The information and opinions expressed below are based on my analysis of price behavior and chart activity

Tuesday, July 1, 2025

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December Soybean Oil (Daily) 

Today December Soybean Oil closed at 53.68, gaining 0.93 on the day, or 1.76%.  For the past week or so, Bean Oil prices have appeared to be in a consolidation range, in anticipation of a potentially volatile trading day on the 30^th.  That day (yesterday) the USDA released the Planted Acreage and Quarterly Grain Stocks data.  I say “potentially volatile” because the reaction to this report has resulted in some outsized moves in years past.  (Soybeans up 77 ½ in 2023, Bean Oil was up 4.00 limit that day, for example)  This year’s data didn’t get a huge reaction on report day, as it contained no real surprises for bulls or bears.  Since the report is past us now, the focus returns to the fundamentals like weather and supply/demand.  As I mentioned in my last piece on Bean Oil, the shift in EPA biofuel mandates is bullish for prices, as that will likely ignite a bit more demand.  There was a gap on the chart, left from Monday-Tuesday of last week, at 53.62.  Today, that gap was filled and is denoted on the chart by the horizontal red line.   Since the market didn’t fail at the upper gap and closed a few ticks above it, I think that points toward another wave up.  (the August contract closed even further above the gap, but Dec is the “front month” when it comes to volume and open interest)   Stochastics (bottom subgraph) are hooking back up and also appear to be pointing toward further strength.  The 5- and 10-day moving averages are in a bearish pattern, having crossed over with Friday’s trade.  However, the close above the 10-day may negate that as a signal whipsaw. The 5-day (blue) is at 52.84 and the 10-day (red) is at 53.64.  I would consider both of those numbers to be support levels now.  My continuous nearby weekly chart (not pictured, but you can find/create one here on Barchart) shows some possible resistance at or near the 55.40 mark.  If the market can clear that, there’s the 60.00 level (nice fat, round even number) and then the 2023 highs near 65.00.  Aggressive and well-margined traders may do well to consider long futures positions with a risk/reverse near either this week’s low of 52.40 or near last week’s low of 51.87.  From today’s closing price, that works out to a risk of $1,086 per contract, before commissions/fees, if your stop is at the low of last week.  Initial profit targets could be placed near 56.47 (June 20^th high) or near 60.00, depending on your risk tolerance and trading style. From today’s close, that first target would result in a gain of $1,674 (before your commissions/fees)   You may choose to move your protective stop up, and trail the market, as well.  Less aggressive traders may do well to consider Call Options.  Perhaps the 55.00-60.00 Call spread (closed at 1.54 today or $924 before commissions/fees) would work for you.  The risk is limited to what you pay for the spread, no risk of margin calls, and has a full potential at expiration of a gain of $2,076, if both options expire in the money.  Realistically, I would suggest a GTC profit target at 2x what you pay for that spread. This afternoon, the monthly Bean Oil stocks were released, and USDA data shows a decline of about 14% from last year’s May stocks.  At 1.876 billion pounds, that is the lowest stock level for this month.  Higher demand moving forward should eat into those stocks even more, as refiners crush more Soybeans to meet the new biofuel standards. 

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Every morning, at about 8 AM CST, I post a short video highlighting where I see opportunities in the futures markets.  You can view my most recent video here   

December Soybean Oil (Weekly)

So far this week, Bean Oil is up 1.07, settling at 53.68 today. This weekly December Bean Oil chart seems to indicate that this market is trending higher.  This view goes back a little over 2 years.  You might notice that since setting the contract low last August, prices have been in a choppy uptrend.  The rally from 2 weeks ago even filled a couple of price gaps that were left on the weekly chart way back in September of 2023.  There is now a gap below the market (horizontal blue dotted line) from 3 weeks ago, at 51.19.  Will it take years to fill in that gap, too?  Only time will tell, but given the volatility that has shown up somewhat recently in many outside markets, I’m not sure it will take that long.  The 5- and 10-week moving averages (blue and red, 52.15 and 50.56, respectively) have been in a bullish pattern since early April and I currently see no technical signs of that changing.  The 100-week moving average (grey, 46.17) is well below the market and has not been tested since early April, as well.  There’s still a slight declination to that average, but it has flattened significantly, to my eye.  The 50-week average (green, 44.92) is much further lower.  That average does appear to be inclined and pointing higher. Stochastics (bottom subgraph) have corrected from an overbought condition that existed for 2 short weeks. I do like this market from the “long side” 

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Every morning, at about 8 AM CST, I post a short video highlighting where I see opportunities in the futures markets.  You can view my most recent video here   

Jefferson Fosse  Walsh Trading

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