in Brazil and Argentina, -- the world's second and third-largest producer of the bean, respectively; this led to a 33% jump in production in these countries to an-time record high. (AP)
- "Rumors that China was switching some of its order for US soy to South American supplies were seen as natural brakes on any momentum." (Reuters)
- A US Department of Agriculture report revealed a record soy crop in the U.S. alongside a significant slowdown in sales.
In the words of one news source at the time: "We are still in a strong downtrend due to weak demand and rising supply." (February 1 Reuters)
Added another, "Until there is some evidence of a threat to the soy crops, the market will continue to drift lower." (January 25 Bloomberg)
Yet -- in the first days of February, with the "threat to soy crops" still at hand, soybean prices kissed their downtrend goodbye and embarked on a powerful rally to one-month highs.
As for seeing soybean's upside potential before it arrived -- EWI's chief commodity analyst Jeffrey Kennedy set the bar. First, Jeffrey presented the following close-up of the grain in the January 29, 2010 Daily Futures Junctures "Weekly Wrap-up." (Elliott wave labels have been removed for this publication)
With critical resistance for his bullish wave count firmly established, Jeffrey then watched and waited for confirming price action. Then, in the February 2 Daily Futures Junctures, Jeffrey upped the urgency of his analysis with an exclusive feature on soybeans that included this well-timed insight:
"Bar patterns, wave patterns, and technical readings in soybeans argue strongly for a move up in prices. I believe the way will be cleared for an advance to near the $10 a bushel handle in the weeks ahead."
Elliott wave analysis won't always deliver such accuracy. Nothing does. But if you're wondering where the near-term story in soybeans goes from here -- the February 24 Daily Futures Junctures (on-line now) has the answer.
There, Jeffrey revisits the market, along with the entire soy complex, to reveal where prices could be in the coming days and weeks. Don't wait another minute. Get the complete Futures Junctures Service package today and have instant access to the most comprehensive analysis of the world's leading commodity markets. Click here to begin.