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Soybean Futures (Jan 2014)Soybean Futures (Jan 2014)Soybean Futures (Jan 2014)

Soybean Futures (Jan 2014)

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Neckline Breaks and Trader Nerves: A Quick Guide to Bearish H&S The head and shoulders pattern is like the market’s way of clearing its throat and saying, “Things might be changing up here.” Once that neckline snaps, traders often sit up straighter — not because something magical happened, but because the chart finally drew a clean line between “maybe” and “now it matters.” In this ZS (Soybean Futures) example, price slipped under the neckline and started wandering toward lower ground. Traders who work with this pattern usually focus on three things: A possible bounce back toward the neckline (because markets love second chances), A clear invalidation level (in this case, above 1136), A logical downside objective such as the gap-and-support combo near 1070'4. That simple trio turns a chaotic chart into a calm plan. Contract specs matter too. The ZS contract moves in bigger bites: Tick: 1/4 of one cent (0.0025) per bushel = $12.50 per contract Margin: $2,000 per contract The MZS (Micro Soybean Futures) contract takes smaller ones: Tick: 0.0050 per bushel = $2.50 per contract Margin: $200 per contract Traders who want more precision sometimes choose the micro so their stop-loss distance and account size stay on speaking terms. Either way, the chart sets the idea, but the contract size sets the comfort level. And of course, the golden rule in pattern-based trading: the market can still do whatever it wants. That’s why traders define their exit if wrong, their objective if right, and their size before clicking anything. A head and shoulders isn't about predicting — it's about organizing. The chart example ties it all together: neckline break, resistance overhead, downside target below. Simple, structured, and practical — just the way traders like it. Want More Depth? If you’d like to go deeper into the building blocks of trading, check out our From Mystery to Mastery trilogy, three cornerstone articles that complement this one: 🔗 From Mystery to Mastery: Trading Essentials 🔗 From Mystery to Mastery: Futures Explained 🔗 From Mystery to Mastery: Options Explained When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com - This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies. General Disclaimer: The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
CBOT:ZS1!Education
by traddictiv
2
From Neckline to Target: Setting H&S Bearish Entries and ExitsUnderstanding the Head & Shoulders Breakdown A bearish head and shoulders pattern gives traders a structured way to define entries and exits using price geometry rather than emotion. The pattern forms when a market transitions from strength to distribution, creating a left shoulder, a higher head, and then a lower right shoulder as momentum begins to fade. The neckline acts as the key support level that separates a developing pattern from a completed one. In the case study illustrated on the chart, the daily timeframe shows a fully developed head and shoulders structure that confirmed during the December 5 trading session, when price closed below the neckline. This type of close is often interpreted by traders as evidence that bearish participation has taken control of the pattern. Whether a trader enters immediately or waits for a retest, the priority becomes identifying the levels that will structure the trade: the area of invalidation, the downside objective, and the points where risk must be controlled. A confirmed neckline break does not imply certainty about future price direction. Instead, it provides an organized framework—a map traders can use to define where their idea is considered valid and where it is considered invalid. The educational value of this pattern lies not in its ability to predict, but in its ability to help traders pre-plan actions with clarity. Structuring the Bearish Entry: Neckline Retests and Resistance Zones One of the most common approaches to trading a bearish head and shoulders is to monitor for a modest bounce back toward the neckline after the breakdown. Retests do not always occur, but when they do, many traders see them as opportunities to enter with more control over the distance between entry and stop. In this example, price sits beneath a well-defined UFO resistance area between 1123 and 1136. This band aligns with a cluster of unfilled sell orders, which may reinforce bearish pressure if price attempts to climb. More importantly, the upper boundary of the zone—1136—serves as an objective point of invalidation. If price were to move above that level, the logic of the completed bearish structure would no longer hold. Therefore, traders could use this upper boundary as a stop-loss level. It is neither arbitrary nor emotional; it is derived directly from the structure. This type of predefined invalidation is essential because even the cleanest technical patterns can fail. The purpose of using a pattern is not to guarantee the outcome, but to know exactly when the trade thesis no longer makes sense. In this framework, the neckline provides context for the entry, while the resistance zone provides clarity for where the idea is wrong. Defining the Target: Gap Alignment and Technical Confluence After establishing where a trade becomes invalid, traders turn to the question of where it becomes complete. In pattern-based trading, target selection often blends classical measurement rules with the identification of technical areas where price has reason to react. In this case study, the downside objective centers on 1070'4, where two important elements align. First, there is an open gap at this price level. Gaps frequently attract price because they represent prior imbalances in trading activity—areas where the market moved too quickly for participants to fully transact. When price revisits such a location, it becomes a zone where activity may increase. Second, the gap coincides with a region of unfilled buy orders that may serve as a UFO support area. When gaps and demand zones overlap, the confluence strengthens the rationale for using the level as a target. Because the bearish pattern is already confirmed, traders using this structure may calculate a reward-to-risk ratio by comparing the distance from the entry zone to the stop (near 1136) and the distance from the entry zone to the target (1070'4). The role of the target is not to predict where price will go, but to anchor the trade in a predefined and measurable plan. It transforms the setup into a risk-managed scenario rather than an open-ended directional hope. Understanding Contract Specs, Margin, and Risk Management Traders using standardized futures contracts must structure their decisions around contract size, tick value, and margin requirements. The chart example in this idea uses the standard ZS contract, which represents 5,000 bushels. The micro contract (MZS) represents 500 bushels. This difference directly affects position sizing