March soybean oil futures at the Chicago Board of Trade on Tuesday popped to a fresh two-week high and gained over 100 points on the day. Short covering, or the buying back of previously sold positions, and fresh speculative bargain-hunting buying were featured. Bullishly postured “outside markets” also supported buying interest in soybean oil Tuesday, as crude oil futures prices were sharply higher and the U.S. dollar index was weaker. The bean oil bulls did gain a bit of fresh near-term technical momentum on Tuesday. The very short-term moving averages (4-day and 9-day) did produce a bullish line crossover signal on the daily chart for March soybean oil, as the 4-day crossed above the 9-day moving average.
A very steep downtrend line drawn from the January high has also been negated in March soybean oil. However, the soybean oil bulls need to show that technically important follow-through buying strength yet this week to begin to suggest that a market low is in place. Strong overhead technical resistance for March soybean oil is located at 38.00 cents. Strong technical support is located at this week’s low of 35.80 cents. Stay tuned! Jim Wyckoff