Study: soybeans crashed. Will probably rebound in the next few months


Soybeans are absolutely being crushed right now, partially due to Trump’s tariffs.

We frequently use the market’s distance from a key moving average (e.g. 50 dma) to determine how “extreme” price movements are.
Soybeans are currently -11% below their 50 daily moving average. This is the first such decline in almost 2 years.

Here are all the historical cases in which Soybeans fell -10% below their 50 dma’s (first event in 1 year), and what happened next to soybeans.


Click here to download the data in Excel.
This chart demonstrates how far Soybeans deviate from their 50 dma. Notice how Soybeans are starting to get oversold.

  1. Any reading above 1 indicates that Soybeans are above their 50 dma.
  2. Any reading below 1 indicates that Soybeans are below their 50 dma.

Conclusion

Notice how:

  1. Soybeans might fall more in the short term. This is a real possibility with Trump threatening more tariffs on China.
  2. But soybeans always rebounded in the medium term (6 months later).

This is because the Soybean markets usually trade within a wide range, which makes it ideal for contrarian trading. So if the market falls too much, it’ll even snap back upwards.

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