Interpreting market movements in a whole new way
Interpreting market movements in a whole new way
Overall stocks of Soybean Oil derived from the Soybean crushed seed has fallen y/y while prices have risen quite drastically during the same period. Today's WASDE report appeared bullish for Soybean oil which appears to have initial and secondary resistance at 83.51 and 84.49 respectively.
Per the WASDE report the 2022/23 outlook for U.S. soybeans is for higher supplies, crush, exports, and ending stocks compared with 2021/22. The soybean crop is projected at 4.64 billion bushels, up 5% from last year’s crop mainly on higher harvested area. With slightly lower beginning stocks, soybean supplies are projected at 4.89 billion bushels, up 4% from 2021/22. Total U.S. oilseed production for 2022/23 is projected at 136.6 million tons, up 6.1 million from 2021/22 mainly on higher soybean production. Production forecasts are also higher for canola and sunflower seed. Global oilseed production for 2022/23 is projected at 647.1 million tons, rising 50.3 million from last marketing year when droughts impacted South American soybean production and the Canadian canola crop. Global soybean production is forecast up 45.3 million tons to 394.7 million, with Brazil accounting for over half of the increase, up 24 million tons to a record 149 million. Argentina’s soybean crop is expected to reach 51 million tons and Paraguay 10 million. Partly offsetting higher global soybean and canola production is lower oilseed production for Ukraine.
We present a continuation trade idea for speculators of Soybean oil futures which have run up considerably this year clocking a high of 87.65 earlier in the month. This is a short-term trade idea and is directionally pointed lower:
| Instrument | Expiration | Direction | Entry Range | Suggested Stop | Profit target |
| ZS | July 2022 | Short | 84.49~83.51 | 85.88 | 77.41 |
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