Bloomberg News

Dalian Soymeal Gains Limited by Bollinger: Technical Analysis

June 07, 2013

A rally in soybean meal futures traded in China, the world’s biggest user of the feed ingredient, may be capped by technical resistance at 3,300 yuan ($538) a metric ton unless the U.S. crop outlook changes, according to Shanghai CIFCO Futures Co.

The contract for January delivery surged as much as 9 percent from its 2013 low on April 26 to 3,427 yuan on May 29. The contract has since dropped back below resistance that’s at 3,314 yuan for Bollinger Bands on price charts, even as the indicator shows an upward trend, said Zhu Gang, an analyst at the Shanghai-based brokerage.

“While Dalian soybean meal is supported by concern that the wetness in the U.S. may cause planting problems, the Bollinger Band will be difficult to overcome unless the weather issues deteriorates further,” Zhu said by e-mail today.

January futures began rebounding through May after wet weather in the U.S. delayed planting. Soybean output this year may be smaller than the government forecast, according to a Bloomberg News survey.

Soybean meal rose 0.2 percent to 3,233 yuan on the Dalian Commodity Exchange at the end of the morning session today. About 96 percent of the China’s crushed soybeans are imported, according to U.S. Department of Agriculture.

In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index.

To contact Bloomberg News staff for this story: William Bi in Beijing at wbi@bloomberg.net

To contact the editor responsible for this story: Brett Miller at bmiller30@bloomberg.net


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