Canada Markets

Soybean Oil Took the Spotlight on Oct. 18

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
Connect with Cliff:
@CliffJamieson
The brown line represents the trend in December soybean oil futures when shown in Canadian dollars/metric ton, which gained $65.91/mt on Oct. 18 and is pointing to a test of the contract high. The blue line on the first study shows the Dec/Jan futures spread, in U.S. cents/lb, which signals growing front-end demand. (DTN ProphetX chart)
The brown line represents the trend in December soybean oil futures when shown in Canadian dollars/metric ton, which gained $65.91/mt on Oct. 18 and is pointing to a test of the contract high. The blue line on the first study shows the Dec/Jan futures spread, in U.S. cents/lb, which signals growing front-end demand. (DTN ProphetX chart)

Soybean oil futures posted solid gains for a second session on Oct. 18, led by the front-end December contract, which gained 1.9 cents/lb. USD to close at 68.74 cents/lb. Tuesday's move saw price push further above the contract's 100-day moving average, while reaching its highest trade in 16 weeks, or since the week of June 21. While not shown, this week's move has seen price move above the 50% retracement of the short-term move from the contract's June high to July low, while is already close to testing the 61.8% retracement at 69.79/mt.

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The brown line on the attached chart shows the move in this contract when presented in Canadian dollars/metric ton. Tuesday's close is seen at $2,084.85/mt, slightly ahead of the close in the Canadian dollar trade, which is the highest seen since mid-June.

The lower study shows the Dec/Jan futures spread or inverse strengthening to 2.24 cents on Tuesday, the largest spread seen over the life of the spread. This is signaling growing demand on the front end. The forward curve for soybean oil is downward sloping, with each contract closing higher than the following contract (inverted trade) through to the July 2025 contract.

Cliff Jamieson can be reached at cliff.jamieson@dtn.com

Follow Cliff Jamieson on Twitter @CliffJamieson

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The brown line represents the trend in December soybean oil futures when shown in Canadian dollars/metric ton, which gained $65.91/mt on Oct. 18 and is pointing to a test of the contract high. The blue line on the first study shows the Dec/Jan futures spread, in U.S. cents/lb, which signals growing front-end demand. (DTN ProphetX chart) 
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