On January 13, Malaysian palm oil futures saw an increase of nearly 1%, continuing the upward trend from the previous trading session. This rise signifies a five-week high for edible oils traded on both the Dalian Commodity Exchange in China and the Chicago Board of Trade. As a result, U.S. soybean oil futures have also climbed above their 200-day moving average. From my perspective, if the market stays above this average, it’s a positive sign. It could be even more encouraging if it maintains that level.
India, the world’s largest importer of edible oil, has shown increased purchasing interest. After hitting an eight-month low in December, it’s anticipated that buying would pick up in January. It’s worth keeping an eye on upcoming data expected from China, a significant player in edible oil purchases. Plus, there’s uncertainty around the speed of B50 biodiesel mandates from Malaysia, the primary supplier, which could impact market dynamics.
A trading strategy currently suggests buying March 2026 soybean oil at 5090, given that today’s settlement price is 5120, and it’s valid until canceled. There’s a risk management plan to stop trading at 4990, with a profit target set at 5330—also GTC. To make a profit of $1,440, a risk of $600 per contract would be necessary. In my opinion, this presents an attractive risk/reward ratio.