and the dollar impact of each tick. Because margin requirements vary over time, traders should always check the latest values before entering any position. Tick (Minimum Price Fluctuation: ZS: 1/4 of one cent (0.0025) per bushel = $12.50 per contract MZS: 0.0050 per bushel = $2.50 per contract Current Margin Requirements: ZS: $2,000 per contract MZS: $200 per contract A key benefit of having two contract sizes available is flexibility. Traders seeking to maintain disciplined risk parameters often use micro contracts to fine-tune exposure, ensuring that the stop-loss level does not exceed their predefined risk tolerance. The objective of the head and shoulders pattern is not merely to identify a direction but to help traders organize their plan around risk boundaries. Knowing the contract’s characteristics enables the trader to size positions correctly. Risk management remains the foundation of pattern-based approaches. Price can behave unpredictably, even when the chart seems decisive. This is why traders emphasize position sizing, controlled leverage, and strict adherence to the stop-loss level. The goal is not to avoid losses entirely but to keep them manageable and consistent. A well-constructed head and shoulders strategy relies not only on identifying the pattern but on respecting the risk parameters that accompany it. Bringing It All Together: Structure, Context, and Discipline The chart included in this idea illustrates the essential elements of the bearish head and shoulders setup: the left shoulder, head, and right shoulder; the neckline break; the gap at 1070'4; and the resistance band between 1123 and 1136. These levels form the backbone of a structured trading plan. Rather than reacting to market movement in real time, traders can use these predefined reference points to guide decision-making with consistency. The purpose of this article is educational. It demonstrates how entries, exits, and risk parameters can be structured around a classical bearish head and shoulders pattern, how confluence strengthens downside targets, and how contract specifications help traders align position size with their risk tolerance. Above all, it shows that disciplined planning matters more than attempting to anticipate every price movement. When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com - This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies. General Disclaimer: The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
CBOT:ZS1!Education
by traddictiv
ZS1!China is expected to purchase 12 million metric tons of soybeans from the United States, following the meeting in South Korea that took place several months ago. After Trump’s statements, the markets surged sharply, but I believe China has not made—and will not make—any public statements on the matter, as that would drive prices higher, which is counterproductive if they intend to carry out a massive purchase. I’ve noticed that the main dairy monopolies in China are showing chart formations that point to a very probable price increase in the coming months (Mengniu +40%, Yili +20%). This could be aligned with likely large-scale commodity purchases planned by the Chinese government. I think it is in China’s interest to buy soybeans from the U.S. because Brazil practically has no soybeans available until the new harvest (May–June 2025), China needs to cover record crushing volumes and rebuild stocks ahead of Chinese New Year (January 29, 2026), and it may also want to send a positive political signal to Washington. Additional data: There is a high probability of a La Niña event during DJF 2025-2026 and a risk of drought in the Southern Cone, which could drive up the cost of commodities such as soybeans and corn.
CBOT:ZS1!Long
by OldWave96
CBOT Soybean Technicals and Fundamentals (ZS1!) - Dec 05, 2025Soybeans remain in a corrective phase after confirming a short‑term top, with price likely to probe lower supports unless weather or WASDE headlines flip the sentiment. 🟤 CBOT Soybean Technicals (ZS1!) - 🧱 **Pattern**: A clear **Head & Shoulders** has formed on the daily chart, with price breaking down toward the neckline zone around **1105–1100¢**, right on a key high‑volume node and 0.382–0.5 retracement of the October–November rally. - 📉 **Downside levels**: Next supports sit near **1078¢** (0.5 retracement / demand box) and **1055–1060¢** (0.618 + 200‑day area), while immediate resistance is now **1138–1150¢** at the right‑shoulder and failed breakout area. - 📊 **Momentum**: Daily and 2‑hour **RSI** have rolled over below their signal lines, and the weekly chart is stalling directly under the **200‑week MA** and a thick volume shelf, highlighting heavy supply overhead. 🎯 Trading Bias & Strategy - 🐻 **Bias**: As long as price holds below roughly **1140–1150¢**, the working assumption is a **corrective leg toward 1080–1060¢**, where multiple supports cluster and responsive buyers are likely to show. - 📌 **Invalidation**: A strong close back above the right‑shoulder band and weekly supply zone around **1160–1170¢** would negate the topping structure and reopen the path toward the recent swing high near **1170¢+**. - 🧮 **Tactics**: Favour **sell‑the‑rally** setups into resistance or maintain producer hedges until either (a) a flush into the lower box prints exhaustion signals, or (b) bulls recapture the neckline with decisive volume. 🌎 Fundamentals Right Now - 💵 **Price context**: Front‑month CBOT soybeans are trading near **1110–1115¢/bu**, softer on the day but still above the autumn lows, mirroring a market that has bounced but is struggling to sustain a trend. - 🇺🇸 **U.S. balance sheet**: USDA’s latest outlook keeps **2025/26 U.S. ending stocks near 290 mbu**, tight versus recent years, but expectations for the December WASDE lean toward only minor tweaks, not a shock. - 🌐 **World stocks & demand**: Global 2024/25 soybean ending stocks are projected around **123 MMT**, while U.S. export sales and inspections trail last year, diluting the bullish impact of tighter U.S. carryout. ## 🇧🇷 South America & Weather Risk - 🌱 **Brazil crop**: Brazil’s 2025/26 soybean crop is still forecast near a **record 175–178 MMT**, but planting has faced a messy mix of **excess rains in central areas** and ongoing concerns in parts of the south, keeping weather risk embedded in prices. - 🔄 **Climate setup**: Forecasters flag a decent chance of **La Niña‑style patterns** later in the season, which often raise dryness risk in southern Brazil and Argentina and could pressure yields if conditions worsen. - 🐉 **China demand**: Chinese buying continues but at a more selective pace, and with U.S. export commitments still lagging last year, rallies are likely to meet selling unless South American weather deteriorates or import demand accelerates meaningfully. Net effect: 🎛️ the market sits in a **range‑trade regime**—technicals lean corrective short term, while fundamentals juggle **record South American potential vs. relatively snug U.S. stocks**, leaving weather and the upcoming WASDE as the key catalysts for any break from the current structure.
