Soybeans - June 2016

 The month of May was a disappointment. Except for the big up day on May 10, most of the month remained in a sideways motion.

 As presented in our 2016 soybean roadmap, there is a cycle due to turn in the first part of the month of June. According to seasonal behavior, after a March bottom prices will most likely rally up until June or July, aligning with the typical seasonal top months.

 Cycle analysis

 Figure 1 is a daily price-time chart for cash soybeans from 2015 to the present time. The chart shows a harmonic of Gann's 20yrs cycle due to turn in the first half of the month of June, 2016.
 

Figure 1
Daily cash prices for soybeans at Central Illinois from 2015 to 2016. A Gann's 20yrs cycle harmonic due to turn in the first part of June 2016. Two PTVs with length equal to 1.5x144 = 216 defining a bear market in 2015 and the current rally in 2016.

 According to normal seasonal behavior, after a March bottom prices will typically rally until June or July. This is one reason why we believe that Gann's 20yrs cycle harmonic could align with a market top. Additional to this, there are other cycles turning in July, but most important is that initially Gann's major 84yrs cycle harmonic is due to bottom around August, so a top should be expected in the weeks before.

 Short geometry analysis

 Figure 1 contains a couple of PTVs[1] with length equal to 1.5 times the First Square of Twelve or 1.5 x 144 = 216. The first vector defined the decline from late June - early July 2015 top until late September 2015 bottom. Up until now, the second PTV defines the rally from early March 2016 until late May 2016. Both PTVs have the same length and both took the same amount of time to complete (58 to 60 trading days.)

 Summary

 According to typical seasonal behavior, June is a good month to expect tops after a March bottom. Gann's 20yrs cycle harmonic could potentially align with a top from where prices could decline into the major 84yrs cycle bottom.

 [1] PTV stands for Price-Time Vector. This concept was introduced by Bradley Cowan in his writings. Both PTV and Price-Time Vector are trademarks of Bradley Cowan.

Next Post: Update: Soybeans - June 2016 

 Ricardo Da Costa

 Grain Market Analysis