December soybean oil (ZLZ26) futures present a selling opportunity on more price weakness. See on the daily bar chart for December soybean oil futures that prices are starting to trend lower and on Monday hit a three-week low. See, too, at the bottom of the chart that the moving average convergence divergence (MACD) indicator is in a bearish posture as the blue MACD line is below the red trigger line and both lines are trending down.
The bean oil market has been grinding sideways at higher levels for months, which suggests the bulls have run out of energy to mount another upside campaign. Coffee Prices Retreat as Global Supply Situation Improves Abundant Supplies and Brazil Rains Weigh on Coffee Prices Livestock Futures Bears Are Growling with Lean Hog Prices Leading the Downside Get exclusive insights with the FREE Barchart Brief newsletter. Subscribe now for quick, incisive midday market analysis you won't find anywhere else.
Fundamentally, the recent selloff in crude oil (CBX26) (CLV26) prices is bearish for bean oil. Speculative traders have also ramped up spreading — selling bean oil and buying meal (ZMZ26) futures. A move in December soybean oil futures below chart support at this week's low of 67.07 cents would become a selling opportunity.
The downside price objective would be 56.00 cents, or below. Technical resistance, for which to place a protective buy stop just above, is located at 72.00 cents. IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account.
It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any trades and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.
Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%): Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker.
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