Soybean meal made a five-wave decline, down from 336.4 level, which is a strong indicator that bears are taking charge in the near-term. We can see a completed five-wave move at the end of May, when the price started again recovering, however only for a three-legged move. We believe an Elliott wave flat pattern is unfolding within a higher degree wave II now, because legs A and B have three sub-waves, and the latest recovery, labeled as leg C is sharp and straight, in an impulsive fashion.

Ideally, wave C of II will recover towards the Fib. the ratio of 50.0 and 61.8 (310/312 level), where resistance will be seen, and a bigger, bearish reversal will resume its path.

Soybean meal, Daily

A Flat is a three-wave pattern labeled A-B-C that generally moves sideways. It is corrective, counter-trend and is a very common Elliott pattern.

• structure is 3-3-5
• wave B terminates about at the level of the beginning of wave A
• wave C terminates a slight bit past the end of wave A
• appears in wave two or four, wave B in an A-B-C, wave X in a double or triple zig-zag, or wave Y in a triple threes

Regular Flat: