Thursday, September 6, 2012

Commercial Traders Sell Soybean Oil Futures

September 6, 2012

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Commercial Trader Selling in Bean Oil Futures

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Commercial traders have been aggressively selling soybean meal since the July high of 55.19. This is a clear adjustment in their expectations of the soybean crush as soybean by products become less desirable as feed to their increasing cost. Yesterday’s inside bar coupled with a Commitment of Traders sell signal provided a low risk entry for a counter trend trade. We sold soybean meal futures on the overnight penetration of yesterday’s low at 55.25. Normally, we would place our protective buy stop at the swing high. However, the inside bar setup allows us to place our stop tighter, at yesterday’s high of 58.24. We are looking for a 1/3 retracement from the June lows through this week’s high. This gives us a target of 55.17.

This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as representation by Commodity & Derivative Adv. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

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