I have been watching soybeans for a few days. Last week a US Department of Agriculture World Agricultural Supply and Demand Estimates report showed higher soybean plantings, but also increased exports to China, at a time when the Chinese say that they are planning to increase stockpiles of soybeans. This has been a bit of good news for soybeans, which sold off at the start of the year on bearish plantings reports (along with wheat and corn). Now soybeans have broken out to the upside from the trading range they have occupied since mid-January.

On Friday I held off from entering this trade because of the general risk-aversion caused by the announcement that the SEC was to sue Goldman Sachs. This afternoon the mood is somewhat more positive, with various risk measures starting to recover or at least not going down any more. Soybeans have had a good re-test of the breakout level — I bought as they did so, having waiting for the 1530 open, and had a very nervous few minutes as the market continued downwards (I bought using a limit order, to prevent myself from jumping in at too high a price — the market surged down through my buy level). I placed the stop rather close (on the far side of 980, with enough leeway to allow for the volatility of this market), and I am wondering whether I should have left some more margin for error. The market is now above my entry point.

Intraday chart, from IG Index, shows approx. entry level and stop postion (entry point at the cross). Long-term chart from Tradingcharts.com (doesn’t show today’s price moves).