Through June and July the price of oats stabilized, finding support above 316 and putting in a rounded bottom. A strong pop higher in August has pushed the price to the highest levels seen in 4.5 months (December contract).
The rally is encouraging and signals that oats could see some bullish activity over the next few months. That said, look for a pullback from the 360 region into the buy zone between 345 and 335.
Figure 1. Oats (ZO - December Contract) Daily Chart
With a stop being placed below 320 (325, possibly even 330, should suffice), picking up the trade near 335 is ideal as it keeps the risk lower, but waiting for a better price may mean missing out if the price doesn't see that deep of a pullback. Overall though, while the price looks to be escalating to the upside, this still is a rounded bottom which can be slow to play out. Better to be patient.
Target for the trade is near 380, offering an attractive reward to risk ratio, depending on entry point and stop loss. This target is a very crude and conservative estimate based on the height of recent price range, of approximately 30 points, added to the breakout point near 350 providing a target of 380.