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.
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This chart demonstrates how far Soybeans deviate from their 50 dma. Notice how Soybeans are starting to get oversold.
- Any reading above 1 indicates that Soybeans are above their 50 dma.
- Any reading below 1 indicates that Soybeans are below their 50 dma.
- Soybeans might fall more in the short term. This is a real possibility with Trump threatening more tariffs on China.
- 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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