The opinions expressed in this report are those of Inspirante Trading Solutions Pte Ltd (“ITS”) and are considered market commentary. They are not intended to act as investment recommendations. Full disclaimers are available at the end of this report.
Subscribe to get the latest updates
Highlights
Upcoming economic events (Singapore Local Time):
|
Date |
Time |
Venue |
| 2025-10-06 | 17:00 | Eurozone Retail Sales (Aug) |
| 2025-10-08 | 09:45 |
BoJ Governor Ueda speech |
| 2025-10-10 | 22:00 |
U.S. Michigan Consumer Sentiment Index (Oct) |
| 2025-10-15 | 09:30 | China CPI (Sep) |
| 2025-10-15 | 20:30 | U.S. CPI (Sep) |
| 2025-10-15 | 20:30 | U.S. Retail Sales (Sep) |
Market snapshots
Figure 1: Soybean Oilshare (Monthly)
Soybean oilshare has been range-bound since the 1980s. The ratio is sitting near the top of its long-term band, indicating soybean oil is historically rich vs. meal.
Figure 2: Soybean Meal Futures (Monthly)
Soybean meal’s long-term structure is a broad horizontal range with a clear post-2010 regime shift. Price is currently testing the lower end of the 15-year range.
Figure 3: Henry Hub Natural Gas Futures (December 2025)
Natural gas has formed an ascending triangle bottom after a multi-month decline. A decisive close above 4.0 for the December contract would complete the reversal pattern.
Figure 4: CAD/USD Futures
The Canadian dollar has formed a multi-month head-and-shoulder (H&S) top. A break below the neckline would suggest more downside for the Canadian dollar vs. the greenback.
Beyond the charts
The past few months have not been an easy environment for many traders. Whipsaws and relationship breakdowns have appeared across asset classes, especially since June. Volatility may not match the peaks seen early in the year, but the market has felt more chaotic. Amid that chaos, it’s natural to seek stability—ideally relationships anchored in fundamentals rather than narratives.
One such example is the soybean “oilshare,” which represents soybean oil’s share of the crush value—the value created by crushing soybeans into meal and oil (for details on the pricing formula, readers can visit What Is Oilshare?; that’s not our focus today). When we examine the long-term relationship between soybean oil and soybean meal via a standardized percentage, we find a remarkably stable range spanning decades. Traders are understandably drawn to such ranges; they can offer asymmetric risk-reward, as we are seeing now. Before trading it, however, it’s crucial to understand why the relationship holds.
Soybean oil and meal are joint products: each bushel crushed reliably yields about 11 lbs of oil and 44 lbs of meal. A rational, margin-driven processor therefore makes run-or-idle decisions on the combined crush margin, not on either leg in isolation. This fixed yield fosters natural mean reversion in the oilshare ratio. Put differently, the inseparability of production means supply of one product cannot increase without the other, so prices for oil and meal adjust together to clear excess supply or absorb demand shifts, whether in animal feed (meal) or edible/industrial uses (oil). As a result, despite short-term shocks from weather, trade or policy, relative values have historically balanced out to keep oil revenue within a consistent band, often around 30-45%.
When oilshare climbs toward the top of its usual range, soybean oil has become “expensive” relative to meal. That makes the overall crush more profitable and encourages processors to run harder, which puts more of both oil and meal into the market. The system then tends to correct itself: buyers switch to other oils like palm or canola, which caps soybean oil demand and price, while the cheaper meal is pulled into animal feed as a substitute for other protein meals and exports also increase, so meal usually finds a floor first. Crucially, crushers can’t make oil without also making meal; if meal gets too cheap, the combined profit shrinks and plants slow down, easing supply. Finally, global trade helps clear the excess—more alternative oils come in, and more meal goes out. Together, these forces pull oilshare back toward its long-term range.
For traders, using the Soybean Oilshare futures contract can be preferable to manually constructing a two-leg spread: the contract directly targets the relationship and embeds the structural mean-reversion that has historically characterized it. For more information, readers can refer to Why Soybean Oilshare Is Not Linear.
Markets evolve, and relationships among instruments do change with regimes. It is rare, however, to find stability persisting across multiple decades. The anchor here is the fundamental joint-product constraint. In a chaotic market, that may be a worthwhile angle to explore.
