Chart of the day: Building to a soybean burst
Scorching temperatures and a drought in Argentina have seriously affected this season’s soy crop. Though on the other side of the world, it has started to affect the price of soybean meal on the Dalian Commodity Exchange. The recent rally, while not on the scale of the sharp gyrations of 2016, has seen the highest weekly close in a year. A golden cross (the 50-day moving average crossing above the 200-day one) happened in November and this has acted as support to prices for a good six months. Though overbought on the RSI, we feel bullish momentum is building and should trigger a burst higher this month, targeting the area around 3,400 yuan (US$536) to 3,600 yuan per tonne.
Nicole Elliott is a technical analyst