Grain Spreads: A Quick Look at Bean Oil

Sean LuskGeneral Commentary Leave a Comment

Please join me for a free grain webinar every Thursday at 3pm Central. We discuss supply, demand, weather, and the charts. Sign Up Now

Commentary

Bean Oil continues to surge. We have seen good demand return to this market that was sorely needed. There appears to be shortages in Asia is the simplest explanation in my opinion for the current rally up to today. Some possible bullish tidbits include, India’s palm oil imports surging 59% in October to a three-month high compared to the previous month, as refiners boosted purchases to replenish stocks depleted by lower-than-usual imports in recent months and strong festive demand. Malaysia’s palm oil inventories are forecasted to fall in October, marking their first decline in three months, due to lower output and higher exports, a Reuters survey showed. Shortages in Aisa coupled with a rebound in crude oil futures is aiding the rally. As always trade the charts. I like getting long this market longer term as many potential shortages of palm/veg oil in Asia may take time to replenish. Trade Idea below.

Trade Ideas

Futures-N/A

Options-Sell the August 65.00/55.00 put spread for 900 points OB on a GTC.

Risk Reward

Futures-N/A

Options-Maximum risk is 6K here. However, one is collecting 5400 upon entry minus trade costs and fees. So, the maximum risk is $600 plus trade costs and fees. 

If you would like to receive more information on the commodity markets, please use the link to join our email list Sign Up Now

Sean Lusk

Vice President Commercial Hedging Division

Walsh Trading

312 957 8103

888 391 7894 toll free

312 256 0109 fax

slusk@walshtrading.com

www.walshtrading.com

Walsh Trading

311 S Wacker Drive Suite 540

Chicago, Il 60606

Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. The information contained on this site is the opinion of the writer or was obtained from sources cited within the commentary. The impact on market prices due to seasonal or market cycles and current news events may already be reflected in market prices.PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. All information, communications, publications, and reports, including this specific material, used and distributed by Walsh Trading, Inc. (“WTI”) shall be construed as a solicitation for entering into a derivatives transaction. WTI does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.

Leave a Reply

Your email address will not be published. Required fields are marked *