When analyzing a particular commodity complex, it is very important to attempt to identify the "leader of the pack" that will outperform the complex and provide the most impressive investor returns. Usually there are several criteria to measure. They include superior technical price patterns, dominant Money Flow characteristics, historical undervaluation on a relative basis, and superior bullish fundamentals. Based on these factors, soybean oil likely will outperform the bean complex in the months ahead. Another key indicator for bean oil is its value relative to beans themselves. Bean oil has been undervalued compared to beans for more than three years. Adding to this bullish scenario, global bean oil stocks-to-usage ratio is at the lowest levels since 1976.
Soybean oil: Ready for a breakout? Shawn Hackett Futures; Jun 2010; 39, 6; Docstoc pg. 20 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
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