• Fxwirepro call review: Soybean remains trapped in bull/bear fight

    Source: FxWire Pro - Commentary / 14 Aug 2018 06:17:41   America/New_York

    Soybean has reached all of our bearish targets amid trade tensions between the United States and China, which happens to be the biggest consumer of Soybeans and biggest importer of U.S. Soybeans. You can check the call here, https://www.econotimes.com/FxWirePro-Call-Review-Soybean-short-target-further-extended-as-sell-off-intensifies-on-trade-tensions-and-bumper-production-1371629

    And, in our follow-up review here, we at FxWirePro forecasted a temporary bounce back, while changing our longer-term outlook from bearish to very bearish. We expect the price to drop as low as 500 cents per bushel, https://www.econotimes.com/FxWirePro-Call-Review-Soybean-to-remain-in-bear-market-in-coming-years-1399874

    Fundamental Review:

    The current fundamental remains very favorable to the longer-term bearish outlook, largely due to the following reasons,

    • U.S. - China trade war threatens U.S. Soybean exports to China. China’s share in global Soybean import market is more than 65 percent and China has ordered the farmers to produce more at home, which threatens longer-term outlook.
    • Both the United States and Brazil are set to produce bumper crops this year. Both countries are likely to see record production. These two are the largest exporters, controlling more than 84 percent of the export market.

    Trade idea:

    Our current calculations suggest that Soybean price remains trapped in a Bull/Bear fight. While the fundamentals favor bearish outlook, good news on trade front could lead to a short squeeze and push price significantly higher towards 1020 cents per bushel. To keep the upside open, the bulls would need to defend 800 cents area. Short term players are recommended to wait for further clarity. 

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