Meal/Bean Spread: Is the Blast Over? Sure Looks Like It

What Goes Up…

Must come down!  Eventually.  Based on yesterday’s close, now might be the time for the Dec-Nov soy meal (x2)/soybean spread to do so.

This spread closed below the rising 30-day Moving Average yesterday for the first time since early April.  This triggered the blog’s short sale signal.

Dec-Nov Soy Meal Soybean (x2) spread daily

Dec-Nov Soy Meal Soybean (x2) spread daily

The IMC blog entered a hypothetical short position when it sold two 100-ton December soy meal contracts at $381.00 (total value of $76,200) and bought one 5,000 bushel November soybean contract at $11.01 1/2 (contract value of $55,075).  This puts us short at +$21,125 (premium meal).  We will initially risk the trade to a two-consecutive day close above +$24,250 (premium beans).

If/when the spread gives us some setups for pyramiding, we will be sure to address it.  But if you have your own methodologies for doing so, don’t wait around for us!  Take advantage of it.  This could be just the start of a beautiful bear market.

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