Soybean futures have quickly rebounded this month to prices not seen since late August on the outlook of “feed demand” rising from domestic livestock and poultry producers. Soybean futures have since backed-off their highs by .25c already this morning currently trading at $10.16 per bushel, and soybean meal futures have given-up their entire gains at this time, currently “unchanged” from yesterday’s close after giving-up $22 per ton from its highs.
Yesterday’s spectacular soybean meal futures 7.6% gain – a one-day rise not seen since 2007 – is a reflection of the need for livestock feed in an attempt to meet demand. Currently it is reported the US railways are tied up with much energy products being delivered around the country which means some livestock producers could potentially be delayed in receiving feed for their animals.
Nicholas Medina, a futures and options specialist for Capital Trading Group in Chicago, shared his insight regarding the current soybean futures situation by stating today, “The grain producers, especially (of) soybeans, are feeling the effects of increased competition from the emerging energy producers in the U.S.” Medina added, “Prior to the boom of natural gas in the U.S., grain producers could easily move their products after harvest, that has all changed now and with a record harvest in grains, railways have the upper hand and will price out their services to the highest bidder.”
Soybean futures have made a complete turn-around in trend this past month. We have already exited our long soybean futures position this morning when it was realized the market couldn’t hold its gains. This is a newly developed up-trend and I have a feeling there is much more to come. Stay tuned…
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