Lower Chinese import demand is bearish for soybean prices
China’s soybean importers are delaying soybean shipment orders. Will soybean prices continue the decline?
On the daily timeframe SOYBEAN: D1 has been trading with negative bias after retracing to two-month high in mid-May. The price is below the 50-day moving average MA(50).
- The Donchian channel is tilted downward indicating downtrend.
- Parabolic indicator has formed a sell signal.
- The MACD indicator is bearish.
- The stochastic oscillator is rising from the oversold zone, this is a bullish signal.
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We believe the bearish momentum will continue after the price closes below lower boundary of Donchian channel at 913.7. This level can be used as an entry point for placing a pending order to sell. The stop loss can be placed above the Parabolic signal at 957.9. After placing the order, the stop loss is to be moved every day to the next fractal high, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop loss level (957.9) without reaching the order (913.7), we recommend cancelling the position: the market has undergone internal changes which were not taken into account.
Summary of technical analysis:
| Position | Sell |
| Sell stop | Below 913.7 |
| Stop loss | Above 957.9 |