Technically Speaking

December Soybean Oil:

December soybean oil closed up 0.46 cent last week at 29.02 cents per pound, finishing just above its 100-day average for the first time since April. On a weekly chart, December soybean oil made a three-year low at 26.95 cents in November 2018, matched by a similar low on May 13 of this year. That gives soybean oil a potential double bottom of support as prices appear to be turning higher, supported by a bullish change of momentum in the weekly stochastic indicator. Traders are mostly neutral with commercials slightly net long and noncommercials slightly net short.

October Palm Oil:

The October contract of Malaysian palm oil futures closed higher every day last week, finishing up 95 ringgits at 2,067 ringgits per ton. The bullish change of heart came after prices had been languishing near their lowest levels in 10 years. Similar to soybean oil, spot palm oil prices on a weekly chart made a three-year low in November 2018. That low was recently tested, but not quite reached in July and now prices have turned higher, accompanied by a bullish change in the weekly stochastic indicator. According to USDA's latest estimates in July, world palm oil production is expected to be up 3% in 2019-20, but ending stocks are expected to be slightly lower on the season.

November canola:

November canola eked out a small gain last week, ending up C$0.90 at C$450.40 per ton. On a weekly chart, November canola prices are testing their lowest levels in four years and may have found support at C$440.00, but they have not yet shown the same bullish change in momentum as we see in soybean oil and palm oil. Locally, Canada's canola market is currently being hurt by political tensions, resulting in a lack of exports to China. In the larger picture, however, USDA expects ending supplies of rapeseed, including canola to be down 17% in 2019-20.

Comments above are for educational purposes and are not meant to be specific trade recommendations. The buying and selling of grains and grain futures involve substantial risk and are not suitable for everyone.

Todd Hultman can be reached at todd.hultman@dtn.com

Follow him on Twitter @ToddHultman

(BAS/ CZ )

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