Making a meal of things
Earlier, we noted that the price of soya beans on the Dalian Commodity Exchange had started to move higher. Now it is soya bean meal’s turn, having rallied steadily for two months. Interestingly on this, historical volatility has eased, bringing it back to within one standard deviation of the mean of the past 16 years. Clearly breaking trend-line resistance a month ago, it is now holding above the shrinking downward-sloping weekly Ichimoku cloud and is struggling somewhat at the psychological 2,950-yuan-per-tonne level, also Fibonacci retracement resistance, and just under a flat-topped cloud of some weeks ago. The lagging line might be capped a little longer, but later this summer we favour a burst to 3,350 yuan.
Nicole Elliott is a technical analyst