CBOT:ZS1!
by Southwind-CT
Soybeans Surge on Thin Ice: Lessons from 2019Soybean prices have surged nearly 8% in two weeks, driven by renewed US-China trade tensions. While this looks like a familiar, event-driven rally, the fundamentals tell a different story. Conflicting Weak Fundamentals China has not purchased any US soybeans for the 2025/26 marketing year. In 2024/25, Chinese buying stalled after May. That’s unusual given that the prior year saw over 500,000 tons of late-season sales. The slowdown dropped China’s share of total US soybean commitments to 45% from 55%, the lowest since 2018. Source – Reuters That matters because 2018 marked the last time soybeans became a trade weapon. Back then, US soybean exports fell 18% from 2017/18 to 2018/19 despite record production. Exports recovered briefly in 2020-21 but have since declined again. If history rhymes, the 2025 conflict could have longer-term consequences for US producers and exporters. The puzzle is that prices have climbed despite worsening fundamentals. Futures rose after the latest escalation, hinting that traders may be pricing in an eventual resolution. If tensions ease before the seasonal export peak over the next two months, demand could lift prices further. If not, the current rally may prove unsustainable. The key uncertainty lies in timing - whether a diplomatic thaw comes soon enough to coincide with US export strength. Source – Kansas City Fed Performance and Parallels with 2019 The structure of this year’s rally mirrors the 2019 pattern. Then, too, optimism around US-China negotiations drove soybean futures higher. On 13 December 2019, as the Phase-One trade deal was announced, CBOT soybean futures rallied about 9.8% for the month. That uptrend persisted until the onset of COVID-19, which derailed demand and disrupted logistics, preventing the expected rebound in US exports. The technical setup also echoes that period. In both 2019 and 2025, the Relative Strength Index (RSI) crossed into overbought territory above 70-a rare signal under normal conditions. Between 2020 and 2022, RSI readings were inflated by one-off global shocks. In contrast, the 2019 and 2025 spikes both stem from optimism around de-escalation, underscoring how trade détente tends to trigger strong momentum buying. Today, market sentiment again hinges on reports that China may resume US soybean purchases. Investors are reacting to statements and commentary including remarks from industry figures suggesting Beijing could pivot back toward US supply as signs that tariffs or import restrictions may soften. If these expectations materialize, the rally could extend into early 2026, though the fundamental picture remains weak. Historical Trade Example To illustrate how optimism-driven price spikes have historically translated into trade outcomes, consider the 2019 example. A trader buying one CBOT soybean futures contract (5,000 bushels) at $8.70 per bushel in early December and exiting at $9.50 in early January would have captured a 9% gain. Entry: 870 cents/bushel Exit: 950 cents/bushel Profit/Loss: 80 cents/bushel = USD 0.8/bushel Each contract of Soybean futures provides exposure to 5000 bushels: Profit/Loss per Contract = 0.8 x 5000 = USD 4,000 Traders can express the same view using CME Micro Soybean Futures, which provide exposure to one-tenth of the standard contract’s notional value and require lower margin. The 2025 setup resembles that pattern. If de-escalation signs strengthen into year-end, a similar short-term momentum trade could play out. However, if diplomatic talks stall or China delays purchases, prices could quickly retrace. The recent rally has also occurred on low trading volume, with limited activity during the upward move and higher volume concentrated near resistance levels. Additionally, the price action around these resistance levels shows long wicks, suggesting a failed breakout and indicating weak momentum. In essence, this rally is speculative optimism priced into a weak fundamental base. For traders, it is a short-duration opportunity with defined risk: the thesis hinges on improved trade headlines within the next two months. For producers and longer-term investors, the focus should remain on export commitments and Chinese buying patterns rather than short-lived technical surges. History suggests that while geopolitical relief rallies can deliver sharp gains, they often fade once the narrative loses momentum. The 2025 soybean rally may yet prove another example of that cycle - strong on hope, but fragile on fundamentals. This content is sponsored. MARKET DATA CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme . DISCLAIMER This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services. Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
CBOT:ZS1!Short
by mintdotfinance
ZS - 14 months RECTANGLE══════════════════════════════ Since 2014, my markets approach is to spot trading opportunities based solely on the development of CLASSICAL CHART PATTERNS 🤝Let’s learn and grow together 🤝 ══════════════════════════════ Hello Traders ✌ After a careful consideration I came to the conclusion that: - it is crucial to be quick in alerting you with all the opportunities I spot and often I don't post a good pattern because I don't have the opportunity to write down a proper didactical comment; - since my parameters to identify a Classical Pattern and its scenario are very well defined, many of my comments were and would be redundant; - the information that I think is important is very simple and can easily be understood just by looking at charts; For these reasons and hoping to give you a better help, I decided to write comments only when something very specific or interesting shows up, otherwise all the information is shown on the chart. Thank you all for your support 🔎🔎🔎 ALWAYS REMEMBER "A pattern IS NOT a Pattern until the breakout is completed. Before that moment it is just a bunch of colorful candlesticks on a chart of your watchlist" ═════════════════════════════ ⚠ DISCLAIMER ⚠ The content is The Art Of Charting's personal opinion and it is posted purely for educational purpose and therefore it must not be taken as a direct or indirect investing recommendations or advices. Any action taken upon these information is at your own risk.
CBOT:ZS1!Long
by TheArtOfCharting
Soybeans on the RiseSoybean futures have seen a significant upward trend over the past two weeks, largely ignoring the pressure of the U.S. harvest season. This bullish move is not being driven by the fundamentals of crop supply, but almost entirely by political speculation surrounding the high-stakes trade talks between the United States and China. The Political Catalyst: Hopes for Chinese Demand The primary fuel for the rally is the highly anticipated meeting this week between U.S. President Donald Trump and Chinese President Xi Jinping. Traders are pricing in the optimistic possibility that the two leaders will announce a breakthrough, specifically a deal that commits China to resuming "substantial" purchases of U.S. soybeans. Since China is the world's largest soybean importer and has been largely absent from the U.S. market, a renewed commitment could instantly boost American export demand and drain the massive supply currently sitting in U.S. storage bins. This speculation is creating a fear of missing out (FOMO) among traders, leading to aggressive buying. The Market Fog: Lack of USDA Data Exacerbating the price volatility is the ongoing U.S. government shutdown. With the Department of Agriculture (USDA) unable to release key reports like the Crop Progress and WASDE updates, the market is effectively "flying blind." In this vacuum of reliable data, any headline or rumor about the trade talks holds outsized influence, amplifying the price reaction. This lack of official information is also compounded by U.S. farmers who are holding back their harvested crops, choosing to store their soybeans rather than sell at current prices while they wait for a potential, politically-driven price spike. What Retail Traders Should Watch Next The current soybean rally is built on rhetoric, not finalized details. The market is heavily exposed to a single event: the outcome of the U.S.-China meeting. 1. The Deal's Content: If an agreement on large-scale soybean purchases is confirmed, futures could spike higher. 2. The Deal's Failure: Conversely, if the meeting disappoints, is postponed, or fails to produce a clear commitment on agricultural purchases, soybean prices are vulnerable to a sharp, sudden correction.
