Soybeans Wound Up

From the pre-harvest low near $5.25 in September 2006 to the monster blow-off high of $16.63 in July 2008, Beans more than tripled in price.   Then in a mere 5 months as the world was crashing in 2008, they lost more than half their value to a low of about $7.75, a drop of nearly $9.   Through 2009 and into 2010 they have established an equilibrium centering right around $10/bushel, closing today at $9.67 1/2.  The planting intentions report is due out day after tomorrow before the market opens.  The thinking is that Beans will pick up acres formerly devoted to wheat setting up a large crop on top of massive crops coming out of Brazil and Argentina.  What is most interesting to me is that the oscillation around the current equilibrium has narrowed, which implies that the market is about to break out one way or the other to a new equilibrium range. Odds are it will fall out the bottom.  See the chart for yourself.

29 March 2010 Soybeans Continuous
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