Chart of the Day -December Soybean Oil

The information and opinions expressed below are based on my analysis of price behavior and chart activity

Thursday, July 24, 2025

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December Soybean Oil (Daily) 

Today, December Soybean Oil settled at 56.34, up 0.48 from Wednesday.  Not a huge change since I wrote about Bean Oil in this space last week.  And to be sure, my message hasn’t changed.  I have been advocating for establishing long futures positions in Bean Oil for aggressive and well-margined traders for a while now, along with a December 55.00/60.00 Call Spread for those that may be a bit more risk-averse.   The initial upside target in the futures that I mentioned was 56.47, which got hit last Thursday, along with a risk/reverse stop level near 52.40, which has not been hit and should have been cancelled when the long futures was liquidated.  The 55.00/60.00 call spread was near 1.54 when I wrote about it earlier this month and today those options settled at a difference of 1.95.  We’ve seen some time-value erosion in the options, but those option positions should still be working, if you chose to take it.  I would still suggest taking profit on that option spread at 2x what you paid for it.  And I still think that Soybean Oil has room to go higher.  Partly due to the EPA Biofuel mandates, but also partly due to strong demand from Asia.  Trade deals seem to be falling into place before the August 1^st “deadline” and may result in more demand for US Soybean Oil. 

Looking at the chart above, there are a few things you might notice.  First off, the trend is still up.  The past 5 days have been mildly volatile, in my opinion.  Last Friday, the prices spiked up to 56.95 and the market got hit with a wave of Friday profit-taking, in my opinion.  Monday’s trade saw a spike lower to 54.71 before closing higher that day, and we’ve seen higher highs and higher lows every day since.  We’re not up that much this week and I wouldn’t expect another wave of profit taking pressure, but tomorrow is Friday and some traders may choose to take some risk off the table over the weekend.  I think the technicals are still positive and still bullish.  The 5-day moving average (blue, 55.80) is still offering support that’s been tested every day this week.  The 10-day average (red, 55.19) is inclined higher, but we haven’t seen the market interact with that average since the 15^th of July.  The longer-term averages on this chart, the 50-, 100- and 200-day (green, grey, purple) are all well below the market, with the 50-day being closest to the price at 51.98, some 4.36 lower.  That level would not even fill the gap on the chart, denoted by the blue horizontal dotted line, and that’s where I would expect to find major support, near 51.19.  Open Interest in the December contract has increased by a little over 4,300 contracts since last Thursday, which usually indicates more buyers entering the market. Trade volume has been “ok” not huge but not low, either.  Stochastics (bottom subgraph) are pointing higher, at the moment, and just starting to inch into overbought status.  Everything that I see, seems to be pointing toward higher prices.  The red trendline, drawn off of the April-May highs, projects to about 59.00 for tomorrow.  Keep in mind that as time goes by, that value will be higher.  I’ve added a blue trendline under the market, drawn off of the March-May lows, seems to form a channel down near 51.00 for tomorrow.   

Aggressive and well-margined traders may do well to consider establishing long futures positions in December Bean Oil.  As I mentioned above, the 5-day average at 55.80 has been support.  That moving average could be a good entry point.  An upside target near that trendline near 59.00 seems like a reasonable target to my eye.  A risk-reverse Sell Stop at Monday’s low of 54.71 might be appropriate.  From the 5 day moving average reading of today (55.80), that could work out to either a profit of $1,920 per contract or a loss of $654 per contract, before your commissions/fees. 

For traders that prefer options, I would still advocate for that December 55.00/60.00 Call Spread, with a target at 2x what you paid for the spread.  Today those settled at a difference of 1.95.   If you’d like a new or different strategy, please reach out to me directly.

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Every morning, at about 8 AM CST, I post a short video highlighting where I see opportunities in the futures markets.  You can view my most recent video here   

December Soybean Oil (Weekly)

This weekly chart shows the life of the December Bean Oil contract.  I don’t have much to say about this one today.  The trend has been up since April, at the latest, and we still have a long way to go before prices come anywhere near the contract highs. 

If you like what you’ve read here and would like to see more like this from Walsh Trading, please Click here and sign up for our daily futures market email. 

Every morning, at about 8 AM CST, I post a short video highlighting where I see opportunities in the futures markets.  You can view my most recent video here   

Jefferson Fosse  Walsh Trading

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jfosse@walshtrading.com   www.walshtrading.com

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