Soy Complex: Meal vs Oil - Where are we headed?
Apr 18, 2013
Soymeal continues to create a recent buzz, as the trade has become more fearful that Argentina will simply not be able to supply the world with its needed supply. There is talk that while the April and June crush in Argentina may stabilize, moving forward it could suffer deeper setbacks. Meaning more global demand for meal, from sources like the US, who doesn't have the extra surplus, and or Brazil who can't seem to get the supply shipped out the door. I would agree that it's ALL about soymeal, and I also agree with 100% of the above mentioned concerns... except for one caveat, "Chinese Demand." Trust me when I tell you this "bird flu" virus is becoming more and more worrisome, and could ultimately be the "Black Swan" swimming right in front of our face. There is already talk that China's poultry feed will slump some 20% plus. Keep in mind poultry demand has fallen by more than 70% in China since the virus first popped up in March. Soybean oil may struggle as there continues to be talk of three cargoes of Argentine bean oil headed for US shores (possibly landing next week). This could obviously add additional pressure to US soy oil prices.... "Meal vs. Oil" spreads my end up paying huge dividends and are certainly worth considering??? Keep in mind there is also a historical tendency for Meal to gain on Oil during the next several weeks. On a side note there continues to be disappointing talks regarding soybean yields in Brazil's Bahia state. Many thinking 30% below their early hopes, corn yields down over 20% from what some were thinking on increased dryness and more intense insect damage. Click hear now and I will break it all down for you in the Van Trump report.