The 66¢ Support Break: Vegoil Winter Flush Begins as D4 RINs Crash and Rhine Logistics Stay Paralyzed
The global middle distillate and bio-complexes are fracturing along a stark structural fault line today. Yesterday, we warned that persistent weakness in soybean oil was foreshadowing a "winter flush" if key support levels failed to hold. Today, that breakdown occurred: December CME soybean oil (ZLZ26) decisively breached its critical 66.00¢ chart support, printing an intraday low of 65.55¢ and trading at 65.97¢/lb. On the weekly chart, ZL is cleanly breaking down through its converging dynamic weekly moving averages (DWMA 68.22 and 68.55), officially triggering downside expansion. The underlying physical weakness is confirmed by the ZLZ26-ZLH27 calendar spread plummeting into a steep contango of -0.41¢/lb, and the January/May (ZLF27-ZLK27) spread depressed at -0.48¢/lb, proving that commercial participants are not scrambling for near-term physical coverage. Even the export market is stagnant, with next season's FOB Paranagua soyoil premiums stuck flat at 1.3¢/lb below Chicago futures.
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