Soymeal futures are up today amid continued buying of the soy-based byproduct in order to feed their pig-population – which happens to reportedly be about 50% of the world’s pork population. Soymeal futures are currently “up” $1.4 per ton today currently trading at $410 per ton at the Chicago Board of Trade.
Soymeal prices in China are said to be up 40% with the volume of soymeal contracts continuing to expand with the animal feed trading in more hands there in a single day than the US consumes in an entire year – completely dominating the Chicago Board of Trade! Also contributing to the demand in soymeal is the fact that dry-weather and flooding in the Southern Hemisphere continue to threaten global supplies of soybeans which are crushed to produce both soybean oil and soymeal used to feed livestock animals.
Monica Tu, a Shanghai-based analyst with Shanghai JC Intelligence Co., who specializes in the soy market, shared her fundamental view of the soymeal futures market by stating, “Downstream users and traders in China have previously kept low stockpiles of soymeal on the expectation of weak demand and prices.” Tu adds, “In recent months, they had to amend their views and restore inventories, supporting solid gains in futures.”
The trend for soymeal futures is up, however, with a short-term top in sight. There has not been any type of significant pull-back in this market and we are due for one, but I would expect continued strength in soymeal futures into summer.
ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.
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