CBOT:ZS1!
by CME_Group
What's Next for Soybeans?The soybean market over the last four weeks has been volatile, largely driven by a combination of geopolitical tensions, U.S. harvest developments, and South American weather. The market has seen consolidation within a range where it seems to be carving out higher lows and may be on track for prices to rise. The 50-day and 200-day moving average are right in line with each other on this daily chart and the market saw selling pressure from these levels in the recent down move. Futures prices generally remain under pressure from large supply estimates but see spikes and drops based on daily news. Most recently, prices have seen a sharp downturn, especially heading into the second week of October, with November soybean futures dropping significantly on fears of escalating U.S.-China trade tensions. The ongoing trade war has severely impacted U.S. soybean exports, as China (the world's largest buyer) has largely avoided new crop purchases. News and rhetoric regarding trade talks, including discussions of a potential meeting between the U.S. and Chinese leaders, have caused significant price swings. The U.S. harvest is underway, and while some initial reports suggested yields slightly below the most recent USDA forecasts, the overall projected supply remains high, which is a bearish factor. However, logistical issues, such as critically low water levels on the Ohio and Mississippi Rivers, are raising concerns about the ability to move the massive crop, potentially firming the cash basis in some areas. Favorable weather for planting in Brazil and recovery from past drought conditions in Argentina are contributing to the expectation of large future global supplies, which puts long-term pressure on prices. Along with that, a U.S. government shutdown led to a postponement of key reports, such as the USDA's monthly WASDE report, leaving traders with less official information and relying more on private estimates and harvest reports. *CME Group futures are not suitable for all investors and involve the risk of loss. Copyright © 2023 CME Group Inc. **All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. The views in this report reflect solely those of the author and not necessarily those of CME Group or its affiliated institutions. This report and the information herein should not be considered investment advice or the results of actual market experience.
CBOT:ZS1!
by CME_Group
Analysis techniques – Soybean Futures (Nov 2025)Date: 30/09/2025 | Timeframe: D1 | Contract Code: ZSX25 1. Trend Overview and Price Structure Soybean futures (Nov 2025) remain under pressure after failing to hold the 10,500 resistance. Prices are trading below 10,200 and are testing the psychological 10,000 level, with risks of retesting the 9,790 support. The dominant trend remains bearish. 2. Key Technical Levels Resistance: 10,160 – 10,500 – 10,750 Support: 10,000 – 9,790 – 9,610 3. Detailed Technical Analysis Short-term trend: The bearish momentum persists, with consecutive red candles confirming seller dominance. Trading volume: No major spikes, but sellers remain in control. Wave structure: A new bearish wave is unfolding, with 9,790 as the immediate target. Confirmation signals: A recovery above 10,160 is needed to invalidate the bearish outlook. 4. VNC Intelligence Strategic View With the U.S. 2025 harvest nearing completion and expectations for strong yields, supply pressure remains elevated. Meanwhile, slower Chinese demand adds to the bearish tone. Only unexpected weather disruptions or acreage cuts in 2026 planting could shift sentiment back to bullish. 5. Suggested Technical Strategies Primary Short Setup: Entry: 10,050 – 10,100 TP: 9,790 SL: 10,220 Probability: 65% Counter-trend Long Setup: Entry: 9,790 – 9,810 TP: 10,050 SL: 9,610 Probability: 50% 6. Corporate Hedging Guidance Importers may consider gradual buying around 9,800 – 9,790 to secure costs, while U.S. farmers are advised to lock in partial sales near 10,100 – 10,200 to protect margins amid a prevailing bearish environment.
CBOT:ZSX2025Short
by Hung-JK
Phased Accumulation on Soybeans; Inverted Head And Shoulders forSoybeans is showing signs of accumulation with volume contraction during price declines and expansion during rallies on the daily range. The Head And Shoulders pattern on the daily timeframe features a more 'complex' inverted type, featuring a left shoulder, double head and right shoulder. However, volume patterns remain consistent with the typical and ideal inverted head and shoulders formation, with volume diminishing in trade on the left shoulder, with slight expansion on the rally to create the valley, and further diminishing volume on the creation of the head, and the proceding right shoulder with volume and price showing signs of activity during the early stages of the rally indicating, genuine activity. Eyes are now set on the break of the neckline, for price to contiune higher for a new profound bull market.
