JULY BEAN OIL FUTURES:
Following the meteoric rise in not only world vegetable oil markets but also U.S. bean oil futures that began in late October and seemed to peak in late March, July bean oil appears to also be acting a little toppy. July bean oil looks to be trading within a 48- to 52-cent range, with a close under 48 cents likely to lead to another leg down to the 43- to 44-cent level. On the other hand, a rally and close above the 52-cent mark could lead to a challenge of the highs.
World veg oil markets continue to be tight, but palm oil plunged 3.2% to start the week as the end of March inventory in Malaysia figured nearly 11% higher than at the end of February. Brazil’s decision over the weekend to temporarily reduce the biodiesel mandate to 10% from 13% for May and June to hold prices down no doubt exacerbated the weakness in oils early this week.
MINNEAPOLIS NEW-CROP SEPTEMBER FUTURES:
It is rare we see triple-top chart formations and, when we do, rarely do those triple tops or bottoms hold. Minneapolis new-crop September wheat futures seem to have a triple-top right now. Last week, September futures rallied 56 cents from the recent low as expanding drought conditions suggest bullish yield and production ideas and even lower planting intentions. However, with some minor rains moving across the Northern Plains and with crop conditions in both the European Union and Russia improving, we could see more bearish pressure on U.S. wheat futures markets in the short run. On a further set back, look for solid support to emerge at the $6.30 level on Minneapolis September. On the flip side, a rally and close over $6.71 to $6.72 on Minneapolis September is likely to lead to a new leg higher.
Comments above are for educational purposes and are not meant to be specific trade recommendations. The buying and selling of grain and soybean futures involves substantial risk and are not suitable for everyone.
Dana Mantini can be reached at: email@example.com
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