A hypothetical guide: from ideas to application
We conclude with the following hypothetical trades:1
Case study 1: Short Soybean Oilshare futures
If one holds a bearish view of soybean oilshare, one could consider taking a short position in Soybean Oilshare (OSF) futures at the current price of 47.95, with a stop-loss above 50.9, a hypothetical maximum loss of 50.95 – 47.95 = 3 points. Looking at Figure 1, if soybean oilshare reverts to the historical average, the futures price could fall back to 37.95, resulting in 47.95 – 37.95 = 10 points. Each point move by the futures contract is 400 USD.
Case study 2: Long Natural Gas futures
If one holds a bullish view of natural gas prices, one could consider taking a long position in Henry Hub Natural Gas (NG) futures at the current price of 4.03, with a stop-loss below 3.73, a hypothetical maximum loss of 4.03 – 3.73 = 0.3 points. Looking at Figure 3, if the ascending triangle bottom reversal is confirmed, natural gas prices could climb to 4.93, resulting in 4.93 – 4.03 = 0.9 points. Each Natural Gas futures contract represents 10,000 MMBtu, and each point move is 10,000 USD.
Our hits and misses
Figure 5: Silver Futures
We managed to map the breakout of silver prices in early July at 37. Silver has advanced to 47 without our stops being challenged.
Figure 6: Platinum Futures
We correctly called the local top of platinum in July, as price reversed sharply and reached our hypothetical target of 1,300 within a few days. Subsequently platinum prices consolidated and resumed its uptrend.
Figure 7: WTI Crude Oil Futures
We called the decline at the end of July as crude oil prices continued to make lower highs and lower lows. However, there has been no sustained breakdown of the long-term support – price remains compressed near the base.
The Rearview Mirror
Figure 8: E-mini Russell 2000 Index Futures (Weekly)
Russell 2000 is pressing the top of its multi-year range near 2,480-2,520 after reclaiming the 2,400 pivot. A weekly close above the band would confirm an upside resolution.
Figure 9: Nikkei (Yen) Futures (Weekly)
Nikkei 225’s multi-year range resolved higher; price is holding well above the 42,000 breakout area, which now acts as support.
Figure 10: Gold Futures
After a few months’ of coiling in an ascending triangle, gold prices broke cleanly above 3,500 with follow-through acceleration.
Figure 11: RBOB Gasoline Futures (Weekly)
Similar to crude oil in the energy sector, RBOB gasoline prices are retesting a long-standing support at 1.90-2.00.
Figure 12: Soybean Futures (Weekly)
After breaking a massive head-and-shoulder top in 2024, soybean prices have been consolidating in a shallow ascending range between 950 and 1,100. A weekly close outside this band would set the next leg.
Figure 13: Brazillian Real Futures
BRL/USD has cleared the multi-month resistance near 0.186 and is back-testing it from above. The formal resistance now becomes a support.
Figure 14: U.S. 5-Year Treasury Yield
The short end of the yield curve is showing signs of breaking lower, as the Fed started cutting rates and market prices in more easing to come.
1 Examples cited above are for illustration only and shall not be construed as investment recommendations or advice. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios. Please refer to full disclaimers at the end of the commentary.
Disclaimer
This publication is provided by Inspirante Trading Solutions Pte Ltd (“ITS”) for general information and educational purposes only. ITS is NOT licensed or regulated for the provision of investment or financial advice, and we do not seek to do so.
Any past performance, projection, forecast, or simulation of results is not necessarily indicative of the future or likely performance of any investment.
Any expression of opinion, which may be subject to change without notice, is personal to the author, and ITS makes no guarantee of any sort regarding the accuracy or completeness of any information or analysis supplied.
None of the information contained here constitutes an offer or solicitation of an offer to buy, sell or hold any currency, product, or financial instrument, to make or hold any investment, or to participate in any particular trading strategy.
ITS does not take into account your personal investment objectives, specific investment goals, specific needs, or financial situation and makes no representation and assumes no liability to the accuracy or completeness of the information provided here. Suitable advice should be obtained from a licensed financial advisor for this purpose. The information and publications are not intended to be and do not constitute financial advice, investment advice, trading advice, or any other advice or recommendation of any sort.
ITS shall not be liable for any loss arising from any investment based on any perceived recommendation, forecast, or any other information contained here. The contents of these publications should not be construed as an express or implied promise, guarantee, or implication by ITS that the reader will profit or that losses in connection therewith can or will be limited from reliance on any information set out here.
This content has been produced by ITS. CME Group has not had any input into the content, and neither CME Group nor its affiliates shall be responsible or liable for the same.
CME Group does not represent that any material or information contained herein is appropriate for use or permitted in any jurisdiction or country where such use or distribution would be contrary to any applicable law or regulation.