CBOT:ZS1!Long
by MacroWaveTheorist
SOYBEAN; Heikin Ashi Trade Idea📈 Hey Traders! Here’s a fresh outlook from my trading desk. If you’ve been following me for a while, you already know my approach: 🧩 I trade Supply & Demand zones using Heikin Ashi chart on the 4H timeframe. 🧠 I keep it mechanical and clean — no messy charts, no guessing games. ❌ No trendlines, no fixed sessions, no patterns, no indicator overload. ❌ No overanalyzing market structure or imbalances. ❌ No scalping, and no need to be glued to the screen. ✅ I trade exclusively with limit orders, so it’s more of a set-and-forget style. ✅ This means more freedom, less screen time, and a focus on quality setups. ✅ Just a simplified, structured plan and a calm mindset. 💬 Let’s Talk: 💡Do you trade supply & demand too ? 💡What’s your go-to timeframe ? 💡Ever tried Heikin Ashi ? 📩 Got questions about my strategy or setup? Drop them below — ask me anything, I’m here to share. Let’s grow together and keep it simple. 👊
CBOT:ZS1!Short
by Matej_trader
5
Soybeans and Rain: Moisture’s Market Impact on the Bean Trade1. Introduction: Moisture & Market Momentum Soybeans, often referred to as “the oilseed king,” are a cornerstone of global agriculture. As a leading source of protein for both humans and animals, their price fluctuations affect industries ranging from food production to biofuels. One key variable traders often monitor? Rainfall. 🌧️ Moisture plays a critical role in soybean development, influencing yield and quality from the moment the seed is sown. It’s no surprise that many market participants assume a strong correlation between rainfall and price behavior. But is that assumption truly supported by data? In this article, we analyze how varying precipitation levels impact weekly soybean futures returns. As you'll see, the results might not be as clear-cut as you’d expect—but they still offer meaningful insights. 2. Biological Realities: Soybeans’ Water Needs Soybeans thrive under specific conditions. While they’re generally resilient, rainfall—or the lack thereof—can tip the balance between bumper harvests and disappointing yields. During early vegetative stages, sufficient moisture ensures healthy root development. Later, during the pod-fill phase, rainfall becomes even more essential. Too little water at this point leads to incomplete pods or aborted seeds. On the flip side, too much rain can invite fungal diseases and delay harvests, especially in lower-lying regions. In countries like Brazil and Argentina, soybean fields often face seasonal extremes, while the U.S. Midwest typically enjoys more consistent conditions—though droughts and floods have both hit the Corn Belt in recent years. These environmental realities create natural volatility in both yield and pricing expectations. 3. Methodology: How We Analyzed Weather vs. Futures To explore the potential connection between rainfall and soybean futures prices, we collected weekly weather data for major soybean-growing cities across the globe. Each week’s precipitation was categorized using a normalized percentile system: Low Rainfall: below the 25th percentile Normal Rainfall: between the 25th and 75th percentiles High Rainfall: above the 75th percentile We then matched this data against weekly returns of standard soybean futures (ZS) and micro soybean futures (MZS), both traded on the CME Group. This allowed us to compare average price behavior in different rainfall scenarios—and test whether there was any statistically significant difference between dry and wet weeks. 4. Statistical Findings: Is There a Signal in the Noise? When examining the data, the initial visual impression from boxplots was underwhelming—return distributions across rainfall categories looked surprisingly similar. However, a deeper dive showed that the difference in mean returns between low and high precipitation weeks was statistically significant, with a p-value around 0.0013. What does that mean for traders? While the signal may not be obvious to the naked eye, statistically, rainfall extremes do impact market behavior. However, the magnitude of impact remains modest—enough to be part of your strategy but not enough to drive decisions in isolation. Soybean prices appear to be influenced by a mosaic of factors, with precipitation being just one tile in that complex picture. 5. Charting the Relationship: Visual Evidence While statistical tests gave us the green light on significance, we know traders love to “see” the story too. Boxplots of weekly soybean futures returns segmented by rainfall categories offered a subtle narrative: Low-precipitation weeks showed slightly higher average returns and tighter interquartile ranges. High-precipitation weeks had broader return distributions and more frequent downside outliers. Normal weeks exhibited relatively stable behavior, reinforcing the idea that the market reacts most during extremes. This kind of visualization may not scream alpha at first glance, but it reinforces the idea that precipitation events—particularly dry spells—tend to nudge prices upward, possibly as market participants price in production risk. 6. Trading Implications: Positioning Around Weather Here’s where things get practical. While weather alone won’t dictate every trading decision, it can be a key filter in a broader strategy. For soybean traders, rainfall data can help inform: Bias assessment: Low-precipitation weeks may suggest bullish tendencies. Risk control: Expect wider return distributions in high-precip weeks—adjust stops or contract sizing accordingly. Event trading: Pair weather anomalies with technical signals like trendline breaks or volume surges for potential setups. It’s also worth noting that weekly weather forecasts from reputable sources can serve as a forward-looking indicator, giving traders a head start before the market fully reacts. 7. Margin Efficiency with Micro Soybeans For traders looking to scale into soybean exposure without the capital intensity of full contracts, the CME Group’s micro-sized futures offer a compelling alternative. 📌 Contract Specs for Soybean Futures (ZS): Symbol: ZS Contract size: 5,000 bushels Tick size: 1/4 of one cent (0.0025) per bushel = $12.50 Initial margin: ~$2,100 (varies by broker and volatility) 📌 Micro Soybean Futures (MZS): Symbol: MZS Contract size: 500 bushels Tick size: 0.0050 per bushel = $2.50 Initial margin: ~$210 These smaller contracts are perfect for strategy testing, risk scaling, or layering exposure around key macro events like WASDE reports or weather disruptions. For traders aiming to build weather-aligned positions, MZS is a powerful tool to balance conviction with capital efficiency. 8. Wrapping It All Together Rain matters. Not just in fields, but in futures prices too. While soybean markets may not overreact to every drizzle or downpour, extreme rainfall conditions—especially drought—can leave noticeable footprints on price action. For traders, this means opportunity. By incorporating precipitation metrics into your workflow, you unlock a new layer of context. One that doesn’t replace technical or fundamental analysis, but enhances both. And remember: this article is just one piece of a larger exploration into how weather affects the commodity markets. Make sure you also read prior installments. When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com - This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies. General Disclaimer: The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
CBOT:ZS1!Education
by traddictiv
