Outlook for U.S. soybean meal is favorable

I am Stephen Davis, senior market strategist at Walsh Trading, Inc., Chicago, Illinois. You can reach me at 312-878-2391.

Often when markets climb above the 200-day moving average, as seen below on this chart for soybean meal, the trend is up, in my opinion. On Friday, May 22, private exporters reported a sale of 252,000 metric tons of soybeans heading to unknown destinations in the 2025-26 and 2026-27 marketing years. Meanwhile, managed fund long positions in soybean meal rose 12.5 percent. 

In its May Oil Crops Outlook, the United States Department of Agriculture (USDA) Economic Research Service states U.S. soybean meal exports for Marketing Year 2026/27 are forecast to increase by 1.9 million short tons to a record-high 21.7 million short tons. The report says this is largely driven by lower soybean meal prices and moderate global meal demand growth. It goes on to say that the United States is expected to increase its share in global soybean meal trade, with competitive prices and expansion in shipping capacity out of the Pacific Northwest.

Argentina, the largest soybean meal shipper in the world, reports that soybean meal stocks hit a three-year low last month. This could lead to increased sales of U.S. soybean meal. 

These are some reasons to be long on soybean meal. 

A trade strategy is to buy July 2026 soybean meal at 326.20 (yesterday's low). Risk the trade to 321.20 stop, good til cancelled (GTC). Profit objective is to sell July 2026 soybean meal at 326.20, GTC. Per contract, that's a $500 risk for a $1,000 reward. A decent ratio, in my opinion.

To discuss trading strategies, contact me anytime. Have an excellent day and healthy, prosperous new year. 

Stephen Davis
Senior Market Strategist 
Walsh Trading

Direct 312 878 2391 
Toll Free 800 556 9411
sdavis@walshtrading.com  
www.walshtrading.com

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