USDA Fats & Oils

Fats & Oils

Soybeans Crush: 6,393,408 Tons (▼2.0% MoM, ▲4.6% YoY)

Soyoil Stocks: 2.315 Billion Pounds (▼5.0% MoM, ▲23.4% YoY)

Biofuel Demand (inedible use): 690,228,000 lbs (▲0.5% MoM)

Analysis 

Soyoil stocks fell for the third straight month, dropping to 2.315 billion pounds from a revised 2.436 billion in April. That is the largest monthly drawdown in this sequence. Crush eased to 6,393,408 tons on normal seasonal patterns but still runs 4.6% above last May. Biofuel demand held near 690 million pounds, keeping the demand pull elevated and driving the ongoing stock drawdown despite robust crush rates.

ZL at 65.48 has sold off nearly 18% from its 52 week high, with the 14 day RSI at 18.3 signaling deeply oversold conditions. Price sits below the 20 day at 71.52 and the 50 day at 73.33, with the 200 day at 59.97 as longer term support. A close below the 64.63 swing low opens the door to 60.00, while a reclaim of 71.50 would suggest the selling has run its course. With stocks still drawing month over month, the case for a technical overshoot to the downside has merit.