Excell with Options: Identifying Options Across the Entire Soybean Complex
Report highlights
Traders that participate in one of the three Soybean markets may not be as familiar with related products. In this week's report Rich Excell analyzes the relationship between soybeans, meal and oil to identify correlated opportunities.
Image 1: Front month futures for soybeans, soybean meal, soybean oil and hypothetical soybean crush
Anyone involved in the soybean complex is likely familiar multiple elements of this chart. Whether one looks at soybeans, soybean oil, soybean meal or the soybean crush, all prices are at or near the lowest levels we have seen since 2020. In the case of the crush, we are at the lowest levels we have tended to get to over the last several years. Certainly, the bumper crop in Brazil and the discount of these beans to U.S. prices are not helping matters at all. However, one bright spot has been the increased demand for soybeans coming from renewable fuel. While U.S. export numbers have been trending lower the last several years, this domestic demand from a growing source could be a source of optimism. This week, I wanted to highlight the dynamics of the soybean market to some who may not be as familiar with much of the inner workings. This could create new opportunities for those who have only been focusing on one or two of these parts.