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Soybean Oil Futures Market Analysis

Free in-depth market analysis on the Soybean Oil futures market written by a professional Soybeans futures trader.

May 09, 2013

Soybean Oil Futures Trader, Van Commodities, Inc.

The soy bean oil future (ZLN13) has had a very limited bounce since trading down roughly eleven percent from its February 04 intraday high of 54.26. Traders will be looking to the USDA Production and Supply Demand data tomorrow for the grain and Soybean complex, but the statistics will probably offer limited relief to ZLN13.

Today’s export data for bean oil were weaker than the market expected, but the contract traded up with the rest of the Soybean complex. Net oil sales came in at 900 tons for the current marketing year. Cumulative sales stand at eighty percent of the USDA forecast verses the five year average of seventy two and a half percent. Sales of ten thousand tons are needed on a weekly basis to meet the USDA forecast.

The longer term trend of ZLN13 appears to be down. Over the near term initial support for ZLN13 may come in at 48.40-48.60, with stronger support at 48.00-48.20. Initial resistance may come in at 49.70-50.10, with stronger resistance at 50.45-50.70.

April 08, 2013

Soybean Futures Trader, Van Commodities, Inc.

The Soybean Oil future (ZLK13) has traded down roughly in line with the rest of the Soybean complex. ZLK13 is oversold based on several momentum studies on both short and intermediate term time frames. The inside day this past Friday may be indicative of a drying up of sellers prior to the crop production data on April 10. Short term indicators have turned up and would be supportive of higher prices.

Ahead of the crop production data initial support for ZLK13 may come in at 49.12-49.30, with stronger support at 48.78-48.95. Initial resistance may come in at 50.25-50.50, with stronger resistance at 50.90-51.10.

January 09, 2013

Soybean Broker, Van Commodities, Inc.

Since the Bean Oil future (ZLH13) dropped roughly twenty percent from September 04, 2012 to November 12, 2012 the contract has been consolidating in a tightening range. ZLH13 had become deeply oversold based on short and intermediate term momentum indicators on its plummet from the 58.89 high in September. The triangle formation created by the consolidation since the low at 46.84 on November 12 has worked off the oversold condition and the intermediate term trend appears to be down.

ZLH13 should find initial resistance 51.00-51.25 and further selling at 51.73-52.20. A break below 47.50-48.00 could take ZLH13 to 44.00 before short covering comes into the market.

Grains Trader, November 11, 2012

The soybean complex traded down throughout Friday, November 09, 2012 on the back of larger than expected USDA revisions to crop production numbers. The rise in production levels resulted in an increase for 2012/13 carryout levels, both globally and for the US. US soybean output was upgraded to 2.971 billion bushels, exceeding market expectations by 80 million bushels. The USDA also increased demand for US soybeans, but ending 2012/13 carryout was increased by 10 million bushels and the stocks/use ratio was increased to 4.6 percent from October’s estimate of 4.5 percent. Soybean oil, basis the December contract (BOZ12) has traded down in line with the top put in for the soybean complex as a whole at the beginning of September.

BOZ12 is oversold on both an intermediate and short term basis, based on several momentum studies. The negative close on Friday should result in further losses over the next several weeks. A bounce back into the multi month trading range would not surprise as bean oil is oversold, but traders will most probably be looking for any strength in price as an opportunity to sell into. BOZ12 may find some support 46.20-47.75 but the potential for a move into the lower 40.00 area seems possible. Initial resistance should appear 49.20-50.50 and further selling 51.80-52.50.

Soybean Oil Futures Broker, May 24, 2012

The CME Soybean oil contract basis July (BON12) is oversold based on several momentum studies. The economic and political turbulence in Europe has resulted in a strong U.S. dollar which has negatively impacted commodity markets in general and BON12 has not been immune. Other factors have played a roll in bean oil’s 16 percent drop since April 10 including the fact that Japan continues to increase its use of palm oil at the expense of bean oil for several products.

BON12 scored an inside day today indicating the possibility that the selling of the last several weeks may be subsiding, at least temporarily. BON12 should find initial support at 47.30-48.00 and secondary support 46.00-46.50. Initial resistance should come in at 50.50-51.00 followed by further potential selling at 52.25-53.30. 

April 6, 2012

Commodities Broker, Van Commodities, Inc.

The soybean complex continued to power it s way to the upside this week after the mild pullback prior to the Planting Intentions Report on March 30. The Soybean futures basis the May contract (SK12), which pulled back 30 cents last week going into the report, rallied 79 cents from last Friday too this Thursday’s early Good Friday holiday close and ahead of the April 10, 2012 USDA Global Supply/Demand Report. Likewise the Soybean Oil front month contract (BOK12) traded down 2.23 cent/lbs in the days leading up to the Planting Intentions Report only to rally 3.05 cents/lb from March 30, 2012 too the April 05, 2012 early holiday close. Although export numbers for US sales of soybeans for the week ended March 29, 2012 topped expectations, net sales reductions for bean oil exports were less than inspiring. On the international markets April 06, 2012 Palm oil climbed to the highest level in more than a year and in China palm and bean oil rose to the highest price in more than six months.

Although BOK12 is overbought on several momentum studies and has some trendline resistance around 57 cents on weekly charts the direction for the market still appears to be up. In the near term a pullback to the 55.80-56.40 should be supportive with a near term upside price objective of 58.80. A trade below 53.80 would lead to a reappraisal of the market.