September soybean meal (ZMU26) futures present a “swing-trade” buying opportunity.
See on the daily bar chart for September soybean meal futures that prices have sold off recently and are now near the bottom of a well-defined trading range. It’s my bias that chart support at the $300.00 area will stop and reverse the price decline. History shows that meal prices around the $300.00 area are a value-buying opportunity.
Fundamentally, global food prices are on the rise amid rising world inflation. Also, soy complex futures spread traders had been selling meal and buying soybean oil (ZLN26). However, those spread trades will have to be unwound at some point, which will support meal.
A move in September meal futures above chart resistance at this week’s high of $308.00 would give the bears fresh momentum and it would also become a buying opportunity. The upside price objective would be $330.00, or above. Technical support, for which to place a protective sell stop just below, is located at $300.00.
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. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.
On the date of publication, Jim Wyckoff did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.