logo

This trade war-sensitive commodity is about to rip higher

VIDEO1:2401:24
This trade war sensitive commodity is about to rise

Trade war conflicts have caused soybeans to suffer this year, but after a 10 percent surge in the last month, one trader expects the rally to continue to grow.

Bill Baruch, president of Blue Line Futures, told CNBC's "Trading Nation " on Tuesday that he has a bullish outlook on soybeans and China. Here is what he had to say:

· The biggest casualty from China's retaliation to the U.S. tariffs was soybeans.

· Soybeans lost as much as 22 percent from the May 29 high through the July low, their worst levels since December 2008, before stabilizing.

· Soybeans are extremely undervalued at $9 a bushel because China doesn't start making its largest purchases until October and there is light at the end of the tunnel for this war.

· The recent swing higher and breakout of a cup and handle pattern is even more important, this level aligns three separate proprietary technical indicators and a close above 9.23 a bushel is extremely bullish.

· We want to be long soybeans above 9.23.

Soybean futures were trading around 9.13 a bushel on Wednesday.