Walsh Soybean Opportunities - Pure Hedge Division

March soybeans closed at 1069, down -2 3/4 cents. Soybeans have had a rough start to December after making a high at 1172 1/2 in the March contract in mid-November. Soybeans filled the gap from October 27 yesterday. March soybeans are trading below the 14, 21, 50, and 100-day moving averages but above the 200-day. The next resistance is the 100-day at 1082. I still feel soybeans can move lower from here, but 1050 looks like a strong level of support if soybeans lose the 200-day moving average at 1064 3/4. The March-May spread gives a reading on Brazil’s 2025/26 crop, which CONAB estimates at a new record 177.1 mmt, up 3% from 2024/25. CONAB’s estimate for Brazil’s new crop in November was slightly higher at 177.6 mmt. The rally in mid-November moved the March-May spread to -7 cents at its tightest point at 23% of full carry. That spread has now widened to -11.5 cents at 36% of full carry, which indicates new commercial selling. The CFTC is still catching up from the government shutdown, but the latest Commitment of Traders report (data as of 11/25/2025) shows managed money unwinding 15k contracts of their 214k long position in soybeans. Soybeans tend to respond better to changes in fund positioning than a lot of other markets, and it looks like funds are continuing to liquidate their long positions or add to their short positions given the sell-off late last week and the entire week this week.  

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Consider the following:

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Soybeans – N/A

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July ’26 SOYBEAN OIL

BUY 1 JULY ’26 54 CALL 2.030

SELL 1 JULY ’26 59 CALL .95

SELL 1 JULY’26 50 PUT 3.385

BUY 1 JULY 45 PUT 1.265

Price: 1.04 CREDIT        Cost: $624 CREDIT/TRADE PACKAGE, PLUS FEES AND COMMISSIONS.

JULY’26 SOYBEAN OIL OPTIONS EXPIRE 6/26/26 (191 DAYS) 

MAXIMUM LOSS: LIMITED

POTENTIAL GAIN: $4,272/TRADE PACKAGE

MAXIMUM GAIN: $3,000.00 FROM CALL SPREAD AND $1,272 FROM SOLD PUT SPREAD

This is a longer-term trade, looking for soybean oil to trade 64.00-66.00. By entering this trade, you collect a credit of 1.04 or $624/Trade Package. Soybean oil has been weaker recently due to uncertainty from the EPA in regard to 2026 biofuel blending rates. The EPA the final rule will not be confirmed until Q1 ’26. I’m still bullish, here’s why: Biofuel percentages are set to increase in Brazil, Indonesia, and Malaysia. Sunflower oil supplies are tight, and production estimates are lower in the EU and the Black Sea. In addition, Brazil has sold most of its beans to China already which will limit their crushing.

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Hans Schmit
Broker, Pure Hedge Division 
312-765-7311
hschmit@walshtrading.com

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