Soybeans Loading a Bounce? Demand Zone + COT1. Price Action & Technical Structure Price has bounced off a strong daily demand zone (1011–969). Today’s daily candle shows a clear rejection wick from the low, and RSI is signaling a potential reversal. The market is trading inside a falling channel, currently near the lower boundary — setting up a possible breakout move. Technical Targets: • First upside target: 1039–1049 Invalidation: daily close below 990, which would confirm structural breakdown. 2. COT Report – Soybeans Futures (as of July 9, 2025) • Non-Commercials:  +11,539 spreads | +7,017 shorts | –7,520 longs → Slight bearish pressure, though spreads suggest growing speculative complexity. • Commercials:  +7,876 longs | –9,084 shorts → Moderate commercial bullish bias. • Open Interest:  +8,076 contracts → Market activity increasing. Overall COT positioning is neutral to slightly bullish, with growing signs of accumulation around the 1000 level. 3. Seasonality – MarketBulls Historically, July is one of the weakest months for Soybeans: • –44.82 (20Y avg) • –36.86 (15Y avg) • –34.74 (10Y avg) However, early August shows signs of seasonal recovery, and price action is already diverging from typical seasonal behavior. This makes a deeper breakdown less likely — we could be nearing the end of the seasonal weakness. Operational Takeaway Current Bias: Neutral-to-Bullish Confluence of signals supports the idea of a technical rebound: ✅ Bullish reaction candle in demand ✅ Fibonacci support + lower trendline touch ✅ COT data stabilizing with rising open interest ✅ Seasonal weakness possibly exhausted
CBOT:ZS1!Long
by EdgeTradingJourney
4
Oversupply Meets Tepid Demand Weighing Down on Soybean MealSoybean meal futures rose in mid-June amid Israel-Iran tensions but retreated after a ceasefire. Even a 129% month-on-month surge in China’s May soybean imports failed to support prices. Spike in import volumes is a consequence of normalisation in customs clearance and a rebound in crushing plant activity. In April, imports plunged to a decade low of 6.08 million metric tonnes due to delayed Brazilian shipments and port congestion. June imports are expected to remain elevated (~12 million tonnes), fuelling oversupply concerns. Rising soybean oil prices, driven by higher crude and seasonal biofuel demand, have led to increased crushing, further boosting meal supply. China’s terminal feed factories are working through high inventories, dampening near-term demand. With China accounting for two-thirds of global bean imports, anaemic demand is a solid bearish price driver. Elevated supply and tepid Chinese demand pose downside risk for soybean meal prices in the near term. TECHNICAL SIGNALS POINT TO BEARISHNESS AS WELL Bearish momentum in soybean meal has strengthened, with prices sliding sharply since 23/Jun. A death cross formed on 25/Jun, as the 21-day Displaced Moving Average (DMA) crossed below the 9-day DMA amplifying bearish sentiments. Additionally, prices fell below the 50-day DMA on 24/Jun and have remained below it, reinforcing the downward trend. Bearish MACD and a weakening RSI signal continued weakening of meal prices. OPTIONS MARKET SIGNAL BULLISHNESS IN THE MEDIUM TERM For the week ending 16/Jun, Managed Money’s net long positioning in soybean meal futures fell by 23.4%, reflecting an 11% drop in longs and an 8.9% rise in shorts. Soybean meal's implied volatility has risen since 25/Jun, with skew picking up from 27/Jun, despite falling prices. This points to rising uncertainty & potential for wider price swings. Source: CME CVOL Option open interest points to muted activity in the near term. However, Overall open-interest put-call-ratio point to bullishness. Source: CME QuikStrike Strong call OI buildup from July to November signals medium-term recovery hopes. HYPOTHETICAL TRADE SETUP The downtrend in soybean meal futures looks set to persist, with both technical and fundamental signals reinforcing bearish sentiment. While rising IV, skew, and an oversold RSI hint at a possible near-term bounce, any mean reversion is likely to be short-lived without a shift in underlying fundamentals. Seasonally, July–August tends to mark seasonal lows as inventory builds pressure prices further, particularly in China. This paper posits a tactical short on CME Micro Soybean Meal August futures (MZMQ25 expiring on 25th Jul), targeting a decline in prices. Investors can use the CME Micro Soybean Meal Futures, which are sized at one-tenth (10 short tons) of standard contracts (which are 100 short tons). This allows for a cost-effective method to express a short-term bearish stance. As of 27th Jun, the minimum exchange margin on this contract is USD 170 per lot. • Entry: USD 284.5/Short Ton • Potential Profit: USD 264.5/Short Ton (284.5– 264.5= 20) x 10 = USD 200 • Potential Stop-Loss: USD 297/Short Ton (284.5- 297 = -12.5) x 10 = USD 125 • Hypothetical Reward-to-Risk Ratio: 1.6x MARKET DATA CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme . DISCLAIMER This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services. Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER, the link to which is provided in our profile description.
CBOT_MINI:MZMQ2025Short
by mintdotfinance
Soybeans Crashing Into Demand — Reversal Coming or Trap?1. COT REPORT — Updated June 17, 2025 📌 Non-Commercials (Speculators) Long: +5,661 → 195,984 Short: -9,226 → 110,761 ✅ Net Long Increase: A clear bullish shift in speculative positioning (+14,887 net contracts). This is an early indication of a sentiment reversal. 📌 Commercials (Hedgers / Producers) Long: +6,023 Short: -5,806 ➡️ The decrease in net shorts suggests improving confidence among institutional players. 📌 Total Open Interest: 846,169 (down by 12,776) ❗ This slight drop may be linked to position rotation or partial profit-taking. 2. NET POSITIONS CHART INSIGHT Commercial traders remain structurally net short, but their exposure has been gradually declining since March. Non-commercial traders have increased their net long positions since April, aligned with the price's technical recovery. The current price is trading near the historical mean, indicating neutral conditions with potential room for further upside. 🕰️ 3. SEASONALITY OUTLOOK The June–July period has historically been bearish: June Average Performance: Last 5 years: -39.61 Last 2 years: -38.71 July Average Performance: Last 20 years: -44.82 Last 2 years: -34.73 📉 August and September typically continue this seasonal downtrend. 🟨 Caution is advised on initiating long positions during this phase. 📊 4. TECHNICAL OUTLOOK — Current Structure: Rising channel has broken to the downside with a strong bearish impulse candle. RSI is neutral but previously showed bearish divergence. Key Support Zones: 1035–1025: Intermediate support area already tested. 1012–994: Golden Pocket aligned with a demand block — likely target zone with high potential for reaction. Possible Scenarios: 🔴 Bearish Continuation: A retracement followed by a move down into the 994–1000 range, where a tactical long setup may emerge. 🔵 Bull Trap and Reversal: A rapid recovery above 1050, potentially triggering a continuation to 1080 (range top). 5. EXECUTION SUMMARY Primary Bias: Bearish in the short term 🎯 Target Zone: 994–1000 🛑 Invalidation Level: Weekly close above 1055 Tactical Long Setup: Monitor price action at 994–1000 for bullish reaction. Macro context and speculative positioning suggest a structural bottom may develop in Q3 2025, but current conditions are not yet favorable for a full swing position.
