Cycle theory dictates that commodities and grains in particular run on 3 year cycles. The chart below shows that there have been what I would consider 6 parabolas since 2003. Two of the parabolas occurred at basically the same time back in 2008. That anomaly is rare, so I would consider for this arguments sake that they were both part of the same parabola. This would mean that out of a 3 year cycle low, you should expect to see a very strong rally. This has happened pretty much every three years.
The daily soybean chart below shows the various parabolas which occurred during that time. What I want you to see is that a typical move for a parabola in soybeans is 30% above the 200 day moving average. Today, we are at 30% above the average.
Now today, the November Soybean contract touched its June 2014 peak. (see below chart) That is probably the last significant point of resistance on the bean chart. It does not mean beans cannot go higher, but I believe we should be safe to sell enough soybeans to get to 100% of what you expect to grow. When this move is complete, expect to see a sell off just as brutal as the rally has been. I believe Friday's WASDE report will probably trigger an end to this rally. Mark your calendar....noon Friday.
"But Mr. Wade, can't prices move even higher if we get weather that hurts the crop?" The answer could be yes. If we have genuine weather scare like we did back in 2008 (see above chart), you could get one more run at these prices. If not, this could be your last chance. A 50% retracement of this rally would bring prices back down to the $10 area. Are you that greedy to risk $1.50?