During the US government shutdown, the soybean futures market rallied due to buying from commercial and noncommercial interests. After the government reopened, noncommercial traders hit a record long position. However, the market is now in a downtrend due to renewed selling from both sides.

Technical analysis shows the March soybean futures contract entered a secondary downtrend after a bearish reversal and crossover by weekly stochastics. Recent data from the CFTC showed noncommercial traders holding a record long position.

The market trend suggests a downward trajectory, influenced by noncommercial activity. The CFTC report revealed a significant increase in net-long futures positions, setting a new record. Fundamentally, there was strong commercial demand indicated by export sales and shipments data.

Despite strong commercial demand, China’s purchases of US soybeans were down from the previous year. This data, along with market trends and noncommercial activity, suggests a bearish outlook for US soybean futures. The US was projected to ship 41.6 mmt (1.529 mb) of soybeans, but the pace decreased during the shutdown. Darin Newsom advises not to go against the trend in the futures market, as noncommercial activity and fund liquidations are influencing prices. Fundamentals suggest pressure from the commercial side and Brazil’s upcoming harvest. Weekly charts are seen as ideal based on the Goldilocks Principle. Newsom did not have any positions in mentioned securities.

Read more at Yahoo Finance: Is it Time to Be Bullish Soybeans?