CBOT:ZS1!Short
by EdgeTradingJourney
10
Soybeans and Heat: Subtle Signals in a Volatile Market1. Introduction Soybeans aren't just a staple in livestock feed and global cuisine—they’re also a major commodity in futures markets, commanding serious attention from hedgers and speculators alike. With growing demand from China, unpredictable yields in South America, and increasing climatic instability, the behavior of soybean prices often reflects a deeper interplay of supply chain stress and environmental variability. Among the many weather variables, temperature remains one of the most closely watched. It’s no secret that extreme heat can harm crops. But what’s less obvious is this: Does high temperature truly move the soybean market in measurable ways? As we’ll explore, the answer is yes—but with a twist. Our deep dive into decades of data reveals a story of statistical significance, but not dramatic deviation. In other words, the signal is there, but you need to know where—and how—to look. 2. Soybeans and Climate Sensitivity The soybean plant’s sensitivity to heat is well documented. During its flowering and pod-setting stages, typically mid-to-late summer in the U.S., soybean yields are highly vulnerable to weather fluctuations. Excessive heat during these windows—particularly above 30ºC (86ºF)—can impair pod development, lower seed count, and accelerate moisture loss from the soil. The optimal range for soybean development tends to hover between 20ºC to 30ºC (68ºF to 86ºF). Within this window, the plant thrives—assuming adequate rainfall and no pest infestations. Go beyond it for long enough, and physiological stress builds up. This is precisely the kind of risk that traders price into futures markets, often preemptively based on forecasts. Yet, trader psychology is just as important as crop biology. Weather alerts—especially heatwaves—often drive speculative trading. The market may anticipate stress well before actual yield reports come out. This behavior is where we see the beginnings of correlation between temperature and market movement. 3. Quantifying Weather Impact on Soybean Futures To test how meaningful these heat-driven narratives are, we categorized weekly temperatures into three buckets: Low: Below the 25th percentile of weekly temperature readings Normal: Between the 25th and 75th percentile High: Above the 75th percentile We then calculated weekly returns of Soybean Futures (ZS) across these categories. The results? Despite the modest visual differences in distribution, the statistical analysis revealed a clear pattern: Returns during high-temperature weeks were significantly different from those during low-temperature weeks, with a p-value of 3.7e-11. This means the likelihood of such a difference occurring by chance is effectively zero. But here’s the catch—the difference in mean return was present, yes, but not huge. And visually, the boxplots showed overlapping quartiles. This disconnect between statistical and visual clarity is exactly what makes this insight subtle, yet valuable. 4. What the Data Really Tells Us At first glance, the boxplots comparing soybean futures returns across temperature categories don’t scream “market-moving force.” The medians of weekly returns during Low, Normal, and High temperature periods are closely clustered. The interquartile ranges (IQRs) overlap significantly. Outliers are present in every category. So why the statistical significance? It’s a matter of consistency across time. The soybean market doesn’t suddenly explode every time it gets hot—but across hundreds of data points, there’s a slightly more favorable distribution of returns during hotter weeks. It’s not dramatic, but it’s reliable enough to warrant strategic awareness. This is where experienced traders can sharpen their edge. If you’re already using technical analysis, seasonal patterns, or supply-demand forecasts, this weather-based nuance can serve as a quiet confirmation or subtle filter. 5. Why This Still Matters for Traders In markets like soybeans, where prices can respond to multiple fundamental factors—currency shifts, export numbers, oilseed competition—small weather patterns might seem like background noise. But when viewed statistically, these small effects can become the grain of edge that separates average positioning from smart exposure. For example: Volatility tends to rise during high-heat weeks, even when average return shifts are small. Institutional players may rebalance positions based on crop health assumptions before USDA reports arrive. Weather trading algos can push prices slightly more aggressively during risk-prone periods. In short, traders don’t need weather to predict price. But by knowing what weather has historically meant, they can adjust sizing, bias, or timing with greater precision. 6. Contract Specs: Standard vs. Micro Soybeans Accessing the soybean futures market doesn’t have to require big institutional capital. With the launch of Micro Soybean Futures (MZS), traders can participate at a more granular scale. Here are the current CME Group specs: 📌 Contract Specs for Soybean Futures (ZS): Symbol: ZS Contract size: 5,000 bushels Tick size: 1/4 of one cent (0.0025) per bushel = $12.50 Initial margin: ~$2,100 (varies by broker and volatility) 📌 Micro Soybean Futures (MZS): Symbol: MZS Contract size: 500 bushels Tick size: 0.0050 per bushel = $2.50 Initial margin: ~$210 The micro-sized contract allows traders to scale into positions, especially when exploring signals like weather impact. It also enables more nuanced strategies—such as partial hedges or volatility exposure—without the capital intensity of full-size contracts. 7. Conclusion: A Nuanced Edge for Weather-Aware Traders When it comes to soybeans and temperature, the story isn’t one of obvious crashes or dramatic spikes. It’s a story of consistent, statistically measurable edges that can quietly inform better trading behavior. Yes, the return differences may look small on a chart. But over time, in leveraged markets with seasonality and fundamental noise, even a few extra basis points in your favor—combined with smarter sizing and timing—can shift your performance curve meaningfully. Using tools like Micro Soybean Futures, and being aware of technical frameworks, traders can efficiently adapt to subtle but reliable signals like temperature-based volatility. And remember: this article is just one piece in a multi-part series exploring the intersection of weather and agricultural trading. The next piece might just provide the missing link to complete your edge. Stay tuned. 🌾📈 When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com - This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies. General Disclaimer: The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
CBOT:ZS1!Education
by traddictiv
2
