Is the Soybean rally due for a pause?
Key Points
- Soybeans have rallied 13% in just over a month and are threatening to break out to even higher all-time highs
- That said, beans are about to enter one of their weakest seasonal periods of the year
- Traders playing the long side might consider adding or tightening a trailing stop to lock in gains if the bean market weakens
- Aggressive short-term traders might look for an opportunity to play the short side, but must be mindful of the fact that seasonality is most useful when price action and seasonality are in agreement, which is not presently the case
Why soybean seasonality tends to persist
Each year, as soybean harvesting season begins in the U.S. Midwest, little doubt remains about the state of the crop harvest. It is either good, bad, or somewhere in between, but the critical point is that the state of the crop harvest is typically a known quantity. As a result, whatever risk premium has been built in is usually shed during this September/early October period.
To understand this hedge unwinding, the chart below displays the annual seasonal trend for soybean futures. As you can see, beans are about to enter another period of typical price weakness that extends from the close on Trading Day of the Year (TDY) #176 through TDY #191. For 2026, this period extends from the close of September 15th through October