I am Stephen Davis, senior market strategist at Walsh Trading, Inc., Chicago, Illinois. You can reach me at 312-878-2391.
Last week, I wrote about a May 2026 soybean trading strategy that worked very well. This week, I am writing about a soybean meal strategy.
Data released today from the National Oilseed Processors Association (NOPA) showed a total of 221.56 million bushels (mbu) of soybeans crushed in January, exceeding estimates. That was 10.57% above last year, but down 1.52% from last month.
According to the Iowa Soybean Association, soybeans are almost never used whole but are instead "crushed" to produce soybean meal and soybean oil. Approximately 80% of the crushed bean results in soybean meal, which is used for protein content in livestock feed, and hulls. The other 20% is soybean oil, which is primarily used for human consumption and biofuels.
Below are two charts that look bullish to me for May 2026 soybean meal. The first one is a daily chart with the 100-day moving average represented by the black horizontal line. The 100-day moving average is worth looking at on any chart for any market. In my opinion, the market is bullish when above the line and not so much when below the line.
The second chart is a monthly soybean meal chart. It shows a reversal up, which, in my opinion, is a rare occurrence that points to higher soybean meal prices in the weeks ahead.
A trade strategy is to buy May 2026 soybean meal at 309.0. On February 13, the low was 309.0. Risk the trade to 304.0 stop. Profit objective is 325.0. That is a $500 risk per contract with a profit potential of $1600 per contract.
To discuss trading strategies, contact me anytime. Have an excellent day.
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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