Bullish Undercurrents Build in Soybean Oil MarketSoybean oil futures have rebounded nearly 14% in June, following a 5.7% drop in May, supported by tightening global supply, resilient demand, expanding biodiesel use, and steady U.S. production with some planting delays. Severe drought in Brazil and Argentina, who together account for 45% of global soybean exports, has slashed yields by roughly 15%, tightening supply chains and boosting prices. Strong Chinese demand, both for food and hog herd rebuilding, continues to be a major price driver. China imports nearly 18.5 million tons of soybean oil annually and remains the world’s largest consumer. The USDA’s June WASDE report underscored a bullish backdrop: U.S. production is steady at 4.34 billion bushels for 2025–26, but ending stocks are projected to fall to 295 million bushels, down from 350 million in 2024–25, signalling a tighter domestic supply. Adding to the bullish momentum, crude oil prices surged on 13/Jun amid escalating Israel-Iran tensions, indirectly supporting soybean oil due to its role in biodiesel production. Higher crude prices enhance biodiesel’s competitiveness, boosting demand for soybean oil as a feedstock. Soybean oil futures also jumped after the EPA proposed higher-than-expected biofuel blending mandates. The Trump administration’s proposal, seen as a major win for the biofuels industry, is expected to significantly increase domestic soybean crush demand in 2026 and 2027. TECHNICAL SIGNALS POINT TO BULLISH REVERSAL Technical indicators suggest weakening bearish momentum in soybean oil. Since early June, prices have climbed above the 9-day, 21-day, and 50-day moving averages after starting the month below them. Though the 9-day MA is still below the 21-day, the narrowing gap signals strengthening momentum and a possible bullish crossover. The MACD and RSI indicate that selling pressure has subsided, with momentum now tilting bullish. If this strength persists, the uptrend in soybean oil futures could gain further traction. OPTIONS DATA SIGNALS GROWING BULLISH MOMENTUM For the week ending 10/Jun, Managed Money’s net long positioning in soybean oil futures fell by 22.6%, reflecting a 13% drop in longs and a 7.1% dip in shorts. Rising implied volatility alongside prices and a positive skew suggest growing bullish sentiment, as market participants position for potential upside in soybean oil futures. Source: CME CVOL The rise in call OI across near-term contracts suggests growing bullish sentiment for soybean oil prices. Source: CME QuikStrike While selective increase in put OI reflects cautious hedging, pointing to expectations of further upside with some near-term uncertainty. HYPOTHETICAL TRADE SETUP Bullish fundamentals driven by rising Chinese demand, supply disruptions in South America, and a sharp uptick in crude oil, combined with supportive technical indicators and skewed options positioning, suggest further upside potential for soybean oil futures. This paper posits a tactical long on CME Micro Soybean Oil August futures (MZLQ25 expiring on 25th July), targeting an uptrend in prices. Investors can position against this backdrop using the CME Micro Soybean Oil Futures, which are sized at one-tenth (6,000 pounds) of standard contracts (which are 60,000 pounds). This allows for a cost-effective method to express a short-term bearish stance. As of 16th June, the minimum exchange margin on this contract is USD 190 per lot. • Entry: USc 51/Pound • Potential Profit: USc 57/Pound (57– 51= 6) x 6000/100 = USD 360 • Stop-Loss: USc 47.3/Pound (47.3- 51 = -3.7) x 6000/100 = USD 222 • Reward-to-Risk Ratio: 1.62x In collaboration with the CME Group, TradingView has launched The Leap trading competition. New and upcoming traders can hone and refine their trading skills, test their trading strategies, and feel the thrill of futures trading with a vibrant global community through this paper trading competition sponsored by CME Group using virtual money and real time market data. The competition lasts another 14 days. Please join the other 54,500 participants who are actively honing their trading skills using virtual money. Click here to learn more. #TheFuturesLeap #Microfutures MARKET DATA CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme . DISCLAIMER This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services. Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER, the link to which is provided in our profile description.
CBOT_MINI:MZL2!Long
by mintdotfinance
Bearishness Persist in Soybeans Despite Rebound HopesSince mid-May, soybean prices have traded sideways, whipsawed by weather shifts, trade tensions, and fluctuating demand cues. Soybean prices began rallying on May 19, driven by optimism over U.S. trade deals, crop damage in Argentina from heavy rains, and strong soybean oil prices. However, the momentum soon faded as U.S.-EU trade tensions resurfaced. Prices came under further pressure from weak export demand, rising competition from South America, and bearish U.S. biofuel mandates. By 02/Jun, soybeans had fallen to a six-week low, weighed down by favorable U.S. crop weather, improved Brazilian production forecasts, and renewed U.S.-China tensions. Over the last week, Bean prices inched higher, supported by firmer soybean oil prices and hopes of renewed US-China trade talks. However, sentiment remains cautious amid policy uncertainty and robust planting progress. According to USDA data , 84% of the U.S. soybean crop was planted as of 1/Jun, above the five-year average of 80%. TECHNICALS SIGNAL PERSISTENT BEARISH TREND WITH SLIGHT CHANCES OF A REVERSAL On 2/Jun, soybean futures formed a bearish death cross, signalling potential downside momentum. Although prices have since rebounded, bearishness persists with the 21-day MA acting as a strong resistance. The MACD reflects ongoing but easing bearish momentum, while the RSI sits just below its 14-day average, close to the neutral zone. These indicators suggest that price momentum is currently subdued. OPTIONS DATA POINT TO MIXED SENTIMENT For the week ending 27/May, Managed Money’s net long positioning in soybean futures surged by 190%, reflecting a 12.9% gain in longs and a 10% fall in shorts. Despite the recent pullback in futures, skew (Up Var minus Down Var) has reached a YTD high, signalling higher demand for calls relative to puts. Source: CME CVOL Open Interest (“OI”) trends over the past week point to increased bearish positioning, with near-term contracts showing a notable rise in put OI. Longer-dated contracts reflect a similar pattern, although contracts expiring in July (OZSN5) and September (OZSU5) were notable exceptions. Source: CME QuikStrike HYPOTHETICAL TRADE SETUP Despite some bullish drivers (US-China trade talks & Argentina crop risks), bearish forces prevail. These include strong US bean planting, improved Brazil forecasts, policy uncertainty, and rising put open interest in the near term. Traders can express this view using CME Micro Soybean Futures, which are sized at one-tenth of standard contracts. This allows for a cost-effective way to express a short-term bullish stance. Considering these dynamics, this paper posits a short position on CME Micro Soybean August futures (MZSQ25, expiring on 25/Jul). • Entry: USc 1,048.5/Bushel • Potential Profit: USc 1,027/Bushel (1,048.5 – 1,027 = 21.5) x 500/100 = USD 107.5 • Stop-Loss: USc 1,062/Bushel (1,048.5 – 1,062 = -13.5) x 500/100 = USD 67.5 • Reward-to-Risk Ratio: 1.6x In collaboration with CME Group, TradingView has launched The Leap trading competition. Through this paper trading competition sponsored by CME Group using virtual money and real-time market data, new and upcoming traders can hone and refine their trading skills, test their trading strategies, and feel the thrill of futures trading with a vibrant global community. The competition lasts another 21 days. Please join the other 42,700 participants who are actively honing their trading skills using virtual money. Click here to learn more. #TheFuturesLeap #Microfutures MARKET DATA CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme . DISCLAIMER This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services. Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER, the link to which is provided in our profile description.
CBOT_MINI:MZSQ2025Short
by mintdotfinance